EXHIBIT 10.1
CONFORMED COPY
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CREDIT AGREEMENT
Dated as of March 13, 1998,
Among
THE IMPERIAL HOME DECOR GROUP INC.,
IMPERIAL HOME DECOR GROUP HOLDINGS II LIMITED,
THE IMPERIAL HOME DECOR GROUP (CANADA) ULC,
THE LENDERS NAMED HEREIN,
and
THE CHASE MANHATTAN BANK,
as U.S. Administrative Agent
and Collateral Agent,
THE CHASE MANHATTAN BANK OF CANADA,
as Canadian Administrative Agent,
and CHASE MANHATTAN BANK DELAWARE,
as Fronting Bank
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[CS&M Ref. No. 6700-606]
TABLE OF CONTENTS
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ARTICLE I. DEFINITIONS........................................................4
SECTION 1.01. Defined Terms..........................................4
SECTION 1.02. Terms Generally.......................................48
ARTICLE II. THE CREDITS......................................................49
SECTION 2.01. Commitments...........................................49
SECTION 2.02. Loans.................................................53
SECTION 2.03. Borrowing Procedure...................................57
SECTION 2.04. Evidence of Debt; Repayment of Loans..................60
SECTION 2.05. Fees..................................................61
SECTION 2.06. Interest on Loans.....................................62
SECTION 2.07. Default Interest......................................64
SECTION 2.08. Alternate Rate of Interest............................65
SECTION 2.09. Termination and Reduction of
Commitments.........................................65
SECTION 2.10. Conversion and Continuation of Term
Borrowings..........................................70
SECTION 2.11. Repayment of Term Borrowings..........................72
SECTION 2.12. Prepayment............................................76
SECTION 2.13. Reserve Requirements; Change in
Circumstances.......................................80
SECTION 2.14. Change in Legality....................................83
SECTION 2.15. Indemnity.............................................85
SECTION 2.16. Pro Rata Treatment....................................86
SECTION 2.17. Sharing of Setoffs....................................86
SECTION 2.18. Payments..............................................87
SECTION 2.19. Taxes.................................................88
SECTION 2.20. Letters of Credit.....................................94
SECTION 2.21. Bankers' Acceptances.................................102
SECTION 2.22. Spot Exchange Rate Calculations......................105
SECTION 2.23. Mitigation Obligations; Replacement of
Lenders............................................106
SECTION 2.24. European Monetary Union..............................107
ARTICLE III. REPRESENTATIONS AND WARRANTIES.................................108
SECTION 3.01. Organization; Powers.................................108
SECTION 3.02. Authorization........................................108
SECTION 3.03. Enforceability.......................................109
SECTION 3.04. Governmental Approvals...............................109
SECTION 3.05. Financial Statements.................................109
SECTION 3.06. No Material Adverse Change...........................110
SECTION 3.07. Title to Properties; Possession Under
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Leases.............................................110
SECTION 3.08. Subsidiaries.........................................111
SECTION 3.09. Litigation; Compliance with Laws.....................111
SECTION 3.10. Agreements...........................................112
SECTION 3.11. Federal Reserve Regulations..........................112
SECTION 3.12. Investment Company Act; Public Utility
Holding Company Act................................113
SECTION 3.13. Use of Proceeds......................................113
SECTION 3.14. Tax Returns..........................................113
SECTION 3.15. No Material Misstatements............................114
SECTION 3.16. Employee Benefit Plans...............................114
SECTION 3.17. Environmental Matters................................115
SECTION 3.18. Capitalization of the Borrowers......................116
SECTION 3.19. Security Documents...................................116
SECTION 3.20. Location of Real Property and
Leased Premises....................................118
SECTION 3.21. Solvency.............................................118
SECTION 3.22. Labor Matters........................................119
SECTION 3.23. No Foreign Assets Control Regulation
Violation..........................................119
SECTION 3.24. Insurance............................................120
ARTICLE IV. CONDITIONS OF LENDING...........................................120
SECTION 4.01. All Credit Events....................................120
SECTION 4.02. First Credit Event...................................121
SECTION 4.03. First Credit Event Under U.K. (pound)
Revolving Credit Commitments.......................127
ARTICLE V. AFFIRMATIVE COVENANTS............................................127
SECTION 5.01. Existence; Businesses and Properties.................128
SECTION 5.02. Insurance............................................128
SECTION 5.03. Taxes................................................131
SECTION 5.04. Financial Statements, Reports, etc...................131
SECTION 5.05. Litigation and Other Notices.........................133
SECTION 5.06. Employee Benefits....................................134
SECTION 5.07. Maintaining Records; Access to
Properties and Inspections.........................135
SECTION 5.08. Use of Proceeds......................................135
SECTION 5.09. Compliance with Environmental Laws...................135
SECTION 5.10. Preparation of Environmental Reports.................135
SECTION 5.11. Further Assurances...................................136
SECTION 5.12. Fiscal Year; Accounting..............................138
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SECTION 5.13. Dividends............................................138
SECTION 5.14. Interest/Exchange Rate Protection
Agreements.........................................138
SECTION 5.15. Surveys..............................................138
ARTICLE VI. NEGATIVE COVENANTS..............................................138
SECTION 6.01. Indebtedness.........................................139
SECTION 6.02. Liens................................................144
SECTION 6.03. Sale and Lease-Back Transactions.....................148
SECTION 6.04. Investments, Loans and Advances......................148
SECTION 6.05. Mergers, Consolidations, Sales of
Assets and Acquisitions............................151
SECTION 6.06. Dividends and Distributions..........................153
SECTION 6.07. Transactions with Affiliates.........................154
SECTION 6.08. Business of the Parent Borrower
and the Subsidiaries...............................155
SECTION 6.09. Subordinated Indebtedness and
Other Material Agreements..........................155
SECTION 6.10. Capital Expenditures.................................156
SECTION 6.11. Interest Coverage Ratio..............................157
SECTION 6.12. Adjusted Net Leverage Ratio..........................157
SECTION 6.13. Capital Stock of the Subsidiaries....................158
ARTICLE VII. EVENTS OF DEFAULT ...........................................158
ARTICLE VIII. THE ADMINISTRATIVE AGENTS AND THE
COLLATERAL AGENT.............................................162
ARTICLE IX. COLLECTION ALLOCATION MECHANISM................................167
SECTION 9.01. Implementation of CAM................................167
SECTION 9.02. Letters of Credit....................................168
SECTION 9.03. Conversion...........................................170
ARTICLE X. MISCELLANEOUS....................................................170
SECTION 10.01. Notices.............................................170
SECTION 10.02. Survival of Agreement...............................171
SECTION 10.03. Binding Effect......................................172
SECTION 10.04. Successors and Assigns..............................172
SECTION 10.05. Expenses; Indemnity.................................177
SECTION 10.06. Right of Setoff.....................................180
SECTION 10.07. Applicable Law......................................180
SECTION 10.08. Waivers; Amendment..................................181
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SECTION 10.09. Interest Rate Limitation............................182
SECTION 10.10. Entire Agreement....................................183
SECTION 10.11. WAIVER OF JURY TRIAL................................183
SECTION 10.12. Severability........................................183
SECTION 10.13. Counterparts........................................183
SECTION 10.14. Headings............................................184
SECTION 10.15. Jurisdiction; Consent to Service
of Process........................................184
SECTION 10.16. Judgment Currency...................................184
SECTION 10.17. Confidentiality.....................................185
SECTION 10.18. Release of Liens and Guarantees.....................186
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Exhibits and Schedules
Exhibit A Form of Administrative Questionnaire
Exhibit B Form of Assignment and Acceptance
Exhibit C-1,
C-2, C-3 Forms of Borrowing Requests
Exhibit D Form of Indemnity, Subrogation and Contribution
Agreement
Exhibit E Form of Intellectual Property Security Agreement
Exhibit F Form of Mortgage
Exhibit G-1 Form of Pledge Agreement
Exhibit G-2 Form of UK Newco Pledge Agreement
Exhibit G-3 Form of U.K. Borrower Pledge Agreement
Exhibit G-4 Form of Canadian Pledge Agreement
Exhibit H Form of Security Agreement
Exhibit I-1 Form of Domestic Subsidiary Guarantee Agreement
Exhibit I-2 Form of Canadian Subsidiary Guarantee Agreement
Exhibit I-3 Form of U.K. Subsidiary Guarantee
Exhibit I-4 Form of UK Newco Guarantee
Exhibit I-5 Form of Parent Borrower Guarantee Agreement
Exhibit J-1 Form of Opinion of Xxxxx, Day, Xxxxxx & Xxxxx
Exhibit J-2 Form of Opinion of U.K. Local Counsel
Exhibit J-3 Form of Opinion of Canadian Local Counsel
Exhibit J-4 Form of Opinion of U.S. Local Counsel
Exhibit 2.21(g) Form of B/A Equivalent Note
Schedule A Pricing Adjustments
Schedule B Synergy Addback Amounts
Schedule C Name Changes
Schedule D GAAP Deviations
Schedule 2.01 Commitments
Schedule 3.08 Subsidiaries
Schedule 3.09 Litigation
Schedule 3.14 Taxes
Schedule 3.17 Environmental Matters
Schedule 3.18 Capitalization
Schedule 3.19 Filing Offices
Schedule 3.20 Real Property and Leased Premises
Schedule 3.22 Labor Matters
Schedule 3.24 Insurance
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Schedule 4.02(a) Local Counsel
Schedule 6.01 Indebtedness
Schedule 6.02 Liens
Schedule 6.04 Investments
Schedule 6.07 Transactions with Affiliates
Schedule 6.09 Limitations on Dividends
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CREDIT AGREEMENT dated as of March 13, 1998, among THE IMPERIAL
HOME DECOR GROUP INC. (formerly known as Xxxxxx Decorative Products
Holdings, Inc.), a Delaware corporation (the "Parent Borrower"),
IMPERIAL HOME DECOR GROUP HOLDINGS II LIMITED, a limited company
incorporated under the laws of England and Wales (the "U.K.
Borrower"), THE IMPERIAL HOME DECOR GROUP (CANADA) ULC, an unlimited
liability company organized under the laws of Nova Scotia, Canada (the
"Canadian Borrower"), the financial institutions listed on Schedule
2.01 (the "Lenders"), THE CHASE MANHATTAN BANK, a New York banking
corporation, as administrative agent (in such capacity, the "U.S.
Administrative Agent") and as collateral agent (in such capacity, the
"Collateral Agent") for the Lenders, THE CHASE MANHATTAN BANK OF
CANADA, as administrative agent (in such capacity, the "Canadian
Administrative Agent") for the C $ Revolving Credit Lenders, and CHASE
MANHATTAN BANK DELAWARE, as fronting bank.
Pursuant to, or in connection with the transactions contemplated by, the
Recapitalization Agreement (such term and each other capitalized term used but
not defined herein having the meaning given it in Article I) and the Acquisition
Agreement, (a) the Fund has formed BDPI Holdings Corporation, a Delaware
corporation ("MergerCo") that is indirectly wholly owned by the Fund and one or
more other persons or entities (collectively with the Fund, the "Investors"),
which consist principally of affiliates of the Fund, (b) immediately prior to
the Merger, the Canadian Borrower will, directly or indirectly, acquire (the
"Sunworthy Acquisition") legal title to (but not beneficial ownership (which
shall reside in the Parent Borrower) of) substantially all the assets (the
"Sunworthy Assets") and assume substantially all the liabilities of Xxxxxx,
Inc.'s ("Xxxxxx") Sunworthy business from direct or indirect subsidiaries of
Xxxxxx, (c) MergerCo will merge with and into the Parent Borrower (the "Merger"
and, together with the Sunworthy Acquisition, the "Recapitalization"), with the
Parent Borrower as the surviving corporation in the Merger and Imperial Home
Decor Group Holdings LLC, a Delaware limited liability company ("Holdings"),
owning not less than 89% of the common stock of the Parent Borrower to be
outstanding immediately following the consummation of the Merger (subject to
reduction (i) by not more than 6.7% if Xxxxxxx & Xxxxxx Products Co. ("C&A")
exercises the C&A Option)
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and (ii) in connection with the exercise of the Management Options, (d) the
consideration payable to or receivable by existing shareholders of the Parent
Borrower (including existing holders of preferred stock of the Parent Borrower)
or owners of assets transferred pursuant to the Recapitalization Agreement
(collectively, the "Borden Sellers") will consist of not more than $320,000,000
(subject to adjustment as provided in the Recapitalization Agreement; such
amount, as so adjusted, the "Recapitalization Consideration"), consisting of (i)
cash and (ii) a retained common equity interest in the Parent Borrower
representing not more than 11% of the equity value of the Parent Borrower
immediately following the consummation of the Merger (valued on the same per
share basis as the investment made in the Parent Borrower by Holdings through
Holdings' investment in MergerCo), (e) not later than immediately following the
Recapitalization, (i) the Parent Borrower will acquire all the issued and
outstanding capital stock of Imperial Wallcoverings, Inc., a Delaware
corporation, and (ii) the Canadian Borrower will acquire the assets of Imperial
Wallcoverings (Canada) Inc., in each case from C&A and certain of C&A's
affiliates (the "C&A Sellers") (the "Imperial Acquisition" and, together with
the Recapitalization, the "Recapitalization/Acquisition"), for not more than
$58,500,000 in cash (subject to adjustment as provided in the Acquisition
Agreement) and an option (the "C&A Option") to purchase up to approximately 6.7%
of the Parent Borrower's common stock to be outstanding immediately following
the consummation of the Transactions (as defined below) (together, the "Imperial
Consideration") and (f) in conjunction with the Recapitalization/Acquisition,
the series of transactions described in the immediately succeeding paragraph
will be consummated (such transactions, together with the
Recapitalization/Acquisition, the "Transactions").
In connection with the Recapitalization/Acquisition, (a) the Investors will
contribute not less than $84,500,000 in cash to Holdings in exchange for all the
limited liability company interests of Holdings and Holdings will contribute
such amount to MergerCo in exchange for all the capital stock of MergerCo (the
"Equity Contribution"), (b) the Parent Borrower will issue in a public offering
or a Rule 144A private placement the Senior Subordinated Notes for gross
proceeds of approximately $125,000,000, (c) prior to the consummation of the
Merger, Xxxxxx will form Xxxxxx Plastics, Inc. ("Xxxxxx") and will transfer the
assets constituting the Xxxxxx Plastics business of Xxxxxx
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Decorative Products, Inc. to Xxxxxx in exchange for Vernon's assumption of the
liabilities related to the Xxxxxx Plastics business and a promissory note (the
"Xxxxxx Note") from Xxxxxx in the principal amount of $50,000,000, (d)
substantially simultaneously with the consummation of the Imperial Acquisition,
(i) Xxxxxx Decorative U.K. IHC, Inc., a Delaware corporation and a direct wholly
owned subsidiary of the Parent Borrower ("IHC"), will form UK Newco, (ii) UK
Newco will acquire all the common stock of Xxxxxx Decorative Products Holdings,
Ltd., a limited company incorporated under the laws of England and Wales and a
wholly owned subsidiary of IHC, for a promissory note for $180,000,000 payable
to IHC (the "IHC Note") and (iii) IHC will merge with and into the Parent
Borrower, with the Parent Borrower as the surviving corporation in such merger,
(e) substantially simultaneously with the consummation of the Imperial
Acquisition, Imperial Wallcoverings, Inc. will merge with and into Xxxxxx
Decorative Products, Inc. (the "Imperial Merger"), with Xxxxxx Decorative
Products, Inc. as the surviving corporation in such merger, Xxxxxx Decorative
Products, Inc. will be merged into a newly created Delaware limited liability
company wholly owned by the Parent Borrower and having the name "The Imperial
Home Decor Group (US) LLC" and the name changes described in Schedule C will be
effected, (f) following the consummation of the Recapitalization/Acquisition,
the Parent Borrower will transfer its beneficial interest in the Sunworthy
Assets to the Canadian Borrower in exchange for shares of common stock issued by
the Canadian Borrower and (g) costs and expenses not in excess of $24,000,000
incurred in connection with the Transactions (the "Transaction Costs") will be
paid.
The Borrowers have requested the Lenders to extend credit in the form of
(a) Tranche A Term Loans to the Parent Borrower on and after the Closing Date,
in an aggregate principal amount not in excess of $65,000,000, (b) Tranche B
Term Loans to the Parent Borrower on the Closing Date, in an aggregate principal
amount not in excess of $115,000,000, (c) Tranche C Term Loans to the Parent
Borrower on the Closing Date, in an aggregate principal amount not in excess of
$45,000,000, (d) U.S. $ Revolving Credit Loans and Swingline Loans to the Parent
Borrower at any time and from time to time prior to the Revolving Credit
Maturity Date, in an aggregate principal amount at any time outstanding not in
excess of the difference between $55,000,000 and the Revolving L/C Exposure at
such time, (e) U.K. (pound) Revolving Credit Loans to the U.K. Borrower at any
time and
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from time to time prior to the Revolving Credit Maturity Date, in an aggregate
principal amount at any time outstanding not in excess of $10,000,000, (f) C $
Revolving Credit Loans to the Canadian Borrower at any time and from time to
time prior to the Revolving Credit Maturity Date, in an aggregate principal
amount at any time outstanding not in excess of $10,000,000 and (g) U.S. $
Letters of Credit at any time and from time to time prior to the Revolving
Credit Maturity Date, in an aggregate stated amount at any time outstanding not
in excess of $15,000,000.
The proceeds of the Tranche B Term Loans and the Tranche C Term Loans will
be used, together with (a) the proceeds of Tranche A Term Loans made on the
Closing Date, (b) the proceeds of U.S. $ Revolving Credit Loans made on the
Closing Date (in an aggregate principal amount which shall not be in excess of
$15,000,000), (c) the proceeds of the Equity Contribution and (d) the proceeds
of the issuance of the Senior Subordinated Notes, solely (i) to pay the cash
portion of the Recapitalization Consideration to the Borden Sellers, (ii) to pay
the cash portion of the Imperial Consideration to the C&A Sellers and (iii) to
pay the Transaction Costs.
The proceeds of Loans and Letters of Credit, if any, (a) made available to
the Parent Borrower in the form of (i) Tranche A Term Loans (other than Loans
used for the purposes specified in the immediately preceding paragraph), (ii)
U.S. $ Revolving Credit Loans (other than Loans used for the purposes specified
in the immediately preceding paragraph), (iii) U.K. (pound) Revolving Credit
Loans and C $ Revolving Credit Loans and (iv) Letters of Credit will be used for
general corporate purposes and (b) made available to the Subsidiary Borrowers in
the form of U.K. (pound) Revolving Credit Loans and C $ Revolving Credit Loans
will only be invested in current or fixed assets of the direct or indirect
subsidiaries (other than UK Newco) of the Parent Borrower located in the country
in which such Loans were made.
The Lenders are willing to extend such credit to the Borrowers and the
Fronting Bank is willing to issue Letters of Credit for the account of the
Parent Borrower, in each case on the terms and subject to the conditions set
forth herein. Accordingly, the parties hereto agree as follows:
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ARTICLE I. DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the following terms
shall have the meanings specified below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan" shall mean any ABR Term Loan, ABR Revolving Credit Loan or
Swingline Loan.
"ABR Margin" shall mean, for any day, with respect to any ABR Borrowing,
the LIBOR Margin that would apply to such Borrowing on such day if it were a
Eurodollar Borrowing minus 1.00%.
"ABR Revolving Credit Loan" shall mean any Revolving Credit Loan bearing
interest at a rate determined by reference to the Alternate Base Rate in
accordance with the provisions of Article II.
"ABR Term Borrowing" shall mean a Borrowing comprised of ABR Term Loans.
"ABR Term Loan" shall mean any Term Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"Acceptance Fee" shall mean a fee payable in Canadian Dollars by the
Canadian Borrower or the Parent Borrower, as applicable, to a C $ Revolving
Credit Lender with respect to the acceptance of a B/A or the purchase of a B/A
Equivalent Note, calculated on the face amount of the B/A or the B/A Equivalent
Note at the rate per annum equal to the B/A Spread on the basis of the number of
days in the applicable Contract Period and a year of 365 days (it being agreed
that the B/A Spread in respect of a B/A Equivalent Note is equivalent to the B/A
Spread otherwise applicable to the B/A Borrowing which has been replaced by the
purchase of such B/A Equivalent Note pursuant to Section 2.21(g)).
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"Acquisition Agreement" shall mean the Acquisition Agreement dated as of
November 4, 1997, among C&A, Imperial Wallcoverings, Inc. and MergerCo.
"Adjusted EBITDA" shall mean, for any period, EBITDA for such period plus
the synergy addback allowances, if any, set forth for such period on Schedule B
plus, at the request of the Parent Borrower, the amount of any cash equity
contribution made to the Parent Borrower by any holder of Capital Stock of the
Parent Borrower during such fiscal period (any such equity contribution, a
"Specified Equity Contribution"), provided that such a request may not be made
unless after giving effect thereto (a) during the four-fiscal-quarter period
ending with the quarter in which such contribution is made, there shall be at
least one fiscal quarter in which no Specified Equity Contribution shall be made
to the Parent Borrower and (b) during the eight-fiscal-quarter period ending
with the quarter in which such contribution is made, there shall be at least one
period of four consecutive fiscal quarters in which no Specified Equity
Contribution shall be made to the Parent Borrower.
"Adjusted LIBO Rate" shall mean, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the product of (a) the LIBO Rate in
effect for such Interest Period and (b) Statutory Reserves, if any.
"Adjusted Net Leverage Ratio" shall mean, on any date, the ratio of (a)
Total Net Debt as of such date to (b) Adjusted EBITDA for the period of four
consecutive fiscal quarters of the Parent Borrower most recently ended as of
such date, all determined on a consolidated basis in accordance with GAAP.
"Administrative Agents" shall mean the U.S. Administrative Agent and the
Canadian Administrative Agent.
"Administrative Questionnaire" shall mean an Administrative Questionnaire
in the form of Exhibit A.
"Affiliate" shall mean, when used with respect to a specified person,
another person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the person
specified.
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"Aggregate C $ Revolving Credit Exposure" shall mean the aggregate amount
of the Lenders' C $ Revolving Credit Exposures.
"Aggregate U.K. (pound) Revolving Credit Exposure" shall mean the aggregate
amount of the Lenders' U.K. (pound) Revolving Credit Exposures.
"Aggregate U.S. $ Revolving Credit Exposure" shall mean the aggregate
amount of the Lenders' U.S. $ Revolving Credit Exposures.
"Alternate Base Rate" shall mean, for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greater of (a) the
Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. If for any reason the U.S. Administrative
Agent shall have determined (which determination shall be conclusive absent
manifest error) that it is unable to ascertain the Federal Funds Effective Rate,
including the failure of the Federal Reserve Bank of New York to publish rates
or the inability of the U.S. Administrative Agent to obtain quotations in
accordance with the terms thereof, the Alternate Base Rate shall be determined
without regard to clause (b) of the preceding sentence until the circumstances
giving rise to such inability no longer exist. Any change in the Alternate Base
Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall
be effective on the effective date of such change in the Prime Rate or the
Federal Funds Effective Rate, respectively.
"Alternative Currency" shall mean Canadian Dollars and Sterling.
"Alternative Currency Borrowing" shall mean a Borrowing comprised of
Alternative Currency Loans.
"Alternative Currency Loan" shall mean any Loan denominated in an
Alternative Currency.
"Applicable Percentage" (a) of any U.S. $ Revolving Credit Lender at any
time shall mean the percentage of the Total U.S. $ Revolving Credit Commitment
represented by such Lender's U.S. $ Revolving Credit Commitment, (b) of any U.K.
(pound) Revolving Credit Lender at any time shall mean the percentage of the
Total
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U.K. (pound) Revolving Credit Commitment represented by such Lender's U.K.
(pound) Revolving Credit Commitment and (c) of any C $ Revolving Credit Lender
at any time shall mean the percentage of the Total C $ Revolving Credit
Commitment represented by such Lender's C $ Revolving Credit Commitment. In the
event any Revolving Credit Commitments shall have expired or been terminated,
the Applicable Percentages shall be determined on the basis of the relevant
Revolving Credit Commitments most recently in effect, but giving effect to any
assignments pursuant to Section 10.04.
"Approved Fund" shall mean, with respect to any Lender that is a fund that
invests in bank loans, any other fund that invests in bank loans and is advised
or managed by the same investment advisor as such Lender or by an Affiliate of
such investment advisor.
"Assigned Dollar Value" shall mean in respect of any U.K. (pound) Revolving
Credit Borrowing or C $ Revolving Credit Borrowing denominated in an Alternative
Currency, the amount thereof expressed in Dollars in the initial Borrowing
Request with respect thereto or, in the case of a B/A Borrowing, the amount
thereof expressed in Dollars as the face amount of the Bankers' Acceptances or
B/A Equivalent Notes relating thereto. Thereafter, Assigned Dollar Value shall
mean, in respect of any U.K. (pound) Revolving Credit Borrowing or C $ Revolving
Credit Borrowing denominated in an Alternative Currency, the Dollar Equivalent
of the principal amount of the Loans relating to such Borrowing (or the face
amounts of the Bankers' Acceptances or B/A Equivalent Notes relating thereto) as
determined on the most recent Reset Date based on the Spot Exchange Rate.
"Assignment and Acceptance" shall mean an assignment and acceptance entered
into by a Lender and an assignee, and accepted by the U.S. Administrative Agent
and the Parent Borrower (and, in the case of an assignment of C $ Revolving
Credit Commitments or C $ Revolving Credit Loans, accepted by the U.S.
Administrative Agent, the Canadian Administrative Agent and the Parent
Borrower), in the form of Exhibit B or such other form as shall be approved by
the U.S. Administrative Agent.
"B/A Borrowing" shall mean a Borrowing comprised of a Bankers' Acceptance
or, as applicable, a B/A Equivalent Note.
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"B/A Equivalent Note" shall have the meaning given such term in Section
2.21(g).
"B/A Spread" shall mean, for any day, with respect to any B/A Borrowing,
the LIBOR Margin that would apply to such Borrowing on such day if such
Borrowing were a Tranche A Term Borrowing.
"Bankers' Acceptance" and "B/A" shall mean a xxxx of exchange denominated
in Canadian Dollars, drawn by the Canadian Borrower or the Parent Borrower, as
applicable, and accepted by a C $ Revolving Credit Lender in accordance with
this Agreement, provided that with respect to a C $ Revolving Credit Lender that
is not a chartered bank under the Bank Act (Canada) or that has notified the
Canadian Administrative Agent that it is otherwise unable to accept such bills
of exchange, it shall mean a B/A Equivalent Note.
"Board" shall mean the Board of Governors of the Federal Reserve System of
the United States.
"Xxxxxx" shall have the meaning given such term in the preamble to this
Agreement.
"Borden Sellers" shall have the meaning given such term in the preamble to
this Agreement.
"Borrowers" shall mean the Parent Borrower and the Subsidiary Borrowers.
"Borrowing" shall mean a group of Loans of a single Type made under a
single Credit Facility or consisting solely of Swingline Loans and made on a
single date and, in the case of Eurodollar Loans, as to which a single Interest
Period is in effect.
"Borrowing Request" shall mean a request by a Borrower in accordance with
the terms of Section 2.03 and substantially in the form, in the case of the
Parent Borrower requesting Term Loans or U.S. $ Revolving Credit Borrowings, of
Exhibit C-1, in the case of an applicable Borrower requesting U.K. (pound)
Revolving Credit Borrowings, of Exhibit C-2, and, in the case of an applicable
Borrower requesting C $ Revolving Credit Borrowings, of Exhibit C-3.
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"Business Day" shall mean any day (other than a day which is a Saturday,
Sunday or legal holiday in the State of New York) on which banks are open for
business in New York City; provided, however, that (i) when used in connection
with a Eurodollar Loan, the term "Business Day" shall also exclude any day on
which banks are not open for dealings in U.S. Dollar deposits in the London
interbank Eurodollar market or, if such Eurodollar Loans are denominated in
Sterling, on any day in which banks are not open for dealing in Sterling
deposits in the London interbank Eurodollar market, (ii) when used in connection
with a U.K. (pound) Revolving Credit Loan, "Business Day" shall also exclude any
day on which commercial banks are not open for foreign exchange business in
London, and (iii) when used in connection with a C $ Revolving Credit Loan
"Business Day" shall also exclude any day on which banks are required or
permitted to be closed in the city of Toronto.
"C&A" shall have the meaning given such term in the preamble to this
Agreement.
"C&A Option" shall have the meaning given such term in the preamble to this
Agreement.
"C&A Sellers" shall have the meaning given such term in the preamble to
this Agreement.
"C $ Revolving Credit Borrowing" shall mean a Borrowing comprised of C $
Revolving Credit Loans.
"C $ Revolving Credit Commitment" shall mean, with respect to any Lender at
any time, the commitment (if any) of such Lender to make loans and accept
Bankers' Acceptances pursuant to Section 2.01(d) or in the Assignment and
Acceptance pursuant to which such Lender assumed its C $ Revolving Credit
Commitment, as applicable. Subject to Section 10.04, the amount of each Lender's
C $ Revolving Credit Commitment is the amount set forth opposite such Lender's
name in Schedule 2.01 under the caption "C $ Revolving Credit Commitment", as
such amount may be permanently terminated or from time to time temporarily or
permanently reduced or increased pursuant to Section 2.09.
"C $ Revolving Credit Exposure" shall mean, with respect to any Lender at
any time, the sum of (a) the aggregate principal amount at such time of all
outstanding C $ Revolving
11
Credit Loans of such Lender denominated in Dollars, plus (b) the Assigned Dollar
Value at such time of all outstanding C $ Revolving Credit Loans of such Lender
that are Alternative Currency Loans.
"C $ Revolving Credit Lender" shall mean a Lender with a C $ Revolving
Credit Commitment, each of which on the Closing Date shall be a Canadian
chartered bank or other Canadian financial institution.
"C $ Revolving Credit Loan" shall mean any loan made by a Lender, and any
Bankers' Acceptance accepted by a Lender, pursuant to its C $ Revolving Credit
Commitment.
"Calculation Date" shall mean (a) the last Business Day of each March,
June, September and December and (b)(i) in respect of U.K. (pound) Revolving
Credit Loans denominated in Sterling at any time when the Aggregate U.K. (pound)
Revolving Credit Exposure exceeds 85% of the Total U.K. (pound) Revolving Credit
Commitments, any other date the U.S. Administrative Agent may determine in its
discretion to be a Calculation Date (but not more than one date during any
calendar week), and (ii) in respect of C $ Revolving Credit Loans denominated in
Canadian Dollars at any time when the Aggregate C $ Revolving Credit Exposure
exceeds 85% of the Total C $ Revolving Credit Commitments, any other date the
Canadian Administrative Agent may determine in its discretion to be a
Calculation Date (but not more than one date during any calendar week).
"CAM" shall mean the mechanism for the allocation and exchange of interests
in the Credit Facilities and collections thereunder established under Article
IX.
"CAM Exchange" shall mean the exchange of the Lenders' interests provided
for in Section 9.01.
"CAM Exchange Date" shall mean the first date after the Closing Date on
which there shall occur (a) any event described in paragraph (g) or (h) of
Article VII with respect to any Borrower or (b) an acceleration of the maturity
of Loans pursuant to Article VII.
"CAM Percentage" shall mean, as to each Lender, a fraction, expressed as a
decimal, of which (a) the numerator
12
shall be the sum of (i) the aggregate Designated Obligations owed to such Lender
and (ii) the Revolving L/C Exposure, if any, of such Lender, in each case
immediately prior to the CAM Exchange Date, and (b) the denominator shall be the
sum of (i) the aggregate Designated Obligations owed to all the Lenders and (ii)
the aggregate Revolving L/C Exposure of all the Lenders, in each case
immediately prior to such CAM Exchange Date. For purposes of computing each
Lender's CAM Percentage, all Designated Obligations which shall be denominated
in Alternative Currencies shall be translated into Dollars at the Spot Exchange
Rate in effect on the CAM Exchange Date.
"Canadian Administrative Agent" shall have the meaning given such term in
the preamble to this Agreement.
"Canadian Borrower" shall have the meaning given such term in the preamble
to this Agreement.
"Canadian Dollars" or "C$" shall mean lawful money of Canada.
"Canadian Guaranteed Parties" shall have the meaning given such term in the
Canadian Subsidiary Guarantee Agreement.
"Canadian Pledge Agreement" shall mean the Canadian Pledge Agreement,
substantially in the form of Exhibit G-4, between the Parent Borrower and the
Collateral Agent for the benefit of the Secured Parties.
"Canadian Prime Borrowing" shall mean a Borrowing comprised of Canadian
Prime Rate Loans.
"Canadian Prime Rate Loan" shall mean a Loan denominated in Canadian
Dollars which bears interest at a rate based upon the Canadian Prime Rate.
"Canadian Prime Rate" shall mean, on any day, the annual rate of interest
(rounded upwards, if necessary, to the nearest 1/16 of 1%) equal to the greater
of:
(a) the annual rate of interest determined by the Canadian Administrative
Agent as the annual rate of interest announced from time to time by
the Canadian Administrative Agent as its prime rate in
13
effect at its principal office in Toronto on such day for determining
interest rates on Canadian Dollar denominated commercial loans in
Canada; and
(b) the annual rate of interest equal to the sum of (i) the CDOR Rate in
effect on such day, and (ii) 1%.
"Canadian Subsidiary Guarantee Agreement" shall mean the Subsidiary
Guarantee Agreement, substantially in the form of Exhibit I-2, made by any
Canadian Subsidiary Guarantors in favor of the Collateral Agent for the benefit
of the Canadian Guaranteed Parties.
"Canadian Subsidiary Guarantor" shall mean each Subsidiary that is a
subsidiary of the Canadian Borrower organized under the laws of Canada other
than the Canadian Borrower.
"Capital Asset Exchange" shall mean any exchange of assets constituting
property, plant or equipment for other assets constituting property, plant or
equipment that are useful in the business of the Parent Borrower and the
Subsidiaries and have a value (determined in good faith by the Parent Borrower)
at least equal to the value of the exchanged assets.
"Capital Expenditures" shall mean, for any person in respect of any period,
the aggregate of all expenditures incurred by such person during such period
that, in accordance with GAAP, are or should be included in "additions to
property, plant or equipment" or similar items reflected in the statement of
cash flows of such person (which shall be deemed to include expenditures by such
person to acquire stock or other evidence of beneficial ownership of any other
person for the purpose of acquiring the capital assets of such person (as
opposed to acquiring such person as a going concern)); provided, however, that
Capital Expenditures for the Parent Borrower and the Subsidiaries shall not
include (a) expenditures to the extent they are made with the proceeds of the
issuance of Capital Stock of the Parent Borrower, or contributions to the
capital of the Parent Borrower, after the Closing Date (to the extent not
previously used to prepay Indebtedness (other than Revolving Credit Loans or
Swingline Loans), make any investment or capital expenditure or otherwise for
any purpose resulting in a deduction
14
to Excess Cash Flow in any fiscal year) or with funds that if not so spent would
constitute Net Proceeds under clause (a) of the definition of the term "Net
Proceeds", (b) expenditures representing Capital Asset Exchanges, (c)
expenditures of proceeds of insurance settlements, condemnation awards and other
settlements in respect of lost, destroyed, damaged or condemned assets,
equipment or other property to the extent such expenditures are made to replace
or repair such lost, destroyed, damaged or condemned assets, equipment or other
property or otherwise to acquire assets or properties useful in the business of
the Parent Borrower and the Subsidiaries within 12 months of receipt of such
proceeds, (d) Interest Expense capitalized during such period, (e) expenditures
that are accounted for as capital expenditures of such person and that actually
are paid for by a third party (excluding Holdings or any subsidiary thereof) and
for which neither Holdings nor any subsidiary thereof has provided or is
required to provide or incur, directly or indirectly, any consideration or
obligation to such third party or any other person (whether before, during or
after such period), (f) the book value of any asset owned by such person prior
to or during such period to the extent that such book value is included as a
capital expenditure during such period as a result of such person reusing or
beginning to reuse such asset during such period without a corresponding
expenditure actually having been made in such period, provided that any
expenditure necessary in order to permit such asset to be reused shall be
included as a Capital Expenditure during the period that such expenditure
actually is made and such book value shall have been included in Capital
Expenditures when such asset was originally acquired or (g) payments in respect
of purchase price adjustments relating to the Recapitalization or the Imperial
Acquisition.
"Capital Lease Obligations" of any person shall mean the obligations of
such person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under GAAP
and, for purposes hereof, the amount of such obligations at any time shall be
the capitalized amount thereof at such time determined in accordance with GAAP.
"Capital Stock" of any person shall mean any and all shares, interests,
rights to purchase, warrants, options,
15
participation or other equivalents of or interests in (however designated)
equity of such person, including any preferred stock, any limited or general
partnership interest and any limited liability company membership interest, but
excluding any debt securities convertible into such equity.
"Cash Interest Expense" shall mean, with respect to the Parent Borrower and
the Subsidiaries on a consolidated basis for any period, Interest Expense for
such period less the sum for such period of (a) pay-in-kind Interest Expense,
(b) to the extent included in Interest Expense, the amortization of fees paid by
the Parent Borrower or any Subsidiary on or prior to the Closing Date in
connection with the Transactions, (c) the amortization of debt discounts, if
any, or fees in respect of Interest/Exchange Rate Protection Agreements and (d)
gross interest income of the Parent Borrower and the Subsidiaries.
"CDOR Rate" shall mean, on any date, the annual rate of interest which is
the rate based on an average rate applicable to C$ bankers' acceptances for a
term of 30 days appearing on the "Reuters Screen CDOR Page" (as defined in the
International Swaps and Derivatives Association, Inc. definitions, as modified
and amended from time to time) at approximately 10:00 a.m. (Toronto time), on
such date, or if such date is not a Business Day, then on the immediately
preceding Business Day, provided that, if such rate does not appear on the
Reuters Screen CDOR Page as contemplated, then the CDOR Rate on any date shall
be calculated as the rate for the term referred to above applicable to C$
bankers' acceptances quoted by the Canadian Administrative Agent as of 10:00
a.m. (Toronto time) on such date or, if such date is not a Business Day, then on
the immediately preceding Business Day.
"CERCLA" shall have the meaning given such term in the definition of the
term "Environmental Law".
A "Change in Control" shall be deemed to have occurred if (a) any person or
group (within the meaning of Rule 13d-5 of the Securities Exchange Act of 1934
as in effect on the date hereof) (other than the Fund, Fund Affiliates and
members of management of the Parent Borrower holding voting stock of Holdings or
the Parent Borrower or options to acquire such stock on the Closing Date or
receiving Management Options or voting stock upon the exercise of such
Management Options after the
16
Closing Date (collectively, the "Designated Persons")) or any combination of
Designated Persons, shall own beneficially, directly or indirectly, in the
aggregate shares representing more than 25% of the aggregate ordinary voting
power represented by the issued and outstanding capital stock of the Parent
Borrower at a time when Designated Persons or any combination of Designated
Persons shall fail to own beneficially, directly or indirectly, shares
representing at least a majority of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of the Parent Borrower;
(b) the Designated Persons or any combination of Designated Persons shall fail
to own beneficially, directly or indirectly, in the aggregate shares
representing at least a majority of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of the Parent Borrower
(such majority requirement to be reduced by the percentage of such voting power
represented by the shares sold by such persons in any public offering of shares
of the Parent Borrower or by the dilution suffered by such persons in such
public offering, but in any event not to a percentage below 35%); (c) any person
or group (within the meaning of Rule 13d-5 of the Securities Exchange Act of
1934 as in effect on the date hereof), other than management of the Parent
Borrower, shall own beneficially, directly or indirectly, in the aggregate
shares representing a greater percentage of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of the Parent Borrower
than the aggregate ordinary voting power at such time represented by the issued
and outstanding capital stock of the Parent Borrower owned beneficially,
directly or indirectly, by the Fund and Fund Affiliates (excluding, for this
purpose, from the definition of Fund Affiliates management of the Parent
Borrower), provided that, a Change of Control shall be deemed to have occurred
at any time when both (i) management of the Parent Borrower shall own
beneficially, directly or indirectly, in the aggregate shares representing a
greater percentage of the aggregate ordinary voting power represented by the
issued and outstanding capital stock of the Parent Borrower than the aggregate
ordinary voting power at such time represented by the issued and outstanding
capital stock of the Parent Borrower owned beneficially, directly or indirectly,
by the Fund and Fund Affiliates (excluding, for this purpose, from the
definition of Fund Affiliates management of the Parent Borrower), and (ii) the
Fund and Fund Affiliates shall fail to own beneficially, directly or indirectly,
in the aggregate shares representing at least one-
17
half the percentage of the aggregate ordinary voting power represented by the
issued and outstanding capital stock of the Parent Borrower owned by the Fund
and Fund Affiliates (excluding, for this purpose, from the definition of Fund
Affiliates management of the Parent Borrower) on the Closing Date; (d) a
majority of the seats (excluding vacant seats) on the board of directors of the
Parent Borrower shall at any time after the Closing Date have been occupied by
persons who were neither (i) nominated by any one or more Designated Persons or
by a majority of the board of directors of the Parent Borrower, nor (ii)
appointed by directors so nominated; or (e) a change in control with respect to
the Parent Borrower (or similar event, however denominated) shall occur under
and as defined in the Senior Subordinated Indenture (so long as any Indebtedness
for borrowed money is outstanding thereunder) or in any other indenture or
agreement in respect of Indebtedness in an aggregate outstanding principal
amount in excess of $3,000,000 to which the Parent Borrower or any Subsidiary is
party. For purposes of clauses (a) and (b) of this definition, the term
"Designated Person" shall be deemed to include any other holder or holders of
shares of the Parent Borrower having ordinary voting power if the Parent
Borrower or the Fund or any Fund Affiliate shall have the power to vote (or
cause to be voted at its discretion), pursuant to contract, irrevocable proxy or
otherwise, the shares held by such holder.
"Closing Date" shall mean a single date (which shall in no event be later
than March 31, 1998) on which the initial Credit Event occurs hereunder.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"Collateral" shall mean all the "Collateral" as defined in any Security
Document and shall also include the Mortgaged Properties.
"Collateral Agent" shall have the meaning given such term in the
introductory paragraph of this Agreement.
"Commitment Fee" shall have the meaning given such term in Section 2.05(a).
18
"Commitments" shall mean, with respect to any Lender, such Lender's U.S. $
Revolving Credit Commitment, U.K. (pound) Revolving Credit Commitment, C $
Revolving Credit Commitment, Term Commitments, Swingline Loan Commitment and,
with respect to the Fronting Bank, the Revolving L/C Commitment.
"Contract Period" shall mean the term of a B/A or B/A Equivalent Note
selected by the Canadian Borrower or the Parent Borrower, as applicable, in
accordance with Section 2.21 commencing on the date of such Borrowing or any
rollover date, as applicable, of such B/A or B/A Equivalent Note (which shall be
a Business Day) and expiring on a Business Day which shall be either 30 days, 60
days, 90 days or (subject to availability from all the C $ Revolving Credit
Lenders) 180 days thereafter, provided that no Contract Period shall extend
beyond the Revolving Credit Maturity Date. Notwithstanding the foregoing,
whenever the last day of any Contract Period would otherwise occur on a day
which is not a Business Day, the last day of such Contract Period shall occur on
the next succeeding Business Day and such extension of time shall in such case
be included in computing the Acceptance Fee in respect of the relevant B/A.
"Control" shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a person,
whether through the ownership of voting securities, by contract or otherwise,
and "Controlling" and "Controlled" shall have meanings correlative thereto.
"Credit Event" shall have the meaning given such term in Article IV.
"Credit Facility" shall mean a category of Commitments and extensions of
credit thereunder. For purposes hereof, each of the following comprises a
separate Credit Facility: (a) the U.S. $ Revolving Credit Commitments, U.S. $
Revolving Credit Loans, Swingline Exposure and Revolving L/C Exposure; (b) the
U.K. (pound) Revolving Credit Commitments and U.K. (pound) Revolving Credit
Loans; (c) the C $ Revolving Credit Commitments and C $ Revolving Credit Loans;
(d) the Tranche A Term Loan Commitments and Tranche A Term Loans; (e) the
Tranche B Term Loan Commitments and Tranche B Term Loans; and (f) the Tranche C
Term Loan Commitments and Tranche C Term Loans.
19
"Current Assets" shall mean, with respect to the Parent Borrower and the
Subsidiaries on a consolidated basis at any date of determination, all assets
(other than cash and Permitted Investments or other cash equivalents) that
would, in accordance with GAAP, be classified on a consolidated balance sheet of
the Parent Borrower and the Subsidiaries as current assets at such date of
determination.
"Current Liabilities" shall mean, with respect to the Parent Borrower and
the Subsidiaries on a consolidated basis at any date of determination, all
liabilities that would, in accordance with GAAP, be classified on a consolidated
balance sheet of the Parent Borrower and the Subsidiaries as current liabilities
at such date of determination, other than (a) the current portion of long-term
debt, (b) accruals of Interest Expense (excluding Interest Expense that is due
and unpaid), (c) Revolving Credit Loans or Swingline Loans classified as
current, (d) accruals, if any, of Transaction Costs and (e) accruals of any
Restructuring Charges.
"Debt Service" shall mean, with respect to the Parent Borrower and the
Subsidiaries on a consolidated basis for any period, Interest Expense for such
period plus scheduled principal amortization of Total Debt for such period
(whether or not such payments are made).
"Default" shall mean any event or condition that upon notice, lapse of time
or both would constitute an Event of Default.
"Denomination Date" shall mean, in relation to any Alternative Currency
Borrowing, the date that is three Business Days before the date such Borrowing
is made.
"Designated Obligations" shall mean all Obligations of the Loan Parties in
respect of (a) principal of and interest on the Loans (including B/As, B/A
Equivalent Notes and Acceptance Fees with respect thereto) and (b) Fees, whether
or not the same shall at the time of any determination be due and payable under
the terms of the Loan Documents.
"Discount Proceeds" shall mean, for any B/A (or, as applicable, any B/A
Equivalent Note), an amount (rounded to the nearest whole cent, and with
one-half of one cent being rounded
20
upwards) calculated on the applicable date of the Borrowing of which such B/A or
B/A Equivalent Note is a part or any rollover date for such Borrowing by
multiplying:
(a) the face amount of the B/A (or, as applicable, the B/A Equivalent
Note); by
(b) the quotient of one divided by the sum of one plus the product of:
(i) the Discount Rate (expressed as a decimal) applicable to such B/A
(or as applicable, such B/A Equivalent Note), and
(ii) a fraction, the numerator of which is the Contract Period of the
B/A (or, as applicable, the B/A Equivalent Note) and the
denominator of which is the number of days in the applicable
calendar year,
with such quotient being rounded up or down to the fifth decimal place, and
.000005 being rounded up.
"Discount Rate" shall mean:
(a) with respect to any C $ Revolving Credit Lender that is a Schedule
I chartered bank under the Bank Act (Canada), as applicable to a B/A (or,
as applicable, a B/A Equivalent Note) being purchased by such Lender on any
day, the average (as determined by the Canadian Administrative Agent) of
the respective percentage discount rates (expressed to two decimal places
and rounded upward, if necessary, to the nearest 0.01%) quoted by the
Schedule I Reference Banks as the percentage discount rate at which the
Schedule I Reference Banks would, in accordance with their normal
practices, at or about 10:00 a.m., Toronto time, on such date, be prepared
to purchase bankers' acceptances accepted by the Schedule I Reference Banks
having a face amount and term comparable to the face amount and term of
such B/A or B/A Equivalent Note; and
(b) with respect to any C $ Revolving Credit Lender that is not a
Schedule I chartered bank under the Bank Act (Canada), as applicable to a
B/A (or, as applicable, a B/A
21
Equivalent Note) being purchased by such Lender on any day, the average (as
determined by the Canadian Administrative Agent) of the respective
percentage discount rates (expressed to two decimal places and rounded
upward, if necessary, to the nearest 0.01%) quoted by the Schedule II
Reference Banks as the percentage discount rates at which the Schedule II
Reference Banks would, in accordance with their normal practices, at or
about 10:00 a.m., Toronto time, on such date, be prepared to purchase
bankers' acceptances accepted by the Schedule II Reference Banks having a
face amount and term comparable to the face amount and term of such B/A;
provided, however, that no Discount Rate calculated pursuant to this clause
(b) shall exceed the Discount Rate calculated pursuant to clause (a) above
in respect of the same issue of Bankers' Acceptances plus 7 basis points
(0.07%) per annum.
"Dollar Equivalent" shall mean, with respect to an amount of any
Alternative Currency on any date, the amount of Dollars that may be purchased
with such amount of such Alternative Currency at the Spot Exchange Rate with
respect to such Alternative Currency on such date.
"Dollars" or "$" shall mean lawful money of the United States of America.
"Domestic" shall mean, with respect to any Subsidiary, that such Subsidiary
is (a) organized in the United States or (b) UK Newco.
"Domestic Subsidiary Guarantee Agreement" shall mean the Domestic
Subsidiary Guarantee Agreement, substantially in the form of Exhibit I-1, made
by the Domestic Subsidiary Guarantors in favor of the Collateral Agent for the
benefit of the Secured Parties.
"Domestic Subsidiary Guarantor" shall mean each Domestic Subsidiary, unless
less than 90% of the Capital Stock of such Domestic Subsidiary is owned by the
Parent Borrower and the Subsidiaries.
"EBITDA" shall mean, with respect to the Parent Borrower and the
Subsidiaries on a consolidated basis for any period, the consolidated net income
of the Parent Borrower and
22
the Subsidiaries for such period plus, to the extent deducted in computing such
consolidated net income, without duplication, the sum of (a) (i) income tax
expense or, if imposed by any relevant jurisdiction in lieu of an income tax,
franchise and/or gross receipts tax expense and (ii) withholding tax expense
incurred in connection with cross-border transactions, (b) gross Interest
Expense, (c) depreciation and amortization expense (excluding amortization of
sample book and design and engraving costs and including amortization of
cylinder bases), (d) any special charges (including any fees, expenses or
charges incurred in connection with the Recapitalization/Acquisition and related
borrowings) and any extraordinary or nonrecurring losses or charges (including
(i) stock compensation expense for the settlement of options in an amount not to
exceed $1,500,000 and (ii) for any period ending on or prior to December 31,
1999, Restructuring Charges in an aggregate amount not to exceed during 1998 and
1999 the excess of (A) $25,000,000 over (B) the amount of Restructuring Charges
for any such period that do not reduce consolidated net income of the Parent
Borrower and the Subsidiaries for 1998), (e) monitoring and management fees paid
to the Fund and/or any of its Affiliates, (f) other non-cash items reducing
consolidated net income (including any non-cash items resulting from purchase
accounting adjustments and excluding any charge which requires an accrual of a
cash reserve for anticipated cash charges for any future period) and (g)
non-cash exchange, translation or performance losses relating to any foreign
currency hedging transactions or currency fluctuations, minus, to the extent
added in computing such consolidated net income, without duplication, (i)
interest income on Permitted Investments, (ii) extraordinary or nonrecurring
gains, (iii) other non-cash items increasing consolidated net income (excluding
any items that represent the reversal of any accrual of, or cash reserve for,
anticipated cash charges in any prior period) and (iv) non-cash exchange,
translation or performance gains relating to any foreign currency hedging
transactions or currency fluctuations, provided that all effects, if any, of the
transactions forming a part of the Transactions shall be eliminated in computing
EBITDA.
"environment" shall mean ambient air, surface water and groundwater
(including potable water, navigable water and wetlands), the land surface or
subsurface strata, the workplace or as otherwise defined in any Environmental
Law.
23
"Environmental Claim" shall mean any written accusation, allegation, notice
of violation, claim, demand, order, directive, cost recovery action or other
cause of action by, or on behalf of, any Governmental Authority or any person
for damages, injunctive or equitable relief, personal injury (including
sickness, disease or death), Remedial Action costs, tangible or intangible
property damage, natural resource damages, nuisance, pollution, any adverse
effect on the environment caused by any Hazardous Material, or for fines,
penalties or restrictions, resulting from or based upon: (a) the threat, the
existence, or the continuation of the existence of a Release (including sudden
or non-sudden, accidental or non-accidental Releases); (b) exposure to any
Hazardous Material; (c) the presence, use, handling, transportation, storage,
treatment or disposal of any Hazardous Material; or (d) the violation or alleged
violation of any Environmental Law or Environmental Permit.
"Environmental Law" shall mean any and all applicable current and future
treaties, laws, rules, regulations, codes, ordinances, orders, decrees,
judgments, injunctions, notices or binding agreements issued, promulgated or
entered into by any Governmental Authority, relating in any way to the
environment, preservation or reclamation of natural resources, the treatment,
storage, disposal, Release or threatened Release of any Hazardous Material or to
human health or safety, including the Hazardous Materials Transportation Act, 49
U.S.C. xx.xx. 1801 et seq., the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. xx.xx. 9601 et
seq. ("CERCLA"), the Solid Waste Disposal Act, as amended, 42 U.S.C. xx.xx.
6901, et seq., the Federal Water Pollution Control Act, as amended, 33 U.S.C.
xx.xx. 1251 et seq., the Clean Air Act of 1970, as amended, 42 U.S.C. xx.xx.
7401 et seq., the Toxic Substances Control Act of 1976, 15 U.S.C. xx.xx. 2601 et
seq., the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C.
xx.xx. 11001 et seq., the National Environmental Policy Act of 1975, 42 U.S.C.
xx.xx. 4321 et seq., the Safe Drinking Water Act of 1974, as amended, 42 U.S.C.
xx.xx. 300(f) et seq., and any similar or implementing state, local or foreign
law, and all amendments or regulations promulgated under any of the foregoing.
"Environmental Permit" shall mean any permit, approval, authorization,
certificate, license, variance, filing or
24
permission required by or from any Governmental Authority pursuant to any
Environmental Law.
"Equity Contribution" shall have the meaning given such term in the
preamble to this Agreement.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that, together with the Parent Borrower, is treated as a single
employer under Section 414(b) or (c) of the Code, or, solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
"Eurodollar Borrowing" shall mean a Borrowing comprised of Eurodollar
Loans.
"Eurodollar Loan" shall mean any Eurodollar Term Loan or Eurodollar
Revolving Credit Loan.
"Eurodollar Revolving Credit Loan" shall mean any Revolving Credit Loan
bearing interest at a rate determined by reference to the Adjusted LIBO Rate in
accordance with the provisions of Article II.
"Eurodollar Term Borrowing" shall mean a Borrowing comprised of Eurodollar
Term Loans.
"Eurodollar Term Loan" shall mean any Term Loan bearing interest at a rate
determined by reference to the Adjusted LIBO Rate in accordance with the
provisions of Article II.
"Event of Default" shall have the meaning given such term in Article VII.
"Excess Cash Flow" shall mean, with respect to the Parent Borrower and the
Subsidiaries on a consolidated basis for any fiscal year, EBITDA of the Parent
Borrower and the Subsidiaries on a consolidated basis for such fiscal year,
minus, without duplication, (a) Debt Service for such fiscal year, (b) permitted
Capital Expenditures by the Parent Borrower and the
25
Subsidiaries on a consolidated basis during such fiscal year that are paid in
cash and, to the extent not included in Capital Expenditures, the aggregate
consideration paid in cash during such fiscal year in respect of Permitted
Business Acquisitions (in each case except to the extent made using Excess Cash
Flow from any prior fiscal year available for such purpose under Section
6.04(l)), (c) Capital Expenditures that the Parent Borrower or any Subsidiary
shall, during such fiscal year, become obligated to make but that are not made
during such fiscal year, provided that the Parent Borrower shall deliver a
certificate to the U.S. Administrative Agent not later than 90 days after the
end of such fiscal year of the Parent Borrower, signed by a Responsible Officer
of the Parent Borrower and certifying that such Capital Expenditures and the
delivery of the related equipment or other asset will be made in the following
fiscal year, (d) taxes and Restructuring Charges paid in cash by any of the
Parent Borrower and the Subsidiaries during such fiscal year, or which are
payable or will be paid within six months after the close of such fiscal year
and for which reserves have been established, including income tax expense or,
if imposed by any relevant jurisdiction in lieu of an income tax, franchise
and/or gross receipts tax expense and withholding tax expense incurred in
connection with cross-border transactions (other than in connection with any
transaction that is part of the Transactions), (e) an amount equal to any
increase in Working Capital of the Parent Borrower and the Subsidiaries for such
fiscal year, (f) to the extent not deducted in determining EBITDA, monitoring
and management fees paid to the Fund and/or any of its Affiliates during such
fiscal year, (g) cash expenditures made in respect of Interest/Exchange Rate
Protection Agreements during such fiscal year, to the extent not reflected in
the computation of EBITDA or Interest Expense, (h) permitted dividends or
repurchases of its Capital Stock paid in cash by the Parent Borrower during such
fiscal year and permitted dividends paid by any Subsidiary to any person other
than the Parent Borrower or any of the other Subsidiaries during such fiscal
year, in each case in accordance with Section 6.06, (i) amounts paid in cash
during such fiscal year on account of items that were accounted for as non-cash
reductions of consolidated net income of the Parent Borrower and the
Subsidiaries in the current or a prior period, (j) special charges or any
extraordinary or nonrecurring losses paid in cash during such fiscal year, (k)
to the extent not deducted in the computation of Net Proceeds in respect of any
asset disposition or condemnation giving rise
26
thereto, mandatory prepayments of Indebtedness (other than Indebtedness created
hereunder or under any other Loan Document), (l) to the extent included in
determining EBITDA, all items that did not result from a cash payment to the
Parent Borrower and the Subsidiaries on a consolidated basis during such fiscal
year, (m) the amount of cash payments made by the Parent Borrower and the
Subsidiaries in respect of purchase price adjustments in connection with the
Recapitalization or the Imperial Acquisition and (n) the amount, if any, by
which the consolidated deferred revenues of the Parent Borrower and the
Subsidiaries decreased during such fiscal year plus, without duplication, (i) an
amount equal to any decrease in Working Capital for such fiscal year, (ii) all
cash proceeds received during such fiscal year of Capital Lease Obligations,
purchase money Indebtedness, Sale and Lease-Back Transactions pursuant to
Section 6.03(a) and any other Indebtedness, in each case to the extent used to
finance any Capital Expenditure (other than Indebtedness under this Agreement to
the extent there is no corresponding deduction to Excess Cash Flow above in
respect of the use of such Borrowings) and all cash proceeds received during
such fiscal year of Sale and Lease-Back Transactions pursuant to Section
6.03(b), (iii) all amounts referred to in (b) above to the extent funded with
(x) the cash proceeds of the issuance of Capital Stock of the Parent Borrower
after the Closing Date (to the extent not previously used to prepay Indebtedness
(other than Revolving Credit Loans or Swingline Loans), make any investment or
capital expenditure or otherwise for any purpose resulting in a deduction to
Excess Cash Flow in any fiscal year, (y) any amount that would have constituted
Net Proceeds under clause (a) of the definition of the term "Net Proceeds" if
not so spent or (z) the portion of the Excess Xxxxxx Proceeds not required to be
applied to prepay Term Loans pursuant to Section 2.12(e), in each case to the
extent there is a corresponding deduction to Excess Cash Flow above, (iv) to the
extent any permitted Capital Expenditures and the corresponding delivery of
equipment or other asset referred to in clause (c) above do not occur in the
fiscal year of the Parent Borrower specified in the certificate of the Parent
Borrower provided pursuant to clause (c) above, such amounts of Capital
Expenditures that were not so made in the fiscal year of the Parent Borrower
specified in such certificate, (v) cash payments received in respect of
Interest/Exchange Rate Protection Agreements during such fiscal year to the
extent not (A) included in the computation of EBITDA or (B) reducing Interest
Expense, (vi) any extraordinary or nonrecurring gain realized in cash
27
during such fiscal year (except to the extent such gain is subject to Section
2.12(c)), (vii) to the extent deducted in the computation of EBITDA, interest
income, (viii) to the extent subtracted in determining EBITDA, all items that
did not result from a cash payment by the Parent Borrower and the Subsidiaries
on a consolidated basis during such fiscal year and (ix) the amount, if any, by
which the consolidated deferred revenues of the Parent Borrower and the
Subsidiaries increased during such fiscal year.
"Excess Xxxxxx Proceeds" shall mean the net cash proceeds (net of any
applicable fees, taxes and expenses described as permitted deductions from cash
proceeds in the definition of the term "Net Proceeds") in excess of $30,000,000
received by the Parent Borrower or any Subsidiary in respect of any sale or
disposition of the Capital Stock or assets of Xxxxxx (including any net cash
proceeds resulting from the realization of cash in respect of any non-cash
consideration received by the Parent Borrower or any Subsidiary) made pursuant
to Section 6.05(h).
"Existing Indebtedness" shall mean the Indebtedness of the Parent Borrower
and the Subsidiaries in existence immediately prior to the
Recapitalization/Acquisition in an aggregate principal amount not to exceed
$1,000,000.
"Facility Fee" shall have the meaning given such term in Section 2.05(a).
"Federal Funds Effective Rate" shall mean, for any day, the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the average
of the quotations for the day of such transactions received by the U.S.
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.
"Fees" shall mean the Commitment Fees, the Facility Fees, the L/C
Participation Fees, the Fronting Bank Fees and the U.S. Administrative Agent
Fees.
28
"Financial Officer" of any person shall mean the chief financial officer,
principal accounting officer, Treasurer, Assistant Treasurer or Controller of
such person.
"Fronting Bank" shall mean Chase Manhattan Bank Delaware or any Affiliate
thereof.
"Fronting Bank Fees" shall have the meaning given to such term in Section
2.05(b).
"Fund" shall mean Blackstone Capital Partners III Merchant Banking Fund
L.P., a Delaware limited partnership.
"Fund Affiliates" shall mean each Affiliate of the Fund that is not an
operating company or Controlled by an operating company and each general partner
of the Fund or any Fund Affiliate who is a partner or employee of The Blackstone
Group L.P.
"GAAP" shall mean generally accepted accounting principles in effect from
time to time in the United States applied on a consistent basis, except as set
forth on Schedule D.
"Gallery Concept Roll-out" shall mean, with respect to any individual
store, investments constituting Capital Expenditures in property and leasehold
improvements and other improvements to property made in respect of such store in
order to showcase a selection of collection books and in-stock residential
wallcoverings products using a dedicated space within such store.
"Governmental Authority" shall mean any Federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory body or,
in the case of references to "Governmental Authority" in Article II and Sections
10.04 and 10.17, the National Association of Insurance Commissioners.
"Guarantee" of or by any person shall mean (a) any obligation, contingent
or otherwise, of such person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other person (the "primary obligor") in any
manner, whether directly or indirectly, and including any obligation of such
person, direct or indirect, (i) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness
29
(whether arising by virtue of partnership arrangements, by agreement to keep
well, to purchase assets, goods, securities or services, to take-or-pay or
otherwise) or to purchase (or to advance or supply funds for the purchase of)
any security for the payment of such Indebtedness, (ii) to purchase or lease
property, securities or services for the purpose of assuring the owner of such
Indebtedness of the payment of such Indebtedness, (iii) to maintain working
capital, equity capital or any other financial statement condition or liquidity
of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or (iv) entered into for the purpose of assuring in any other
manner the holders of such Indebtedness of the payment thereof or to protect
such holders against loss in respect thereof (in whole or in part), or (b) any
Lien on any assets of such person securing any Indebtedness of any other person,
whether or not such Indebtedness is assumed by such person; provided, however,
that the term "Guarantee" shall not include endorsements for collection or
deposit, in either case in the ordinary course of business, or customary and
reasonable indemnity obligations in effect on the Closing Date or entered into
in connection with any acquisition or disposition of assets permitted under this
Agreement.
"Guarantee Agreements" shall mean the Domestic Subsidiary Guarantee
Agreement, the U.K. Subsidiary Guarantee, the UK Newco Guarantee, the Parent
Borrower Guarantee Agreement and the Canadian Subsidiary Guarantee Agreement.
"Guarantors" shall mean the Domestic Subsidiary Guarantors, the U.K.
Subsidiary Guarantors, the Canadian Subsidiary Guarantors and the Parent
Borrower.
"Hazardous Materials" shall mean any material meeting the definition of a
"hazardous substance" in CERCLA 42 U.S.C. ss.9601(14) and all explosive or
radioactive substances or wastes; hazardous or toxic substances or wastes;
pollutants; solid, liquid or gaseous wastes, including petroleum, petroleum
distillates or fractions or residues, asbestos or asbestos containing materials,
polychlorinated biphenyls ("PCBs") or materials or equipment containing PCBs in
excess of 50 parts per million (ppm), radon gas, infectious or medical wastes,
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law, or that reasonably could form the basis of an Environmental
Claim.
30
"Holdings" shall have the meaning given such term in the preamble to this
Agreement.
"IHC" shall have the meaning given such term in the preamble to this
Agreement.
"IHC Note" shall have the meaning given such Term in the preamble to this
Agreement.
"Imperial Acquisition" shall have the meaning given such term in the
preamble to this Agreement.
"Imperial Consideration" shall have the meaning given such term in the
preamble to this Agreement.
"Imperial Merger" shall have the meaning given such term in the preamble to
this Agreement.
"Inactive U.K. Subsidiary" means any Subsidiary organized under the laws of
England and Wales that (a) has total assets not in excess of the lesser of (i)
(pound)20,000 and (ii) the minimum capital such Subsidiary is required to
maintain by applicable law, (b) has no Indebtedness and (c) conducts no
business.
"Indebtedness" of any person shall mean, without duplication, (a) all
obligations of such person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such person
upon which interest charges are customarily paid (other than trade payables
incurred in the ordinary course of business), (d) all obligations of such person
under conditional sale or other title retention agreements relating to property
or assets purchased by such person, (e) all obligations of such person issued or
assumed as the deferred purchase price of property or services (other than
current trade liabilities incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such person, whether or not the obligations
secured thereby have been assumed, (g) all Guarantees by such person of
Indebtedness of others, (h) all Capital Lease Obligations of such person, (i)
all
31
payments that such person would have to make in the event of an early
termination, on the date Indebtedness of such person is being determined, in
respect of outstanding interest rate protection agreements, foreign currency
exchange agreements or other interest or exchange rate hedging arrangements and
(j) all obligations of such person as an account party in respect of letters of
credit and bankers' acceptances. The Indebtedness of any person shall include
the Indebtedness of any partnership in which such person is a general partner,
other than to the extent that the instrument or agreement evidencing such
Indebtedness expressly limits the liability of such person in respect thereof,
provided that, if the sole asset of such person is its general partnership
interest in such partnership, the amount of such Indebtedness shall be deemed
equal to the value of such general partnership interest and the amount of any
Indebtedness in respect of any Guarantee of such partnership Indebtedness shall
be limited to the same extent as such Guarantee may be limited.
"Indemnity, Subrogation and Contribution Agreement" shall mean the
Indemnity, Subrogation and Contribution Agreement, substantially in the form of
Exhibit D, among the Parent Borrower, the Domestic Subsidiary Guarantors and the
Collateral Agent.
"Indenture Trustee" shall mean The Bank of New York, in its capacity as
trustee for the Senior Subordinated Note Holders.
"Information Memorandum" shall have the meaning given such term in Section
3.15.
"Installment Date" shall have the meaning given such term in Section 2.11.
"Intellectual Property Security Agreement" shall mean the Intellectual
Property Security Agreement, substantially in the form of Exhibit E, among the
Parent Borrower and certain Subsidiaries and the Collateral Agent for the
benefit of the Secured Parties.
"Interest Coverage Ratio" shall have the meaning given such term in Section
6.11.
"Interest/Exchange Rate Protection Agreement" shall mean any interest rate
or currency hedging agreement or
32
arrangement approved by the U.S. Administrative Agent (such approval not to be
unreasonably withheld) entered into by the Parent Borrower or a Subsidiary and
designed to protect the Parent Borrower or such Subsidiary against fluctuations
in interest rates or currency exchange rates. Notwithstanding the foregoing, the
approval of the U.S. Administrative Agent shall not be required with respect to
any interest rate hedging agreement or arrangement or currency hedging agreement
or arrangement not required pursuant to Section 5.14 and entered into in the
ordinary course of business and not for speculative purposes.
"Interest Expense" shall mean, with respect to the Parent Borrower and the
Subsidiaries on a consolidated basis for any period, the sum of (a) gross
interest expense of the Parent Borrower and the Subsidiaries for such period on
a consolidated basis, including (i) the amortization of debt discounts, (ii) the
amortization of all fees (including fees with respect to interest or exchange
rate protection agreements) payable in connection with the incurrence of
Indebtedness to the extent included in interest expense and (iii) the portion of
any payments or accruals with respect to Capital Lease Obligations allocable to
interest expense and (b) capitalized interest of the Parent Borrower and the
Subsidiaries on a consolidated basis. For purposes of the foregoing, gross
interest expense shall be determined after giving effect to any net payments
made or received by the Parent Borrower and the Subsidiaries with respect to
interest or exchange rate protection agreements.
"Interest Payment Date" shall mean, (a) with respect to any Eurodollar
Loan, the last day of the Interest Period applicable to the Borrowing of which
such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest
Period of more than three months' duration, each day that would have been an
Interest Payment Date had successive Interest Periods of three months' duration
been applicable to such Borrowing, and, in addition, the date of any refinancing
or conversion of such Borrowing with or to a Borrowing of a different Type, (b)
with respect to any ABR Loan, the last day of each calendar quarter and (c) with
respect to any Canadian Prime Rate Loan, the last day of each calendar month.
"Interest Period" shall mean as to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing or
33
on the last day of the immediately preceding Interest Period applicable to such
Borrowing, as the case may be, and ending on the numerically corresponding day
(or, if there is no numerically corresponding day, on the last day) in the
calendar month that is 1, 2, 3 or 6 months thereafter (or 9 or 12 months, if at
the time of the relevant Borrowing, all U.S. $ Revolving Credit Lenders (or all
C $ Revolving Credit Lenders or U.K. (pound) Revolving Credit Lenders, as
applicable) make interest periods of such length available), as the applicable
Borrower may elect; provided, however, that if any Interest Period would end on
a day other than a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless such next succeeding Business Day would fall
in the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day. Interest shall accrue from and including the first
day of an Interest Period to but excluding the last day of such Interest Period.
"Investment" shall have the meaning given such term in Section 6.04.
"Investors" shall have the meaning given such term in the preamble to this
Agreement.
"L/C Disbursement" shall mean a payment or disbursement made by the
Fronting Bank pursuant to a Letter of Credit.
"L/C Participation Fee" shall have the meaning given such term in Section
2.05(b).
"Leasehold Mortgage" shall mean any Mortgage that is a leasehold or
subleasehold mortgage.
"Lenders" shall have the meaning given such term in the introductory
paragraph of this Agreement. Unless the context otherwise requires, the term
"Lenders" includes the Swingline Lender.
"Letter of Credit" shall mean any letter of credit issued pursuant to this
Agreement.
"Leverage Ratio" shall mean, (a) on September 30, 1998, the ratio of (i)
Total Debt as of such date to (ii) the product of (A) EBITDA for the two quarter
period ended as of such date
34
and (B) two, (b) on December 31, 1998, the ratio of (i) Total Debt as of such
date to (ii) the product of (A) EBITDA for the three quarter period ended as of
such date and (B) 4/3 and (c) on any date after December 31, 1998, the ratio of
(a) Total Debt as of such date to (b) EBITDA for the period of four consecutive
fiscal quarters of the Parent Borrower most recently ended as of such date, all
determined on a consolidated basis in accordance with GAAP.
"LIBO Rate" shall mean, with respect to any Eurodollar Borrowing for any
Interest Period, the rate (rounded upwards, if necessary, to the next 1/16 of
1%) at which deposits in the currency in which such Borrowing is denominated
approximately equal in principal amount to the U.S. Administrative Agent's
portion of such Eurodollar Borrowing (or, if the U.S. Administrative Agent is
not a Lender in respect of such Borrowing, then the portion of such Borrowing of
the Lender with the largest Loan included in such Borrowing amount) and for a
maturity comparable to such Interest Period are offered to the principal London
office of the U.S. Administrative Agent or such Lender in immediately available
funds in the London interbank market at approximately 11:00 a.m., London time,
two Business Days prior to the commencement of such Interest Period.
"LIBOR Margin" shall mean, for any day, with respect to any Eurodollar
Borrowing, the applicable LIBOR Margin set forth in Schedule A under the caption
"Revolving Credit Loans and Tranche A LIBOR Margin and L/C Participation Fee",
"Tranche B LIBOR Margin" or "Tranche C LIBOR Margin", as applicable, based upon
the Leverage Ratio in effect as of such day, as set forth in Schedule A;
provided, however, that the LIBOR Margin for any Eurodollar Borrowing that is a
C $ Revolving Credit Borrowing or a U.K. (pound) Revolving Credit Borrowing
shall be such applicable LIBOR Margin set forth on Schedule A, minus the
Facility Fee in effect at such time.
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any
35
purchase option, call or similar right of a third party with respect to such
securities.
"Loan Documents" shall mean this Agreement, the Letters of Credit, the
Guarantee Agreements, the Security Documents and the Indemnity, Subrogation and
Contribution Agreement.
"Loan Parties" shall mean Holdings, the Borrowers and the Guarantors.
"Loans" shall mean the Revolving Credit Loans, the Term Loans and the
Swingline Loans.
"Majority Lenders" shall mean, with respect to any Credit Facility on any
date, Lenders having Loans and unused Commitments representing more than 50% of
the sum of all Loans and unused Commitments under such Credit Facility on such
date. For purposes of determining the Majority Lenders, any amounts denominated
in an Alternative Currency shall be translated into Dollars at the Spot Exchange
Rates in effect on the Closing Date.
"Management Options" shall mean the options on the common stock of the
Parent Borrower issued to officers of the Parent Borrower and the Subsidiaries,
which options in the aggregate shall not at any time represent more than 12.0%
of the issued and outstanding Capital Stock of the Parent Borrower on a fully
diluted basis.
"Margin Stock" shall have the meaning given such term in Regulation U.
"Material Adverse Effect" shall mean (a) a materially adverse effect on the
assets, business, properties, financial condition or results of operations of
the Parent Borrower and its subsidiaries, the Sunworthy business, Imperial
Wallcoverings (Canada) Inc. and Imperial Wallcoverings, Inc. and its
subsidiaries, taken as a whole, (b) a material impairment of the ability of the
Parent Borrower or any Subsidiary to perform any of its material obligations
under any Loan Document to which it is or will be a party or to consummate the
Transactions or (c) an impairment of the validity or enforceability of, or a
material impairment of the material rights, remedies or benefits available to
the Lenders, the Fronting Bank, the U.S. Administrative Agent or the Collateral
Agent under, any Loan Document.
36
"Merger" shall have the meaning given such term in the preamble to this
Agreement.
"MergerCo" shall have the meaning given such term in the preamble to this
Agreement.
"Mortgaged Properties" shall mean the owned real properties and leasehold
interests of the Loan Parties specified on Schedule 3.20 that are expressly
designated "Mortgaged Properties".
"Mortgages" shall mean the mortgages, deeds of trust, leasehold mortgages,
assignments of leases and rents, modifications and other security documents
delivered pursuant to clause (i) of Section 4.02(i) or pursuant to Section 5.11,
each (except in the case of any Leasehold Mortgage) substantially in the form of
Exhibit F.
"Multiemployer Plan" shall mean a multiemployer plan as defined in Section
4001(a)(3) of ERISA to which the Parent Borrower or any ERISA Affiliate (other
than one considered an ERISA Affiliate only pursuant to subsection (m) or (o) of
Code Section 414) is making or accruing an obligation to make contributions, or
has within any of the preceding five plan years made or accrued an obligation to
make contributions.
"Net Proceeds" shall mean (a) 100% of the cash proceeds actually received
by the Parent Borrower or any Subsidiary (including any cash payments received
by way of deferred payment of principal pursuant to a note or installment
receivable or purchase price adjustment receivable or otherwise and including
casualty insurance settlements and condemnation awards, but only as and when
received), net of (i) attorneys' fees, accountants' fees, investment banking
fees, survey costs, title insurance premiums, and related search and recording
charges, transfer taxes, deed or mortgage recording taxes, required debt
payments (other than pursuant hereto), other customary expenses and brokerage,
consultant and other customary fees actually incurred in connection therewith
and (ii) taxes paid or payable as a result thereof (including withholding taxes
incurred in connection with cross-border transactions, if applicable, and
including taxes estimated by the Parent Borrower to be payable as a result
thereof or as a result of such transactions), from any
37
loss, damage, destruction or condemnation of, or any sale, transfer or other
disposition (including any sale and leaseback of assets and any mortgage or
lease of real property) to any person of any asset or assets of the Parent
Borrower or any Subsidiary (other than those pursuant to Sections 6.03, 6.05(a),
6.05(b), 6.05(e) and 6.05(h) (to the extent any such proceeds constitute Excess
Xxxxxx Proceeds) or any other financing subject to clause (ii) of the definition
of the term "Excess Cash Flow"), provided that if the Parent Borrower shall
deliver a certificate of a Responsible Officer to the U.S. Administrative Agent
promptly following receipt of any such proceeds (other than any such proceeds
received in connection with the sale of all or substantially all of the assets
or the Capital Stock of Xxxxxx pursuant to Section 6.05(h)) setting forth the
Parent Borrower's intention to use any portion of such proceeds to purchase
assets useful in the business of the Parent Borrower and the Subsidiaries within
12 months of such receipt, such portion of such proceeds shall not constitute
Net Proceeds except to the extent not so used within such 12-month period, and
provided further that (x) no proceeds realized in a single transaction or series
of related transactions shall constitute Net Proceeds unless such proceeds shall
exceed $500,000 and (y) no such proceeds shall constitute Net Proceeds in any
fiscal year until the aggregate amount of all such proceeds in such fiscal year
shall exceed $1,000,000 or the aggregate of all such proceeds received after the
Closing Date shall exceed $2,000,000 and (b) 100% of the cash proceeds from the
incurrence, issuance or sale by the Parent Borrower or any Subsidiary of any
Indebtedness (other than Indebtedness permitted pursuant to Section 6.01), net
of all taxes (including withholding taxes incurred in connection with
cross-border transactions, if applicable, and including taxes estimated by the
Parent Borrower to be payable as a result thereof or as a result of such
transactions) and fees (including investment banking fees), commissions, costs
and other expenses incurred in connection with such issuance or sale. For
purposes of calculating the amount of Net Proceeds, fees, commissions and other
costs and expenses payable to the Parent Borrower or any Affiliate of the Parent
Borrower shall be disregarded, except for financial advisory fees customary in
type and amount paid to Affiliates of The Blackstone Group L.P.
"Notes" shall mean any promissory note of any Borrower issued pursuant to
this Agreement.
38
"Obligation Currency" shall have the meaning specified in Section 10.16.
"Obligations" shall mean all obligations defined as "Obligations" in the
Guarantee Agreements and the Security Documents.
"Offering Memorandum" shall mean the Offering Memorandum dated March 11,
1998, relating to the Senior Subordinated Notes, as amended, supplemented or
otherwise modified from time to time, subject to the prior written consent of
all the Lenders in the case of any amendment, supplement or other modification
in any manner adverse to the Lenders.
"Parent Borrower" shall have the meaning given such term in the preamble to
this Agreement.
"Parent Borrower Guarantee Agreement" shall mean the Parent Borrower
Guarantee Agreement, substantially in the form of Exhibit I-5, made by the
Parent Borrower in favor of the Collateral Agent for the benefit of the Secured
Parties.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA.
"Permitted Business Acquisition" shall mean any acquisition as a going
concern of all or substantially all the assets of, or shares or other equity
interests in, a person or division or line of business of a person (or any
subsequent investment made in a previously acquired Permitted Business
Acquisition) if immediately after giving effect thereto: (a) no Default or Event
of Default shall have occurred and be continuing or would result therefrom, (b)
all transactions related thereto shall be consummated in accordance with
applicable laws, (c) at least 90% of the Capital Stock of any acquired or newly
formed corporation, partnership, association or other business entity are owned
directly by the Parent Borrower or a Domestic Wholly Owned Subsidiary (other
than UK Newco) (unless there is a material tax or legal or other economic
disadvantage in not having a non-Domestic Subsidiary or UK Newco hold such
Capital Stock, in which case such Capital Stock may be held directly by a
non-Domestic Subsidiary or UK Newco) and all actions required to be taken, if
any, with respect to such acquired or newly formed subsidiary under Section 5.11
shall have been taken and (d)(i) the Parent Borrower and the Subsidiaries shall
be in
39
compliance, on a pro forma basis after giving effect to such acquisition or
formation, with the covenants contained in Sections 6.11 and 6.12 recomputed as
at the last day of the most recently ended fiscal quarter of the Parent Borrower
and the Subsidiaries as if such acquisition had occurred on the first day of
each relevant period for testing such compliance, and the Parent Borrower shall
have delivered to the U.S. Administrative Agent an officers' certificate to such
effect, together with all relevant financial information for such subsidiary or
assets, and (ii) any acquired or newly formed subsidiary shall not be liable for
any Indebtedness (except for Indebtedness permitted by Section 6.01). Pro forma
calculations made pursuant to clause (d)(i) of the immediately preceding
sentence may include adjustments (a) to reflect operating expense reductions
reasonably expected to result during the 12-month period following the date of
the applicable acquisition from any acquisition that occurred during the
relevant period for testing compliance or (b) to eliminate the effect of any
extraordinary accounting event with respect to any acquired person or assets on
EBITDA, in each case as determined reasonably and in good faith by the Chief
Financial Officer of the Parent Borrower and approved by the Board of Directors
of the Parent Borrower, as set forth in an officer's certificate delivered to
the U.S. Administrative Agent.
"Permitted Foreign Transfer" shall mean (a) the transfer (other than the
Sunworthy Transfer) by means of Indebtedness, investment or otherwise (provided
that each transfer of cash shall be made by means of intercompany Indebtedness
(which shall be pledged to the extent required under the Pledge Agreement if, in
the reasonable judgment of the senior management of the Parent Borrower, no
material tax disadvantage to the Parent Borrower or any Subsidiary shall result
therefrom) unless, in the reasonable judgment of the senior management of the
Parent Borrower, there is a material tax or other material economic or legal
disadvantage to the Parent Borrower or any Subsidiary in structuring the
transfer as Indebtedness instead of as an equity investment, it being agreed by
the parties hereto that such a material tax disadvantage would result from the
transfer, directly or indirectly, of cash by UK Newco to any of its direct or
indirect subsidiaries by means of intercompany Indebtedness) from the Parent
Borrower or any Domestic Subsidiary to any non-Domestic Wholly Owned Subsidiary
organized under the laws of the United Kingdom or Canada, of (i) inventory and
equipment in the ordinary course of business consistent with past practice; and
(ii) cash in an aggregate net amount (giving effect to, without duplication, all
returns of cash to the Parent Borrower or any
40
Domestic Subsidiary (other than UK Newco) by way of dividends, capital
distributions, repurchase of equity interests, payments in respect of
reimbursements of drawings under Letters of Credit or repayment of principal of
any intercompany Indebtedness created pursuant thereto, in each case to the
extent permitted by the terms of this Agreement) not to exceed (A) $40,000,000
minus (B) the Foreign L/C Investment Amount (as defined below) at the time to
fund (x) working capital needs and capital expenditures, in each case in the
ordinary course of business consistent with the respective past practices of
Xxxxxx or C&A, and (y) debt service on Indebtedness permitted under this
Agreement paid in the ordinary course of business, and, in the case of any
transaction under clause (x) or clause (y), solely to the extent internally
generated funds and funds available as U.K. (pound) Revolving Credit Borrowings
or C $ Revolving Credit Borrowings, as applicable, of the applicable transferee
and permitted to be applied for such purposes are insufficient for such purposes
and the Parent Borrower shall have delivered to the U.S. Administrative Agent a
certificate to such effect and (b) the issuance for the account of the Parent
Borrower of Letters of Credit in support of working capital needs of
non-Domestic Wholly Owned Subsidiaries organized under the laws of the United
Kingdom or Canada in the ordinary course of business, and the reimbursement by
the Parent Borrower (including by means of Revolving Credit Borrowings) of
disbursements made by the Fronting Bank in respect of such Letters of Credit,
provided that the aggregate amount (the "Foreign L/C Investment Amount") of
reimbursement payments (including by means of Revolving Credit Borrowings) in
respect of such Letters of Credit made by the Parent Borrower to the Fronting
Bank at or prior to such time that have not been reimbursed by the applicable
non-Domestic Subsidiary in cash within three Business Days after the date on
which the Parent Borrower made the applicable reimbursement payments (net,
without duplication of reductions in the net amount referred to in clause
(a)(ii) above, of returns of cash referred to in the parenthetical to clause
(a)(ii) above) shall not exceed (A) $40,000,000 minus (B) the aggregate net
amount of transfers made pursuant to clause (a) above.
"Permitted Investments" shall mean: (a) with respect to investments
denominated in Dollars, (i) direct obligations of the United States of America
or any agency thereof or obligations guaranteed by the United States of America
or any agency thereof; (ii) time deposit accounts, certificates of deposit and
money market deposits maturing within 180 days of the date of acquisition
thereof issued by a bank or trust company which is organized under the laws of
the United States of America, Canada,
41
any state or province thereof or any foreign country recognized by the United
States of America or Canada having capital, surplus and undivided profits
aggregating in excess of $250,000,000 (or the foreign currency equivalent
thereof) and whose long-term debt, or whose parent holding company's long-term
debt, is rated A (or such similar equivalent rating or higher by at least one
nationally recognized statistical rating organization (as defined in Rule 436
under the Securities Act of 1933, as amended)); (iii) repurchase obligations
with a term of not more than 30 days for underlying securities of the types
described in clause (i) above entered into with a bank meeting the
qualifications described in clause (ii) above; (iv) commercial paper, maturing
not more than 180 days after the date of acquisition, issued by a corporation
(other than an Affiliate of any Borrower) organized and in existence under the
laws of the United States of America, Canada or any foreign country recognized
by the United States of America or Canada with a rating at the time as of which
any investment therein is made of P-1 (or higher) according to Xxxxx'x Investors
Service, Inc., or A-1 (or higher) according to Standard & Poor's Ratings Group;
(v) securities with maturities of six months or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States of America, or by any political subdivision or taxing
authority thereof, and rated at least A by Standard & Poor's Ratings Group or A
by Xxxxx'x Investors Service, Inc.; (vi) in the case of any Subsidiary organized
in a jurisdiction outside the United States: (A) direct obligations of the
sovereign nation (or any agency thereof) in which such Subsidiary is organized
and is conducting business or in obligations fully and unconditionally
guaranteed by such sovereign nation (or any agency thereof), (B) investments of
the type and maturity described in clauses (i) through (v) above of foreign
obligors, which investments or obligors (or the parents of such obligors) have
ratings described in such clauses or equivalent ratings from comparable foreign
rating agencies or (C) investments of the type and maturity described in clauses
(i) through (v) above of foreign obligors (or the parents of such obligors),
which investments or obligors (or the parents of such obligors) are not rated as
provided in such clauses or in clause (B) above but which are, in the reasonable
judgment of the Parent Borrower, comparable in investment quality to such
investments and obligors (or the parents of such obligors), provided that the
aggregate face amount outstanding at any time of such investments of all
non-Domestic Subsidiaries made pursuant to clause (C) does not exceed
$5,000,000; (viii) shares of mutual funds whose investment guidelines restrict
such funds' investments to those satisfying the provisions of clauses (i)
through (v) above; and (ix) time
42
deposit accounts, certificates of deposit and money market deposits in an
aggregate face amount not in excess of 1/2 of 1% of total assets of the Parent
Borrower and the Subsidiaries, on a consolidated basis, as of the end of the
Parent Borrower's most recently completed fiscal year; and
(b) with respect to investments denominated in Canadian Dollars, (i) direct
obligations of Canada or any agency thereof or obligations guaranteed by Canada
or any agency thereof; (ii) time deposit accounts, certificates of deposit and
money market deposits maturing within 180 days of the date of acquisition
thereof issued by (A) any bank described in clause (a)(ii) above, (B) any bank
listed under Schedule I to the Bank Act (Canada) or (C) any other bank which is
organized under the laws of Canada or any province thereof whose long-term debt,
or whose parent holding company's long-term debt, is rated at least A by
Canadian Bond Rating Service, Inc. and the Dominion Bond Rating Service Limited;
and (iii) commercial paper, maturing not more than 180 days after the date of
acquisition, issued by a corporation (other than an Affiliate of any Loan Party)
organized and in existence under the laws of the United States of America,
Canada, any state or province thereof or any foreign country recognized by the
United States of America or Canada with a rating at the time as of which an
investment therein is made of A1 (or higher) according to Canadian Bond Rating
Service, Inc. and R1 (high) according to Dominion Bond Rating Service Limited.
"person" shall mean any natural person, corporation, business trust, joint
venture, association, company, partnership, limited liability company or
government, or any agency or political subdivision thereof.
"Plan" shall mean any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code and in respect of which the Parent Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Pledge Agreement" shall mean the Pledge Agreement, substantially in the
form of Exhibit G-1, among Holdings, the Parent Borrower, certain Subsidiaries
and the Collateral Agent for the benefit of the Secured Parties.
"Pledge Agreements" shall mean the Pledge Agreement, the Canadian Pledge
Agreement, the UK Newco Pledge Agreement and the U.K. Borrower Pledge Agreement.
43
"Prime Rate" shall mean (a) in respect of ABR Loans provided by the U.S. $
Revolving Credit Lenders, the rate of interest per annum publicly announced from
time to time by the U.S. Administrative Agent as its prime rate in effect at its
principal office in New York City and (b) in respect of ABR Loans provided by C
$ Revolving Credit Lenders, the rate per annum announced from time to time by
the Canadian Administrative Agent as its U.S. base rate in effect at its office
in Toronto for determining interest rates on Dollar denominated commercial loans
in Canada; each change in the Prime Rate shall be effective on the date such
change is publicly announced as being effective.
"Product Development Costs" shall mean costs incurred for sample books,
studio strike offs, design acquisition and development, printing cylinders,
engraving and analogous items.
"Properties" shall have the meaning given such term in Section 3.17(a).
"Recapitalization" shall have the meaning given such term in the preamble
to this Agreement.
"Recapitalization/Acquisition" shall have the meaning given such term in
the preamble to this Agreement.
"Recapitalization Agreement" shall mean the Recapitalization Agreement
dated as of October 14, 1997, among Xxxxxx, Xxxxxx Decorative Products Holdings,
Inc. and MergerCo.
"Recapitalization Consideration" shall have the meaning given such term in
the preamble to this Agreement.
"Refinancing Note Indenture" shall mean one or more indentures pursuant to
which the Refinancing Notes are issued.
"Refinancing Notes" shall mean one or more series of subordinated
debentures or notes issued by the Parent Borrower, the Net Proceeds of which are
used by the Parent Borrower to redeem Senior Subordinated Exchange Notes or
Senior Subordinated Notes.
"Register" shall have the meaning given such term in Section 10.04(d).
44
"Regulation G" shall mean Regulation G of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Regulation U" shall mean Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Regulation X" shall mean Regulation X of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Related Claims" shall mean (a) in respect of any Borrower, all obligations
of such Borrower in respect of any Loans and L/C Disbursements that comprise a
single Credit Facility and are denominated in the same currency and (b) in
respect of any other Loan Party, all obligations of such Loan Party in respect
of any Loans and L/C Disbursements that are denominated in the same currency.
"Related Lenders" shall mean all Lenders holding Related Claims.
"Release" shall have the meaning given such term in CERCLA, 42 U.S.C.
ss.9601(22).
"Remedial Action" shall mean (a) "remedial action" as such term is defined
in CERCLA, 42 U.S.C. Section 9601(24), and (b) all other actions, including
studies and investigations, required by any Governmental Authority or
voluntarily undertaken to (i) clean up, remove, treat, xxxxx or in any other way
respond to any Hazardous Material in the environment or (ii) prevent the Release
or threatened Release, or minimize the further Release of any Hazardous
Material.
"Reportable Event" shall mean any reportable event as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than a Plan maintained by an ERISA Affiliate that is considered an ERISA
Affiliate only pursuant to subsection (m) or (o) of Code Section 414).
"Required Lenders" shall mean, at any time, Lenders having Loans (excluding
Swingline Loans), Revolving L/C Exposure, Swingline Exposure and unused
Commitments (excluding commitments to issue Letters of Credit or make Swingline
Loans) representing more than 50% of the sum of all Loans (excluding Swingline
45
Loans), Revolving L/C Exposure, Swingline Exposure and unused Commitments
(excluding commitments to issue Letters of Credit or make Swingline Loans) at
such time. For purposes of determining the Required Lenders, any amounts
denominated in an Alternative Currency shall be translated into Dollars at the
Spot Exchange Rates in effect on the Closing Date.
"Reset Date" shall have the meaning given such term in Section 2.22(a).
"Responsible Officer" of any person shall mean any executive officer or
Financial Officer of such person and any other officer or similar official
thereof responsible for the administration of the obligations of such person in
respect of this Agreement.
"Restructuring Charges" shall mean employee severance and termination,
restructuring, consolidation and business discontinuation costs.
"Revolving Credit Borrowing" shall mean a Borrowing comprised of U.S. $
Revolving Credit Loans, U.K. (pound) Revolving Credit Loans or C $ Revolving
Credit Loans.
"Revolving Credit Commitments" shall mean the U.S. $ Revolving Credit
Commitments, the U.K. (pound) Revolving Credit Commitments and the C $ Revolving
Credit Commitments.
"Revolving Credit Exposures" shall mean the U.S. $ Revolving Credit
Exposures, the U.K. (pound) Revolving Credit Exposures and the C $ Revolving
Credit Exposures.
"Revolving Credit Lenders" shall mean the U.S. $ Revolving Credit Lenders,
the U.K. (pound) Revolving Credit Lenders and the C $ Revolving Credit Lenders.
"Revolving Credit Loan" shall mean any U.S. $ Revolving Credit Loan, U.K.
(pound) Revolving Credit Loan or C $ Revolving Credit Loan.
"Revolving Credit Maturity Date" shall mean March 13, 2004.
"Revolving L/C Commitment" shall mean, with respect to the Fronting Bank,
the commitment of the Fronting Bank to issue Letters of Credit pursuant to
Section 2.20(a).
46
"Revolving L/C Exposure" shall mean, at any time, the sum of (a) the
aggregate undrawn amount of all outstanding Letters of Credit at such time, plus
(b) the aggregate principal amount of all L/C Disbursements that have not yet
been reimbursed at such time. The Revolving L/C Exposure of any U.S. $ Revolving
Credit Lender at any time shall mean its Applicable Percentage of the aggregate
Revolving L/C Exposure at such time. U.K. (pound) Revolving Credit Lenders and C
$ Revolving Credit Lenders, in their capacity as such, shall not have any
Revolving L/C Exposure.
"Sale and Lease-Back Transaction" shall have the meaning given such term in
Section 6.03.
"Schedule I Reference Banks" shall mean such Schedule I chartered banks
under the Bank Act (Canada) as are mutually agreed upon by the Canadian
Administrative Agent and the Canadian Borrower.
"Schedule II Reference Banks" shall mean such Schedule II chartered banks
under the Bank Act (Canada) as are mutually agreed upon by the Canadian
Administrative Agent and the Canadian Borrower.
"Secured Parties" shall have the meaning given such term in the Security
Agreement.
"Security Agreement" shall mean the Security Agreement, substantially in
the form of Exhibit H, among the Parent Borrower, certain Subsidiaries and the
Collateral Agent for the benefit of the Secured Parties.
"Security Documents" shall mean the Mortgages (including any Leasehold
Mortgages), the Security Agreement, the Intellectual Property Security
Agreement, the Pledge Agreements and each of the security agreements, mortgages
and other instruments and documents executed and delivered pursuant to any of
the foregoing or pursuant to Section 5.11.
"Senior Subordinated Exchange Indenture" shall mean the indenture pursuant
to which the Senior Subordinated Exchange Notes are issued.
"Senior Subordinated Exchange Notes" shall mean senior subordinated notes
of the Parent Borrower issued in exchange for
47
Senior Subordinated Notes on terms substantially identical to the terms of the
Senior Subordinated Notes.
"Senior Subordinated Indenture" shall mean the indenture dated as of March
, 1998, among the Parent Borrower, as issuer, the Subsidiaries parties thereto,
as guarantors, and the Indenture Trustee, as amended from time to time in
accordance with the terms hereof and thereof.
"Senior Subordinated Note Holders" shall mean the holders of the Senior
Subordinated Notes.
"Senior Subordinated Notes" shall mean up to $125,000,000 aggregate
principal amount of Senior Subordinated Notes of the Parent Borrower issued
pursuant to the Senior Subordinated Indenture.
"Spot Exchange Rate" shall mean, on any day, (a) with respect to Sterling,
the spot rate at which Dollars are offered on such day by The Chase Manhattan
Bank in London for Sterling at approximately 11:00 a.m. (London time) and (b)
with respect to Canadian Dollars, the spot rate at which Dollars are offered on
such day by the Canadian Administrative Agent in Toronto for Canadian Dollars at
approximately 11:00 a.m. (Toronto time).
"Statutory Reserves" shall mean with respect to any currency, a fraction
(expressed as a decimal), the numerator of which is the number one and the
denominator of which is the number one minus the aggregate of the maximum
reserve, liquid asset or similar percentages (including any marginal, special,
emergency or supplemental reserves) expressed as a decimal established by any
Governmental Authority of the United States or of the jurisdiction of such
currency or in which any subject Loans in such currency are made to which banks
in such jurisdiction are subject for any category of deposits or liabilities
customarily used to fund loans in such currency or by reference to which
interest rates applicable to Loans in such currency are determined. Such
reserve, liquid asset or similar percentages shall, in the case of Dollars,
include those imposed pursuant to Regulation D (and for purposes of Regulation
D, Eurodollar Loans shall be deemed to constitute Eurocurrency Liabilities).
Loans shall be deemed to be subject to such reserve requirements without benefit
of or credit for proration, exemptions or offsets that may be available from
time to time to any Lender under Regulation D or any other applicable law, rule
or regulation. Statutory Reserves shall be adjusted
48
automatically on and as of the effective date of any change in any reserve
percentage.
"Sterling" or "(pound)" shall mean lawful money of the United Kingdom.
"subsidiary" shall mean, with respect to any person (herein referred to as
the "parent"), any corporation, partnership, association or other business
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or more
than 50% of the general partnership interests are, at the time any determination
is being made, directly or indirectly, owned, controlled or held, or (b) that
is, at the time any determination is made, otherwise Controlled, by the parent
or one or more subsidiaries of the parent or by the parent and one or more
subsidiaries of the parent.
"Subsidiary" shall mean each subsidiary of the Parent Borrower. For
purposes of the representations and warranties made herein on the Closing Date,
the term "Subsidiary" includes each of Imperial Wallcoverings, Inc. and Xxxxxx'x
Sunworthy business and, where applicable, the assets and liabilities to be
transferred to Sunworthy pursuant to the Recapitalization Agreement.
"Subsidiary Borrowers" shall mean the U.K. Borrower and the Canadian
Borrower.
"Sunworthy Assets" shall have the meaning given such term in the preamble
to this Agreement.
"Sunworthy Transfer" shall mean the transfer on or following the Closing
Date by the Parent Borrower or any of its Domestic Subsidiaries of any
beneficial or other ownership interest any of them may have in the Sunworthy
Assets to the Canadian Borrower.
"Swingline Exposure" shall mean at any time the aggregate principal amount
at such time of all outstanding Swingline Loans. The Swingline Exposure of any
U.S. $ Revolving Credit Lender at any time shall mean its Applicable Percentage
of the aggregate Swingline Exposure at such time.
"Swingline Lender" shall mean The Chase Manhattan Bank in its capacity as
Swingline Lender hereunder.
49
"Swingline Loan Commitment" shall mean the commitment of the Swingline
Lender to make Swingline Loans as set forth in Section 2.01(e).
"Swingline Loans" shall mean the swingline loans made by the Swingline
Lender to the Parent Borrower pursuant to Section 2.01(e).
"Term Borrowing" shall mean a Borrowing comprised of Term Loans.
"Term Commitments" shall mean the Tranche A Term Loan Commitments, the
Tranche B Term Loan Commitments and the Tranche C Term Loan Commitments.
"Term Lender" shall mean a Lender with a Term Commitment.
"Term Loans" shall mean the term loans made by the Lenders to the Parent
Borrower pursuant to Section 2.01(a). Each Term Loan shall be a Eurodollar Term
Loan or an ABR Term Loan.
"Total C $ Revolving Credit Commitment" shall mean, at any time, the
aggregate amount of the C $ Revolving Credit Commitments, as in effect at such
time. The Total C $ Revolving Credit Commitment on the Closing Date is U.S.
$20,000,000.
"Total Debt" shall mean, with respect to the Parent Borrower and the
Subsidiaries on a consolidated basis at any time (without duplication), all
Indebtedness consisting of Capital Lease Obligations, Indebtedness for borrowed
money and Indebtedness in respect of the deferred purchase price of property or
services of the Parent Borrower and the Subsidiaries on a consolidated basis at
such time.
"Total Net Debt" shall mean, at any time, (a) Total Debt at such time minus
(b) the aggregate amount of cash and cash equivalents in excess of $2,500,000
set forth on the consolidated balance sheet of the Parent Borrower and the
Subsidiaries prepared as of such time in accordance with GAAP, and located in
the United States or, if located outside the United States, the net amount (net
of any applicable taxes, fees or transaction costs) that may be transferred to
the United States within two Business Days, as certified by a Financial Officer
of the Parent Borrower as of the date of any determination of Total Net Debt.
50
"Total U.K. (pound) Revolving Credit Commitment" shall mean, at any time,
the aggregate amount of the U.K. (pound) Revolving Credit Commitments, as in
effect at such time. The Total U.K. (pound) Revolving Credit Commitment on the
Closing Date is U.S. $10,000,000.
"Total U.S. $ Revolving Credit Commitment" shall mean, at any time, the
aggregate amount of the U.S. $ Revolving Credit Commitments, as in effect at
such time. The Total U.S. $ Revolving Credit Commitment on the Closing Date is
$45,000,000.
"Tranche A Lender" shall mean a Lender with a Tranche A Term Loan
Commitment.
"Tranche A Maturity Date" shall mean March 13, 2004.
"Tranche A Term Borrowing" shall mean a Borrowing comprised of Tranche A
Term Loans.
"Tranche A Term Loan Closing Date" shall mean each date on which Tranche A
Term Loans are made.
"Tranche A Term Loan Commitment" shall mean with respect to each Lender,
the commitment of such Lender to make Tranche A Term Loans hereunder as set
forth in Section 2.01(a)(i), as the same may be reduced from time to time
pursuant to Section 2.09.
"Tranche A Term Loans" shall mean the term loans made by the Lenders to the
Parent Borrower pursuant to Section 2.01(a)(i).
"Tranche B Maturity Date" shall mean March 13, 2005.
"Tranche B Term Borrowing" shall mean a Borrowing comprised of Tranche B
Term Loans.
"Tranche B Term Loan Commitment" shall mean with respect to each Lender,
the commitment of such Lender to make Tranche B Term Loans hereunder as set
forth in Section 2.01(a)(ii), as the same may be reduced from time to time
pursuant to Section 2.09.
51
"Tranche B Term Loans" shall mean the term loans made by the Lenders to the
Parent Borrower pursuant to Section 2.01(a)(ii).
"Tranche C Maturity Date" shall mean March 13, 2006.
"Tranche C Term Borrowing" shall mean a Borrowing comprised of Tranche C
Term Loans.
"Tranche C Term Loan Commitment" shall mean with respect to each Lender,
the commitment of such Lender to make Tranche C Term Loans hereunder as set
forth in Section 2.01(a)(iii), as the same may be reduced from time to time
pursuant to Section 2.09.
"Tranche C Term Loans" shall mean the term loans made by the Lenders to the
Parent Borrower pursuant to Section 2.01(a)(iii).
"Transaction Costs" shall have the meaning given such term in the preamble
to this Agreement.
"Transactions" shall have the meaning given such term in the preamble to
this Agreement.
"Type", when used in respect of any Loan or Borrowing, shall refer to the
Rate by reference to which interest on such Loan or on the Loans comprising such
Borrowing is determined. For purposes hereof, the term "Rate" shall include the
Adjusted LIBO Rate, the Alternate Base Rate, the Canadian Prime Rate and the
Discount Rate Applicable to B/As or B/A Equivalent Notes.
"U.K. (pound) Revolving Credit Borrowing" shall mean a Borrowing comprised
of U.K. (pound) Revolving Credit Loans.
"U.K. (pound) Revolving Credit Commitment" shall mean, with respect to any
Lender at any time, the commitment (if any) of such Lender to make loans
pursuant to Section 2.01(c) or in the Assignment and Acceptance pursuant to
which such Lender assumed its U.K. (pound) Revolving Credit Commitment, as
applicable. Subject to Section 10.04, the amount of each Lender's U.K. (pound)
Revolving Credit Commitment is the amount set forth opposite such Lender's name
in Schedule 2.01 under the caption "U.K. (pound) Revolving Credit Commitment",
as such amount may be permanently terminated or from time to time permanently or
temporarily reduced or increased pursuant to Section 2.09.
52
"U.K. (pound) Revolving Credit Exposure" shall mean, with respect to any
Lender at any time, the sum of (a) the aggregate principal amount at such time
of all outstanding U.K. (pound) Revolving Credit Loans of such Lender
denominated in Dollars, plus (b) the Assigned Dollar Value at such time of the
aggregate principal amount at such time of all outstanding U.K. (pound)
Revolving Credit Loans of such Lender that are Alternative Currency Loans.
"U.K. (pound) Revolving Credit Lender" shall mean a Lender with a U.K.
(pound) Revolving Credit Commitment.
"U.K. (pound) Revolving Credit Loan" shall mean any loan made by a Lender
pursuant to its U.K. (pound) Revolving Credit Commitment.
"U.K. Borrower" shall have the meaning given such term in the preamble to
this Agreement.
"U.K. Borrower Pledge Agreement" shall mean the Mortgage of Shares of
Imperial Home Decor Group Holdings II Limited, substantially in the form of
Exhibit G-3, among UK Newco, IHC and the Collateral Agent for the benefit of the
Secured Parties.
"U.K. Guaranteed Parties" shall have the meaning given such term in the
U.K. Subsidiary Guarantee Agreement.
"UK Newco" shall mean Imperial Home Decor Group Holdings I Limited, a
limited company incorporated under the laws of England and Wales that is a
Wholly Owned Subsidiary, which, after the consummation of the Transactions, for
United States federal income tax purposes will be classified and treated as a
division of the Parent Borrower and for tax purposes of the United Kingdom will
be treated as a company incorporated under the laws of England and Wales. For
purposes of this Agreement and the other Loan Documents, UK Newco shall be
deemed to be a Domestic Subsidiary.
"UK Newco Guarantee" shall mean the UK Newco Guarantee, substantially in
the form of Exhibit I-4, made by UK Newco in favor of the Collateral Agreement
for the benefit of the Secured Parties.
"UK Newco Pledge Agreement" shall mean the Mortgage of Shares of UK Newco,
substantially in the form of Exhibit G-2, between the Parent Borrower and the
Collateral Agent for the benefit of the Secured Parties.
53
"U.K. Subsidiary Guarantee" shall mean the Subsidiary Guarantee,
substantially in the form of Exhibit I-3, made by the U.K. Subsidiary Guarantors
in favor of the Collateral Agent for the benefit of the U.K. Guaranteed Parties.
"U.K. Subsidiary Guarantor" shall mean each Subsidiary organized under the
laws of the United Kingdom other than (a) the U.K. Borrower, (b) UK Newco, (c)
Imperial Pension Trustees Limited and (d) Inactive U.K. Subsidiaries.
"U.S. $ Revolving Credit Borrowing" shall mean a Borrowing comprised of
U.S. $ Revolving Credit Loans.
"U.S. $ Revolving Credit Commitment" shall mean, with respect to any
Lender, the commitment (if any) of such Lender to make loans pursuant to Section
2.01(b) or in the Assignment and Acceptance pursuant to which such Lender
assumed its U.S. $ Revolving Credit Commitment, as applicable, and to acquire
participations in Letters of Credit pursuant to Section 2.20 and Swingline Loans
pursuant to Section 2.01(f). Subject to Section 10.04, the amount of each
Lender's U.S. $ Revolving Credit Commitment is the amount set forth opposite
such Lender's name in Schedule 2.01 under the caption "U.S. $ Revolving Credit
Commitment", as such amount may be permanently terminated or from time to time
permanently or temporarily reduced or increased pursuant to Section 2.09.
"U.S. $ Revolving Credit Exposure" shall mean, with respect to any Lender
at any time, the sum of (a) the aggregate principal amount at such time of all
outstanding U.S. $ Revolving Credit Loans of such Lender, plus (b) the aggregate
amount at such time of such Lender's Revolving L/C Exposure, plus (c) the
aggregate amount at such time of such Lender's Swingline Exposure.
"U.S. $ Revolving Credit Lender" shall mean a Lender with a U.S. $
Revolving Credit Commitment.
"U.S. $ Revolving Credit Loan" shall mean any loan made by a Lender
pursuant to its U.S. $ Revolving Credit Commitment.
"U.S. Administrative Agent" shall have the meaning given such term in the
introductory paragraph of this Agreement.
"U.S. Administrative Agent Fees" shall have the meaning given such term in
Section 2.05(c).
54
"Xxxxxx" shall have the meaning given such term in the preamble to this
Agreement.
"Xxxxxx Note" shall have the meaning given such term in the preamble to
this Agreement.
"Wholly Owned Subsidiary" means a Subsidiary, at least 99% of the Capital
Stock of which (other than directors' qualifying shares) is owned by the Parent
Borrower or another Wholly Owned Subsidiary.
"Withdrawal Liability" shall mean liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
"Working Capital" shall mean, with respect to the Parent Borrower and the
Subsidiaries on a consolidated basis at any date of determination, Current
Assets at such date of determination minus Current Liabilities at such date of
determination.
SECTION 1.02. Terms Generally. The definitions in Section 1.01 shall apply
equally to both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". All references
herein to Articles, Sections, Exhibits and Schedules shall be deemed references
to Articles and Sections of, and Exhibits and Schedules to, this Agreement
unless the context shall otherwise require. Except as otherwise expressly
provided herein, (a) any reference in this Agreement to any Loan Document shall
mean such document as amended, restated, supplemented or otherwise modified from
time to time and (b) all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided,
however, that for purposes of determining compliance with the covenants
contained in Section 2.12(d) and Article VI all accounting terms herein shall be
interpreted and all accounting determinations hereunder (in each case, unless
otherwise provided for or defined herein) shall be made in accordance with GAAP
(i) as in effect on the date of this Agreement and (ii) applied on a basis
consistent with the application used in the financial statements referred to in
Section 3.05, except that, to the extent permitted under clause (i) above, the
Parent Borrower may
55
elect to expense certain Product Development Costs and similar costs that have
been capitalized historically and, whether or not such election is made, for
purposes of determining compliance with any such covenants, Product Development
Costs shall be treated as if expensed; and provided further that if the Parent
Borrower notifies the U.S. Administrative Agent that the Parent Borrower wishes
to amend any covenant in Section 2.12(d) or Article VI or any related definition
to eliminate the effect of any change in GAAP occurring after the date of this
Agreement on the operation of such covenant (or if the U.S. Administrative Agent
notifies the Parent Borrower that the Required Lenders wish to amend Section
2.12(d) or Article VI or any related definition for such purpose), then (i) the
Parent Borrower and the U.S. Administrative Agent shall negotiate in good faith
to agree upon an appropriate amendment to such covenant and (ii) the Parent
Borrower's compliance with such covenant shall be determined on the basis of
GAAP in effect immediately before the relevant change in GAAP became effective
until such covenant is amended in a manner satisfactory to the Parent Borrower
and the Required Lenders. For the purposes of determining compliance under
Sections 6.01, 6.02, 6.03, 6.04, 6.05, 6.06, 6.07 and 6.10 with respect to any
amount in a currency other than Dollars, such amount shall be deemed to equal
the Dollar equivalent thereof at the time such amount was incurred or expended,
as the case may be.
ARTICLE II. THE CREDITS
SECTION 2.01. Commitments. (a) Subject to the terms and conditions and
relying upon the representations and warranties of the Borrowers herein set
forth, each Lender agrees, severally and not jointly:
(i) to make a Tranche A Term Loan in Dollars to the Parent Borrower
(A) on the Closing Date in a principal amount not to exceed an amount equal
to the Tranche A Term Loan Commitment set forth opposite its name on
Schedule 2.01 and (B) at any time and from time to time after the Closing
Date and until the earlier of the date that is 18 months after the Closing
Date and the termination of the Tranche A Term Loan Commitment of such
Lender in accordance with the terms hereof, in an aggregate principal
amount not to exceed an amount equal to the Tranche A Term Loan Commitment
set forth opposite its name on Schedule 2.01 less the amount of Tranche A
Term Loans made by such Lender on the Closing Date, as such amount may be
reduced from time to time
56
pursuant to Section 2.09, provided that the Parent Borrower shall not be
permitted to make more than 5 Tranche A Term Borrowings after the Closing
Date that increase the aggregate principal amount of Tranche A Term
Borrowings outstanding;
(ii) to make a Tranche B Term Loan in Dollars to the Parent Borrower
on the Closing Date in a principal amount not to exceed the Tranche B Term
Loan Commitment set forth opposite its name on Schedule 2.01, as the same
may be reduced from time to time pursuant to Section 2.09; and
(iii) to make a Tranche C Term Loan in Dollars to the Parent Borrower
on the Closing Date in a principal amount not to exceed the Tranche C Term
Loan Commitment set forth opposite its name on Schedule 2.01, as the same
may be reduced from time to time pursuant to Section 2.09.
(b) Subject to the terms and conditions and relying upon the
representations and warranties herein set forth, each U.S. $ Revolving Credit
Lender agrees, severally and not jointly, to make U.S. $ Revolving Credit Loans
to the Parent Borrower, at any time and from time to time on or after the date
hereof and until the earlier of the Revolving Credit Maturity Date and the
termination of the U.S. $ Revolving Credit Commitment of such Lender in
accordance with the terms hereof, in Dollars, in an aggregate principal amount
at any time outstanding that will not result in such Lender's U.S. $ Revolving
Credit Exposure at such time exceeding the U.S. $ Revolving Credit Commitment
set forth opposite its name on Schedule 2.01, as the same may be reduced or
increased from time to time pursuant to Section 2.09, provided that U.S. $
Revolving Credit Loans made on the Closing Date shall not exceed $15,000,000 in
aggregate principal amount.
(c) Subject to the terms and conditions and relying upon the
representations and warranties herein set forth, each U.K. (pound) Revolving
Credit Lender agrees, severally and not jointly, to make loans to the Parent
Borrower or the U.K. Borrower (as specified in the Borrowing Requests with
respect thereto), at any time and from time to time on and after the date that
is the fourth Business Day after the Closing Date and until the earlier of the
Revolving Credit Maturity Date and the termination of the U.K. (pound) Revolving
Credit Commitment of such Lender in accordance with the terms hereof, in Dollars
or Sterling (as specified in the Borrowing Requests with respect thereto), in an
aggregate principal amount at any time outstanding that will not result in such
Lender's U.K. (pound) Revolving Credit Exposure at such time
57
exceeding the U.K. (pound) Revolving Credit Commitment set forth opposite its
name on Schedule 2.01, as the same may be reduced or increased from time to time
pursuant to Section 2.09.
(d) Subject to the terms and conditions and relying upon the
representations and warranties herein set forth, each C $ Revolving Credit
Lender agrees, severally and not jointly, to make loans, including by means of a
B/A or B/A Equivalent Note, to the Parent Borrower or the Canadian Borrower (as
specified in the Borrowing Requests with respect thereto), at any time and from
time to time on and after the date hereof and until the earlier of the Revolving
Credit Maturity Date and the termination of the C $ Revolving Credit Commitment
of such Lender in accordance with the terms hereof, in Dollars or Canadian
Dollars (as specified in the Borrowing Requests with respect thereto), in an
aggregate principal amount at any time outstanding that will not result in such
Lender's C $ Revolving Credit Exposure at such time exceeding the C $ Revolving
Credit Commitment set forth opposite its name on Schedule 2.01, as the same may
be reduced or increased from time to time pursuant to Section 2.09.
(e) (i) The Swingline Lender hereby agrees, subject to the terms and
conditions and relying upon the representations and warranties herein set forth,
and subject to the limitations set forth below with respect to the maximum
amount of Swingline Loans permitted to be outstanding from time to time, to make
a portion of the U.S. $ Revolving Credit Commitments available to the Parent
Borrower from time to time during the period from the Closing Date through and
excluding the earlier of the Revolving Credit Maturity Date and the termination
of the U.S. $ Revolving Credit Commitments in an aggregate principal amount not
to exceed the Swingline Loan Commitment, by making Swingline Loans to the Parent
Borrower. Swingline Loans may be made notwithstanding the fact that such
Swingline Loans, when aggregated with the Swingline Lender's outstanding U.S. $
Revolving Credit Loans, Revolving L/C Exposure and outstanding Swingline Loans,
may exceed the Swingline Lender's U.S. $ Revolving Credit Commitment. The
original amount of the Swingline Loan Commitment is $10,000,000. The Swingline
Loan Commitment shall expire on the date the U.S. $ Revolving Credit Commitments
are terminated, and all Swingline Loans and all other amounts owed hereunder
with respect to Swingline Loans shall be paid in full no later than that date.
The Parent Borrower shall give the Swingline Lender telephonic, written or
telecopy notice (in the case of telephonic notice, such notice shall be promptly
confirmed in writing or by telecopy) not later than 12:00 (noon), New York City
time, on the day of a proposed borrowing. Such notice shall be delivered on a
58
Business Day, shall be irrevocable and shall refer to this Agreement and shall
specify the requested date (which shall be a Business Day) and amount of such
Swingline Loan. The Swingline Lender shall give the U.S. Administrative Agent,
which shall in turn give to each Lender, prompt written or telecopy advice of
any notice received from the Parent Borrower pursuant to this paragraph.
(ii) In no event shall (A) the aggregate principal amount of Swingline
Loans outstanding at any time exceed the aggregate Swingline Loan Commitment in
effect at such time, (B) the Aggregate U.S. $ Revolving Credit Exposure at any
time exceed the Total U.S. $ Revolving Credit Commitment at such time or (C) the
aggregate Swingline Loan Commitment exceed at any time the aggregate U.S. $
Revolving Credit Commitments in effect at such time. Swingline Loans may only be
made as ABR Loans.
(iii) With respect to any Swingline Loans that have not been voluntarily
prepaid by the Parent Borrower, the Swingline Lender (by request to the U.S.
Administrative Agent) or U.S. Administrative Agent at any time may, and shall at
any time Swingline Loans in an amount not less than $5,000,000 shall have been
outstanding for more than 10 days, on one Business Day's notice, require each
U.S. $ Revolving Credit Lender, including the Swingline Lender, and each U.S. $
Revolving Credit Lender hereby agrees, subject to the provisions of this Section
2.01(e), to make a U.S. $ Revolving Credit Loan (which shall be funded as an ABR
Loan) in an amount equal to such Lender's Applicable Percentage of the amount of
the Swingline Loans ("Refunded Swingline Loans") outstanding that the Swingline
Lender has designated for prepayment by the Lenders.
(iv) In the case of U.S. $ Revolving Credit Loans made by Lenders other
than the Swingline Lender under the immediately preceding paragraph (iii), each
such Lender shall make the amount of its U.S. $ Revolving Credit Loan available
to the U.S. Administrative Agent, in same day funds, at the office of the U.S.
Administrative Agent, Loan and Agency Services Group located at One Chase
Xxxxxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, not later than 1:00 p.m.,
New York City time, on the Business Day next succeeding the date such notice is
given. The proceeds of such U.S. $ Revolving Credit Loans shall be immediately
delivered to the Swingline Lender (and not to the Parent Borrower) and applied
to repay the Refunded Swingline Loans. On the day such U.S. $ Revolving Credit
Loans are made, the Swingline Lender's Applicable Percentage of the Refunded
Swingline Loans shall be deemed to be paid with the proceeds of a
59
U.S. $ Revolving Credit Loan made by the Swingline Lender and such portion of
the Swingline Loans deemed to be so paid shall no longer be outstanding as
Swingline Loans and shall be outstanding as U.S. $ Revolving Credit Loans of
Lenders. The Parent Borrower authorizes the U.S. Administrative Agent and the
Swingline Lender to charge the Parent Borrower's account with the U.S.
Administrative Agent (up to the amount available in such account) in order to
pay immediately to the Swingline Lender the amount of such Refunded Swingline
Loans to the extent amounts received from Lenders, including amounts deemed to
be received from the Swingline Lender, are not sufficient to repay in full such
Refunded Swingline Loans. If any portion of any such amount paid (or deemed to
be paid) to the Swingline Lender should be recovered by or on behalf of the
Parent Borrower from the Swingline Lender in bankruptcy, by assignment for the
benefit of creditors or otherwise, the loss of the amount so recovered shall be
ratably shared among all Lenders in the manner contemplated by Section 2.17.
Subject to the compliance by the Swingline Lender with the provisions of
subparagraph (vii) below, and subject to subparagraph (vi) below, each Lender's
obligation to make the U.S. $ Revolving Credit Loans referred to in this
paragraph shall be absolute and unconditional and shall not be affected by any
circumstance, including (A) any setoff, counterclaim, recoupment, defense or
other right that such Lender may have against the Swingline Lender, the Parent
Borrower or any other person for any reason whatsoever; (B) the occurrence or
continuance of an Event of Default or a Default; (C) any adverse change in the
condition (financial or otherwise) of the Parent Borrower or any of the
Subsidiaries; (D) any breach of this Agreement by the Parent Borrower or any
other Lender; or (E) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing. Nothing in this Section 2.01(e)
shall be deemed to relieve any Lender from its obligation to fulfill its
Commitments hereunder or to prejudice any rights that the Parent Borrower may
have against any Lender as a result of any default by such Lender hereunder.
(v) A copy of each notice given by the Swingline Lender or the U.S.
Administrative Agent pursuant to this Section 2.01(e) shall be promptly
delivered by the Swingline Lender to the U.S. Administrative Agent and the
Parent Borrower. Upon the making of a U.S. $ Revolving Credit Loan by a Lender
pursuant to this Section 2.01(e), the amount so funded shall no longer be owed
in respect of Swingline Loans.
(vi) If as a result of any bankruptcy or similar proceeding, U.S. $
Revolving Credit Loans are not made pursuant
60
to this Section 2.01(e) sufficient to repay any amounts owed to the Swingline
Lender as a result of a nonpayment of outstanding Swingline Loans, each U.S. $
Revolving Credit Lender agrees to purchase, and shall be deemed to have
purchased, a participation in such outstanding Swingline Loans in an amount
equal to its Applicable Percentage of the unpaid amount together with accrued
interest thereon. Upon one Business Day's notice from the Swingline Lender, each
U.S. $ Revolving Credit Lender shall deliver to the Swingline Lender an amount
equal to its respective participation in same day funds at the office of the
Swingline Lender in New York, New York. In order to evidence such participation
each U.S. $ Revolving Credit Lender agrees to enter into a participation
agreement at the request of the Swingline Lender in form and substance
reasonably satisfactory to all parties. In the event any U.S. $ Revolving Credit
Lender fails to make available to the Swingline Lender the amount of such U.S. $
Revolving Credit Lender's participation as provided in this Section 2.01(e), the
Swingline Lender shall be entitled to recover such amount on demand from such
U.S. $ Revolving Credit Lender together with interest at the customary rate set
by the Swingline Lender for correction of errors among banks in New York City
for one Business Day and thereafter at the Alternate Base Rate plus the ABR
Margin.
(vii) Notwithstanding anything herein to the contrary, the Swingline Lender
shall not make any Swingline Loans at any time the Swingline Lender is aware
that the conditions to the making of such Swingline Loan set forth in Section
4.01 have not been satisfied unless such conditions shall have been waived in
accordance with this Agreement.
(f) Within the limits set forth in paragraphs (b), (c), (d) and (e) above,
the Borrowers may borrow, pay or prepay (including pursuant to a refinancing
permitted by Section 2.02(f)) and reborrow U.S. $ Revolving Credit Loans, U.K.
(pound) Revolving Credit Loans, C $ Revolving Credit Loans and Swingline Loans
on or after the Closing Date and prior to the Revolving Credit Maturity Date,
subject to the terms, conditions and limitations set forth herein. Amounts paid
or prepaid in respect of Term Loans may not be reborrowed.
SECTION 2.02. Loans. (a) Each Loan shall be made as part of a Borrowing
consisting of Loans made by the applicable Lenders ratably in accordance with
their applicable Commitments; provided, however, that the failure of any Lender
to make any Loan shall not relieve any other Lender of its obligation to lend
hereunder (it being understood, however, that no Lender shall be
61
responsible for the failure of any other Lender to make any Loan required to be
made by such other Lender). The Loans comprising any Borrowing shall, subject to
Section 2.21 in the case of B/A Borrowings, be in an aggregate principal amount
which is (i) an integral multiple of $1,000,000 (or, in the case of Swingline
Loans, $500,000) and not less than $5,000,000 (or, in the case of Swingline
Loans, $500,000) or (ii) equal to the remaining available balance of the
applicable Commitments, provided that Revolving Credit Loans used to pay
Refunded Swingline Loans may be in the amount of such Refunded Swingline Loans.
The Loans comprising each Alternative Currency Borrowing shall be made in the
Alternative Currency specified in the applicable Borrowing Request in an amount
the Dollar Equivalent of which is the Dollar amount specified in such Borrowing
Request, as determined by the U.S. Administrative Agent (or, in the case of
Loans denominated in Canadian Dollars, the Canadian Administrative Agent) as of
the Denomination Date for such Borrowing (which determination shall be
conclusive absent manifest error); provided, however, that (A) for purposes of
clause (i) above, each Alternative Currency Borrowing shall be deemed to be in
an aggregate principal amount equal to the Dollar amount specified in the
applicable Borrowing Request for such Borrowing and (B) (x) if the Dollar
Equivalent of an outstanding U.K. (pound) Revolving Credit Borrowing denominated
in an Alternative Currency that is a Eurodollar Borrowing, determined based upon
the applicable Spot Exchange Rate as of the date that is three Business Days
before the end of the Interest Period with respect to such Borrowing, does not
exceed by more than 5% the Assigned Dollar Value of such Borrowing, and if the
entire amount of such Borrowing is to be refinanced with a new U.K. (pound)
Revolving Credit Borrowing that is a Eurodollar Borrowing of equivalent amount
in the same currency and by the same Borrower, then such U.K. (pound) Revolving
Credit Borrowing may be refinanced without regard to compliance with clause (i)
above and, if so refinanced, shall continue to have the same Assigned Dollar
Value as in effect prior to such refinancing and (y) if such Dollar Equivalent
does exceed by more than 5% the Assigned Dollar Value of such Borrowing, then
only a portion of such Borrowing with a Dollar Equivalent determined based on
the applicable Spot Exchange Rate as of the date that is three Business Days
before the end of the Interest Period with respect to such Borrowing equal to an
amount that is in compliance with clause (i) above may be refinanced with a new
U.K. (pound) Revolving Credit Borrowing that is a Eurodollar Borrowing, in the
same currency and by the same Borrower, and any amount not so
62
refinanced shall be repaid by such Borrower on the Interest Payment Date
coinciding with the end of such Interest Period. The U.S. Administrative Agent
shall determine the applicable Spot Exchange Rate as of the date three Business
Days before the end of an Interest Period with respect to a U.K. (pound)
Revolving Credit Borrowing denominated in an Alternative Currency that is a
Eurodollar Borrowing and shall promptly notify the applicable Borrower and the
U.K. (pound) Revolving Credit Lenders whether the Dollar Equivalent of such
Borrowing exceeds by more than 5% the Assigned Dollar Value thereof.
(b) Subject to Sections 2.08 and 2.14, (i) each Term Borrowing and U.S. $
Revolving Credit Borrowing shall be comprised entirely of ABR Loans or (except
in the case of Swingline Loans) Eurodollar Loans, (ii) each U.K. (pound)
Revolving Credit Borrowing shall be comprised entirely of Eurodollar Loans and
(iii) each C $ Revolving Credit Borrowing, in the case of such a Borrowing
denominated in Canadian Dollars, shall be comprised entirely of B/A Borrowings
or Canadian Prime Borrowings, and in the case of such a Borrowing denominated in
Dollars, shall be comprised entirely of ABR Loans or Eurodollar Loans, as the
applicable Borrower may request pursuant to Section 2.03. Each Lender may at its
option make any Eurodollar Loan or any Alternative Currency Loan by causing any
domestic or foreign branch or Affiliate of such Lender to make such Loan,
provided that any exercise of such option shall not affect the obligation of the
applicable Borrower to repay such Loan in accordance with the terms of this
Agreement and such Lender shall not be entitled to any amounts payable under
Section 2.13 or Section 2.19 in respect of increased costs arising as a result
of such exercise. Borrowings of more than one Type may be outstanding at the
same time; provided, however, that none of the Borrowers shall be entitled to
request any Borrowing that, if made, would result in more than twelve Eurodollar
Borrowings or six B/A Borrowings outstanding hereunder at any time. For purposes
of the foregoing, Borrowings having different Interest Periods or maturity dates
(in the case of B/A Borrowings) or denominated in different currencies,
regardless of whether they commence on the same date, shall be considered
separate Borrowings.
(c) Subject to paragraph (f) below, (i) each Term Lender, U.S. $ Revolving
Credit Lender and U.K. (pound) Revolving Credit Lender shall make each Loan to
be made by it hereunder on the proposed date thereof by wire transfer to such
account as the U.S. Administrative Agent may designate in federal funds (in the
63
case of any Loan denominated in Dollars) or such other immediately available
funds as may then be customary for the settlement of international transactions
in the relevant currency not later than 11:00 a.m., New York City time, in the
case of fundings to an account in New York City, or 11:00 a.m., local time, in
the case of fundings to an account in another jurisdiction, and (ii) each C $
Revolving Credit Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer to such account as the Canadian
Administrative Agent may designate in immediately available funds not later than
11:00 a.m., Toronto time, and, with respect to each of clauses (i) and (ii), the
U.S. Administrative Agent or the Canadian Administrative Agent, as the case may
be, shall by 12:00 (noon), New York City time, in the case of fundings to an
account in New York City, or 12:00 (noon), local time, in the case of fundings
to an account in another jurisdiction, (A) in the case of any Loan the proceeds
of which are to be received by any Borrower, credit the amounts so received to
an account designated by such Borrower in the applicable Borrowing Request,
which account must be in the name of such Borrower and, unless otherwise agreed
to by the applicable Administrative Agent, in the financial center of the
country of such Loan (except that, in the case of Loans denominated in Dollars
and in the case of all Loans made on the Closing Date, such account shall be in
New York and/or London) and (B) in the case of any Loan made to reimburse any
L/C Disbursement or to refund any Swingline Loan, apply the amounts so received
to effect such reimbursement or refund as contemplated by Section 2.20 or
Section 2.01(e); provided, however, that if a Borrowing shall not occur on such
date because any condition precedent herein specified shall not have been met,
the U.S. Administrative Agent or the Canadian Administrative Agent, as the case
may be, shall return the amounts so received to the respective Lenders.
(d) Unless the U.S. Administrative Agent, or the Canadian Administrative
Agent, as applicable, shall have received notice from a Lender prior to the date
of any Borrowing that such Lender will not make available to such Administrative
Agent such Lender's portion of such Borrowing, such Administrative Agent may
assume that such Lender has made such portion available to such Administrative
Agent on the date of such Borrowing in accordance with paragraph (c) above and
may, in reliance upon such assumption, make available to the applicable Borrower
on such date a corresponding amount in the required currency. If either
Administrative Agent shall have so made funds available then, to
64
the extent that such Lender shall not have made such portion available to such
Administrative Agent, such Lender and the applicable Borrower severally agree to
repay to such Administrative Agent forthwith on demand such corresponding amount
together with interest thereon in such currency, for each day from the date such
amount is made available to the applicable Borrower until the date such amount
is repaid to such Administrative Agent, at (i) in the case of a Borrower, the
interest rate applicable at the time to the Loans comprising such Borrowing and
(ii) in the case of such Lender, a rate determined by such Administrative Agent
to represent its cost of overnight or short-term funds in the relevant currency
(which determination shall be conclusive absent manifest error). If such Lender
shall repay to such Administrative Agent such corresponding amount, such amount
shall constitute such Lender's Loan as part of such Borrowing for purposes of
this Agreement.
(e) Notwithstanding any other provision of this Agreement, no Borrower
shall be entitled to request any Borrowing if the Interest Period or maturity
date (in the case of a B/A Borrowing) requested with respect thereto would end
after the Revolving Credit Maturity Date, Tranche A Maturity Date, Tranche B
Maturity Date or Tranche C Maturity Date, as applicable.
(f) Subject to clause (B) of the proviso to the third sentence of Section
2.02(a), a Borrower may refinance all or any part of a Revolving Credit
Borrowing with another Revolving Credit Borrowing by such Borrower in the same
currency and of the same Type, subject to the conditions and limitations set
forth in this Agreement (including (i) the condition that the Aggregate U.S. $
Revolving Credit Exposure, the Aggregate C $ Revolving Credit Exposure or the
Aggregate U.K. (pound) Revolving Credit Exposure, as applicable, after giving
effect thereto will not exceed the Total U.S. $ Revolving Credit Commitment, the
Total C $ Revolving Credit Commitment or the Total U.K. (pound) Revolving Credit
Commitment, as applicable and (ii) the provisions of Section 2.12(g)). Any
Revolving Credit Borrowing or part thereof so refinanced shall be deemed to be
repaid or prepaid in accordance with the applicable provisions of this Agreement
with the proceeds of the new Revolving Credit Borrowing and the proceeds of such
new Borrowing, to the extent they do not exceed the principal amount of the
Borrowing being refinanced, shall not be paid by the applicable Revolving Credit
Lenders to the applicable Administrative Agent or by the applicable
Administrative Agent to the applicable Borrower pursuant to paragraph (c) above.
65
(g) The U.S. Administrative Agent or the Canadian Administrative Agent (in
the case of clause (iii) below) shall notify (i) the Parent Borrower and the
U.S. $ Revolving Credit Lenders of the amount of the Aggregate U.S. $ Revolving
Credit Exposure, (ii) the Parent Borrower, the U.K. Borrower and the U.K.
(pound) Revolving Credit Lenders of the amount of the Aggregate U.K. (pound)
Revolving Credit Exposure and (iii) the Parent Borrower, the Canadian Borrower
and the C $ Revolving Credit Lenders of the amount of the Aggregate C $
Revolving Credit Exposure, promptly following the last day of each March, June,
September and December.
SECTION 2.03. Borrowing Procedure. Subject to Section 2.21, in order to
request a Borrowing (other than a Swingline Loan), a Borrower shall hand deliver
or telecopy to the U.S. Administrative Agent or, in the case of any C $
Revolving Credit Borrowing, the Canadian Administrative Agent, a duly completed
Borrowing Request substantially in the form of Exhibit C-1, C-2, or C-3, as
applicable, (a) in the case of a Eurodollar Borrowing (other than a U.K. (pound)
Revolving Credit Borrowing described in clause (c) below), not later than 12:00
(noon), New York City time (unless (i) the Borrowing Request relates to a U.K.
(pound) Revolving Credit Borrowing (other than a U.K. (pound) Revolving Credit
Borrowing described in clause (c) below), in which case it shall be delivered or
telecopied to the U.S. Administrative Agent in London, not later than 1:00 p.m.,
London time or (ii) the Borrowing Request relates to a C $ Revolving Credit
Borrowing, in which case it shall be delivered to the Canadian Administrative
Agent not later than 12:00 (noon), Toronto time), three Business Days before
such proposed Borrowing, (b) in the case of an ABR Borrowing, not later than
12:00 (noon), New York City time (unless the Borrowing Request relates to a C $
Revolving Credit Borrowing, in which case it shall be delivered to the Canadian
Administrative Agent not later than 12:00 (noon), Toronto time), one Business
Day before such proposed Borrowing, (c) in the case of a Eurodollar Borrowing
requested by the U.K. Borrower and denominated in Sterling, in London, not later
than 1:00 p.m., London time, three Business Days before such proposed Borrowing,
(d) in the case of a B/A Borrowing, not later than 10:00 a.m., Toronto time, one
Business Day before such proposed Borrowing, and (e) in the case of a Canadian
Prime Borrowing, not later than 12:00 (noon), Toronto time, one Business Day
before such proposed Borrowing; provided, however, that Borrowing Requests with
respect to Borrowings to be made on the Closing Date may, at the discretion of
the U.S. Administrative Agent, be delivered later than the times specified
above. Each Borrowing Request shall be
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irrevocable, shall be signed by or on behalf of the applicable Borrower and
shall specify the following information: (i) the Borrower requesting such
Borrowing, (ii) whether the Borrowing then being requested is to be a Term
Borrowing, a U.S. $ Revolving Credit Borrowing, a U.K. (pound) Revolving Credit
Borrowing or a C $ Revolving Credit Borrowing (and in the case of a Term
Borrowing the Commitments pursuant to which the Loans comprising such Borrowing
are to be made), and whether such Borrowing is to be a Eurodollar Borrowing, an
ABR Borrowing, a B/A Borrowing or a Canadian Prime Borrowing; (iii) the date of
such Borrowing (which shall be a Business Day), (iv) in the case of a Borrowing
the proceeds of which are to be received by a Borrower, the number and location
of the account to which funds are to be disbursed (which shall be an account
that complies with the requirements of Section 2.02(c)); (v) the amount of such
Borrowing (which shall be expressed in Dollars, regardless of whether such
Borrowing is an Alternative Currency Borrowing) or the face amount of the
Bankers' Acceptance being requested, in the case of a B/A Borrowing; (vi) the
currency of such Borrowing (which (A) shall be Dollars, in the case of any U.S.
$ Revolving Credit Borrowing or ABR Borrowing, (B) subject to clause (A) above,
shall be Dollars or Canadian Dollars, in the case of any C $ Revolving Credit
Borrowing, and (C) shall be in Dollars or Sterling, in the case of any U.K.
(pound) Revolving Credit Borrowing; (vii) if such Borrowing is to be a
Eurodollar Borrowing, the Interest Period with respect thereto; and (viii) if
such Borrowing is to be a B/A Borrowing, the Contract Period and maturity date
thereof; provided, however, that, notwithstanding any contrary specification in
any Borrowing Request, each requested Borrowing shall comply with the
requirements set forth in Section 2.02. If no election as to the currency of (A)
a U.S. $ Revolving Credit Borrowing is specified in any such notice, then the
requested Borrowing shall be denominated in Dollars, (B) a U.K. (pound)
Revolving Credit Borrowing is specified in any such notice, then the requested
Borrowing shall be denominated in Sterling and (C) a C $ Revolving Credit
Borrowing is specified in any such notice, then the Requested Borrowing shall be
denominated in Canadian Dollars. If no election as to the Type of Borrowing is
specified in any such notice, then the requested Borrowing shall be an ABR
Borrowing if denominated in Dollars, a Eurodollar Borrowing if denominated in
Sterling and a Canadian Prime Borrowing, if denominated in Canadian Dollars. If
no election as to the Credit Facility to which such Borrowing relates is
specified in any such notice, then the requested Borrowing shall be (x) in the
case of a request made to the U.S. Administrative Agent in New York, a U.S. $
Revolving Credit Borrowing, (y) in the case of a request made to the U.S.
Administrative Agent in London, a
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U.K. (pound) Revolving Credit Borrowing and (z) in the case of a request to the
Canadian Administrative Agent, a C $ Revolving Credit Borrowing. If no Interest
Period with respect to any Eurodollar Borrowing is specified in any such notice,
then the Borrower shall be deemed to have selected an Interest Period of one
month's duration. If no maturity date or Contract Period with respect to a B/A
Borrowing is specified in any such notice, then the applicable Borrower shall be
deemed to have selected a maturity date which is 30 days following the date of
such B/A Borrowing. The U.S. Administrative Agent or the Canadian Administrative
Agent, as the case may be, shall promptly (and in any event on the same day that
such Administrative Agent receives such notice, if received by 1:00 p.m., local
time, on such day) advise the applicable Lenders of any notice given pursuant to
this Section 2.03 and of each Lender's portion of the requested Borrowing and,
in the case of an Alternative Currency Borrowing, of the Alternative Currency
amount of such Borrowing and the Spot Exchange Rate utilized to determine such
amount.
If the applicable Borrower shall not have delivered a Borrowing Request in
accordance with this Section 2.03 prior to the end of the Interest Period then
in effect for any Revolving Credit Borrowing that is a Eurodollar Borrowing
requesting that such Borrowing be refinanced, then such Borrower shall (unless
such Borrower has notified the U.S. Administrative Agent (and, in the case of
any Eurodollar Borrowing that is a C $ Revolving Credit Borrowing, the Canadian
Administrative Agent), not less than three Business Days prior to the end of
such Interest Period, that such Borrowing is to be repaid at the end of such
Interest Period) be deemed to have delivered a Borrowing Request requesting that
such Borrowing be refinanced with a new Borrowing of equivalent amount in the
same currency, and such new Borrowing shall be an ABR Borrowing if denominated
in Dollars or a Eurodollar Borrowing with an Interest Period of one month's
duration if denominated in Sterling. If the applicable Borrower shall not have
delivered a Borrowing Request in accordance with this Section 2.03 prior to the
maturity date then in effect for any B/A Borrowing requesting that such
Borrowing be refinanced with another B/A Borrowing or with a Canadian Prime
Borrowing, then such Borrower shall (unless such Borrower has notified the
Canadian Administrative Agent, before 10:00 a.m., Toronto time, not less than
one Business Day prior to such maturity date, that such Borrowing is to be
repaid on such maturity date) be deemed to have delivered a Borrowing Request
requesting that such Borrowing be refinanced with a new Borrowing of equivalent
amount in the same currency, and such new Borrowing shall be a Canadian Prime
Borrowing.
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SECTION 2.04. Evidence of Debt; Repayment of Loans. (a) The outstanding
principal balance of each Loan shall be payable (i) in the case of a Revolving
Credit Loan or a Swingline Loan, on the Revolving Credit Maturity Date and (ii)
in the case of a Term Loan, as provided in Section 2.11. Each Loan shall bear
interest from the date of the first Borrowing hereunder on the outstanding
principal balance thereof as set forth in Section 2.06.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness to such Lender resulting from
each Loan made by such Lender from time to time, including the amounts of
principal and interest payable and paid to such Lender from time to time under
this Agreement.
(c) Each of the Administrative Agents shall maintain accounts in which it
will record (i) the applicable Borrower with respect to each Term Loan,
Swingline Loan, U.S. $ Revolving Credit Loan and U.K. (pound) Revolving Credit
Loan (in the case of the U.S. Administrative Agent) or C $ Revolving Credit Loan
(in the case of the Canadian Administrative Agent) made hereunder, the amount of
each Loan made and the Credit Facility under which each Loan is made hereunder,
the Type of each Loan made and the Interest Period (if a Eurodollar Borrowing)
or maturity date and Contract Period (if a B/A Borrowing) applicable thereto,
(ii) the currency in which each Loan is denominated, and, if such currency is an
Alternative Currency, (x) the Denomination Date for such Loan, (y) the Assigned
Dollar Value for such Loan and (z) the Spot Exchange Rate used to calculate such
Assigned Dollar Value, (iii) the amount of any principal or interest due and
payable or to become due and payable from the applicable Borrower to each Lender
hereunder and (iv) the amount of any sum received by such Administrative Agent
hereunder from the applicable Borrower and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraphs (b)
and (c) of this Section 2.04 shall be prima facie evidence of the existence and
amounts of the obligations therein recorded; provided, however, that the failure
of any Lender or either Administrative Agent to maintain such accounts or any
error therein shall not in any manner affect the obligations of the applicable
Borrower to repay the Loans in accordance with their terms.
(e) Notwithstanding any other provision of this Agreement, in the event any
Lender shall request and receive a
69
Note as provided in Section 10.04(h) or otherwise the interests represented by
that Note shall at all times (including after any assignment of all or part of
such interests pursuant to Section 10.04) be represented by one or more Notes
payable to the payee named therein or its registered assigns.
SECTION 2.05. Fees. (a) The Parent Borrower agrees to pay, or to cause the
applicable Borrower (with respect to the Credit Facility under which it may
request Borrowings) to pay, (i) to each Term Lender and U.S. $ Revolving Credit
Lender, through the U.S. Administrative Agent, on the last day of March, June,
September and December in each year, and on the date on which the Commitments of
all the Lenders shall be terminated as provided herein, a commitment fee (a
"Commitment Fee") on the average daily unused amount of the Commitments of such
Lender during the preceding quarter (or other period commencing with the Closing
Date or ending with the date on which the last of the Commitments of such Lender
shall be terminated), (ii) to each C $ Revolving Credit Lender through the
Canadian Administrative Agent, on the last day of March, June, September and
December in each year, and on the date on which the C $ Revolving Credit
Commitments of all the Lenders shall be terminated as provided herein, a
facility fee (the "Canadian Facility Fee") on the C $ Revolving Credit
Commitments of such Lender outstanding on each day (whether used or unused)
during the preceding quarter (or other period commencing with the Closing Date
or ending with the date on which the last of the C $ Revolving Credit
Commitments of such Lender shall be terminated) and (iii) to each U.K. (pound)
Revolving Credit Lender through the U.S. Administrative Agent, on the last day
of March, June, September and December in each year, and on the date on which
the U.K. (pound) Revolving Credit Commitments of all the Lenders shall be
terminated as provided herein, a facility fee (the "U.K. Facility Fee" and,
together with the Canadian Facility Fee, the "Facility Fees") on the U.K.
(pound) Revolving Credit Commitments of such Lender outstanding on each day
(whether used or unused) during the preceding quarter (or other period
commencing with the Closing Date or ending with the date on which the last of
the U.K. (pound) Revolving Credit Commitments of such Lender shall be
terminated), in the case of each of clauses (i), (ii) and (iii) at either (A) a
rate equal to 0.50% per annum or (B) for any day on or after the date of the
Parent Borrower's delivery to the U.S. Administrative Agent of the Parent
Borrower's consolidated financial statements for the fiscal quarter of the
Parent Borrower ending September 30, 1998, at the rate per annum effective for
each day in such period as set forth on Schedule A. All Commitment Fees and
Facility Fees shall be computed on the basis of the actual number of days
70
elapsed in a year of 365 or 366 days, as applicable. For the purpose of
calculating any Lender's Commitment Fee, the outstanding Swingline Loans during
the period for which such Lender's Commitment Fee is calculated shall be deemed
to be zero. The Commitment Fee and/or Facility Fee due to each Lender shall
commence to accrue on the Closing Date and shall cease to accrue on the date on
which the last of the Commitments of such Lender shall be terminated as provided
herein.
(b) The Parent Borrower from time to time agrees to pay (i) to each U.S. $
Revolving Credit Lender, through the U.S. Administrative Agent, on the last day
of March, June, September and December of each year and on the date on which the
U.S. $ Revolving Credit Commitment of such Lender shall be terminated as
provided herein, a fee (an "L/C Participation Fee") on such U.S. $ Revolving
Credit Lender's Applicable Percentage of the average daily aggregate Revolving
L/C Exposure (excluding the portion thereof attributable to unreimbursed L/C
Disbursements), during the preceding quarter (or shorter period commencing with
the date hereof or ending with the Revolving Credit Maturity Date or any date on
which the U.S. $ Revolving Credit Commitment of such Lender shall be terminated)
at the rate per annum equal to (A) 2.50% or (B) for any day on or after the date
of the Parent Borrower's delivery to the U.S. Administrative Agent of the Parent
Borrower's consolidated financial statements for the fiscal quarter of the
Parent Borrower ending September 30, 1998, the LIBOR Margin effective for each
day in such period for U.S. $ Revolving Credit Loans as set forth on Schedule A
and (ii) to the Fronting Bank, the fees separately agreed upon by the Parent
Borrower and the Fronting Bank plus, in connection with the issuance, amendment
or transfer of any such Letter of Credit or any L/C Disbursement thereunder, the
Fronting Bank's customary documentary and processing charges (collectively, the
"Fronting Bank Fees"). All L/C Participation Fees and Fronting Bank Fees that
are payable on a per annum basis shall be computed on the basis of the actual
number of days elapsed in a year of 360 days.
(c) The Parent Borrower agrees to pay to the U.S. Administrative Agent, for
its own account, the fees set forth in the Fee Letter dated as of October 14,
1997, at the times specified therein (the "U.S. Administrative Agent Fees").
(d) All Fees shall be paid on the dates due, in immediately available
funds, to the U.S. Administrative Agent or the Canadian Administrative Agent, as
the case may be, for distribution, if and as appropriate, among the Lenders,
except that the Fronting Bank Fees shall be paid directly to the
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Fronting Bank. All Fees payable to the U.S. Administrative Agent, the Fronting
Bank, the Term Lenders, the U.S. $ Revolving Credit Lenders and the U.K. (pound)
Revolving Credit Lenders shall be payable in Dollars, and all Fees payable to
the Canadian Administrative Agent and the C $ Revolving Credit Lenders shall be
payable in Canadian Dollars. Once paid, none of the Fees shall be refundable
under any circumstances.
SECTION 2.06. Interest on Loans. (a) Subject to the provisions of paragraph
(d) below and Section 2.07, the Loans comprising each ABR Borrowing shall bear
interest (computed on the basis of the actual number of days elapsed over a year
of 365 or 366 days, as the case may be, when determined by reference to the
Prime Rate and over a year of 360 days at all other times) at a rate per annum
equal to the Alternate Base Rate plus, in the case of (i) Tranche A Term Loans,
U.S. $ Revolving Credit Loans, C $ Revolving Credit Loans or Swingline Loans,
1.50%, (ii) Tranche B Term Loans, 1.75% or (iii) Tranche C Term Loans, 2.00%.
(b) Subject to the provisions of paragraph (d) below and Section 2.07, the
Loans comprising each Eurodollar Borrowing shall bear interest (computed on the
basis of the actual number of days elapsed over a year of 360 days) at a rate
per annum equal to the Adjusted LIBO Rate for the Interest Period in effect for
such Borrowing plus, in the case of (i) Tranche A Term Loans, U.S. $ Revolving
Credit Loans, C $ Revolving Credit Loans or U.K. (pound) Revolving Credit Loans,
2.50%, (ii) Tranche B Term Loans, 2.75% or (iii) Tranche C Term Loans, 3.00%.
(c) Subject to the provisions of paragraph (d) below and Section 2.07, the
Loans comprising any Canadian Prime Borrowing shall bear interest (computed on
the basis of the actual number of days elapsed over a year of 365 days) at a
rate per annum equal to the Canadian Prime Rate, plus 1.50%.
(d) Subject to the provisions of Section 2.07, Tranche A Term Loans,
Tranche B Term Loans, Tranche C Term Loans, Revolving Credit Loans and Swingline
Loans comprising any ABR Borrowing, Canadian Prime Borrowing or Eurodollar
Borrowing shall bear interest (computed as set forth in paragraph (a), (b) or
(c) above, as applicable) for any day on or after the date of the Parent
Borrower's delivery to the U.S. Administrative Agent of the Parent Borrower's
consolidated financial statements for the fiscal quarter of the Parent Borrower
ending September 30, 1998, at a rate per annum equal to (i) the Alternate Base
Rate or the Canadian Prime Rate, as applicable, plus the ABR Margin (which
72
shall apply to both ABR Borrowings and Canadian Prime Borrowings) or (ii) the
Adjusted LIBO Rate, plus the LIBOR Margin effective for such date as set forth
on Schedule A.
(e) Interest on each Loan (other than pursuant to a B/A Borrowing) shall be
payable on the Interest Payment Dates applicable to such Loan except as
otherwise provided in this Agreement. The applicable Alternate Base Rate or
Canadian Prime Rate for each day, or Adjusted LIBO Rate for each Interest
Period, shall be determined by the U.S. Administrative Agent or the Canadian
Administrative Agent (in the case of Canadian Prime Borrowings), and such
determination shall be conclusive absent manifest error. The applicable
Administrative Agent shall give the applicable Borrower prompt notice of each
such determination.
(f) Subject to the provisions of Section 2.07, the Loans comprising each
B/A Borrowing shall be subject to an Acceptance Fee calculated and payable at a
rate per annum equal to the applicable B/A Spread from time to time in effect
and payable as set forth in Section 2.21.
(g) For the purposes of the Interest Act (Canada) and disclosure
thereunder, whenever interest to be paid hereunder or in connection herewith is
to be calculated on the basis of a year of 360 days or any other period of time
that is less than a calendar year, the yearly rate of interest to which the rate
determined pursuant to such calculation is equivalent is the rate so determined
multiplied by the actual number of days in the calendar year in which the same
is to be ascertained and divided by either 360 or such other period of time, as
the case may be. The rates of interest under this Agreement are nominal rates,
and not effective rates or yields. The principle of deemed reinvestment of
interest does not apply to any interest calculation under this Agreement.
(h) If any provision of this Agreement would oblige any Borrower to make
any payment of interest or other amount payable to any C $ Revolving Credit
Lender in respect of any C $ Revolving Credit Loan made by such Lender in an
amount or calculated at a rate which would be prohibited by law or would result
in a receipt by such Lender of "interest" at a "criminal rate" (as such terms
are construed under the Criminal Code (Canada)), then notwithstanding such
provision, such amount or rate shall be deemed to have been adjusted with
retroactive effect to the maximum amount or rate of interest, as the case may
be, as would not be so prohibited by law or so result in a
73
receipt by such Lender of "interest" at a "criminal rate", such adjustment to be
effected, to the extent necessary, as follows:
(i) first, by reducing the amount or rate of interest or the amount
or rate of any Acceptance Fee required to be paid to the affected
Lender under this Section 2.06; and
(ii) thereafter, by reducing any fees, commissions, premiums and other
amounts required to be paid to the affected Lender which would
constitute interest for purposes of Section 347 of the Criminal
Code (Canada).
SECTION 2.07. Default Interest. If any Borrower shall default in the
payment of the principal of or interest on any Loan or any other amount becoming
due hereunder, by acceleration or otherwise, the applicable Borrower shall on
demand from time to time pay interest, to the extent permitted by law, on such
defaulted amount for the period beginning on the date of such default up to (but
not including) the date of actual payment (after as well as before judgment) at
a rate per annum (computed on the basis of the actual number of days elapsed
over a year of 360 days) equal to (a) in the case of (i) overdue Loans, overdue
interest thereon, overdue Commitment Fees, overdue Facility Fees or other
overdue amounts owing in respect of Loans or other obligations (or the related
Commitments) under a particular Credit Facility or (ii) other overdue amounts
owing hereunder to a Lender participating in no more than one of the Credit
Facilities, the rate that would otherwise be applicable to ABR Loans under such
Credit Facility or for Eurodollar Loans in the case of the above described
overdue amounts relating to the U.K. (pound) Revolving Credit Facility, as
applicable, pursuant to Section 2.06 plus 2.0% or (b) in the case of any other
overdue amount, the Alternate Base Rate plus the ABR Margin for Tranche A Term
Loans plus 2.0%.
SECTION 2.08. Alternate Rate of Interest. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Borrowing or the Contract Period for a B/A
Borrowing the U.S. Administrative Agent (in the case of a Term Loan, U.S. $
Revolving Credit Loan or U.K. (pound) Revolving Credit Loan) or the Canadian
Administrative Agent (in the case of a C $ Revolving Credit Loan) shall have
determined that deposits in the principal amounts of the Loans comprising such
Borrowing and in the currency in which such Loans are to be denominated are not
74
generally available in the London interbank market or in the Canadian market for
bankers' acceptances, as applicable, or that the rates at which such deposits
are being offered will not adequately and fairly reflect the cost to the
Majority Lenders in respect of the affected Credit Facility of making or
maintaining its Eurodollar Loan during such Interest Period or its B/A or B/A
Equivalent Note during such Contract Period, as applicable, or that reasonable
means do not exist for ascertaining the Adjusted LIBO Rate or the Discount Rate,
as applicable, such Administrative Agent shall, as soon as practicable
thereafter, give written or telecopy notice of such determination to the Parent
Borrower and any other applicable Borrower and the Lenders. In the event of any
such determination, until such Administrative Agent shall have advised the
Parent Borrower and any other applicable Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, any request by any
Borrower for a Eurodollar Borrowing or a B/A Borrowing, as applicable, pursuant
to Section 2.03 or 2.10 shall be deemed to be a request for an ABR Borrowing or
a Canadian Prime Rate Loan (if a B/A Borrowing had been requested), as
applicable, or, in the case of a request for a U.K. (pound) Revolving Credit
Borrowing shall be deemed to be void. Each determination by an Administrative
Agent hereunder shall be conclusive absent manifest error.
SECTION 2.09. Termination and Reduction of Commitments. (a) The Tranche B
Term Loan Commitments, Tranche C Term Loan Commitments and 50% of the Tranche A
Term Loan Commitments shall be automatically and permanently terminated at 5:00
p.m., New York City time, on the Closing Date. The remaining Tranche A Term Loan
Commitments shall be automatically and permanently terminated at 5:00 p.m., New
York City time, on the date that is 18 months after the Closing Date. Prior to
the termination thereof in full, the Tranche A Term Loan Commitments shall be
automatically and permanently reduced at 5:00 p.m., New York City time, on each
Tranche A Term Loan Closing Date, by an aggregate amount equal to the aggregate
principal amount of the Tranche A Term Loans made on such date. The Revolving
Credit Commitments shall be automatically and permanently terminated at 5:00
p.m., New York City time, on the Revolving Credit Maturity Date.
(b) Upon at least three Business Days' prior irrevocable written or
telecopy notice to the U.S. Administrative Agent, the Parent Borrower (on behalf
of all the applicable Borrowers) may at any time in whole permanently terminate,
or from time to time in part permanently reduce, any of the Term
75
Commitments, the U.S. $ Revolving Credit Commitments, the U.K. (pound) Revolving
Credit Commitments or the C $ Revolving Credit Commitments; provided, however,
that (i) each partial reduction of any Commitments pursuant to this Section
2.09(b) shall be in an integral multiple of $1,000,000 and in a minimum
principal amount of $5,000,000 (or, if less, the remaining amount of the
applicable Commitments), (ii) the Total U.S. $ Revolving Credit Commitment shall
not be reduced to an amount that is less than the aggregate U.S. $ Revolving
Credit Exposure of the U.S. $ Revolving Credit Lenders at the time, (iii) the
Total U.K. (pound) Revolving Credit Commitment shall not be reduced to an amount
that is less than the aggregate U.K. (pound) Revolving Credit Exposure of the
U.K. (pound) Revolving Credit Lenders at the time and (iv) the Total C $
Revolving Credit Commitment shall not be reduced to an amount that is less than
the aggregate C $ Revolving Credit Exposure of the C $ Revolving Credit Lenders
at the time.
(c) Upon at least ten Business Days' prior irrevocable written or telecopy
notice to the U.S. Administrative Agent and, if applicable, the Canadian
Administrative Agent, the Parent Borrower may, from time to time, in whole or in
part, temporarily reduce the U.S. $ Revolving Credit Commitments, the C $
Revolving Credit Commitments or the U.K. (pound) Revolving Credit Commitments;
provided, however, that (x) any reduction of the U.S. $ Revolving Credit
Commitments pursuant to this Section 2.09(c), to the extent such reduction is
allocated by the Parent Borrower to increase the C $ Revolving Credit
Commitments, shall only be made on the first day of a fiscal quarter and (y)
subject to Section 2.13(c), any reduction of the C $ Revolving Credit
Commitments pursuant to this Section 2.09(c) shall be made from time to time in
accordance with such notice of the Parent Borrower, and provided, further, that
(i) each partial reduction of the U.S. $ Revolving Credit Commitments, the C $
Revolving Credit Commitments or the U.K. (pound) Revolving Credit Commitments
pursuant to this Section 2.09(c) shall be in an integral multiple of $1,000,000
and in a minimum aggregate principal amount of $5,000,000 (or, if less, the
remaining amount of the applicable Commitments), (ii) the Total U.S. $ Revolving
Credit Commitments shall not be reduced to an amount that is less than the
aggregate U.S. $ Revolving Credit Exposure of the U.S. $ Revolving Credit
Lenders at the time, (iii) the Total C $ Revolving Credit Commitments shall not
be reduced to an amount that is less than the aggregate C $ Revolving Credit
Exposure of the C $ Revolving Credit Lenders at the time, (iv) the Total U.K.
(pound) Revolving Credit Commitments shall not be reduced to an amount that is
less than the aggregate U.K. (pound) Revolving Credit Exposure of the U.K.
(pound)
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Revolving Credit Lenders at the time, (v) the amount of any reduction of the
U.S. $ Revolving Credit Commitments pursuant to this Section 2.09(c) shall not
exceed the difference, if positive, between (A) the aggregate amount of all
prior reductions, if any, of the C $ Revolving Credit Commitments and the U.K.
(pound) Revolving Credit Commitments pursuant to this Section 2.09(c) and (B)
the aggregate amount of all prior reductions, if any, of the U.S. $ Revolving
Credit Commitments pursuant to this Section 2.09(c), (vi) the representations
and warranties set forth in each Loan Document shall be true and correct in all
material respects on and as of the date of such termination or reduction with
the same effect as though made on and as of such date, except to the extent such
representations expressly relate to an earlier date, and (vii) at the time of
and immediately after such termination or reduction no Event of Default or
Default shall have occurred and be continuing. The Parent Borrower will specify
in each notice of reduction of U.S. $ Revolving Credit Commitments given to the
Administrative Agent pursuant to this Section 2.09(c) the amount of such
reduction that will be allocated to increase the C $ Revolving Credit
Commitments and the amount of such reduction that will be allocated to increase
the U.K.(pound) Revolving Credit Commitments pursuant to Section 2.09(e) which
specified amount or amounts shall equal the full amount of the reduction of the
U.S. $ Revolving Credit Commitments; provided, however, that (i) the amount of
any such reduction that will be allocated to increase the C $ Revolving Credit
Commitments shall not exceed the difference, if positive, between (A) the
aggregate amount of all prior reductions of C $ Revolving Credit Commitments
pursuant to this Section 2.09(c) and (B) the aggregate amount of all prior
reductions of U.S. $ Revolving Credit Commitments pursuant to this Section
2.09(c) that were allocated to increases in the C $ Revolving Credit Commitments
and (ii) the amount of any such reduction that will be allocated to increase the
U.K. (pound) Revolving Credit Commitments shall not exceed the difference, if
positive, between (C) the aggregate amount of all prior reductions of U.K.
(pound) Revolving Credit Commitments pursuant to Section this 2.09(c) and (D)
the aggregate amount of all prior reductions of U.S. $ Revolving Credit
Commitments pursuant to this Section 2.09(c) that were allocated to increases in
the U.K. (pound) Revolving Credit Commitments.
(d) Each reduction in the Term Commitments and the U.S. $ Revolving Credit
Commitments pursuant to Section 2.09(b) shall be made ratably among the
applicable Term Lenders and the U.S. $ Revolving Credit Lenders, respectively,
in accordance with their respective applicable Term Commitments or U.S. $
Revolving
77
Credit Commitments, as applicable. Each reduction in the U.K. (pound) Revolving
Credit Commitments pursuant to Section 2.09(b) or (c) shall be made ratably
among the U.K.(pound) Revolving Credit Lenders in accordance with their
respective U.K. (pound) Revolving Credit Commitments and each reduction in the C
$ Revolving Credit Commitments pursuant to Section 2.09(b) or (c) shall be made
ratably among the C $ Revolving Credit Lenders in accordance with their
respective C $ Revolving Credit Commitments. Each reduction of the U.S. $
Revolving Credit Commitments pursuant to Section 2.09(c) (i) that is allocated
to the increase of C $ Revolving Credit Commitments pursuant to Section 2.09(c)
shall be made ratably among the Original Reallocated C $ Lenders (as defined
below), and any other Lenders to which the applicable U.S. $ Revolving Credit
Commitments of Reallocated C $ Lenders have been assigned pursuant to Section
10.04 (such other Lenders, together with the Original Reallocated C $ Lenders,
the "Reallocated C $ Lenders"), in accordance with their respective U.S. $
Revolving Credit Commitments to the extent such Commitments arose or were
increased pursuant to Section 2.09(e) in connection with reductions in the C $
Revolving Credit Commitments pursuant to Section 2.09(c) and (ii) that is
allocated to the increase of U.K. (pound) Revolving Credit Commitments pursuant
to Section 2.09(c) shall be made ratably among the Original Reallocated U.K.
(pound) Lenders (as defined below), and any other Lenders to which the
applicable U.S. $ Revolving Credit Commitments of Reallocated U.K. (pound)
Lenders have been assigned pursuant to Section 10.04 (such other Lenders,
together with the Original Reallocated U.K. (pound) Revolving Lenders, the "U.K.
(pound) Reallocated Lenders"), in accordance with their respective U.S. $
Revolving Facility Commitments to the extent such Commitments arose or were
increased pursuant to Section 2.09(e) in connection with reductions in the U.K.
(pound) Revolving Credit Commitments pursuant to Section 2.09(c). The Parent
Borrower shall pay to the applicable Administrative Agent for the account of the
applicable Lenders, on the date of each termination or reduction, the Commitment
Fees and, to the extent applicable, L/C Participation Fees and Facility Fees on
the amount of the Commitments so terminated or reduced accrued to but excluding
the date of such termination or reduction.
(e) Upon each reduction of any Lender's C $ Revolving Credit Commitment or
U.K. (pound) Revolving Credit Commitment pursuant to Sections 2.09(c) and (d),
subject to the provisions of Sections 2.09(c)(vi) and (vii), such Lender will
automatically and without further act be deemed to have assumed a U.S. $
Revolving Credit Commitment (or, if such Lender has an existing U.S. $ Revolving
Credit Commitment, such Commitment will
78
automatically and without further act be increased) in an amount equal to the
amount of such reduction and, if any payment to be made to such Lender in
respect of Loans or other amounts that will become owing to such Lender by the
Parent Borrower in connection with such Commitment would be subject to any
withholding or other Tax, such Lender will immediately assign such Commitment
pursuant to Section 10.04 to an Affiliate of such Lender that will not be
subject to such Tax. Each Lender that is deemed to have assumed a U.S. $
Revolving Credit Commitment, the U.S. $ Revolving Credit Commitment of which has
been increased or to which a U.S. $ Revolving Credit Commitment has been
assigned, in each case pursuant to this Section 2.09(e), (i) in connection with
a reduction of such Lender's C $ Revolving Credit Commitment is referred to
herein as an "Original Reallocated C $ Lender" and (ii) in connection with a
reduction of such Lender's U.K. (pound) Revolving Credit Commitment is referred
to herein as an "Original Reallocated U.K. (pound) Lender".
(f) Upon each reduction of any Reallocated C $ Lender's U.S. $ Revolving
Credit Commitment pursuant to Sections 2.09(c) and (d) that has been allocated
to the increase of the C $ Revolving Credit Commitments pursuant to Section
2.09(c), subject to the provisions of Sections 2.09(c)(vi) and (vii), the C $
Revolving Credit Commitment of such Lender (or of the C $ Revolving Credit
Lender that assigned such U.S. $ Revolving Credit Commitment to such Reallocated
C $ Lender) will automatically and without further act be increased in an amount
equal to such reduction. Upon each reduction of any Reallocated U.K. (pound)
Lender's U.S. $ Revolving Credit Commitment pursuant to Sections 2.09(c) and (d)
that has been allocated to the increase of the U.K. (pound) Revolving Credit
Commitments pursuant to Section 2.09(c), subject to the provisions of Sections
2.09(c)(vi) and (vii), the U.K. (pound) Revolving Credit Commitment of such
Lender (or of the U.K. (pound) Revolving Credit Lender that assigned such U.S. $
Revolving Credit Commitment to such Reallocated U.K. (pound) Lender) will
automatically and without further act be increased in an amount equal to such
reduction.
(g) Notwithstanding the foregoing, the Parent Borrower shall not be
entitled to request more than two reductions of Commitments pursuant to Section
2.09(c) during any fiscal year of the Parent Borrower, provided, that for this
purpose a requested reduction of the C $ Revolving Credit Commitments and a
requested reduction of the U.K. (pound) Revolving Credit Commitments will be
deemed a single reduction if made pursuant to the same reduction request. The
U.S. Administrative Agent shall promptly notify each Lender of (i) each
reduction of Commitments pursuant to
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Section 2.09(c), (ii) each corresponding increase in Commitments pursuant to
Section 2.09(e) or (f) and (iii) such Lender's share, if any, of each such
reduction or increase.
(h) Upon each increase in the Total U.S. $ Revolving Credit Commitment
pursuant to Section 2.09(e), (i) each U.S. $ Revolving Credit Lender immediately
prior to such increase will automatically and without further act be deemed to
have assigned to each Original Reallocated C $ Lender and Original Reallocated
U.K. (pound) Lender in respect of such increase, and each such Original
Reallocated C $ Lender and Original Reallocated U.K. (pound) Lender will
automatically and without further act be deemed to have assumed, a portion of
such U.S. $ Revolving Credit Lender's participations hereunder in outstanding
Letters of Credit and Swingline Loans such that, after giving effect to each
such deemed assignment and assumption of participations, the percentage of the
aggregate outstanding (A) participations hereunder in Letters of Credit and (B)
participations hereunder in Swingline Loans held by each U.S. $ Revolving Credit
Lender (including each such Original Reallocated C $ Lender and Original
Reallocated U.K. (pound) Lender) will equal such U.S. $ Revolving Credit
Lender's Applicable Percentage and (ii) if, on the date of such increase, there
are any U.S. $ Revolving Credit Loans outstanding, the Parent Borrower will
borrow from each such Original Reallocated C $ Lender and Original Reallocated
U.K. (pound) Lender U.S. $ Revolving Credit Loans such that, after giving effect
to such Loans, the percentage of the aggregate principal amount of U.S. $
Revolving Credit Loans held by each U.S. $ Revolving Credit Lender (including
each such Original Reallocated C $ Lender and Original Reallocated U.K. (pound)
Lender) will equal such U.S. $ Revolving Credit Lender's Applicable Percentage.
(i) Upon each increase in the Total C $ Revolving Credit Commitment or
Total U.K. (pound) Revolving Credit Commitment pursuant to Section 2.09(f), if,
on the date of such increase, there are any C $ Revolving Credit Loans or U.K.
(pound) Revolving Credit Loans, as applicable, outstanding, the Canadian
Borrower or U.K. Borrower, as applicable, will borrow from each Lender to which
a portion of the increase in such Commitment was allocated pursuant to Section
2.09(f) C $ Revolving Credit Loans or U.K. (pound) Revolving Credit Loans, as
applicable, such that, after giving effect to such Loans, the percentage of the
aggregate principal amount of C $ Revolving Credit Loans or U.K. (pound)
Revolving Credit Loans, as applicable, held by each C $ Revolving Credit Lender
or U.K. (pound) Revolving Credit Lender, as applicable, will equal such Lender's
Applicable Percentage.
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(j) The Administrative Agents and the Lenders hereby agree that the minimum
borrowing, pro rata borrowing and pro rata payment requirements contained
elsewhere in this Agreement shall not apply to the transactions effected
pursuant to Section 2.09(h) or (i). Each Borrower hereby agrees to use
reasonable efforts to cause, as soon as practicable after an increase in the
Total U.S. $ Revolving Credit Commitment pursuant to Section 2.09(e) or an
increase in the Total C $ Revolving Credit Commitment or Total U.K. (pound)
Revolving Credit Commitment pursuant to Section 2.09(f), the percentage of all
U.S. $ Revolving Credit Borrowings, C $ Revolving Credit Borrowings or U.K.
(pound) Revolving Credit Borrowings, as applicable, outstanding hereunder held
by each U.S. $ Revolving Credit Lender, C $ Revolving Credit Lender or U.K.
(pound) Revolving Credit Lender to equal the Applicable Percentage of such
Lender.
SECTION 2.10. Conversion and Continuation of Term Borrowings. The Parent
Borrower shall have the right at any time upon prior irrevocable notice to the
U.S. Administrative Agent (a) not later than 12:00 (noon), New York City time,
one Business Day prior to conversion, to convert any Eurodollar Term Borrowing
into an ABR Term Borrowing, (b) not later than 10:00 a.m., New York City time,
three Business Days prior to conversion or continuation, to convert any ABR Term
Borrowing into a Eurodollar Term Borrowing or to continue any Eurodollar Term
Borrowing as a Eurodollar Term Borrowing for an additional Interest Period, and
(c) not later than 10:00 a.m., New York City time, three Business Days prior to
conversion, to convert the Interest Period with respect to any Eurodollar Term
Borrowing to another permissible Interest Period, subject in each case to the
following:
(i) each conversion or continuation shall be made pro rata among the
relevant Lenders in accordance with the respective principal amounts of the
Loans comprising the converted or continued Term Borrowing;
(ii) if less than all the outstanding principal amount of any Term
Borrowing shall be converted or continued, then each resulting Term
Borrowing shall satisfy the limitations specified in Sections 2.02(a) and
(b) regarding the principal amount and maximum number of Borrowings of the
relevant Type;
(iii) each conversion shall be effected by each Lender by recording
for the account of such Lender the new Term Loan of such Lender resulting
from such conversion and reducing the Term Loan (or portion thereof) of
such Lender being
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converted by an equivalent principal amount; accrued interest on a Term
Loan (or portion thereof) being converted shall be paid by the Parent
Borrower at the time of conversion;
(iv) if any Eurodollar Term Borrowing is converted at a time other
than the end of the Interest Period applicable thereto, the Parent Borrower
shall pay, upon demand, any amounts due to the Lenders pursuant to Section
2.15;
(v) any portion of a Term Borrowing maturing or required to be repaid
in less than one month may not be converted into or continued as a
Eurodollar Term Borrowing;
(vi) any portion of a Eurodollar Term Borrowing which cannot be
converted into or continued as a Eurodollar Term Borrowing by reason of the
immediately preceding clause shall be automatically converted at the end of
the Interest Period in effect for such Borrowing into an ABR Term
Borrowing; and
(vii) no Interest Period may be selected for any Eurodollar Term
Borrowing that would end later than an Installment Date occurring on or
after the first day of such Interest Period if, after giving effect to such
selection, the aggregate outstanding amount of (A) the Eurodollar Term
Borrowings made pursuant to the same Commitments with Interest Periods
ending on or prior to such Installment Date and (B) the ABR Term Borrowings
made pursuant to the same Commitments would not be at least equal to the
principal amount of Term Borrowings made pursuant to the same Commitments
to be paid on such Installment Date.
Each notice pursuant to this Section 2.10 shall be irrevocable and shall
refer to this Agreement and specify (i) the identity and amount of the Term
Borrowing that the Parent Borrower requests be converted or continued, (ii)
whether such Term Borrowing is to be converted to or continued as a Eurodollar
Borrowing or an ABR Borrowing, (iii) if such notice requests a conversion, the
date of such conversion (which shall be a Business Day) and (iv) if such Term
Borrowing is to be converted to or continued as a Eurodollar Borrowing, the
Interest Period with respect thereto. If no Interest Period is specified in any
such notice with respect to any conversion to or continuation as a Eurodollar
Borrowing, the Parent Borrower shall be deemed to have selected an Interest
Period of one month's duration. The U.S. Administrative Agent shall advise the
other Lenders of any
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notice given pursuant to this Section 2.10 and of each Lender's portion of any
converted or continued Term Borrowing. If the Parent Borrower shall not have
given notice in accordance with this Section 2.10 to continue any Term Borrowing
into a subsequent Interest Period (and shall not otherwise have given notice in
accordance with this Section 2.10 to convert such Term Borrowing), such Term
Borrowing shall, at the end of the Interest Period applicable thereto (unless
repaid pursuant to the terms hereof), automatically be converted into an ABR
Borrowing.
SECTION 2.11. Repayment of Term Borrowings. (a) The Term Borrowings shall
be payable as to principal in the amounts and on the dates set forth below (each
such date being called an "Installment Date").
Tranche A Term Tranche B Term Tranche C Term
Date Loan Amount Loan Amount Loan Amount
September 30, 1999 $ 500,000 $ 500,000 $ 250,000
March 31, 2000 500,000 500,000 250,000
September 30, 2000 1,000,000 500,000 250,000
March 31, 2001 1,000,000 500,000 250,000
September 30, 2001 6,000,000 500,000 250,000
March 31, 2002 6,000,000 500,000 250,000
September 30, 2002 11,250,000 500,000 250,000
March 31, 2003 11,250,000 500,000 250,000
September 30, 2003 13,750,000 500,000 250,000
March 13, 2004 13,750,000
March 31, 2004 500,000 250,000
September 30, 2004 500,000 250,000
March 13, 2005 109,500,000
March 31, 2005 250,000
September 30, 2005 250,000
March 13, 2006 41,750,000
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(b) Except as set forth in paragraphs (c), (d) and (e) below,
(i) all Excess Xxxxxx Proceeds, Net Proceeds and Excess Cash Flow
(collectively, "Proceeds or Excess Cash Flow") to be applied at any time to
prepay Term Borrowings and, if applicable, to reduce Tranche A Term Loan
Commitments pursuant to Sections 2.12(c), (d) and (e), respectively, shall
be applied as follows: (A) a portion of such Proceeds or Excess Cash Flow
equal to (x) the amount of such Proceeds or Excess Cash Flow multiplied by
(y) a fraction, the numerator of which is the outstanding principal amount
of Tranche B Term Borrowings at such time and the denominator of which is
the sum of the outstanding principal amount of Term Borrowings at such time
and the unused Tranche A Term Loan Commitments at such time shall be
applied to prepay Tranche B Term Borrowings, (B) a portion of such Proceeds
or Excess Cash Flow equal to (x) the amount of such Proceeds or Excess Cash
Flow multiplied by (y) a fraction, the numerator of which is the
outstanding principal amount of Tranche C Term Borrowings at such time and
the denominator of which is the sum of the outstanding principal amount of
Term Borrowings at such time and the unused Tranche A Term Loan Commitments
at such time shall be applied to prepay Tranche C Term Borrowings and (C) a
portion of such Proceeds or Excess Cash Flow equal to (x) the amount of
such Proceeds or Excess Cash Flow multiplied by (y) a fraction, the
numerator of which is the sum of the outstanding principal amount of
Tranche A Term Borrowings at such time and the unused Tranche A Term Loan
Commitments at such time and the denominator of which is the sum of the
outstanding principal amount of Term Borrowings at such time and the unused
Tranche A Term Loan Commitments at such time shall be applied, first, to
prepay Tranche A Term Borrowings and, after all outstanding Tranche A Term
Borrowings have been prepaid, to reduce Tranche A Term Loan Commitments and
(ii) each prepayment of principal of the Term Borrowings pursuant to
Section 2.12(a) shall be applied to the Tranche A Term Borrowings, the
Tranche B Term Borrowings and the Tranche C Term Borrowings ratably in
accordance with the respective outstanding amounts thereof.
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Such prepayments made pursuant to Section 2.12(a) and prepayments or
reductions in the Tranche A Term Loan Commitments made pursuant to Section
2.12(d) shall reduce scheduled payments required under paragraph (a) above after
the date of such prepayment in the scheduled order of maturity and such
prepayments and reductions in the Tranche A Term Loan Commitments made pursuant
to Sections 2.12(c) and 2.12(e) shall reduce scheduled payments required under
paragraph (a) above after the date of such prepayment on a pro rata basis. To
the extent not previously paid, all Tranche A Term Borrowings shall be due and
payable on the Tranche A Maturity Date, all Tranche B Term Borrowings shall be
due and payable on the Tranche B Maturity Date and all Tranche C Term Borrowings
shall be due and payable on the Tranche C Maturity Date. Each payment of
Borrowings pursuant to this Section 2.11 shall be accompanied by accrued
interest on the principal amount paid to but excluding the date of payment.
(c) In the event and on each occasion Tranche A Term Loan Commitments shall
be reduced or shall expire or terminate other than as a result of the making of
Tranche A Term Loans or as a result of (i) the making of any mandatory or
optional prepayment or (ii) the reduction of the Tranche A Term Loan
Commitments, in the case of clauses (i) and (ii), pursuant to Section 2.12(a),
(c), (d) or (e), the installments payable on each Installment Date in respect of
Tranche A Term Loans shall be reduced pro rata by an aggregate amount equal to
the amount of such reduction, expiration or termination.
(d) Notwithstanding the provisions of paragraph (b) above, at the election
of the Parent Borrower, the first $10,000,000 in aggregate (i) mandatory
prepayments that would otherwise be made pursuant to Section 2.12(d) to Lenders
holding Tranche B Term Loans or Tranche C Term Loans, or (ii) optional
prepayments that would otherwise be made pursuant to Section 2.12(a) to Lenders
holding Tranche B Term Loans or Tranche C Term Loans, in either case shall be
applied, until the Tranche A Term Borrowings shall have been paid in full and,
in the case of mandatory prepayments, the Tranche A Term Loan Commitments have
been reduced to zero, to prepay Tranche A Term Borrowings and, in the case of
mandatory prepayments, after all outstanding Tranche A Term Borrowings have been
prepaid, to reduced Tranche A Term Loan Commitments, and shall reduce scheduled
payments in respect of such Tranche A Term Borrowings
85
under Section 2.11(a) after the date of any such prepayment in the scheduled
order of maturity (it being understood that the Parent Borrower shall be
entitled to retain mandatory prepayment amounts referred to in this Section
2.11(d) to the extent such amounts have been applied to reduce Tranche A Term
Loan Commitments as aforesaid).
(e) Any Lender holding Tranche B Term Loans or Tranche C Term Loans may, to
the extent Tranche A Term Borrowings are outstanding or, in the case of any
mandatory prepayment referred to in clause (ii) below, the Tranche A Term Loan
Commitments are greater than zero, elect on not less than one Business Day's
prior written notice to the U.S. Administrative Agent with respect to (i) any
optional prepayment made pursuant to Section 2.12(a), if the Parent Borrower
shall have consented to the availability of such election pursuant to this
Section 2.11(e), or (ii) any mandatory prepayment made pursuant to Section
2.12(d), not to have such prepayment applied to such Lender's Tranche B Term
Loans and/or Tranche C Term Loans until all Tranche A Term Borrowings shall have
been paid in full and , in the case of any such mandatory prepayment, the
Tranche A Term Loan Commitments have been reduced to zero, in which case the
amount not so applied shall be applied to prepay Tranche A Term Borrowings and,
in the case of any such mandatory prepayment, after all outstanding Tranche A
Term Borrowings have been prepaid, to reduce Tranche A Term Loan Commitments,
and shall reduce scheduled payments of Tranche A Term Borrowings under Section
2.11(a) after the date of any prepayment in the scheduled order of maturity (it
being understood that the Parent Borrower shall be entitled to retain mandatory
prepayment amounts referred to in this Section 2.11(e) to the extent such
amounts have been applied to reduce Tranche A Term Loan Commitments as
aforesaid).
SECTION 2.12. Prepayment. (a) Each Borrower shall, subject to Section
2.12(h), have the right at any time and from time to time to prepay any
Borrowing, in whole or in part, upon at least three Business Days' prior written
or telecopy notice (or telephone notice promptly confirmed by written or
telecopy notice) to the applicable Administrative Agent (or in the case of
Swingline Loans, same day telecopy notice (or telephone notice promptly
confirmed by telecopy notice)), before 11:00 a.m., New York City time or Toronto
time, as the case may be (or, in the case of prepayment of a U.K. (pound)
Revolving Credit Borrowing in respect of which previous notices have been
delivered to the U.S.
86
Administrative Agent in London, then to the U.S. Administrative Agent in London
before 1:00 p.m., London time); provided, however, that (i) each partial
prepayment under this Section 2.12(a) (other than of a Swingline Loan) shall be
in an aggregate amount that is an integral multiple of $1,000,000 (or the
equivalent based upon Assigned Dollar Values) and not less than $5,000,000 (or
the equivalent based upon Assigned Dollar Values) (or, if less, the aggregate
outstanding amount under the applicable Credit Facility), and (ii) a partial
prepayment of a Eurodollar Borrowing under this paragraph shall not be made if
it would result in the remaining aggregate outstanding principal amount thereof
being less than the minimum principal amount that would be required pursuant to
Section 2.02(a) in respect of a Eurodollar Borrowing made on the date of such
prepayment (determined based upon Assigned Dollar Values in the case of U.K.
(pound) Revolving Credit Borrowings).
(b) In the event of any termination of the U.S. $ Revolving Credit
Commitments, the Parent Borrower shall on the date of such termination repay or
prepay all its outstanding Swingline Loans and U.S. $ Revolving Credit
Borrowings, reduce the Revolving L/C Exposure to zero and cause all Letters of
Credit issued on behalf of it to be canceled and returned to the Fronting Bank.
In the event of any termination of the U.K. (pound) Revolving Credit Commitments
or C $ Revolving Credit Commitments, the U.K. Borrower or the Canadian Borrower,
as applicable, shall on the date of such termination repay or prepay all its
outstanding U.K. (pound) Revolving Credit Borrowings or C $ Revolving Credit
Borrowings, as applicable. In the event of any partial reduction of the U.S. $
Revolving Credit Commitments, then (i) at or prior to the effective date of such
reduction, the U.S. Administrative Agent shall notify the Parent Borrower, the
Swingline Lender and the U.S. $ Revolving Credit Lenders of the Aggregate U.S. $
Revolving Credit Exposure, and (ii) if the Aggregate U.S. $ Revolving Credit
Exposure would exceed the Total U.S. $ Revolving Credit Commitment after giving
effect to such reduction, then the Parent Borrower shall, on the date of such
reduction, repay or prepay Swingline Loans and U.S. $ Revolving Credit
Borrowings, or reduce the Revolving L/C Exposure, in an aggregate amount
sufficient to eliminate such excess. In the event of any partial reduction of
the U.K. (pound) Revolving Credit Commitments or C $ Revolving Credit
Commitments, then (i) at or prior to the effective date of such reduction, the
U.S. Administrative Agent or the Canadian Administrative Agent, as
87
applicable, shall notify the Parent Borrower and the U.K. Borrower or the
Canadian Borrower, as applicable, and the U.K. (pound) Revolving Credit Lenders
or the C $ Revolving Credit Lenders, as applicable, of the Aggregate U.K.
(pound) Revolving Credit Exposure or the Aggregate C $ Revolving Credit
Exposure, and (ii) if the Aggregate U.K. (pound) Revolving Credit Exposure or
the Aggregate C $ Revolving Credit Exposure, as applicable, would exceed the
Total U.K. (pound) Revolving Credit Commitment or the Total C $ Revolving Credit
Commitment, as applicable, after giving effect to such reduction, then the
Parent Borrower, the U.K. Borrower or the Canadian Borrower, as applicable,
shall, on the date of such reduction, repay or prepay U.K. (pound) Revolving
Credit Borrowings or C $ Revolving Credit Borrowings, as applicable, in an
aggregate amount sufficient to eliminate such excess. Notwithstanding the
foregoing, on the date of any termination or reduction of the U.S. $ Revolving
Credit Commitments, the U.K. (pound) Revolving Credit Commitments or the C $
Revolving Credit Commitments pursuant to Section 2.09, the Parent Borrower shall
pay or prepay, or shall cause the applicable Subsidiary Borrower to pay or
prepay, so much of, first, in the case of any termination or reduction of the
U.S. $ Revolving Credit Commitments, the Swingline Loans and, second, the U.S. $
Revolving Credit Borrowings, the U.K. (pound) Revolving Credit Borrowings or the
C $ Revolving Credit Borrowings, as the case may be, as shall be necessary in
order that the Aggregate U.S. $ Revolving Credit Exposure will not exceed the
Total U.S. $ Revolving Credit Commitment, the Aggregate Revolving U.K. (pound)
Credit Exposure will not exceed the Total U.K. (pound) Revolving Credit
Commitment or the Aggregate C $ Revolving Credit Exposure will not exceed the
Total C $ Revolving Credit Commitment, as applicable, after giving effect to
such termination or reduction.
(c) The Parent Borrower shall apply all Net Proceeds promptly upon receipt
thereof by the Parent Borrower or any Subsidiary to prepay Term Borrowings and,
if applicable, to reduce Tranche A Term Loan Commitments in accordance with
Section 2.11(b).
(d) Not later than 90 days after the end of each fiscal year of the Parent
Borrower, commencing with the fiscal year ending December 31, 1998, the Parent
Borrower shall calculate Excess Cash Flow for such fiscal year and shall prepay
Term Borrowings and, if applicable, reduce Tranche A Term Loan Commitments in
accordance with Section 2.11(b) in an amount equal
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to (i) 75% of such Excess Cash Flow, provided that, if at the time of such
prepayment or reduction, the ABR Margin and the LIBOR Margin are determined by
reference to Level 4 as set forth on Schedule A, the Parent Borrower shall be
required to apply only 50% of such Excess Cash Flow to prepay such Borrowings
and, if applicable, to reduce such Commitments; less (ii) any voluntary
prepayments of Term Loans during the period beginning on April 1 of such fiscal
year and ending on March 31 of the immediately succeeding fiscal year and any
permanent reductions to the Revolving Credit Commitments made during the same
period to the extent that an equal amount of the Revolving Credit Loans
simultaneously is repaid, provided that, with respect to the period ending on
December 31, 1998, Excess Cash Flow shall, notwithstanding anything to the
contrary herein, be determined with respect to the period beginning on the
Closing Date and ending on December 31, 1998. Not later than the date on which
the Parent Borrower is required to deliver financial statements with respect to
the end of each fiscal year under Section 5.04(a), the Parent Borrower will
deliver to the U.S. Administrative Agent a certificate signed by a Financial
Officer of the Parent Borrower setting forth the amount, if any, of Excess Cash
Flow for such fiscal year and the calculation thereof in reasonable detail.
(e) The Parent Borrower shall apply 50% of all Excess Xxxxxx Proceeds
promptly upon any such receipt thereof to prepay Term Borrowings and, if
applicable, to reduce Tranche A Term Loan Commitments in accordance with Section
2.11(b), and may retain the balance of such proceeds.
(f) Upon two Business Days written notice from the U.S. Administrative
Agent, the U.K. Borrower or the Parent Borrower, as applicable, shall repay U.K.
(pound) Revolving Credit Loans in accordance with the proviso to the third
sentence of Section 2.02(a).
(g) (i) If, on any Reset Date, the Aggregate C $ Revolving Credit Exposure
(expressed in Dollars) exceeds an amount equal to 105% of the Total C $
Revolving Credit Commitment, then (A) the Canadian Administrative Agent shall
give notice thereof to the C $ Revolving Credit Lenders, the Parent Borrower and
the Canadian Borrower and (B) the Parent Borrower shall, or shall cause the
Canadian Borrower to, on the next succeeding Business Day, apply an amount equal
to such excess to
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repay or prepay outstanding C $ Revolving Credit Borrowings (or cash
collateralize Bankers' Acceptances in accordance with paragraph (h) below).
(ii) If, on any Reset Date, the Aggregate U.K. (pound) Revolving Credit
Exposure (expressed in Dollars) exceeds an amount equal to 105% of the Total
U.K. (pound) Revolving Credit Commitment, then (A) the U.S. Administrative Agent
shall give notice thereof to the U.K. (pound) Revolving Credit Lenders, the
Parent Borrower and the U.K. Borrower and (B) the Parent Borrower shall, or
shall cause the U.K. Borrower to, on the next succeeding Business Day, apply an
amount equal to such excess to repay or prepay outstanding U.K. (pound)
Revolving Credit Borrowings.
(h) All repayments or prepayments of C $ Revolving Credit Borrowings under
this Section 2.12 shall be applied first, to repay or prepay outstanding C $
Revolving Credit Loans that are Canadian Prime Rate Loans or ABR Loans, and
second, to cash collateralize outstanding C $ Revolving Credit Loans that are
Eurodollar Loans in accordance with the terms of paragraph (j) below or to cash
collateralize outstanding Bankers' Acceptances or B/A Equivalent Notes, on terms
and subject to documentation satisfactory to the Canadian Administrative Agent
as security for the applicable Borrower's obligations under such Bankers'
Acceptances or B/A Equivalent Notes until the maturity and repayment of such
Bankers' Acceptances or B/A Equivalent Notes. Notwithstanding anything herein to
the contrary, no Bankers' Acceptance or B/A Equivalent Note may be prepaid prior
to the maturity date thereof, except as provided in Article VII.
(i) The applicable Borrower shall deliver to the applicable Administrative
Agent at the time of each prepayment required under this Section 2.12, a notice
of prepayment accompanied by a certificate signed by a Financial Officer of such
Borrower setting forth in reasonable detail the calculation of the amount of
such prepayment. Each notice of prepayment or reduction pursuant to this Section
2.12 shall specify the prepayment date and the principal amount of each
Borrowing (or portion thereof) to be prepaid, shall be irrevocable and shall
commit the applicable Borrower to prepay such Borrowing by the amount stated
therein on the date stated therein. Each prepayment of Term Borrowings under
this Section 2.12 shall be applied as set forth in paragraphs (b), (c), (d) and
(e) of Section 2.11. All prepayments under this Section 2.12 shall be
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subject to Section 2.15 but otherwise without premium or penalty. All
prepayments under this Section 2.12 shall be accompanied by accrued interest on
the principal amount being prepaid to but excluding the date of payment.
(j) In the event the amount of any prepayment required to be made above
shall exceed the aggregate principal amount of the ABR Loans or Canadian Prime
Rate Loans outstanding under the Credit Facilities required to be prepaid (the
amount of any such excess being called the "Excess Amount"), the Parent Borrower
shall have the right, in lieu of making such prepayment in full, to prepay or
cause a Subsidiary Borrower to prepay all the outstanding applicable ABR Loans
and Canadian Prime Rate Loans and to deposit an amount equal to the Excess
Amount with the Collateral Agent or the Canadian Administrative Agent (in the
case of a prepayment required in respect of C $ Revolving Credit Loans) in a
cash collateral account maintained (pursuant to documentation reasonably
satisfactory to the U.S. Administrative Agent) by and in the sole dominion and
control of the Collateral Agent. Any amounts so deposited shall be held by the
Collateral Agent as collateral for the Obligations and applied to the prepayment
of the applicable Eurodollar Loans, if any, at the end of the current Interest
Periods applicable thereto. On any Business Day on which (i) collected amounts
remain on deposit in or to the credit of such cash collateral account after
giving effect to the payments made on such day pursuant to this Section 2.12(j)
and (ii) the Parent Borrower shall have delivered to the Collateral Agent, or
the Canadian Administrative Agent, as applicable, a written request or a
telephonic request (which shall be promptly confirmed in writing) that such
remaining collected amounts be invested in the Permitted Investments specified
in such request, the Collateral Agent, or the Canadian Administrative Agent, if
applicable, shall use its reasonable efforts to invest such remaining collected
amounts in such Permitted Investments; provided, however, that the Collateral
Agent, or the Canadian Administrative Agent, as applicable, shall have
continuous dominion and full control over any such investments (and over any
interest that accrues thereon) to the same extent that it has dominion and
control over such cash collateral account and no Permitted Investment shall
mature after the end of the Interest Period for which it is to be applied. The
Parent Borrower shall not have the right to withdraw any amount from such cash
collateral account until the applicable
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Eurodollar Loans and accrued interest thereon are paid in full or if a Default
or Event of Default then exists or would result.
SECTION 2.13. Reserve Requirements; Change in Circumstances. (a)
Notwithstanding any other provision herein, if after the date of this Agreement
any change in applicable law or regulation or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the force of
law) shall change the basis of taxation of payments to any Lender or the
Fronting Bank in respect of any Letter of Credit or of the principal of or
interest on (or discount rate applicable to) any Eurodollar Loan or Alternative
Currency Loan made by such Lender or any Fees or other amounts payable hereunder
(other than changes in respect of (i) taxes imposed on the overall net income of
such Lender or the Fronting Bank by the jurisdiction in which such Lender or the
Fronting Bank has its principal office or by any political subdivision or taxing
authority therein and (ii) any Taxes described in Section 2.19), or shall
impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets or deposits with or for the account of or credit
extended by or, in the case of the Letters of Credit, participated in by such
Lender (except any such reserve requirement which is reflected in the Adjusted
LIBO Rate the Alternate Base Rate or the Canadian Prime Rate), or the Fronting
Bank or shall impose on such Lender or the Fronting Bank or the interbank
Eurodollar market or any other relevant market any other condition affecting
this Agreement, any Letter of Credit (or any participation with respect
thereto), the Revolving L/C Exposure, any Eurodollar Loans or any Alternative
Currency Loans of such Lender or the Fronting Bank, and the result of any of the
foregoing shall be to increase the cost to such Lender or the Fronting Bank of
making or maintaining its Revolving L/C Exposure, any Eurodollar Loan or any
Alternative Currency Loan (or, in the case of the Fronting Bank, of making any
payment under any Letter of Credit) or to reduce the amount of any sum received
or receivable by such Lender or the Fronting Bank hereunder (whether of
principal, interest or otherwise) by an amount deemed by such Lender or the
Fronting Bank to be material, then from time to time the Parent Borrower will
pay, or will cause the applicable Subsidiary Borrower to pay, to such Lender or
the Fronting Bank upon demand such additional amount or amounts as will
compensate such Lender or the Fronting Bank for such additional costs incurred
or reduction suffered.
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(b) If any Lender or the Fronting Bank shall have determined that the
adoption after the date hereof of any law, rule, regulation or guideline
regarding capital adequacy, or any change after the date hereof in any of the
foregoing or in the interpretation or administration of any of the foregoing by
any Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or any
lending office of such Lender) or the Fronting Bank or any Lender's or the
Fronting Bank's holding company with any request or directive regarding capital
adequacy (whether or not having the force of law) made or issued after the date
hereof by any such authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on such Lender's or the Fronting
Bank's capital or on the capital of such Lender's or the Fronting Bank's holding
company, if any, as a consequence of this Agreement or its obligations pursuant
hereto to a level below that which such Lender or the Fronting Bank or such
Lender's or the Fronting Bank's holding company would have achieved but for such
adoption, change or compliance (taking into consideration such Lender's or the
Fronting Bank's policies and the policies of such Lender's or the Fronting
Bank's holding company with respect to capital adequacy) by an amount deemed by
such Lender or the Fronting Bank to be material, then from time to time the
Parent Borrower shall pay, or shall cause the applicable Subsidiary Borrower to
pay, to such Lender or the Fronting Bank upon demand such additional amount or
amounts as will compensate such Lender or the Fronting Bank or such Lender's or
the Fronting Bank's holding company for any such reduction suffered.
(c) If, as a result of (i) any Borrower's delivery of any notice pursuant
to Section 2.09(c) requesting any reduction of U.S. $ Revolving Credit
Commitments, to the extent such reduction will be allocated to increase C $
Revolving Credit Commitments pursuant to Section 2.09(c), to be effective on any
day other than the first day of a fiscal quarter and (ii) the reduction of C $
Revolving Credit Commitments in accordance with such request, any C $ Revolving
Credit Lender shall remain or become subject to any reserve, special deposit or
similar requirement for credit extended by such Lender, and the result of any of
the foregoing would have the effect of reducing the rate of return on such
Lender's capital or on the capital of such Lender's holding company, if any, to
a level below that which such Lender or such Lender's holding company would have
achieved
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but for such Borrower's delivery of such request and such reduction, then from
time to time the Canadian Borrower shall pay to the Canadian Administrative
Agent on behalf of such Lender upon demand from such Lender or the Canadian
Administrative Agent such additional amount or amounts as will compensate such
Lender or such Lender's holding company for any such reduction suffered.
(d) A certificate of each Lender or the Fronting Bank setting forth such
amount or amounts as shall be necessary to compensate such Lender or the
Fronting Bank or its holding company as specified in paragraph (a), (b) or (c)
above, as the case may be, shall be delivered to the Parent Borrower through the
U.S. Administrative Agent and shall be conclusive absent manifest error. The
Parent Borrower shall pay, or shall cause the applicable Subsidiary Borrower to
pay, each Lender or the Fronting Bank the amount shown as due on any such
certificate delivered by it within 10 days after its receipt of the same.
(e) In the event any Lender or the Fronting Bank delivers a notice pursuant
to paragraph (f) below (other than any notice relating to paragraph (c) above),
the Parent Borrower may require, at the Parent Borrower's expense and subject to
Section 2.15, such Lender or the Fronting Bank to assign, at par plus accrued
interest and fees, without recourse (in accordance with Section 10.04) all its
interests, rights and obligations hereunder (including, in the case of a Lender,
all of its Commitments and the Loans at the time owing to it and participations
in Letters of Credit and Swingline Loans held by it and its obligations to
acquire such participations) to a financial institution specified by the Parent
Borrower, provided that (i) such assignment shall not conflict with or violate
any law, rule or regulation or order of any court or other Governmental
Authority, (ii) the Parent Borrower shall have received the written consent of
the U.S. Administrative Agent (which consent shall not be unreasonably withheld)
and the Fronting Bank to such assignment, (iii) the Parent Borrower shall have
paid to the assigning Lender or the Fronting Bank all monies accrued and owing
hereunder to it (including pursuant to this Section 2.13 and including all
monies owed pursuant to Section 2.15 as a result thereof) and (iv) in the case
of a required assignment by the Fronting Bank, all outstanding Letters of Credit
issued by the Fronting Bank shall be canceled and returned to the Fronting Bank.
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(f) Promptly after any Lender or the Fronting Bank has determined, in its
sole judgment, that it will make a request for increased compensation pursuant
to this Section 2.13, such Lender or the Fronting Bank will notify the Parent
Borrower thereof. Failure on the part of any Lender or the Fronting Bank so to
notify the Parent Borrower or to demand compensation for any increased costs or
reduction in amounts received or receivable or reduction in return on capital
with respect to any period shall not constitute a waiver of such Lender's or the
Fronting Bank's right to demand compensation with respect to such period or any
other period, provided that the Parent Borrower shall not be under any
obligation to compensate any Lender or the Fronting Bank under paragraph (b)
above with respect to increased costs or reductions with respect to any period
prior to the date that is six months prior to such request if such Lender or the
Fronting Bank knew or could reasonably have been expected to be aware of the
circumstances giving rise to such increased costs or reductions and of the fact
that such circumstances would in fact result in a claim for increased
compensation by reason of such increased costs or reductions and provided
further that the foregoing limitation shall not apply to any increased costs or
reductions arising out of the retroactive application of any law, regulation,
rule, guideline or directive as aforesaid within such six month period. The
protection of this Section 2.13 shall be available to each Lender and the
Fronting Bank regardless of any possible contention as to the invalidity or
inapplicability of the law, rule, regulation, guideline or other change or
condition which shall have occurred or been imposed.
SECTION 2.14. Change in Legality. (a) Notwith standing any other provision
herein, if (i) the adoption of or any change in any law or regulation or in the
interpretation thereof by any Governmental Authority charged with the
administration or interpretation thereof shall make it unlawful for any Lender
to make or maintain any Eurodollar Loan or any Alternative Currency Loan or to
give effect to its obligations as contemplated hereby with respect to any
Eurodollar Loan or any Alternative Currency Loan, or (ii) there shall have
occurred any change in national or international financial, political or
economic conditions (including the imposition of or any change in exchange
controls) or currency exchange rates which would make it impracticable for any
Lender to make Loans denominated in any Alternative Currency (or for any C $
Revolving Credit Lender to make Loans denominated in Dollars) or to any
Borrower, then, by
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written notice to the Parent Borrower and to the applicable Administrative
Agent, such Lender may:
(i) declare that Eurodollar Loans or Alternative Currency Loans (or,
in the case of C $ Revolving Credit Lenders, Loans denominated in Dollars)
(in the affected currency or currencies or to the affected Borrower), as
the case may be, will not thereafter (for the duration of such unlawfulness
or impracticability) be made by such Lender hereunder, whereupon any
request for a Eurodollar Borrowing or Alternative Currency Borrowing (or,
in the case of C $ Revolving Credit Lenders, Loans denominated in Dollars)
(in the affected currency or currencies or to the affected Borrower), as
the case may be, shall, as to such Lender only, be deemed a request for an
ABR Loan or a Loan denominated in Dollars (or, in the case of any C $
Revolving Credit Lender, in Canadian Dollars), as the case may be, unless
such declaration shall be subsequently withdrawn (or, if a Loan to the
requesting Borrower cannot be made for the reasons specified above, such
request shall be deemed to have been withdrawn); and
(ii) require that all outstanding Eurodollar Loans or Alternative
Currency Loans (in the affected currency or currencies), as the case may
be, made by it be converted to ABR Loans or Loans denominated in Dollars
(or, in the case of any C $ Revolving Credit Lender, Canadian Dollars), as
the case may be, in which event all such Eurodollar Loans or Alternative
Currency Loans (or in the case of C $ Revolving Credit Lenders, Loans
denominated in Dollars) (in the affected currency or currencies), as the
case may be, shall be automatically converted to ABR Loans or Loans
denominated in Dollars (or, in the case of any C $ Revolving Credit Lender,
Canadian Dollars), as the case may be, as of the effective date of such
notice as provided in paragraph (b) below.
In the event any Lender shall exercise its rights under subparagraphs (i) and
(ii) above, all payments and prepayments of principal that would otherwise have
been applied to repay the Eurodollar Loans or Alternative Currency Loans, as the
case may be, that would have been made by such Lender or the converted
Eurodollar Loans or Alternative Currency Loans (or in the case of C $ Revolving
Credit Lenders, Loans denominated in Dollars), as
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the case may be, of such Lender shall instead be applied to repay the ABR Loans
or Loans denominated in Dollars (or, if such Lender is a C $ Revolving Credit
Lender, Canadian Dollars), as the case may be, made by such Lender in lieu of,
or resulting from the conversion of, such Eurodollar Loans or Alternative
Currency Loans (or in the case of C $ Revolving Credit Lenders, Loans
denominated in Dollars), as the case may be.
(b) For purposes of this Section 2.14, a notice to the Parent Borrower by
any Lender shall be effective as to each Eurodollar Loan or Alternative currency
Loan, as the case may be, if lawful, on the last day of the Interest Period
currently applicable to such Eurodollar Loan; in all other cases such notice
shall be effective on the date of receipt by the Parent Borrower.
SECTION 2.15. Indemnity. Each Borrower shall indemnify each Lender against
any loss or expense (other than taxes) that such Lender may sustain or incur as
a consequence of (a) any failure by such Borrower to fulfill on the date of any
Borrowing or proposed Borrowing hereunder the applicable conditions set forth in
Article IV, (b) any failure by such Borrower to borrow or to refinance, convert
or continue any Loan hereunder after irrevocable notice of such Borrowing,
refinancing, conversion or continuation has been given pursuant to Section 2.03
or 2.10, (c) any payment, prepayment, exchange pursuant to Article IX or
conversion of a Eurodollar Loan to such Borrower or Alternative Currency Loan to
such Borrower or any portion thereof required by any other provision of this
Agreement or otherwise made or deemed made on a date other than the last day of
the Interest Period applicable thereto, or any payment, prepayment, exchange by
or in respect of such Borrower pursuant to Article IX of a B/A or B/A Equivalent
Note required by any other provision of this Agreement otherwise made or deemed
made on a date other than the maturity date thereof, (d) any default by such
Borrower in payment or prepayment of the principal amount of any Loan or any
part thereof or interest accrued thereon, as and when due and payable (at the
due date thereof, whether by scheduled maturity, acceleration, irrevocable
notice of prepayment or otherwise) or (e) in the case of the Parent Borrower,
the occurrence of any Event of Default, including, in each such case, any loss
or reasonable expense sustained or incurred or to be sustained or incurred in
liquidating or employing deposits from third parties acquired to effect or
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maintain such Loan or any part thereof as a Eurodollar Loan or Alternative
Currency Loan (including B/As). Such loss or reasonable expense shall exclude
loss of margin hereunder but shall include an amount equal to the excess, if
any, as reasonably determined by such Lender, of (i) its cost of obtaining the
funds for the Loan being paid, prepaid, converted or not borrowed, converted or
continued (assumed to be the Adjusted LIBO Rate or the Discount Rate, as
applicable, applicable thereto) for the period from the date of such payment,
prepayment, conversion or failure to borrow, convert or continue to the last day
of the Interest Period for such Loan or the maturity date of such B/A, as
applicable (or, in the case of a failure to borrow, convert or continue, the
Interest Period for such Loan which would have commenced on the date of such
failure) over (ii) the amount of interest (as reasonably determined by such
Lender) that would be realized by such Lender in reemploying the funds so paid,
prepaid, converted or not borrowed, converted or continued for such period or
Interest Period, as the case may be. A certificate of any Lender setting forth
any amount or amounts that such Lender is entitled to receive pursuant to this
Section 2.15 (and the reasons therefor) shall be delivered to the Parent
Borrower through the U.S. Administrative Agent and shall be conclusive absent
manifest error.
SECTION 2.16. Pro Rata Treatment. Except as required under Section 2.09 or
2.14 and subject to Section 2.11, each Borrowing, each payment or prepayment of
principal of any Borrowing, each payment of interest on the Loans, each
reimbursement of L/C Disbursements, each payment of the Commitment Fees or
Facility Fees in respect of any Credit Facility or L/C Participation Fees, each
reduction of the Term Commitments or the Revolving Credit Commitments and each
refinancing of any Borrowing with, conversion of any Borrowing to or
continuation of any Borrowing as a Borrowing of any Type shall be allocated
(except in the case of Swingline Loans) pro rata among the Lenders in accordance
with their respective applicable Commitments (or, if such Commitments shall have
expired or been terminated, in accordance with the respective principal amounts
of their applicable outstanding Loans or participations in L/C Disbursements and
Swingline Loans, as applicable). Each Lender agrees that in computing such
Lender's portion of any Borrowing or L/C Disbursement, the applicable
Administrative Agent may, in its discretion, round each Lender's percentage of
such Borrowing or L/C Disbursement, computed in accordance with Section 2.01, to
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the next higher or lower whole Dollar (or comparable unit of any applicable
Alternative Currency) amount.
SECTION 2.17. Sharing of Setoffs. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim against
any Loan Party or pursuant to a secured claim under Section 506 of Title 11 of
the United States Code or other security or interest arising from, or in lieu
of, such secured claim, received by such Lender under any applicable bankruptcy,
insolvency or other similar law or otherwise, or by any other means, obtain
payment (voluntary or involuntary) in respect of any Loan or L/C Disbursement as
a result of which the unpaid principal portion of its Related Claims (or, after
acceleration of the Loans pursuant to Article VII, applicable to any Related
Claim) shall be proportionately less than the unpaid principal portion of the
Related Claims of any other Related Lender (or, after acceleration of the Loans
pursuant to Article VII, applicable to any Related Claim), it shall be deemed
simultaneously to have purchased from such other Related Lender at face value,
and shall promptly pay to such other Related Lender the purchase price for a
participation in the Related Claims of such other Related Lender, so that the
aggregate unpaid principal amount of the Related Claims and participations in
Related Claims held by each Related Lender shall be in the same proportion to
the aggregate unpaid principal amount of all Related Claims then outstanding as
the principal amount of its Related Claims prior to such exercise of banker's
lien, setoff or counterclaim or other event was to the principal amount of all
Related Claims outstanding prior to such exercise of banker's lien, setoff or
counterclaim or other event; provided, however, that, if any such purchase or
purchases or adjustments shall be made pursuant to this Section 2.17 and the
payment giving rise thereto shall thereafter be recovered, such purchase or
purchases or adjustments shall be rescinded to the extent of such recovery and
the purchase price or prices or adjustment restored without interest. The
Borrowers expressly consent to the foregoing arrangements and agree that any
Lender holding a participation in a Loan or L/C Disbursement deemed to have been
so purchased may exercise any and all rights of banker's lien, setoff or
counterclaim with respect to any and all moneys owing by the applicable Borrower
to such Lender by reason thereof as fully as if such Lender had made a Loan
directly to, or L/C Disbursement directly for the benefit of, such Borrower in
the amount of such participation.
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SECTION 2.18. Payments. (a) Each Borrower shall make each payment
(including principal of or interest on any Borrowing or L/C Disbursement or any
Fees or other amounts) required to be made by it hereunder and under any other
Loan Document without setoff or counterclaim not later than 12:00 noon, local
time at the place of payment, on the date when due and, unless and until
otherwise specified, all such payments payable in Dollars shall be made to the
U.S. Administrative Agent, Loan and Agency Services Group, at its offices at One
Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, in immediately
available funds, for credit to The Chase Manhattan Bank, ABA Number 0210 00021,
Account Number 323-518419. All such payments payable in Canadian Dollars or that
are otherwise payable to the Canadian Administrative Agent shall be made to the
Canadian Administrative Agent at its office at 1 First Canadian Place, 000 Xxxx
Xxxxxx Xxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx X0X 0X0, by 12:00 (noon), Toronto
time, on the date such payment is due. Each such payment (other than principal
of and interest on Alternative Currency Loans which shall be made in the
applicable Alternative Currency) shall be made in Dollars. Any payments received
by the U.S. Administrative Agent after the specified time shall be deemed to
have been received on the next Business Day. The U.S. Administrative Agent shall
distribute such payments to the Lenders and the Fronting Bank promptly upon
receipt in like funds as received.
(b) Whenever any payment (including principal of or interest on any
Borrowing or L/C Disbursement or any Fees or other amounts) hereunder or under
any other Loan Document shall become due, or otherwise would occur, on a day
that is not a Business Day, such payment may be made on the next succeeding
Business Day (except in the case of payment of principal of a Eurodollar
Borrowing if the effect of such extension would be to extend such payment into
the next succeeding month, in which event such payment shall be due on the
immediately preceding Business Day), and such extension of time shall in such
case be included in the computation of interest or Fees, if applicable.
SECTION 2.19. Taxes. (a) Any and all payments by any Borrower to the
applicable Administrative Agent, the Fronting Bank or the Lenders hereunder or
under the other Loan Documents shall be made, in accordance with Section 2.18,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all
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liabilities with respect thereto, excluding (i) in the case of each Lender, the
Fronting Bank and the applicable Administrative Agent, taxes, levies, imposts,
deductions, charges or withholdings that would not be imposed but for a
connection between such Lender, the Fronting Bank or the applicable
Administrative Agent (as the case may be) and the jurisdiction imposing such
tax, other than a connection arising solely by virtue of the activities of such
Lender, the Fronting Bank or the applicable Administrative Agent (as the case
may be) pursuant to or in respect of this Agreement or under any other Loan
Document, including entering into, lending money or extending credit pursuant
to, receiving payments under, or enforcing, this Agreement or any other Loan
Document, (ii) in the case of each Lender, the Fronting Bank and the applicable
Administrative Agent, taxes, levies, imposts, deductions, charges or
withholdings imposed solely as a result of the failure to assign a Commitment as
required by Section 2.09(e), and (iii) in the case of each Lender, the Fronting
Bank and the applicable Administrative Agent, any United States withholding
taxes or Canadian withholding taxes (except for withholding taxes on payments
(other than Fees) with respect to Obligations of Borrowers that are non-Domestic
Subsidiaries (other than the Canadian Borrower with respect to C $ Revolving
Credit Loans) and withholding taxes on payments with respect to Obligations of
Borrowers that are not non-Domestic Subsidiaries acquired by a Lender as a
result of the CAM Exchange) payable with respect to any payments made hereunder
or under the other Loan Documents, other than in respect of C $ Revolving Credit
Loans held by C $ Revolving Credit Lenders that are residents of Canada for
purposes of the Income Tax Act (Canada), under laws (including any statute,
treaty, ruling, determination or regulation) in effect on the Initial Date (as
hereinafter defined) applicable to such Lender, the Fronting Bank or the U.S.
Administrative Agent, as the case may be, but not excluding any United States
withholding taxes payable solely as a result of any change in such laws
occurring after the Initial Date and not excluding any withholding taxes that
would apply to such Lender solely as a result of a CAM Exchange pursuant to
Section 9.02 (for which such Lender shall be entitled to receive additional
amounts from the Borrowers regardless of whether such withholding taxes are
payable under laws in effect on the Initial Date) (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). For purposes of this Section 2.19, the term
"Initial
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Date" shall mean (i) in the case of the applicable Administrative Agent, the
Fronting Bank or any Lender, the date on which such person became a party to
this Agreement and (ii) in the case of any assignment, including any assignment
by a Lender or the Fronting Bank to a new lending office, the date of such
assignment. If any Taxes shall be required by law to be deducted from or in
respect of any sum payable hereunder or under any other Loan Document to any
Lender, the Fronting Bank or the applicable Administrative Agent, (i) the sum
payable by the applicable Borrower shall be increased as may be necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.19) such Lender, the Fronting Bank
or the Administrative Agent, as the case may be, receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the applicable
Borrower shall make such deductions and (iii) the applicable Borrower shall pay
the full amount deducted to the relevant taxation authority or other authority
in accordance with applicable law. No Borrower that makes payments from an
office located in the United States of America shall, however, be required to
pay any amounts pursuant to clause (i) of the preceding sentence to any Lender,
the Fronting Bank or the applicable Administrative Agent not organized under the
laws of the United States of America or a state thereof if such Lender, the
Fronting Bank or the U.S. Administrative Agent fails to comply with the
requirements of paragraph (f)(i) or (ii)of this Section 2.19. No Borrower that
makes payments from an office located in the United Kingdom shall, however, be
required to pay any amounts pursuant to clause (i) of the preceding sentence to
any Lender, the Fronting Bank or the applicable Administrative Agent not
organized under the laws of the United Kingdom if such Lender, the Fronting Bank
or the U.S. Administrative Agent fails to comply with the requirements of
paragraph (f)(ii) or (iii) of this Section 2.19.
(b) In addition, each Borrower agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from the execution, delivery or registration of, or otherwise
with respect to, this Agreement or any other Loan Document (hereinafter referred
to as "Other Taxes").
(c) Each Borrower will indemnify each Lender, the Fronting Bank and the
applicable Administrative Agent for the
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full amount of Taxes and Other Taxes (including any Taxes or Other Taxes imposed
by any jurisdiction on amounts payable under this Section 2.19) paid by such
Lender, the Fronting Bank or the applicable Administrative Agent, as the case
may be, in respect of payments with respect to the Obligations of such Borrower
and any liability (including penalties, interest and expenses including
reasonable attorney's fees and expenses) arising therefrom or with respect
thereto whether or not such Taxes or Other Taxes were correctly or legally
asserted. A certificate as to the amount of such payment or liability prepared
by a Lender (or Transferee), the Fronting Bank or the applicable Administrative
Agent, absent manifest error, shall be final, conclusive and binding for all
purposes, provided that if the applicable Borrower reasonably believes that such
Taxes were not correctly or legally asserted, such Lender, the Fronting Bank or
the applicable Administrative Agent, as the case may be shall use reasonable
efforts to cooperate with such Borrower to obtain a refund of such Taxes or
Other Taxes. Such indemnification shall be made within 10 days after the date
any Lender, the Fronting Bank or the applicable Administrative Agent, as the
case may be, makes written demand therefor. If a Lender, the Fronting Bank or
the applicable Administrative Agent shall become aware that it is entitled to
receive a refund in respect of Taxes or Other Taxes, it shall promptly notify
the applicable Borrower of the availability of such refund and shall, within 30
days after receipt of a request by such Borrower, pursue or timely claim such
refund at such Borrower's expense. If any Lender, the Fronting Bank or the
applicable Administrative Agent receives a refund in respect of any Taxes or
Other Taxes for which such Lender, the Fronting Bank or the applicable
Administrative Agent has received payment from any Borrower hereunder, it shall
promptly repay such refund (plus any interest received) to such Borrower (but
only to the extent of indemnity payments made, or additional amounts paid, by
such Borrower under this Section 2.19 with respect to the Taxes or Other Taxes
giving rise to such refund), provided that such Borrower, upon the request of
such Lender, the Fronting Bank or the applicable Administrative Agent, agrees to
return such refund (plus any penalties, interest or other charges required to be
paid) to such Lender, the Fronting Bank or the applicable Administrative Agent
in the event such Lender, such Fronting Bank or the applicable Administrative
Agent is required to repay such refund to the relevant taxing authority.
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(d) Within 30 days after the date of any payment of Taxes or Other Taxes
withheld by any Borrower in respect of any payment to any Lender, the Fronting
Bank or the U.S. Administrative Agent, such Borrower will furnish to the U.S.
Administrative Agent, at its address referred to in Section 9.01, the original
or a certified copy of a receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement contained
herein, the agreements and obligations contained in this Section 2.19 shall
survive the payment in full of principal and interest hereunder, the expiration
of the Letters of Credit and the termination of the Commitments.
(f)(i) In the case of any Borrowing by, or L/C Disbursement for the benefit
of, the Parent Borrower, this paragraph (f) shall apply. Each Lender, the
Fronting Bank and the applicable Administrative Agent that is not organized
under the laws of the United States of America or a state thereof agrees that at
least 10 days prior to the first Interest Payment Date following the Initial
Date in respect of the Fronting Bank or such Lender, it will, if consistent with
applicable law and required in order to establish or take advantage of an
available exemption from Taxes and/or Other Taxes, deliver to the Parent
Borrower and the applicable Administrative Agent (if appropriate) two duly
completed copies of either (i) United States Internal Revenue Service Form 1001
or 4224 or successor applicable form, as the case may be, certifying in each
case that the Fronting Bank, such Lender or the U.S. Administrative Agent, as
the case may be, is entitled to receive payments under this Agreement and the
other Loan Documents payable to it without deduction or withholding of any
United States federal income taxes and backup withholding taxes or is entitled
to receive such payments at a reduced rate pursuant to a treaty provision, and
shall deliver to the Parent Borrower and the Administrative Agent a further copy
of such Form 1001 or 4224 or successor applicable form, as the case may be, on
or before the date that such form expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent form previously
delivered by such Lender, the Fronting Bank or the applicable Administrative
Agent, or (ii) in the case of a Lender that is not a "bank" within the meaning
of Section 881(c)(3) of the Code, (A) deliver to the Parent Borrower and the
U.S. Administrative Agent (I) a statement under penalties of perjury that such
Lender (w) is not a "bank"
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under Section 881(c)(3)(A) of the Code, is not subject to regulatory or other
legal requirements as a bank in any jurisdiction, and has not been treated as a
bank for purposes of any tax, securities law or other filing or submission made
to any Governmental Authority, any application made to a rating agency or
qualification for any exemption from tax, securities law or other legal
requirements, (x) is not a 10-percent shareholder within the meaning of Section
881(c)(3)(B) of the Code, (y) is not a controlled foreign corporation receiving
interest from a related person within the meaning of Section 881(c)(3)(c) of the
Code and (z) is not a "conduit entity" within the meaning of U.S. Treasury
Regulations Section 1.881-3 and (II) an Internal Revenue Service Form W-8; (B)
deliver to the Parent Borrower and the U.S. Administrative Agent a further copy
of said Form W-8, or any successor applicable form or other manner of
certification on or before the date that any such Form W-8 expires or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent form previously delivered by such Lender; and (C) obtain such extensions
of time for filing and complete such forms or certifications as may be
reasonably requested by the Parent Borrower or the applicable Administrative
Agent; unless in any such case an event (including any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders any such forms inapplicable or which would
prevent such Lender from duly completing and delivering any such form with
respect to it and such Lender so advises the Parent Borrower and the U.S.
Administrative Agent. Such Lender shall certify (i) in the case of a Form 1001
or 4224, that it is entitled to receive payments under this Agreement without
deduction or withholding of any United States Federal income taxes or is
entitled to receive such payments at a reduced rate pursuant to a treaty
provision and (ii) in the case of a Form W-8 or W-9, that it is entitled to an
exemption from United States backup withholding tax. Each Person that shall
become a participant pursuant to Section 10.04 shall, upon the effectiveness of
the related transfer, be required to provide, if consistent with applicable law,
all the forms and statements required pursuant to this paragraph (f) to the
Lender from which the related participation shall have been purchased. Unless
the Parent Borrower and the U.S. Administrative Agent have received forms,
certificates and other documents required by this Section 2.19(f) indicating
that payments hereunder or under this Agreement, any other Loan Document or the
Letters of Credit to or for the Fronting Bank or Lender not incorporated under
the laws
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of the United States or a state thereof are not subject to United States
withholding tax or are subject to such tax at a rate reduced by an applicable
tax treaty, the applicable Borrower or the U.S. Administrative Agent shall
withhold such taxes from such payments at the applicable statutory rate.
(ii) Each Lender that is managed and controlled from or incorporated under
the laws of any jurisdiction other than the United Kingdom and which is making a
Loan to the U.K. Borrower through a lending branch or lending office located
outside the United Kingdom agrees to furnish to the taxing authority of the
country in which such Lender is resident for tax purposes on or prior to the
Closing Date (or, if such Lender becomes a Lender after the Closing Date, then
at or prior to the time such Lender becomes a Lender) (with a copy to the U.S.
Administrative Agent and the U.K. Borrower), for certification and forwarding by
such taxing authority to the appropriate United Kingdom taxing authority, two
copies of Form "Claim on Behalf of a United States Domestic Corporation to
Relief from United Kingdom Income Tax on Interest and Royalties Arising in the
United Kingdom" (or its counterpart for jurisdictions other than the United
States), or any successor forms (wherein such Lender claims entitlement to
complete exemption from or reduced rate of United Kingdom withholding tax on
interest paid by such Borrower hereunder) and to provide successor forms thereto
if any previously delivered form is found to be incomplete or incorrect in any
material respect or upon the obsolescence of any previously delivered form. Each
Lender that is managed and controlled from and incorporated under the laws of
the United Kingdom or that is making all of its Loans to the U.K. Borrower
through a lending branch or lending office within the United Kingdom hereby
represents that it is a "bank" within the meaning of section 840A Income and
Corporation Taxes Xxx 0000, and that it is beneficially entitled to the interest
payable to it under this Agreement, undertakes to notify the U.K. Borrower and
the U.S. Administrative Agent if either representation ceases to be correct, and
further agrees to ensure that such interest is brought within the charge to
United Kingdom corporation tax by the person beneficially entitled to the
interest.
(iii) Upon the written request of any Borrower, each Lender promptly will
provide to such Borrower and to the applicable Administrative Agent, or file
with the relevant taxing authority (with a copy to the applicable Administrative
Agent)
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such form, certification or similar documentation that it is legally able to
provide (each duly completed, accurate and signed) as is required by the
relevant jurisdiction in order to obtain an exemption from, or reduced rate of
Taxes or Other Taxes to which such Lender or the applicable Administrative Agent
is entitled pursuant to an applicable tax treaty or the law of the relevant
jurisdiction; provided, however, such Lender will not be required to (i)
disclose information which in its reasonable judgment it deems confidential or
proprietary or (ii) incur a disadvantage if such disadvantage would, in its
reasonable judgment, be substantial.
(iv) A Lender shall be required to furnish a form under this paragraph (f)
only if it is entitled to claim an exemption from or a reduced rate of
withholding under applicable law. A Lender that is not entitled to claim an
exemption from or a reduced rate of withholding under applicable law, promptly
upon written request of the applicable Borrower, shall so inform the applicable
Borrower in writing.
(g) Notwithstanding anything to the contrary set forth in this Section
2.19, any and all payments by the Parent Borrower to the Canadian Administrative
Agent or a C $ Revolving Credit Lender hereunder or under the other Loan
Documents shall be made, in accordance with section 2.18, free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto
("Taxes Regarding Parent Payments to Canadian Lenders"). If any Taxes Regarding
Parent Payments to Canadian Lenders shall be required by law to be deducted from
or in respect of any sum payable hereunder or under any other Loan Document to
any C $ Revolving Credit Lender or the Canadian Administrative Agent, (i) the
sum payable by the Parent Borrower shall be increased as may be necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.19(g)), such C $ Revolving Credit
Lender or the Canadian Administrative Agent, as the case may be, receives an
amount equal to the amount it would have received had no such deductions been
made, (ii) the Parent Borrower shall make such deductions, and (iii) the Parent
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law.
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(h) Nothing contained in this Section 2.19 shall require any Lender or the
Fronting Bank or the applicable Administrative Agent to make available any of
its tax returns (or any other information that it deems to be confidential or
proprietary).
SECTION 2.20. Letters of Credit. (a) Letters of Credit. (i) General.
Subject to the terms and conditions set forth herein, the Parent Borrower may
request the issuance of a Letter of Credit, in a form reasonably acceptable to
the U.S. Administrative Agent and the Fronting Bank, appropriately completed,
for the account of the Parent Borrower at any time and from time to time while
the U.S. $ Revolving Credit Commitments remain in effect. This Section 2.20(a)
shall not be construed to impose an obligation upon the Fronting Bank to issue
any Letter of Credit that is inconsistent with the terms and conditions of this
Agreement or that would result in there existing Letters of Credit in an
aggregate stated amount at any time outstanding in excess of the difference
between $15,000,000 and the aggregate outstanding amount of unreimbursed L/C
Disbursements.
(ii) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.
In order to request the issuance of a Letter of Credit (or to request that the
Fronting Bank amend, renew or extend an existing Letter of Credit), the Parent
Borrower shall hand deliver or telecopy to the Fronting Bank and the U.S.
Administrative Agent (reasonably in advance of the requested date of issuance,
amendment, renewal or extension) a notice requesting the issuance of such Letter
of Credit, or identifying any Letter of Credit to be amended, renewed or
extended, and specifying the date of issuance, amendment, renewal or extension,
the date on which such Letter of Credit is to expire (which shall comply with
paragraph (iii) below), the amount of such Letter of Credit to be issued,
amended, renewed or extended, the name and address of the account party (which
shall be the Parent Borrower) and the beneficiary thereof and such other
information as shall be necessary to prepare such Letter of Credit or grant such
issuance, amendment, renewal or extension. Following receipt of such notice and
prior to the issuance, amendment, renewal or extension of any Letter of Credit
the U.S. Administrative Agent shall notify the Parent Borrower and the Fronting
Bank of the amount of the Aggregate U.S. $ Revolving Credit Exposure after
giving effect to (A) the issuance, amendment, renewal or extension of such
Letter of Credit, (B) the issuance or
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expiration of any other Letter of Credit that is to be issued or will expire
prior to the requested date of issuance of such Letter of Credit and (C) the
borrowing or repayment of any U.S. $ Revolving Credit Loans and Swingline Loans
that (based upon notices delivered to the U.S. Administrative Agent by the
Parent Borrower) are to be borrowed or repaid prior to the requested date of
issuance of such Letters of Credit. Each Letter of Credit shall be issued,
amended, renewed or extended subject to the terms and conditions and relying on
the representations and warranties of the Parent Borrower set forth herein, and
in any case only if, and upon issuance, amendment, renewal or extension of each
Letter of Credit the Parent Borrower shall be deemed to represent and warrant
that, after giving effect to such issuance, amendment, renewal or extension the
Aggregate U.S. $ Revolving Credit Exposure shall not exceed the Total U.S. $
Revolving Credit Commitment in effect at such time.
(iii) Expiration Date. Each Letter of Credit shall expire at the close of
business on the earlier of the date one year after the date of the issuance of
such Letter of Credit and the date that is five Business Days prior to the
Revolving Credit Maturity Date, unless such Letter of Credit expires by its
terms on an earlier date, provided that a Letter of Credit shall not be issued
(nor shall a Letter of Credit be amended, renewed or extended) that would result
in the Aggregate U.S. $ Revolving Credit Exposure exceeding the Total Revolving
Credit Commitment in effect at such time. Compliance with the foregoing proviso
shall be determined based upon the assumption that (A) each Letter of Credit
remains outstanding and undrawn in accordance with its terms until its
expiration date (taking into account any rights of renewal or extension that do
not require written notice by or consent of the Fronting Bank, in its sole
discretion, in order to effect such renewal or extension) and (B) the U.S. $
Revolving Credit Commitments will not be reduced pursuant to Section 2.09.
(iv) Participations. By the issuance of a Letter of Credit and without any
further action on the part of the Fronting Bank or the U.S. $ Revolving Credit
Lenders, the Fronting Bank will grant to each U.S. $ Revolving Credit Lender,
and each such Lender will acquire from the Fronting Bank, a participation in
such Letter of Credit equal to such U.S. $ Revolving Credit Lender's Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit, effective upon the
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issuance of such Letter of Credit. In consideration and in furtherance of the
foregoing, each U.S. $ Revolving Credit Lender hereby absolutely and
unconditionally agrees to pay to the U.S. Administrative Agent, for the account
of the Fronting Bank, such U.S. $ Revolving Credit Lender's Applicable
Percentage of each L/C Disbursement made by the Fronting Bank under such Letter
of Credit and not reimbursed by the Parent Borrower (or, if applicable, another
party pursuant to its obligations under any other Loan Document) on or before
the next Business Day as provided in paragraph (v) below. Each Revolving Credit
Lender acknowledges and agrees that its obligation to acquire participations
pursuant to this paragraph in respect of Letters of Credit is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or an Event of Default,
and that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever, provided that nothing in this Agreement
shall be construed to excuse the Fronting Bank from liability to the U.S. $
Revolving Credit Lenders caused by the gross negligence or wilful misconduct of
the Fronting Bank.
(v) Reimbursement. If the Fronting Bank shall make any L/C Disbursement in
respect of a Letter of Credit, the Parent Borrower shall pay to the U.S.
Administrative Agent, on or before the Business Day immediately following the
date of such L/C Disbursement, an amount equal to such L/C Disbursement. If the
Parent Borrower shall fail to pay any amount required to be paid under this
paragraph on or before such Business Day (or to cause payment thereof when due
pursuant to a U.S. $ Revolving Credit Borrowing), then (A) such unpaid amount
shall bear interest, for each day from and including such Business Day to but
excluding the date of payment, at a rate per annum equal to the interest rate
applicable to overdue ABR Loans that are U.S. $ Revolving Credit Loans pursuant
to Section 2.07 (provided that the 2.00% margin referred to therein shall not be
applicable until the first Business Day after the Parent Borrower receives
notice from the U.S. Administrative Agent that such L/C Disbursement has been or
will be made), (B) the U.S. Administrative Agent shall notify the Fronting Bank
and the U.S. $ Revolving Credit Lenders thereof, (C) each Revolving Credit
Lender shall comply with its obligation under paragraph (iv) above by wire
transfer of immediately available funds, in the same manner as provided in
Section 2.02(c) with respect to Loans made by such U.S. $ Revolving Credit
Lender (and Section 2.02(d) shall apply,
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mutatis mutandis, to the payment obligations of the U.S. $ Revolving Credit
Lenders) and (D) the U.S. Administrative Agent shall promptly pay to the
Fronting Bank amounts so received by it from the U.S. $ Revolving Credit
Lenders. The U.S. Administrative Agent shall promptly pay to the Fronting Bank
on a pro rata basis with respect to outstanding L/C Disbursements any amounts
received by it from the Parent Borrower (or, if applicable, another party
pursuant to its obligations under any other Loan Document) pursuant to this
paragraph prior to the time that any U.S. $ Revolving Credit Lender makes any
payment pursuant to paragraph (iv) above; any such amounts received by the U.S.
Administrative Agent thereafter shall be promptly remitted by the U.S.
Administrative Agent to the U.S. $ Revolving Credit Lenders that shall have made
such payments and to the Fronting Bank, as their interests may appear.
(b) Obligations Absolute. The Parent Borrower's obligations to reimburse
L/C Disbursements as provided in paragraph (a) above shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement, under any and all circumstances whatsoever,
and irrespective of:
(i) any lack of validity or enforceability of any Letter of Credit or
any Loan Document, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure from all
or any of the provisions of any Letter of Credit or any Loan Document;
(iii) the existence of any claim, setoff, defense or other right that
the Parent Borrower, any other party guaranteeing, or otherwise obligated
with, the Parent Borrower or any Subsidiary or other Affiliate thereof or
any other person may at any time have against the beneficiary under any
Letter of Credit, the Fronting Bank, the U.S. Administrative Agent or any
Lender (other than the defense of payment in accordance with the terms of
this Agreement or a defense based on the gross negligence or wilful
misconduct of the Fronting Bank) or any other person, whether in connection
with this Agreement, any other Loan Document or any other related or
unrelated agreement or transaction;
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(iv) any draft or other document presented under a Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or
any statement therein being untrue or inaccurate in any respect, provided
that payment by the applicable Fronting Bank shall not have constituted
gross negligence or wilful misconduct of the Fronting Bank;
(v) payment by the Fronting Bank under a Letter of Credit against
presentation of a draft or other document that does not comply with the
terms of such Letter of Credit, provided that payment by the Fronting Bank
shall not have constituted gross negligence or wilful misconduct of such
Fronting Bank;
(vi) any other act or omission to act or delay of any kind of the
Fronting Bank, the Lenders, the U.S. Administrative Agent or any other
person or any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the provisions of this
Section 2.20(b), constitute a legal or equitable discharge of the Parent
Borrower's obligations hereunder, provided that such act or omission shall
not have constituted gross negligence or wilful misconduct of such Fronting
Bank.
(c) Disbursement Procedures. The Fronting Bank shall, promptly following
its receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Fronting Bank shall as promptly as
possible give telephonic notification, confirmed by telecopy, to the U.S.
Administrative Agent and the Parent Borrower of such demand for payment and
whether the Fronting Bank has made or will make an L/C Disbursement thereunder,
provided that any failure to give or delay in giving such notice shall not
relieve the Parent Borrower of its obligation to reimburse the Fronting Bank and
the Lenders with respect to any such L/C Disbursement. The U.S. Administrative
Agent shall promptly give each U.S. $ Revolving Credit Lender notice thereof.
(d) Interim Interest. If the Fronting Bank shall make any L/C Disbursement
in respect of a Letter of Credit, then, unless the Parent Borrower shall
reimburse such L/C Disbursement in full on such date, the unpaid amount thereof
shall bear interest for the account of the Fronting Bank, for each day from
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and including the date of such L/C Disbursement, to but excluding the earlier of
the date of payment or the date on which interest shall commence to accrue
thereon as provided in subparagraph (a)(v) above, at the rate per annum that
would apply to such amount if such amount were an ABR Loan.
(e) Liability of the Fronting Bank. Without limiting the generality of
paragraph (b) above, it is expressly understood and agreed that the absolute and
unconditional obligation of the Parent Borrower to reimburse L/C Disbursements
will not be excused by the gross negligence or wilful misconduct of the Fronting
Bank, except as otherwise expressly provided in said paragraph (b). However,
nothing in this Agreement shall be construed to excuse the Fronting Bank from
liability to the Parent Borrower to the extent of any direct damages (as opposed
to consequential damages, claims in respect of which are hereby waived by the
Parent Borrower to the extent permitted by applicable law) suffered by the
Parent Borrower that are caused by the Fronting Bank's gross negligence or
wilful misconduct in determining whether drafts and other documents presented
under a Letter of Credit comply with the terms thereof. It is understood that
the Fronting Bank may accept documents that appear on their face to be in order,
without responsibility for further investigation in making any payment under any
Letter of Credit and, except as otherwise expressly provided in said paragraph
(b), (i) the Fronting Bank's exclusive reliance on the documents presented to it
under such Letter of Credit as to any and all matters set forth therein,
including reliance on the amount of any draft presented under such Letter of
Credit, whether or not the amount due to the beneficiary thereunder equals the
amount of such draft and whether or not any document presented pursuant to such
Letter of Credit proves to be insufficient in any respect, if such document on
its face appears to be in order, and whether or not any other statement or any
other document presented pursuant to such Letter of Credit proves to be forged
or invalid or any statement therein proves to be inaccurate or untrue in any
respect whatsoever and (ii) any noncompliance in any immaterial respect of the
documents presented under such Letter of Credit with the terms thereof shall, in
each case, be deemed not to constitute wilful misconduct or gross negligence of
such Fronting Bank.
(f) Resignation or Removal of the Fronting Bank. The Fronting Bank may
resign at any time by giving 180 days' prior
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written notice to the U.S. Administrative Agent, the Lenders and the Parent
Borrower, and may be removed at any time by the Parent Borrower by notice to the
Fronting Bank, the U.S. Administrative Agent and the Lenders, subject in each
case to the appointment by the Parent Borrower of a replacement Fronting Bank
reasonably satisfactory to the U.S. Administrative Agent, provided that (i)
Chase Manhattan Bank Delaware shall not resign as the Fronting Bank hereunder
for any reason other than compliance with applicable legal and regulatory
requirements and (ii) no Fronting Bank may resign as to any Letter of Credit
previously issued by it. Subject to the next succeeding sentences of this
paragraph (f), upon the acceptance of any appointment as the Fronting Bank
hereunder by a successor Fronting Bank, such successor shall succeed to and
become vested with all the interests, rights and obligations of the retiring
Fronting Bank and the retiring Fronting Bank shall be discharged from its
obligations to issue additional Letters of Credit hereunder to the extent of the
commitment of the successor Fronting Bank to provide Letters of Credit. At the
time such removal or resignation shall become effective, the Parent Borrower
shall pay all accrued and unpaid fees of such Fronting Bank pursuant to Section
2.05(b)(ii). The acceptance of any appointment as Fronting Bank hereunder by a
successor Fronting Bank shall be evidenced by an agreement entered into by such
successor, in a form satisfactory to the Parent Borrower and the U.S.
Administrative Agent, and, from and after the effective date of such agreement,
(i) such successor Fronting Bank shall have all the rights and obligations of
its predecessor Fronting Bank under this Agreement and the other Loan Documents
and (ii) references herein and in the other Loan Documents to the term "Fronting
Bank" shall be deemed to refer to such successor or to such predecessor Fronting
Bank, or to such successor and all predecessor and current Fronting Banks, as
the context shall require. After the resignation or removal of a Fronting Bank
hereunder, such retiring Fronting Bank shall remain a party hereto and shall
continue to have all the rights and obligations of a Fronting Bank under this
Agreement and the other Loan Documents with respect to Letters of Credit issued
by it prior to such resignation or removal, but shall not be required to issue
additional Letters of Credit.
(g) Cash Collateralization. If any Event of Default shall occur and be
continuing, the Parent Borrower shall, on the Business Day the Parent Borrower
receives notice from the U.S. Administrative Agent or U.S. $ Revolving Credit
Lenders with
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combined U.S. $ Revolving Credit Commitments representing a majority of the
aggregate U.S. $ Revolving Credit Commitments (or, if the maturity of the Loans
has been accelerated, Revolving Credit Lenders holding participations in
outstanding Letters of Credit representing a majority of the aggregate undrawn
amount of all outstanding Letters of Credit) thereof and of the amount to be
deposited, deposit in an account with the Collateral Agent, for the benefit of
the U.S. $ Revolving Credit Lenders an aggregate amount in cash equal to the
Revolving L/C Exposure as of such date. Such deposit shall be held by the
Collateral Agent as collateral for the payment and performance of the
Obligations. The Collateral Agent shall have exclusive dominion and control,
including the exclusive right of withdrawal, over such account. Other than any
interest earned on the investment of such deposits in Permitted Investments,
which investments shall be made at the option and sole discretion of the
Collateral Agent (provided that the Collateral Agent shall use reasonable
efforts to make such investments), such deposits shall not bear interest.
Interest or profits, if any, on such investments shall accumulate in such
account. Moneys in such account shall (a) automatically be applied by the U.S.
Administrative Agent to reimburse the Fronting Bank for L/C Disbursements that
have not been reimbursed, (b) be held for the satisfaction of the reimbursement
obligations of the Parent Borrower for the Revolving L/C Exposure and (c) if the
maturity of the Loans has been accelerated (but subject to the consent of U.S. $
Revolving Credit Lenders holding participations in outstanding Letters of Credit
representing greater than 50% of the aggregate undrawn amount of all outstanding
Letters of Credit), be applied to satisfy the Obligations. If the Parent
Borrower is required to provide an amount of cash collateral hereunder as a
result of the occurrence of an Event of Default, such amount (to the extent not
applied as aforesaid) shall be returned to the Parent Borrower within three
Business Days after all Events of Default have been cured or waived.
(h) Additional Fronting Banks. From time to time, the Parent Borrower may
by notice to the U.S. Administrative Agent designate additional Fronting Banks
reasonably satisfactory to the U.S. Administrative Agent. Such additional
Fronting Banks shall execute a counterpart of this Agreement upon approval of
the U.S. Administrative Agent (which shall not be unreasonably withheld) and
shall thereafter be Fronting Banks hereunder for all purposes and shall have the
Revolving L/C Commitment noted
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under their signature and, if applicable, the Revolving L/C Commitment of any
other Fronting Bank shall be reduced by the amount or amounts specified to the
U.S. Administrative Agent and each affected Fronting Bank and delivered
concurrently with any notice of designation of an additional Fronting Bank.
SECTION 2.21. Bankers' Acceptances. (a) Subject to the terms and conditions
of this Agreement, the Canadian Borrower and the Parent Borrower (for purposes
of this Section 2.21 only, such Borrowers shall collectively be referred to as
the "Borrower") may request a C $ Revolving Credit Borrowing by presenting
drafts for acceptance and purchase as B/As by the C $ Revolving Credit Lenders.
(b) To facilitate availment of B/A Borrowings, the Borrower hereby appoints
each C $ Revolving Credit Lender as its attorney to sign and endorse on its
behalf, in handwriting or by facsimile or mechanical signature as and when
deemed necessary by such Lender, blank forms of B/As in the form requested by
such Lender. In this respect, it is each C $ Revolving Credit Lender's
responsibility to maintain an adequate supply of blank forms of B/As for
acceptance under this Agreement. The Borrower recognizes and agrees that all
B/As signed and/or endorsed on its behalf by a C $ Revolving Credit Lender shall
bind the Borrower as fully and effectually as if signed in the handwriting of
and duly issued by the proper signing officers of the Borrower. Each C $
Revolving Credit Lender is hereby authorized to issue such B/As endorsed in
blank in such face amounts as may be determined by such Lender, provided that
the aggregate amount thereof is equal to the aggregate amount of B/As required
to be accepted and purchased by such Lender. No C $ Revolving Credit Lender
shall be liable for any damage, loss or other claim arising by reason of any
loss or improper use of any such instrument except the gross negligence or
wilful misconduct of such Lender or its officers, employees, agents or
representatives. Each C $ Revolving Credit Lender shall maintain a record with
respect to B/As (i) received by it in blank hereunder, (ii) voided by it for any
reason, (iii) accepted and purchased by it hereunder and (iv) canceled at their
respective maturities. Each C $ Revolving Credit Lender further agrees to retain
such records in the manner and for the statutory periods provided in the various
provincial or federal statutes and regulations which apply to such Lender. Each
C $ Revolving Credit Lender agrees to provide a copy of such records to the
Borrower at the Borrower's expense upon request.
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On request by or on behalf of the Borrower, a C $ Revolving Credit Lender shall
cancel all forms of B/A which have been pre-signed or pre-endorsed on behalf of
the Borrower and which are held by such Lender and are not required to be issued
in accordance with the Borrower's irrevocable notice.
(c) Drafts of the Borrower to be accepted as B/As hereunder shall be signed
as set forth in this Section 2.21. Notwithstanding that any person whose
signature appears on any B/A may no longer be an authorized signatory for any C
$ Revolving Credit Lender or the Borrower at the date of issuance of a B/A, such
signature shall nevertheless be valid and sufficient for all purposes as if such
authority had remained in force at the time of such issuance and any such B/A so
signed shall be binding on the Borrower.
(d) Promptly following receipt of a Borrowing Request or notice of rollover
pursuant to Section 2.03 by way of B/As, the Canadian Administrative Agent shall
so advise the C $ Revolving Credit Lenders and shall advise each C $ Revolving
Credit Lender of the aggregate face amount of the B/As to be accepted by it and
the applicable Contract Period (which shall be identical for all C $ Revolving
Credit Lenders). The aggregate face amount of the B/As to be accepted by a C $
Revolving Credit Lender shall be a whole multiple of $100,000, and such face
amount shall be in the C $ Revolving Credit Lenders' pro rata portions of such C
$ Revolving Credit Borrowing, provided that the Canadian Administrative Agent
may in its sole discretion increase or reduce any C $ Revolving Credit Lender's
portion of such B/A Borrowing to the nearest $100,000.
(e) Upon acceptance of a B/A by a C $ Revolving Credit Lender, such Lender
shall purchase, or arrange the purchase of, each B/A from the Borrower at the
Discount Rate for such Lender applicable to such B/A accepted by it and provide
to the Canadian Administrative Agent the Discount Proceeds for the account of
the Borrower. The Acceptance Fee payable by the Borrower to a C $ Revolving
Credit Lender under Section 2.06 in respect of each B/A accepted by such Lender
shall be set off against the Discount Proceeds payable by such Lender under this
Section 2.21.
(f) Each C $ Revolving Credit Lender may at any time and from time to time
hold, sell, rediscount or otherwise dispose of any or all B/As accepted and
purchased by it.
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(g) If a C $ Revolving Credit Lender is not a chartered bank under the Bank
Act (Canada) or if a C $ Revolving Credit Lender notifies the Canadian
Administrative Agent in writing that it is otherwise unable to accept Bankers'
Acceptances, such Lender will, instead of accepting and purchasing Bankers'
Acceptances, purchase from the Borrower a non-interest bearing note (a "B/A
Equivalent Note"), in the form of Exhibit 2.21(g), issued by the Borrower in the
amount and for the same term as the draft which such Lender would otherwise have
been required to accept and purchase hereunder, at a purchase price calculated
on the same basis as Bankers' Acceptances are discounted pursuant to this
Agreement. Each such Lender will provide to the Canadian Administrative Agent
the proceeds of such purchase for the account of the Borrower. The Borrower
will, upon purchase of a B/A Equivalent Note, pay to the Canadian Administrative
Agent on behalf of the C $ Revolving Credit Lender which purchased from the
Borrower the B/A Equivalent Note an Acceptance Fee in respect of such B/A
Equivalent Note. The Acceptance Fee payable by the Borrower to a C $ Revolving
Credit Lender under this Section 2.21(g) in respect of each B/A Equivalent Note
purchased by such Lender shall be set off against the Discount Proceeds payable
by such Lender under this Section 2.21(g).
(h) With respect to each B/A Borrowing, at or before 10:00 a.m., Toronto
time, one Business Day before the maturity date of such B/As, the Borrower shall
notify the Canadian Administrative Agent at the Canadian Administrative Agent's
address set forth in Section 10.01 by irrevocable telephone notice, followed by
a notice of rollover on the same day, if the Borrower intends to issue B/As on
such maturity date to provide for the payment of such maturing B/As. If the
Borrower fails to notify the Canadian Administrative Agent of its intention to
issue B/As on such maturity date, the Borrower shall provide payment to the
Canadian Administrative Agent on behalf of the C $ Revolving Credit Lenders of
an amount equal to the aggregate face amount of such B/As on the maturity date
of such B/As. If the Borrower fails to make such payment, such maturing B/As
shall be deemed to have been converted on their maturity date into a Canadian
Prime Rate Loan in an amount equal to the face amount of such B/A as provided in
Section 2.03 and the Borrower shall on demand pay any losses, costs or penalties
that may have been incurred by the Canadian Administrative Agent or any C $
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Revolving Credit Lender due to the failure of the Borrower to make such payment.
(i) The Borrower waives presentment for payment and any other defense to
payment of any amounts due to a C $ Revolving Credit Lender in respect of a B/A
accepted and purchased by it pursuant to this Agreement which might exist solely
by reason of such B/A being held, at the maturity thereof, by such Lender in its
own right and the Borrower agrees not to claim any days of grace if such Lender
as holder sues the Borrower on the B/A for payment of the amount payable by the
Borrower thereunder. On the specified maturity date of a B/A, or such earlier
date as may be required or permitted pursuant to the provisions of this
Agreement, the Borrower shall pay, through the Canadian Administrative Agent,
the C $ Revolving Credit Lender that has accepted and purchased such B/A the
full face amount of such B/A and after such payment, the Borrower shall have no
further liability in respect of such B/A and such Lender shall be entitled to
all benefits of, and be responsible for all payments due to third parties under,
such B/A.
(j) If a C $ Revolving Credit Lender grants a participation in a portion of
its rights under this Agreement to a participant under Section 10.04(f), then in
respect of any B/A Borrowing, a portion thereof may, at the option of such
Lender, be by way of Bankers' Acceptance accepted by such participant. In such
event, the Borrower shall upon request of the Canadian Administrative Agent or
the C $ Revolving Credit Lender granting the participation execute and deliver a
form of Bankers' Acceptance undertaking in favor of such participant for
delivery to such participant.
SECTION 2.22. Spot Exchange Rate Calculations. (a)(i) Not later than 2:00
p.m., Toronto time, on each Calculation Date, the Canadian Administrative Agent
shall (A) determine the Spot Exchange Rate as of such Calculation Date with
respect to Canadian Dollars if at such time C $ Revolving Credit Loans
denominated in Canadian Dollars are then outstanding and (B) give notice thereof
to the Parent Borrower, the Canadian Borrower and the C $ Revolving Credit
Lenders.
(ii) Not later than 1:00 p.m., New York City time, on each Calculation
Date, the U.S. Administrative Agent shall (A) determine the Spot Exchange Rate
as of such Calculation Date with
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respect to Sterling if at such time U.K. (pound) Revolving Credit Loans
denominated in Sterling are then outstanding and (B) give notice thereof to the
Parent Borrower, the U.K. Borrower, and the U.K. (pound) Revolving Credit
Lenders.
(iii) The Spot Exchange Rates determined pursuant to this Section 2.22(a)
shall become effective on the second Business Day immediately following the
relevant Calculation Date (a "Reset Date") and shall remain effective until the
next succeeding Reset Date.
(b)(i) Not later than 2:00 p.m., Toronto time, on the Business Day
immediately following the delivery of any notice pursuant to Section 2.09(b) or
2.12(g) in connection with the repayment of C $ Revolving Credit Loans, the
Canadian Administrative Agent shall (A) determine as of such date the Assigned
Dollar Value, based on the Spot Exchange Rate then in effect, of each C $
Revolving Credit Loan then outstanding denominated in Canadian Dollars (after
giving effect to any C $ Revolving Credit Loan repaid in connection therewith)
and (B) notify the Parent Borrower, the Canadian Borrower and the C $ Revolving
Credit Lenders of the results of such determination.
(ii) Not later than 1:00 p.m., New York City time, on the Business Day
immediately following the delivery of any notice pursuant to Section 2.09(b),
2.12(f) or 2.12(g) in connection with the repayment of U.K. (pound) Revolving
Credit Loans, the U.S. Administrative Agent shall (A) determine as of such date
the Assigned Dollar Value, based on the Spot Exchange Rate then in effect, of
each U.K. (pound) Revolving Credit Loan then outstanding denominated in Sterling
(after giving effect to any U.K. (pound) Revolving Credit Loan repaid in
connection therewith) and (B) notify the Parent Borrower, the U.K. Borrower and
the U.K. (pound) Revolving Credit Lenders of the results of such determination.
SECTION 2.23. Mitigation Obligations; Replacement of Lenders. (a) If any
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.19,
then such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such
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designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 2.19 in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender in such Lender's sole judgment. The Parent Borrower hereby agrees to pay,
or to cause the applicable Subsidiary Borrower to pay, all reasonable costs and
expenses incurred by any Lender in connection with any such designation or
assignment.
(b) If (i) any Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 2.19 or (ii) any Lender defaults in its obligation to fund Loans
hereunder or becomes subject to an order, judgment or decree of any Governmental
Authority that purports to enjoin or restrain such Lender from making Loans
hereunder, then the Parent Borrower may, at its sole expense and effort and
subject to Section 2.15, upon notice to such Lender and the U.S. Administrative
Agent, require such Lender to assign and delegate, at par plus accrued interest
and fees, without recourse (in accordance with and subject to the restrictions
contained in Section 10.04), all its interests, rights and obligations under
this Agreement (including all of its Commitments and the Loans at the time owing
to it and participations in L/C Disbursements and Swingline Loans held by it and
its obligations to acquire such participations) to a financial institution
specified by the Parent Borrower that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment), provided
that (i) the Parent Borrower shall have received the prior written consent of
the U.S. Administrative Agent (and, if a Revolving Commitment is being assigned,
the Fronting Bank and Swingline Lender), which consent shall not unreasonably be
withheld, (ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in L/C Disbursements and
Swingline Loans, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Parent Borrower or any other
applicable Borrower (in the case of all other amounts), (iii) in the case of any
such assignment resulting from payments required to be made pursuant to Section
2.19, such assignment will result in a reduction in such payments and (iv) such
assignment shall not conflict with or violate any law, rule or regulation or
order of any court or other Governmental Authority. A Lender shall not be
required to
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make any such assignment and delegation if, prior thereto, as a result of a
waiver by such Lender or otherwise, the circumstances entitling the Parent
Borrower to require such assignment and delegation cease to apply.
SECTION 2.24. European Monetary Union. If, as a result of the
implementation of European monetary union, (i) any currency that is an
Alternative Currency ceases to be lawful currency of the nation issuing the same
and is replaced by a European common currency, or (ii) any currency that is an
Alternative Currency and a European common currency are at the same time
recognized by the central bank or comparable authority of the nation issuing
such currency as lawful currency of such nation and the Administrative Agent or
the Majority Lenders shall so request in a notice delivered to the Parent
Borrower, then any amount payable hereunder by any party hereto in such currency
shall instead be payable in the European common currency and the amount so
payable shall be determined by translating the amount payable in such currency
to such European common currency at the exchange rate recognized by the European
Central Bank for the purpose of implementing European monetary union. Prior to
the occurrence of the event or events described in clause (i) or (ii) of the
preceding sentence, each amount payable hereunder in any currency will, subject
to Section 9.03, continue to be payable only in that currency. Each of the
Borrowers agrees, at the request of the Majority Lenders, at the time of or at
any time following the implementation of European monetary union, to enter into
an agreement amending this Agreement in such manner as the Majority Lenders
shall reasonably request in order to reflect the implementation of such monetary
union and to place the parties hereto in the position they would have been in
had such monetary union not been implemented.
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ARTICLE III. REPRESENTATIONS AND WARRANTIES
The Parent Borrower represents and warrants to each of the Lenders that,
and the U.K. Borrower represents and warrants with respect to itself and its
subsidiaries that, and the Canadian Borrower represents and warrants with
respect to itself and its subsidiaries, if any, that:
SECTION 3.01. Organization; Powers. Each of MergerCo, Holdings, the Parent
Borrower and the Subsidiaries (a) is a corporation unlimited liability company,
limited liability company or limited company, as the case may be, duly
organized, validly existing and in good standing (or, if applicable in a foreign
jurisdiction, enjoys the equivalent status under the laws of any jurisdiction of
organization outside the United States) under the laws of the jurisdiction of
its organization, (b) has all requisite power and authority to own its property
and assets and to carry on its business as now conducted, (c) is qualified to do
business in every jurisdiction where such qualification is required, except
where the failure so to qualify could not reasonably be expected to result in a
Material Adverse Effect, and (d) has the corporate power and authority to
execute, deliver and perform its obligations under each of the Loan Documents
and each other agreement or instrument contemplated thereby to which it is or
will be a party and, in the case of each Borrower, to borrow and otherwise
obtain credit hereunder.
SECTION 3.02. Authorization. The execution, delivery and performance by
MergerCo of the Recapitalization Agreement and Acquisition Agreement and the
Transactions and the execution, delivery and performance by the Parent Borrower
and each of the Subsidiaries of each of the Loan Documents to which it is a
party and the borrowings hereunder and the Transactions (a) have been duly
authorized by all corporate and stockholders analogous action required to be
obtained by the Investors, MergerCo, the Parent Borrower and the Subsidiaries
and (b) will not (i) violate (A) any provision of law, statute, rule or
regulation, or of the certificate or articles of incorporation or other
constitutive documents or by-laws of MergerCo, the Parent Borrower or any
Subsidiary, (B) any applicable order of any court or any rule, regulation or
order of any Governmental Authority or (C) any provision of any indenture,
certificate of designation for preferred stock, agreement or other instrument to
which MergerCo, the Parent Borrower or any Subsidiary is a party or by which any
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of them or any of their property is or may be bound, (ii) be in conflict with,
result in a breach of or constitute (alone or with notice or lapse of time or
both) a default under any such indenture, certificate of designation for
preferred stock, agreement or other instrument, where any such conflict,
violation, breach or default referred to in clause (i) or (ii) of this Section
3.02, individually or in the aggregate could reasonably be expected to have a
Material Adverse Effect, or (iii) result in the creation or imposition of any
Lien upon or with respect to any property or assets now owned or hereafter
acquired by MergerCo, the Parent Borrower or any Subsidiary, other than the
Liens created by the Loan Documents.
SECTION 3.03. Enforceability. This Agreement has been duly executed and
delivered by each Borrower and constitutes, and each other Loan Document when
executed and delivered by the Parent Borrower and each other Loan Party that is
party thereto will constitute, a legal, valid and binding obligation of such
Borrower and such Loan Party enforceable against such Borrower and such Loan
Party in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, moratorium, reorganization or other similar laws
affecting creditors' rights generally and except as enforceability may be
limited by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
SECTION 3.04. Governmental Approvals. No action, consent or approval of,
registration or filing with or any other action by any Governmental Authority is
or will be required in connection with the Transactions, except for (a) the
filing of Uniform Commercial Code financing statements and filings with the
United States Patent and Trademark Office and the United States Copyright Office
and comparable offices in foreign jurisdictions and equivalent filings in
foreign jurisdictions, (b) recordation of the Mortgages, (c) such as have been
made or obtained and are in full force and effect and (d) such actions, consents
and approvals the failure to obtain or make which could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 3.05. Financial Statements. The Parent Borrower has heretofore
furnished to the Lenders (a) separate combined balance sheets and combined
statements of operations, cash flows and shareholders' equity and owners
investment for
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each of the two businesses of the Parent Borrower that were, prior to the
consummation of the Transactions, owned, directly or indirectly, by Xxxxxx as of
and for the fiscal years ended December 31, 1995, and December 31, 1996, and by
C&A as of and for the fiscal years ended January 27, 1996, and December 28,
1996, and the fiscal year and the nine-month period ended September 27, 1997,
audited by and accompanied by the reports of Deloitte & Touche, LLP, in the case
of the business owned by Xxxxxx, and Xxxxxx Xxxxxxxx LLP, in the case of the
business owned by C&A, in each case independent public accountants, and (ii) as
of and for the portion of the fiscal year ended September 27, 1997, certified by
its chief financial officer. Such financial statements present fairly, in all
material respects, the financial position and results of operations of the
Parent Borrower and its combined subsidiaries as of such dates and for such
periods. None of the Parent Borrower and its combined subsidiaries has or shall
have as of the Closing Date any material Guarantee, contingent liability or
liability for taxes, or any long-term lease or unusual forward or long-term
commitment, including any interest rate or foreign currency hedging transaction,
which is not reflected in the foregoing statements or the notes thereto, other
than pursuant to the Loan Documents. Such financial statements were prepared in
accordance with GAAP applied on a consistent basis, except as disclosed therein.
SECTION 3.06. No Material Adverse Change. There has been no material
adverse change in the business, financial condition or results of operations of
the Parent Borrower and its subsidiaries, the Sunworthy business, Imperial
Wallcoverings (Canada) Inc., and Imperial Wallcoverings, Inc. and its
subsidiaries, taken as a whole, since September 27, 1997.
SECTION 3.07. Title to Properties; Possession Under Leases. (a) Each of the
Parent Borrower and the Subsidiaries has good and marketable title to, or valid
leasehold interests in, or easements or other limited property interests in, all
its material properties and assets (including all Mortgaged Properties), except
for minor defects in title that do not interfere with its ability to conduct its
business as currently conducted or to utilize such properties and assets for
their intended purposes. All such material properties and assets are free and
clear of Liens, other than Liens expressly permitted by Section 6.02.
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(b) Each of the Parent Borrower and the Subsidiaries has complied with all
obligations under all material leases to which it is a party, except where the
failure to comply would not have a Material Adverse Effect, and all such leases
are in full force and effect, except leases in respect of which the failure to
be in full force and effect could not reasonably be expected to have a Material
Adverse Effect. Each of the Parent Borrower and the Subsidiaries enjoys peaceful
and undisturbed possession under all such material leases, other than leases
which, individually or in the aggregate, are not material to the Parent Borrower
and the Subsidiaries, taken as a whole, and in respect of which the failure to
enjoy peaceful and undisturbed possession could not reasonably be expected to,
individually or in the aggregate, result in a Material Adverse Effect.
(c) Each of the Parent Borrower and the Subsidiaries owns or has rights to
use, or could obtain ownership or rights to use, on terms not materially adverse
to it, all patents, trademarks, service marks, trade names, copyrights, licenses
and rights with respect thereto necessary for the present conduct of its
business, without any known conflict with the rights of others, and free from
any burdensome restrictions, except where such failure to own or have rights to
use, and such conflicts and restrictions, could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(d) Except as set forth on Schedule 3.07(d), as of the Closing Date, none
of the Parent Borrower and the Subsidiaries has received any notice of, or has
any knowledge of, any pending or contemplated condemnation proceeding affecting
any of the Mortgaged Properties or any sale or disposition thereof in lieu of
condemnation that continues to be pending or contemplated as of the Closing
Date.
(e) None of the Borrowers and the Subsidiaries is obligated under any right
of first refusal, option or other contractual right to sell, assign or otherwise
dispose of any Mortgaged Property or any interest therein, except as permitted
under Section 6.05.
SECTION 3.08. Subsidiaries. (a) Schedule 3.08 (i) sets forth as of the
Closing Date the name and jurisdiction of incorporation of each Subsidiary and,
as to each such Subsidiary, the percentage of each class of Capital Stock owned
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by the Parent Borrower or by any Subsidiary and (ii) identifies each Subsidiary
that is an Inactive U.K. Subsidiary as of the Closing Date.
(b) As of the Closing Date, there are no outstanding subscriptions,
options, warrants, calls, rights or other agreements or commitments (other than
stock options granted to employees or directors and directors' qualifying
shares) of any nature relating to any Capital Stock of the Parent Borrower or
any Subsidiary, except under the Loan Documents and except the C&A Option and
the Management Options issued on or before the Closing Date.
SECTION 3.09. Litigation; Compliance with Laws. (a) Except as set forth in
Schedule 3.09, there are not any material actions, suits or proceedings at law
or in equity or by or before any Governmental Authority now pending or, to the
knowledge of any Borrower, threatened against or affecting such Borrower or any
Subsidiary or any business, property or rights of any such person (i) which
involve any Loan Document or, as of the Closing Date, the Transactions or (ii)
as to which there is a reasonable possibility of an adverse determination and
which, if adversely determined, could, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect or materially
adversely affect the Transactions.
(b) None of the Borrowers, the Subsidiaries and their respective material
properties or assets is in violation of (nor will the continued operation of
their material properties and assets as currently conducted violate) any law,
rule or regulation (including any zoning, building, Environmental Law,
ordinance, code or approval or any building permit) or any restriction of record
or agreement affecting any Mortgaged Property, or is in default with respect to
any judgment, writ, injunction or decree of any Governmental Authority, where
such violation or default could reasonably be expected to result in a Material
Adverse Effect.
(c) Certificates of occupancy, to the extent required by applicable law,
and all material permits are in effect for each Mortgaged Property as currently
constructed, and true and complete copies of such certificates of occupancy have
been delivered to the Collateral Agent as mortgagee with respect to each
Mortgaged Property.
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SECTION 3.10. Agreements. (a) None of the Parent Borrower and the
Subsidiaries is a party to any agreement or instrument or subject to any
corporate restriction that has resulted or could reasonably be expected to
result in a Material Adverse Effect.
(b) None of the Parent Borrower and the Subsidiaries is in default in any
manner under any provision of any indenture or other agreement or instrument
evidencing Indebtedness, or any other material agreement or instrument to which
it is a party or by which it or any of its properties or assets are or may be
bound, in either case where such default could reasonably be expected to result
in a Material Adverse Effect. Immediately after giving effect to the
Transactions, no Default or Event of Default shall have occurred and be
continuing.
SECTION 3.11. Federal Reserve Regulations. (a) None of the Parent Borrower
and the Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying Margin Stock.
(b) No part of the proceeds of any Loan will be used, whether directly or
indirectly, and whether immediately, incidentally or ultimately, (i) to purchase
or carry Margin Stock or to extend credit to others for the purpose of
purchasing or carrying Margin Stock or to refund indebtedness originally
incurred for such purpose, or (ii) for any purpose which entails a violation of,
or which is inconsistent with, the provisions of the Regulations of the Board,
including Regulation G, U or X.
SECTION 3.12. Investment Company Act; Public Utility Holding Company Act.
None of the Parent Borrower and the Subsidiaries is (a) an "investment company"
as defined in, or subject to regulation under, the Investment Company Act of
1940 or (b) a "holding company" as defined in, or subject to regulation under,
the Public Utility Holding Company Act of 1935.
SECTION 3.13. Use of Proceeds. Each Borrower will use the proceeds of the
Loans and will request the issuance of Letters of Credit only for the purposes
specified in the preamble to this Agreement.
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SECTION 3.14. Tax Returns. Each of the Parent Borrower and the Subsidiaries
has timely filed or caused to be timely filed all Federal, and all material
state and local, tax returns required to have been filed by it and has paid or
caused to be paid all taxes shown thereon to be due and payable by it and all
assessments in excess of $1,000,000 in the aggregate received by it, except
taxes or assessments that are being contested in good faith by appropriate
proceedings in accordance with Section 5.03 and for which the Parent Borrower
has set aside on its books adequate reserves in accordance with GAAP and taxes,
assessments, charges, levies or claims in respect of property taxes for property
that the Parent Borrower or a Subsidiary has determined to abandon where the
sole recourse for such tax, assessment, charge, levy or claim is to such
property. Each of the Parent Borrower and the Subsidiaries has paid in full or
made adequate provision (in accordance with GAAP) for the payment of all taxes
due with respect to all periods ending on or before the Closing Date, which
taxes, if not paid or adequately provided for, could reasonably be expected to
have a Material Adverse Effect. Except as set forth on Schedule 3.14, as of the
Closing Date, with respect to each of the Parent Borrower and the Subsidiaries,
(a) no material claims are being asserted in writing with respect to any taxes,
(b) no presently effective waivers or extensions of statutes of limitation with
respect to taxes have been given or requested, (c) no tax returns are being
examined by, and no written notification of intention to examine has been
received from, the Internal Revenue Service or, with respect to any material
potential tax liability, any other taxing authority and (d) no currently pending
issues have been raised in writing by the Internal Revenue Service or, with
respect to any material potential tax liability, any other taxing authority. For
purposes hereof, "taxes" shall mean any present or future tax, levy, impost,
duty, charge, assessment or fee of any nature (including interest, penalties and
additions thereto) that is imposed by any Governmental Authority.
SECTION 3.15. No Material Misstatements. (a) The written information,
reports, financial statements, exhibits and schedules furnished by or on behalf
of the Parent Borrower or any of the Subsidiaries to the U.S. Administrative
Agent or any Lender in connection with the negotiation of any Loan Document or
included therein or delivered pursuant thereto (including the Confidential
Information Memorandum dated February 1998 relating to the Parent Borrower (the
"Information Memorandum") but
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excluding the financial projections referred to in Section 3.15(b)), when taken
as a whole, did not contain, and as they may be amended, supplemented or
modified from time to time, will not contain, as of the Closing Date any
material misstatement of fact and did not omit, and as they may be amended,
supplemented or modified from time to time, will not omit, to state as of the
Closing Date any material fact necessary to make the statements therein, in the
light of the circumstances under which they were, are or will be made, not
materially misleading in their presentation of the Transactions or of the Parent
Borrower and the Subsidiaries taken as a whole.
(b) All financial projections concerning the Parent Borrower and the
Subsidiaries that are or have been made available to the U.S. Administrative
Agent or any Lender by the Parent Borrower or any Subsidiary have been or will
be prepared in good faith based upon assumptions believed by the Parent Borrower
to be reasonable on the Closing Date.
SECTION 3.16. Employee Benefit Plans. Each of the Parent Borrower and the
ERISA Affiliates is in compliance with the applicable provisions of ERISA and
the provisions of the Code relating to ERISA and the regulations and published
interpretations thereunder and any similar applicable non-U.S. law except for
such noncompliance which could not reasonably be expected to result in a
Material Adverse Effect. No Reportable Event has occurred as to which the Parent
Borrower or any ERISA Affiliate was required to file a report with the PBGC,
other than reports for which the 30 day notice requirement is waived, reports
that have been filed and reports the failure of which to file could not
reasonably be expected to result in a Material Adverse Effect. As of the Closing
Date, the present value of all benefit liabilities under each Plan of the Parent
Borrower and the ERISA Affiliates (on a termination basis and based on those
assumptions used to fund such Plan) did not, as of the last annual valuation
date applicable thereto for which a valuation is available, exceed by more than
$10,000 the value of the assets of such Plan, and the present value of all
benefit liabilities of all underfunded Plans (based on those assumptions used to
fund each such Plan) did not, as of the last annual valuation dates applicable
thereto for which valuations are available, exceed by more than $10,000 the
value of the assets of all such underfunded Plans. None of the Parent Borrower
and the ERISA Affiliates has incurred or could reasonably be expected to incur
any Withdrawal
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Liability that could reasonably be expected to result in a Material Adverse
Effect. None of the Parent Borrower and the ERISA Affiliates have received any
written notification that any Multiemployer Plan is in reorganization or has
been terminated within the meaning of Title IV of ERISA, and no Multiemployer
Plan is reasonably expected to be in reorganization or to be terminated, where
such reorganization or termination has resulted or could reasonably be expected
to result, through increases in the contributions required to be made to such
Plan or otherwise, in a Material Adverse Effect.
SECTION 3.17. Environmental Matters. Except as set forth in Schedule 3.17:
(a) There has not been a Release or threatened Release of Hazardous
Materials at, on, under or around the properties currently or formerly owned,
operated or leased by the Parent Borrower and the Subsidiaries (the
"Properties") in amounts or concentrations which (i) constitute or constituted a
violation of Environmental Laws, except as could not reasonably be expected to
have a Material Adverse Effect; (ii) would reasonably be expected to give rise
to an Environmental Claim that, in any such case or in the aggregate, is
reasonably likely to result in a Material Adverse Effect; or (iii) could
reasonably be expected to impair materially the fair saleable value of any
material Property;
(b) The Properties and all operations of the Parent Borrower and the
Subsidiaries are in compliance, and in all prior periods have been in
compliance, with all Environmental Laws, and all necessary Environmental Permits
have been obtained and are in effect, except to the extent that such
non-compliance or failure to obtain any necessary permits, in the aggregate, are
not reasonably likely to result in a Material Adverse Effect;
(c) None of the Parent Borrower and the Subsidiaries has received any
notice of an Environmental Claim in connection with the Properties or the
operations of the Parent Borrower or the Subsidiaries or with regard to any
person whose liabilities for environmental matters the Parent Borrower or the
Subsidiaries has retained or assumed, in whole or in part, contractually, by
operation of law or otherwise, which, in either such case or in the aggregate,
is reasonably likely to result in a Material Adverse Effect, nor does senior
management of the Parent Borrower
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or the Subsidiaries have reason to believe that any such notice will be received
or is being threatened;
(d) Hazardous Materials have not been transported from the Properties, nor
have Hazardous Materials been generated, treated, stored or disposed of at, on,
under or around any of the Properties in a manner that could reasonably give
rise to liability under any Environmental Law, nor have any of the Parent
Borrower and the Subsidiaries retained or assumed any liability, contractually,
by operation of law or otherwise, with respect to the generation, treatment,
storage or disposal of Hazardous Materials, which, in each case, individually or
in the aggregate, is reasonably likely to result in a Material Adverse Effect;
(e) No Lien in favor of any Governmental Authority for (i) any liability
under any Environmental Law or (ii) damages arising from or costs incurred by
such Governmental Authority in response to a Release or threatened Release of
Hazardous Materials into the environment has been recorded with respect to the
Properties except for Liens permitted by Section 6.02.
SECTION 3.18. Capitalization of the Borrowers. The authorized Capital
Stock, the par value thereof and the amount of such authorized Capital Stock
issued and outstanding for the Parent Borrower is set forth on Schedule 3.18 as
of the Closing Date (after giving effect to the Transactions). All outstanding
shares of Capital Stock of the Parent Borrower are fully paid and nonassessable
and, on and immediately after the Closing Date, not less than 82.0% of such
shares of Capital Stock on a fully diluted basis will be owned beneficially and
of record by Holdings free and clear of all Liens and encumbrances whatsoever
other than the Liens created by the Loan Documents, the C&A Option and the
Management Options issued on or before the Closing Date. The Parent Borrower
owns, directly or indirectly, 100% of the authorized Capital Stock of each of
the Subsidiary Borrowers.
SECTION 3.19. Security Documents. (a) The Pledge Agreements (and/or as
applicable in the case of Subsidiaries not organized in the United States, the
making of requisite filings or registrations) are effective to create in favor
of the Collateral Agent, for the ratable benefit of the Secured Parties, a
legal, valid and enforceable security interest in the Collateral (as defined in
the applicable Pledge Agreement) and, when the Capital Stock pledged pursuant to
the Pledge Agreements
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is delivered to the Collateral Agent (and/or, as applicable in the case of
Capital Stock of non-Domestic Subsidiaries and UK Newco, the requisite filings
or registrations are made), the Pledge Agreements will constitute fully
perfected and, in the case of the Pledged Stock of Domestic Subsidiaries other
than UK Newco, first priority Liens on, and security interest in, all right,
title and interest of the pledgors thereunder in such pledged Capital Stock, in
each case prior and superior in right to any other person.
(b) The Security Agreement is effective to create in favor of the
Collateral Agent, for the ratable benefit of the Secured Parties, a legal, valid
and enforceable security interest in all right, title and interest of the
grantors thereunder in the Collateral (as defined in the Security Agreement)
and, when financing statements in appropriate form are filed in the offices
specified on the schedules to the Security Agreement, the Security Agreement
will constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the grantors thereunder in such Collateral and, to the
extent contemplated therein and subject to ss. 9-306 of the Uniform Commercial
Code, the proceeds thereof, in each case prior and superior in right to any
other person, other than with respect to the rights of persons pursuant to Liens
expressly permitted by Section 6.02.
(c) The Mortgages are effective to create in favor of the Collateral Agent,
for the ratable benefit of the Secured Parties, a legal, valid and enforceable
Lien on all of the right, title and interest of the Loan Parties signatory
thereto in and to the Mortgaged Properties thereunder and, to the extent
contemplated therein and subject to ss. 9-306 of the Uniform Commercial Code,
the proceeds thereof, and when the Mortgages are filed in the offices specified
on the schedules thereto and when financing statements in appropriate form are
filed in the offices specified on the schedules thereto, each Mortgage will
constitute an enforceable mortgage Lien on, and fully perfected security
interest in, all right, title and interest of such Loan Parties in the Mortgaged
Property subject thereto and, to the extent contemplated therein and subject to
ss. 9-306 of the Uniform Commercial Code, the proceeds thereof, in each case
prior and superior in right to any other person, other than with respect to the
rights of persons pursuant to Liens expressly permitted by Section 6.02.
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(d) The Intellectual Property Security Agreement is effective to create in
favor of the Collateral Agent, for the ratable benefit of the Secured Parties, a
legal, valid and enforceable security interest in all right, title and interest
of the Loan Parties party thereto in the U.S. Collateral (as defined in the
Intellectual Property Security Agreement), and when financing statements in
appropriate form are filed in the offices specified on Schedule 3.19 and the
Intellectual Property Security Agreement is filed in the United States Patent
and Trademark Office and the United States Copyright Office, such security
interest under the Intellectual Property Security Agreement will constitute a
perfected security interest in such U.S. Collateral (i) that is identified in
Schedules I, II and III to the Intellectual Property Security Agreement and is
issued or registered in the United States (the "Scheduled Registered U.S.
Collateral") and, to the extent contemplated in the Intellectual Property
Security Agreement and subject to ss. 9-306 of the Uniform Commercial Code, the
proceeds thereof, and (ii) that is not Scheduled Registered U.S. Collateral, in
each case in this clause (ii) to the extent perfection of a security interest
therein can be obtained by the making of filings under the Uniform Commercial
Code in the UCC filing offices specified on Schedule 3.19, and, to the extent
contemplated in the Intellectual Property Security Agreement and subject to ss.
9-306 of the Uniform Commercial Code, the proceeds thereof, which security
interests, in each case in clauses (i) and (ii) above, are prior and superior in
right to any other person (it being understood that subsequent recordings in the
United States Patent and Trademark Office and the United States Copyright Office
may be necessary to perfect in the United States a lien on registered
trademarks, trademark applications and copyrights acquired by the Loan Parties
after the date hereof), other than with respect to the rights of persons
pursuant to Liens expressly permitted by Section 6.02.
SECTION 3.20. Location of Real Property and Leased Premises. (a) Schedule
3.20 lists completely and correctly as of the Closing Date all real property
owned by the Parent Borrower and the Subsidiaries and the addresses thereof,
other than individual properties that have a fair market value (as determined in
good faith by senior management of the Parent Borrower) on the Closing Date of
less than $200,000 and that are otherwise not material to the business of the
Parent Borrower and the Subsidiaries. As of the Closing Date, the Parent
Borrower
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and the Subsidiaries own in fee all the real property set forth as being owned
by them on Schedule 3.20.
(b) Schedule 3.20 lists completely and correctly as of the Closing Date all
real property leased by the Parent Borrower and the Subsidiaries and the
addresses thereof. As of the Closing Date, the Parent Borrower and the
Subsidiaries have a valid leasehold interest in all the real property set forth
as being leased by them on Schedule 3.20.
SECTION 3.21. Solvency. (a) Immediately after the consummation of the
Transactions and the other transactions to occur on the Closing Date and
immediately following the making of each Loan made, and the issuance of each
Letter of Credit issued, on the Closing Date and after giving effect to the
application of the proceeds thereof, (i) the fair value of the assets of the
Parent Borrower and the Subsidiaries on a consolidated basis, at a fair
valuation, will exceed the debts and liabilities, direct, subordinated,
contingent or otherwise, of the Parent Borrower and the Subsidiaries on a
consolidated basis; (ii) the present fair saleable value of the property of the
Parent Borrower and the Subsidiaries on a consolidated basis will be greater
than the amount that will be required to pay the probable liability of the
Parent Borrower and the Subsidiaries on a consolidated basis on their debts and
other liabilities, direct, subordinated, contingent or otherwise, as such debts
and other liabilities become absolute and matured; (iii) the Parent Borrower and
the Subsidiaries on a consolidated basis will be able to pay their debts and
liabilities, direct, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (iv) the Parent Borrower and the
Subsidiaries on a consolidated basis will not have unreasonably small capital
with which to conduct the businesses in which they are engaged as such
businesses are now conducted and are proposed to be conducted following the
Closing Date.
(b) The Parent Borrower does not intend to, and does not believe that it or
any Subsidiary will, incur debts beyond its ability to pay such debts as they
mature, taking into account the timing and amounts of cash to be received by it
or any such Subsidiary and the timing and amounts of cash to be payable on or in
respect of its Indebtedness or the Indebtedness of any such Subsidiary.
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SECTION 3.22. Labor Matters. Except as set forth in Schedule 3.22, there
are no strikes pending or threatened against the Parent Borrower or any
Subsidiary that, individually or in the aggregate, could reasonably be expected
to result in a Material Adverse Effect. The hours worked and payments made to
employees of the Parent Borrower and the Subsidiaries have not been in violation
in any material respect of the Fair Labor Standards Act or any other applicable
law dealing with such matters. All material payments due from the Parent
Borrower or any Subsidiary or for which any claim may be made against the Parent
Borrower or any Subsidiary, on account of wages and employee health and welfare
insurance and other benefits have been paid or accrued as a liability on the
books of the Parent Borrower or such Subsidiary to the extent required by GAAP.
The consummation of the Transactions will not give rise to a right of
termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which the Parent Borrower or any Subsidiary
(or any predecessor) is a party or by which the Parent Borrower or any
Subsidiary (or any predecessor) is bound, other than collective bargaining
agreements which, individually or in the aggregate, are not material to the
Parent Borrower and the Subsidiaries taken as a whole.
SECTION 3.23. No Foreign Assets Control Regulation Violation. None of the
Transactions will result in a violation of any of the foreign assets control
regulations of the United States Treasury Department, 31 C.F.R., Subtitle B,
Chapter V, as amended (including the Foreign Assets Control Regulations, the
Transaction Control Regulations, the Cuban Assets Control Regulations, the
Foreign Funds Control Regulations, the Iranian Assets Control Regulations, the
Nicaraguan Trade Control Regulations, the South African Transactions
Regulations, the Libyan Sanctions Regulations, the Soviet Gold Coin Regulations,
the Panamanian Transactions Regulations, the Kuwaiti Assets Control Regulations
and the Iraqi Sanctions Regulations contained in said Chapter V), or any ruling
issued thereunder or any enabling legislation or Presidential Executive Order
granting authority therefor, nor will the proceeds of the Loans be used by the
Parent Borrower in a manner that would violate any thereof.
SECTION 3.24. Insurance. Schedule 3.24 sets forth a true, complete and
correct description of all insurance (other than title insurance) maintained by
or on behalf of the Parent Borrower or the Subsidiaries as of the Closing Date.
As of such
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date, such insurance is in full force and effect and all premiums have been duly
paid. The Parent Borrower and the Subsidiaries have insurance in such amounts
and covering such risks and liabilities (and with such deductibles and
exclusions) as are in accordance with normal industry practice.
Notwithstanding anything to the contrary in this Agreement, the U.K.
Borrower shall not have any liability to any party with respect to any
representation or warranty made pursuant hereto other than to the applicable
Administrative Agents and to the U.K. (pound) Revolving Credit Lenders (and
assignees thereof pursuant to Section 9.01 or Section 10.04), and the Canadian
Borrower shall not have any liability to any party with respect to any
representation or warranty made pursuant hereto other than to the applicable
Administrative Agents and to the C $ Revolving Credit Lenders (and assignees
thereof pursuant to Section 9.01 or Section 10.04).
ARTICLE IV. CONDITIONS OF LENDING
The obligations of the Lenders to make Loans and of the Fronting Bank to
issue Letters of Credit hereunder (each, a "Credit Event") are subject to the
satisfaction of the following conditions:
SECTION 4.01. All Credit Events. On the date of each Borrowing and on the
date of each issuance or renewal of a Letter of Credit (other than a Borrowing
in which Revolving Credit Loans are refinanced with new Revolving Credit Loans
as contemplated by Section 2.02(f) without any increase in the aggregate
principal amount of Revolving Credit Loans outstanding and any extension or
renewal of any Letter of Credit without any increase in the stated amount of
such Letter of Credit):
(a) The U.S. Administrative Agent and, in the case of a C $ Revolving
Credit Borrowing, the Canadian Administrative Agent shall have received a
notice of such Borrowing as required by Section 2.03 (or such notice shall
have been deemed given in accordance with the last paragraph of Section
2.03) or, in the case of the issuance of a Letter of Credit, the Fronting
Bank and the U.S. Administrative Agent shall have received a notice
requesting the issuance of such Letter of Credit as required by Section
2.20(a).
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(b) The representations and warranties set forth in each Loan Document
shall be true and correct in all material respects on and as of the date of
such Borrowing or issuance of such Letter of Credit, as the case may be,
with the same effect as though made on and as of such date, except to the
extent such representations and warranties expressly relate to an earlier
date (it being understood that on the Closing Date such representations and
warranties shall be true and correct in all material respects both before
and after giving effect to the Recapitalization/Acquisition and the other
Transactions to occur on the Closing Date).
(c) At the time of and immediately after such Borrowing or issuance of
such Letter of Credit, as the case may be, no Event of Default or Default
shall have occurred and be continuing.
Each Borrowing and each issuance or renewal of a Letter of Credit (except those
specified in the parenthetical contained in the introductory paragraph of this
Section 4.01) shall be deemed to constitute a representation and warranty by the
Parent Borrower and, if applicable, the Canadian Borrower and the U.K. Borrower
on the date of such Borrowing or issuance, as the case may be, as
to the matters specified in paragraphs (b) and (c) of this
Section 4.01.
SECTION 4.02. First Credit Event. On the Closing Date:
(a) The U.S. Administrative Agent shall have received, on behalf of
itself, the Lenders and the Fronting Bank, a favorable written opinion of
(i) Xxxxx, Day, Xxxxxx & Xxxxx, counsel for the Borrowers, substantially to
the effect set forth in Exhibit J-1, (ii) Xxxxx, Day, Xxxxxx & Xxxxx, local
counsel for the U.K. Borrower, and XxXxxxx Xxxxxx & Xxxxxxxxx, local
counsel for the Canadian Borrower, substantially to the effect set forth in
Exhibit J-2, and J- 3, respectively, and (iii) Cain, Hibbard, Xxxxxx &
Xxxx, and XxXxxxxxxx & Xxxxx, local counsels for the Parent Borrower,
substantially to the effect set forth in Exhibit J-4, in each case (A)
dated the Closing Date, (B) addressed to the Fronting Bank, the U.S.
Administrative Agent and the Lenders, and (C) covering such other matters
relating to the Loan Documents and the Transactions as the U.S.
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Administrative Agent shall reasonably request, and the Borrower hereby
instructs its counsel to deliver such opinions.
(b) All legal matters incident to this Agreement, the Borrowings and
extensions of credit hereunder and the other Loan Documents shall be
reasonably satisfactory to the U.S. Administrative Agent, the Lenders and
the Fronting Bank.
(c) The U.S. Administrative Agent shall have received each of the
items referred to in clauses (A), (B) and (C) below with respect to each
Loan Party: (A) a copy of the certificate or articles of incorporation
(other than with respect to the U.K. Subsidiary Guarantors), including all
amendments thereto, of each Loan Party (other than with respect to the U.K.
Subsidiary Guarantors), certified as of a recent date by the Secretary of
State of the state of its organization, and a certificate as to the good
standing of each Loan Party as of a recent date from such Secretary of
State, or comparable documentation reasonably satisfactory to the
Administrative Agent with respect to any Loan Party that is a non-Domestic
Subsidiary and UK Newco; (B) a certificate of the Secretary or Assistant
Secretary of each Loan Party (other than with respect to the U.K.
Subsidiary Guarantors) dated the Closing Date and certifying (w) that
attached thereto is a true and complete copy of the by-laws of such Loan
Party as in effect on the Closing Date and at all times since a date prior
to the date of the resolutions described in clause (x) below, (x) that
attached thereto is a true and complete copy of resolutions duly adopted by
the Board of Directors of such Loan Party authorizing the execution,
delivery and performance of the Loan Documents to which such person is a
party and, in the case of each Borrower, the borrowings hereunder, and that
such resolutions have not been modified, rescinded or amended and are in
full force and effect, (y) that the certificate or articles of
incorporation of such Loan Party have not been amended since the date of
the last amendment thereto shown on the certificate of good standing
furnished pursuant to clause (A) above, and (z) as to the incumbency and
specimen signature of each officer executing any Loan Document or any other
document delivered in connection herewith on behalf of such Loan Party; (C)
a certificate of another officer as to the incumbency and specimen
signature of the Secretary or
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Assistant Secretary executing the certificate pursuant to (B) above; and
such other documents as the U.S. Administrative Agent, the Lenders or the
Fronting Bank may reasonably request.
(d) The U.S. Administrative Agent shall have received a certificate of
the Parent Borrower, dated the Closing Date and signed by a Financial
Officer of and on behalf of the Parent Borrower, confirming compliance with
the conditions precedent set forth in paragraphs (b) and (c) of Section
4.01.
(e) The U.S. Administrative Agent shall have received all Fees and
other amounts due and payable on or prior to the Closing Date, including,
to the extent invoiced, reimbursement or payment of all out-of-pocket
expenses required to be reimbursed or paid by any Borrower hereunder or
under any other Loan Document.
(f) Each of the Guarantee Agreements (other than the U.K. Subsidiary
Guarantee Agreement) and the Indemnity, Subrogation and Contribution
Agreement shall have been duly executed by the parties thereto and
delivered to the Collateral Agent and shall be in full force and effect.
(g) (i) The Pledge Agreements shall have been duly executed by the
parties thereto and delivered to the Collateral Agent and shall be in full
force and effect, and (A) the Xxxxxx Note, the IHC Note and all notes
evidencing any intercompany Indebtedness of UK Newco to the Parent Borrower
shall have been duly and validly pledged thereunder to the Collateral Agent
for the benefit of the Secured Parties and (B) all the outstanding Capital
Stock of the Parent Borrower owned by Holdings and all the outstanding
Capital Stock of each Domestic Subsidiary, and 65% of the outstanding
Capital Stock of each non-Domestic Subsidiary (or, if less, all such
Capital Stock) owned directly by the Parent Borrower or any Domestic
Subsidiary, shall have been duly and validly pledged thereunder to the
Collateral Agent for the ratable benefit of the Secured Parties and
certificates representing such shares, accompanied in the case of
certificated shares by stock powers endorsed in blank, shall be in the
actual possession of the Collateral Agent; and (ii) the Security Agreement
and the Intellectual
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Property Security Agreement shall have been duly executed by the Loan
Parties party thereto and shall have been delivered to the Collateral Agent
and shall be in full force and effect on such date and each document
(including each Uniform Commercial Code financing statement) required by
law or reasonably requested by the U.S. Administrative Agent to be filed,
registered or recorded in order to create in favor of the Collateral Agent
for the benefit of the Secured Parties a valid, legal and perfected
first-priority security interest in and lien on the Collateral described in
each such agreement (subject to any Lien expressly permitted by Section
6.02) shall have been delivered to the Collateral Agent.
(h) The Collateral Agent shall have received (i) the results of a
search of the Uniform Commercial Code filings made with respect to the Loan
Parties (other than non-Domestic Subsidiaries and UK Newco) in the states
in which the chief executive office of each such person is located and the
other jurisdictions in which Uniform Commercial Code filings are to be made
pursuant to the preceding paragraph, together with copies of the financing
statements disclosed by such search and (ii) the results of equivalent
searches made in each other jurisdiction requested by the U.S.
Administrative Agent, in each case accompanied by evidence satisfactory to
the U.S. Administrative Agent that the Liens indicated in any such
financing statement (or similar document) or otherwise disclosed in such
searches would be permitted under Section 6.02 or have been released.
(i) (i) Each of the Mortgages, substantially in the form of Exhibit F,
relating to each of the Mortgaged Properties shall have been duly executed
by the parties thereto and delivered to the Collateral Agent and shall be
in full force and effect, (ii) each of such Mortgaged Properties shall not
be subject to any Lien other than those expressly permitted under Section
6.02, (iii) a lender's title insurance policy, together with such surveys,
abstracts, appraisals and legal opinions required to be furnished pursuant
to the terms of the Mortgages or this Agreement, paid for by the Parent
Borrower, in form and substance acceptable to the U.S. Administrative
Agent, insuring such Mortgage as a first lien on such Mortgaged Property
(subject to any Lien expressly permitted by
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Section 6.02 or otherwise agreed to by the U.S. Administrative Agent) shall
have been received by the U.S. Administrative Agent and (iv) the Collateral
Agent shall have received such other documents as reasonably requested in
writing by the U.S. Administrative Agent or the Lenders.
(j) The U.S. Administrative Agent shall have received copies of, or an
insurance broker's or agent's certificate as to coverage under, the
insurance policies required by Section 5.02 and the applicable provisions
of the Security Documents, each of which policies shall be endorsed or
otherwise amended to include a "standard" or "New York" lender's loss
payable endorsement and to name the Collateral Agent as additional insured,
in form and substance satisfactory to the U.S. Administrative Agent.
(k) The U.S. Administrative Agent shall be reasonably satisfied with
the scope of due diligence performed with respect to environmental matters
concerning the Parent Borrower and the Subsidiaries, including with respect
to any environmental hazards, liabilities or Remedial Action to which the
Parent Borrower or any of the Subsidiaries may be subject.
(l) The Recapitalization and the Imperial Acquisition shall each have
been consummated substantially simultaneously with the initial Credit Event
hereunder in accordance (i) in all material respects with applicable law
and (ii) with the respective terms of the Recapitalization Agreement and
the Acquisition Agreement and all related documentation, in each case in
the form previously approved by the U.S. Administrative Agent, and
otherwise on terms reasonably satisfactory to the U.S. Administrative Agent
(it being agreed that the Recapitalization shall occur prior to the
Imperial Acquisition); the conditions to MergerCo's obligations set forth
in the Recapitalization Agreement shall have been satisfied without giving
effect to any waiver or amendment in any manner adverse to the Lenders that
was not approved by all the Lenders; the conditions to MergerCo's
obligations set forth in the Acquisition Agreement shall have been
satisfied without giving effect to any waiver or amendment in any manner
materially adverse to the Lenders that was not approved by the U.S.
Administrative Agent; and the other Transactions intended to occur on or
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before the Closing Date (including the consummation of the Imperial Merger)
shall have been consummated before or substantially simultaneously with the
initial Credit Event hereunder and the capital, corporate and ownership
structures intended to be in effect on the Closing Date shall have become
effective not later than the initial Credit Event hereunder.
(m) The U.S. Administrative Agent shall be satisfied that the
aggregate level of fees and expenses to be paid by MergerCo and the Parent
Borrower and the Subsidiaries in connection with the
Recapitalization/Acquisition, the other Transactions, the financing
therefor and the other transactions contemplated herein shall not exceed
$24,000,000.
(n) The Fund or other current stockholders of Holdings shall have
purchased, or shall purchase simultaneously with the initial Credit Event
hereunder, newly issued shares of common stock of Holdings for a cash
purchase price at least equal to $84,500,000 and Holdings shall have made
the Equity Contribution to MergerCo.
(o) The Senior Subordinated Notes shall have been issued on the terms
set forth in the Offering Memorandum and the Parent Borrower shall have
received gross proceeds of not less than $125,000,000 therefrom.
(p) After giving effect to the Transactions, including the repayment
of any Existing Indebtedness (other than such Indebtedness set forth on
Schedule 6.01), (i) the Parent Borrower and the Subsidiaries shall have
outstanding no preferred stock and no Indebtedness other than Loans
hereunder, the Senior Subordinated Notes and Indebtedness otherwise
permitted under Section 6.01 and (ii) the Parent Borrower shall have
outstanding no Capital Stock other than common stock owned by Holdings and
the Borden Sellers in the amounts described in the preamble to this
Agreement and other than the C&A Option and the Management Options. All
agreements, commitments, security interests and other rights and
obligations in respect of the Existing Indebtedness shall have been
terminated and all amounts due in respect thereof shall have been paid in
full from the proceeds of
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the Loans made on the Closing Date, except as set forth on Schedule 6.01
and Schedule 6.02.
(q) There shall have been no material adverse change in the business,
financial condition or results of operations of the Parent Borrower and the
Subsidiaries, the Sunworthy business, Imperial Wallcoverings (Canada) Inc.
and Imperial Wallcoverings, Inc. and its subsidiaries taken as a whole
since September 27, 1997.
(r) The U.S. Administrative Agent shall have received a satisfactory
pro forma combined balance sheet of the Parent Borrower as of September 27,
1997, together with a certificate of the Parent Borrower, dated the Closing
Date and signed by a Financial Officer of the Parent Borrower, to the
effect that such statement fairly presents the pro forma financial position
of the Parent Borrower and the Subsidiaries in accordance with GAAP after
giving effect to the Credit Events to occur on the Closing Date and the
Transactions as if such transactions occurred as of September 27, 1997, and
the U.S. Administrative Agent shall be reasonably satisfied that such
balance sheet and the Transactions and the financing arrangements
contemplated hereby are consistent with the sources and uses of funds
delivered to the Lenders prior to the date hereof and are not materially
inconsistent with the information, projections and financial models
delivered prior to the date hereof. MergerCo and the Parent Borrower shall
have provided such other financial information as the U.S. Administrative
Agent may reasonably request in connection with the
Recapitalization/Acquisition.
(s) All requisite material approvals and consents to the Transactions
of or from Governmental Authorities and all material third parties shall
have been received to the extent required and all applicable appeal periods
shall have expired.
(t) There shall be no governmental or judicial action, actual or
threatened, that has or could have a reasonable likelihood of restraining,
preventing or imposing materially burdensome conditions on the Transactions
or the consummation of the other transactions contemplated hereby.
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(u) The Lenders shall have received a solvency letter in form and
substance satisfactory to the U.S. Administrative Agent from Xxxxxx, Xxxxxx
& Co., together with other evidence reasonably requested by the Lenders as
to the solvency of the Parent Borrower and the Subsidiaries on a
consolidated basis, after giving effect to the Transactions and the
consummation of the other transactions contemplated hereby.
SECTION 4.03. First Credit Event Under U.K. (pound) Revolving Credit
Commitments. On or before the date on which the first Credit Event in respect of
the U.K. (pound) Revolving Credit Commitments shall occur (a) the conditions
specified in Sections 4.01 and 4.02 shall have been satisfied, (b) the U.S.
Administrative Agent shall have received the items referred to in clauses (A),
(B) and (C) of Section 4.02(c) with respect to each U.K. Subsidiary Guarantor
and (c) the U.K. Subsidiary Guarantee Agreement shall have been duly executed by
the parties thereto and delivered to the Collateral Agent and shall be in full
force and effect.
ARTICLE V. AFFIRMATIVE COVENANTS
The Parent Borrower covenants and agrees with each Lender that so long as
this Agreement shall remain in effect and until the Commitments have been
terminated and the principal of and interest on each Loan, all Fees and all
other expenses or amounts payable under any Loan Document shall have been paid
in full and all Letters of Credit have been canceled or have expired and all
amounts drawn thereunder have been reimbursed in full, unless the Required
Lenders shall otherwise consent in writing, the Parent Borrower will, and will
cause each of the Subsidiaries to:
SECTION 5.01. Existence; Businesses and Properties. (a) Do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence (which shall not preclude it changing its organizational
status from a corporation to a limited liability company), except as otherwise
expressly permitted under Section 6.05, and except for the liquidation or
dissolution of Subsidiaries if the assets of such Subsidiaries to the extent
they exceed estimated liabilities are acquired by the Parent Borrower or a
Wholly Owned Subsidiary
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in such liquidation or dissolution, provided that Subsidiaries that are
Guarantors may not be liquidated into Subsidiaries that are not Guarantors and
Domestic Subsidiaries may not be liquidated into non-Domestic Subsidiaries.
(b) Do or cause to be done all things necessary to obtain, preserve, renew,
extend and keep in full force and effect the rights, licenses, permits,
franchises, authorizations, patents, copyrights, trademarks and trade names
material to the conduct of its business; comply in all material respects with
all applicable laws, rules, regulations (including any zoning, building,
Environmental Law, ordinance, code or approval or any building permits or any
restrictions of record or agreements affecting the Mortgaged Properties) and
orders of any Governmental Authority, whether now in effect or hereafter
enacted; and at all times maintain and preserve all property material to the
conduct of such business and keep such property in good repair, working order
and condition and from time to time make, or cause to be made, all needful and
proper repairs, renewals, additions, improvements and replacements thereto
necessary in order that the business carried on in connection therewith, if any,
may be properly conducted at all times (in each case except as expressly
permitted by this Agreement).
SECTION 5.02. Insurance. (a) Keep its insurable properties insured at all
times by financially sound and reputable insurers in such amounts as shall be
customary for similar businesses and maintain such other reasonable insurance
(including, to the extent consistent with past practices, self-insurance), of
such types, to such extent and against such risks, as is customary with
companies in the same or similar businesses (including business interruption
insurance as reasonably requested by the U.S. Administrative Agent), and
maintain such other insurance as may be required by law or any other Loan
Document.
(b) Cause all such property and casualty insurance policies with respect to
the Mortgaged Properties to be endorsed or otherwise amended to include a
"standard" or "New York" lender's loss payable endorsement, in form and
substance reasonably satisfactory to the U.S. Administrative Agent and the
Collateral Agent, which endorsement shall provide that, from and after the
Closing Date, if the insurance carrier shall have received written notice from
the U.S. Administrative Agent or the
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Collateral Agent of the occurrence of an Event of Default, the insurance carrier
shall pay all proceeds otherwise payable to the Parent Borrower or the Loan
Parties under such policies directly to the Collateral Agent; cause all such
policies to provide that neither the Parent Borrower, the U.S. Administrative
Agent, the Collateral Agent nor any other party shall be a coinsurer thereunder
and to contain a "Replacement Cost Endorsement", without any deduction for
depreciation, and such other provisions as the U.S. Administrative Agent or the
Collateral Agent may reasonably (in light of a Default or a material development
in respect of the insured Mortgaged Property) require from time to time to
protect their interests; deliver original or certified copies of all such
policies or a certificate of an insurance broker to the Collateral Agent; cause
each such policy to provide that it shall not be canceled or modified to reduce
the amount (including by means of increased deductibles), type or scope of
coverage or not renewed upon less than 30 days' prior written notice thereof by
the insurer to the U.S. Administrative Agent and the Collateral Agent; deliver
to the U.S. Administrative Agent and the Collateral Agent, prior to the
cancelation, modification or nonrenewal of any such policy of insurance, a copy
of a renewal or replacement policy (or other evidence of renewal of a policy
previously delivered to the U.S. Administrative Agent and the Collateral Agent),
or insurance certificate with respect thereto, together with evidence
satisfactory to the U.S. Administrative Agent and the Collateral Agent of
payment of the premium therefor.
(c) If at any time the area in which the Premises (as defined in the
Mortgages) are located is designated (i) a "flood hazard area" in any Flood
Insurance Rate Map published by the Federal Emergency Management Agency (or any
successor agency), obtain flood insurance in such reasonable total amount as the
U.S. Administrative Agent, the Collateral Agent or the Required Lenders may from
time to time reasonably require, and otherwise comply with the National Flood
Insurance Program as set forth in the Flood Disaster Protection Act of 1973, as
it may be amended from time to time, or (ii) a "Zone 1" area (as so designated
in the National Ocean and Earthquake Risk Map), obtain earthquake insurance in
such reasonable total amount as the U.S. Administrative Agent, the Collateral
Agent or the Required Lenders may from time to time reasonably require.
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(d) With respect to each Mortgaged Property, carry and maintain
comprehensive general liability insurance including the "broad form CGL
endorsement" and coverage on an occurrence basis against claims made for
personal injury (including bodily injury, death and property damage) and
umbrella liability insurance against any and all claims, in no event for a
combined single limit of less than $500,000, naming the Collateral Agent as an
additional insured, in forms reasonably satisfactory to the Collateral Agent.
(e) Notify the U.S. Administrative Agent and the Collateral Agent promptly
whenever any separate insurance concurrent in form or contributing in the event
of loss with that required to be maintained under this Section 5.02 is taken out
by the Parent Borrower or any Subsidiary; and promptly deliver to the U.S.
Administrative Agent and the Collateral Agent a duplicate original copy of such
policy or policies, or an insurance certificate with respect thereto.
(f) In connection with the covenants set forth in this Section 5.02, it is
understood and agreed that:
(i) none of the U.S. Administrative Agent, the Lenders, the Fronting
Bank and their respective agents or employees shall be liable for any loss
or damage insured by the insurance policies required to be maintained under
this Section 5.02, it being understood that (A) the Parent Borrower and the
other Loan Parties shall look solely to their insurance companies or any
other parties other than the aforesaid parties for the recovery of such
loss or damage and (B) such insurance companies shall have no rights of
subrogation against the U.S. Administrative Agent, the Collateral Agent,
the Lenders, the Fronting Bank or their agents or employees. If, however,
the insurance policies do not provide waiver of subrogation rights against
such parties, as required above, then the Parent Borrower hereby agrees, to
the extent permitted by law, to waive, and to cause each Subsidiary to
waive, its right of recovery, if any, against the U.S. Administrative
Agent, the Collateral Agent, the Lenders, the Fronting Bank and their
agents and employees; and
(ii) the designation of any form, type or amount of insurance coverage
by the U.S. Administrative Agent, the
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Collateral Agent or the Required Lenders under this Section 5.02 shall in
no event be deemed a representation, warranty or advice by the U.S.
Administrative Agent, the Collateral Agent or the Lenders that such
insurance is adequate for the purposes of the business of the Parent
Borrower and the Subsidiaries or the protection of their properties and the
U.S. Administrative Agent, the Collateral Agent and the Required Lenders
shall have the right from time to time, during the continuance of a Default
or Event of Default or in light of a material development in respect of any
Mortgaged Property, to require the Parent Borrower and the other Loan
Parties to keep other insurance in such form and reasonable amount as the
U.S. Administrative Agent, the Collateral Agent or the Required Lenders may
reasonably request, provided that such insurance shall be obtainable on
commercially reasonable terms.
SECTION 5.03. Taxes. Pay and discharge promptly when due all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits or in respect of its property, before the same shall become
delinquent or in default, as well as all lawful claims for labor, materials and
supplies or otherwise which, if unpaid, might give rise to a Lien upon such
properties or any part thereof; provided, however, that such payment and
discharge shall not be required with respect to any such tax, assessment,
charge, levy or claim so long as (a) the validity or amount thereof shall be
contested in good faith by appropriate proceedings and the Parent Borrower or
the affected Subsidiary, as applicable, shall have set aside on its books
adequate reserves in accordance with GAAP with respect thereto, (b) such tax,
assessment, charge, levy or claim is in respect of property taxes for property
that the Parent Borrower or one of the Subsidiaries has determined to abandon
and the sole recourse for such tax, assessment, charge, levy or claim is to such
property or (c) the amount of such taxes, assessments, charges, levies and
claims and interest and penalties thereon does not exceed $1,000,000 in the
aggregate.
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SECTION 5.04. Financial Statements, Reports, etc. In the case of the Parent
Borrower, furnish to the U.S. Administrative Agent and each Lender:
(a) within 120 days after the end of fiscal year 1997, and within 90
days after the end of each fiscal year thereafter, a consolidated balance
sheet and related statements of operations, cash flows and shareholders'
equity and owners investment showing the financial position of the Parent
Borrower and the Subsidiaries as of the close of such fiscal year and the
consolidated results of their operations during such year, all audited by
Deloitte & Touche, LLP or other independent public accountants of
recognized national standing reasonably acceptable to the U.S.
Administrative Agent and accompanied by a report of such accountants (which
shall not be qualified in any material respect) to the effect that such
consolidated financial statements fairly present, in all material respects,
the financial position and results of operations of the Parent Borrower and
the Subsidiaries on a consolidated basis in accordance with GAAP (except,
as to GAAP, as disclosed therein);
(b) within 60 days after the end of the first fiscal quarter of 1998,
and within 45 days after the end of each of the first three fiscal quarters
of each fiscal year thereafter, a consolidated balance sheet and related
statements of operations, cash flows and shareholders' equity and owners
investment showing the financial position of the Parent Borrower and the
Subsidiaries as of the close of such fiscal quarter and the consolidated
results of their operations during such fiscal quarter and the then-elapsed
portion of the fiscal year, all certified by one of its Financial Officers
on behalf of the Parent Borrower as fairly presenting, in all material
respects, the financial position and results of operations of the Parent
Borrower and the Subsidiaries on a consolidated basis in accordance with
GAAP (except for the absence of footnotes and except as disclosed therein),
subject to normal year-end audit adjustments;
(c) concurrently with any delivery of financial statements under (a)
or (b) above, a certificate of the accounting firm or Financial Officer, as
applicable, on
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behalf of the Parent Borrower opining on or certifying such statements
(which certificate, when furnished by an accounting firm, may be limited to
accounting matters and disclaim responsibility for legal interpretations)
(i) certifying that no Event of Default or Default has occurred or, if such
an Event of Default or Default has occurred, specifying the nature and
extent thereof and any corrective action taken or proposed to be taken with
respect thereto and (ii) setting forth computations in reasonable detail
satisfactory to the U.S. Administrative Agent (A) demonstrating compliance
with the covenants contained in Sections 6.10, 6.11 and 6.12, and (B)
determining the Leverage Ratio and Adjusted Net Leverage Ratio as of the
last day of the fiscal quarter or fiscal year in respect of which such
financial statements are being delivered (it being understood that the
information required by this clause (ii) may be provided in a certificate
of a Financial Officer on behalf of the Parent Borrower instead of from
such accounting firm);
(d) promptly after the same become publicly available, copies of all
periodic and other publicly available reports, proxy statements and, to the
extent requested by the U.S. Administrative Agent, other materials filed by
the Parent Borrower or any Subsidiary with the Securities and Exchange
Commission, or any governmental authority succeeding to any of or all the
functions of said Commission, or with any national securities exchange, or
distributed to its share holders generally, as the case may be;
(e) if, as a result of any change in accounting principles and
policies from those as in effect on the date of this Agreement, the
consolidated financial statements of the Parent Borrower and the
Subsidiaries delivered pursuant to paragraph (a) or (b) above will differ
in any material respect from the consolidated financial statements that
would have been delivered pursuant to such clauses had no such change in
accounting principles and policies been made, then, together with the first
delivery of financial statements pursuant to paragraph (a) and (b) above
following such change, a schedule prepared by a Financial Officer on behalf
of the Parent Borrower reconciling such changes to what the financial
statements would have been without such changes;
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(f) within 90 days after the beginning of each fiscal year, a copy of
an operating and capital expenditure budget for such fiscal year;
(g) promptly following the creation or acquisition of any Subsidiary,
a certificate from a Responsible Officer, identifying such new Subsidiary
and the ownership interest of the Parent Borrower and the Subsidiaries
therein;
(h) simultaneously with the delivery of any financial statements
pursuant to paragraph (a) or (b) above, a balance sheet and related
statements of operations, cash flows and stockholder's equity for each
unconsolidated Subsidiary for the applicable period;
(i) promptly, a copy of all reports submitted in connection with any
material interim or special audit made by independent accountants of the
books of the Parent Borrower or any Subsidiary; and
(j) promptly, from time to time, such other information regarding the
operations, business affairs and financial condition of the Parent Borrower
or any Subsidiary, or compliance with the terms of any Loan Document, or
such consolidating financial statements, as in each case the U.S.
Administrative Agent or any Lender, acting through the U.S. Administrative
Agent, may reasonably request.
SECTION 5.05. Litigation and Other Notices. Furnish to the U.S.
Administrative Agent and each Lender written notice of the following promptly
after any Responsible Officer of any Borrower obtains actual knowledge thereof:
(a) any Event of Default or Default, specifying the nature and extent
thereof and the corrective action (if any) proposed to be taken with
respect thereto;
(b) the filing or commencement of, or any written threat or notice of
intention of any person to file or com mence, any action, suit or
proceeding, whether at law or in equity or by or before any Governmental
Authority, against such Borrower or any Subsidiary in respect of which
there is a reasonable possibility of an adverse determination and
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which, if adversely determined, could reasonably be expected to result in a
Material Adverse Effect; and
(c) any other development specific to such Borrower or any Subsidiary
that is not a matter of general public knowledge and that has resulted in,
or could reasonably be expected to result in, a Material Adverse Effect.
SECTION 5.06. Employee Benefits. (a) Comply in all material respects with
the applicable provisions of ERISA and the provisions of the Code relating to
ERISA and any applicable similar non-U.S. law and (b) furnish to the U.S.
Administrative Agent (i) as soon as possible after, and in any event within 30
days after any Responsible Officer of the Parent Borrower or any ERISA Affiliate
knows or has reason to know that, any Reportable Event has occurred, a statement
of a Financial Officer setting forth details as to such Reportable Event and the
action proposed to be taken with respect thereto, together with a copy of the
notice, if any, of such Reportable Event given to the PBGC, (ii) promptly after
any such Responsible Officer learns of receipt thereof, a copy of any notice
that the Parent Borrower or any ERISA Affiliate may receive from the PBGC
relating to the intention of the PBGC to terminate any Plan or Plans (other than
a Plan maintained by an ERISA Affiliate that is considered an ERISA Affiliate
only pursuant to subsection (m) or (o) of Code Section 414) or to appoint a
trustee to administer any such Plan, (iii) within 30 days after the due date for
filing with the PBGC pursuant to Section 412(n) of the Code a notice of failure
to make a required installment or other payment with respect to a Plan, a
statement of a Financial Officer setting forth details as to such failure and
the action proposed to be taken with respect thereto, together with a copy of
any such notice given to the PBGC and (iv) promptly after any such Responsible
Officer learns thereof and in any event within 30 days after receipt thereof by
the Parent Borrower or any ERISA Affiliate from the sponsor of a Multiemployer
Plan, a copy of each notice received by the Parent Borrower or any ERISA
Affiliate concerning (A) the imposition of Withdrawal Liability or (B) a
determination that a Multiemployer Plan is, or is expected to be, terminated or
in reorganization, in each case within the meaning of Title IV of ERISA,
provided that in the case of each of clauses (i) through (iv) above, notice to
the U.S. Administrative Agent shall only be required if such event or condition,
together with all other events or conditions referred to in clauses (i) through
(iv) above, could
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reasonably be expected to result in liability of the Parent Borrower or any
Subsidiary in an aggregate amount exceeding $3,000,000.
SECTION 5.07. Maintaining Records; Access to Properties and Inspections.
Maintain all financial records in accordance with GAAP and permit any persons
designated by the U.S. Administrative Agent or any Lender to visit and inspect
the financial records and the properties of the Parent Borrower or any
Subsidiary at reasonable times, upon reasonable prior notice to the Parent
Borrower, and as often as reasonably requested and to make extracts from and
copies of such financial records, and permit any persons designated by the U.S.
Administrative Agent or any Lender upon reasonable prior notice to the Parent
Borrower to discuss the affairs, finances and condition of the Parent Borrower
or any Subsidiary with the officers thereof and independent accountants therefor
(subject to reasonable requirements of confidentiality, including requirements
imposed by law or by contract).
SECTION 5.08. Use of Proceeds. Use the proceeds of the Loans and request
the issuance of Letters of Credit only for the purposes set forth in the
preamble to this Agreement.
SECTION 5.09. Compliance with Environmental Laws. Comply, and make
reasonable efforts to cause all lessees and other persons occupying its
Properties to comply, with all Environmental Laws and Environmental Permits
applicable to its operations and Properties; obtain and renew all material
Environmental Permits necessary for its operations and Properties; and conduct
any Remedial Action in accordance with Environmental Laws, except, in each case
with respect to this Section 5.09, to the extent the failure to do so,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
SECTION 5.10. Preparation of Environmental Reports. If a default caused by
reason of a breach of Section 3.17 or 5.09 shall have occurred and be
continuing, at the request of the Required Lenders through the U.S.
Administrative Agent, provide to the Lenders within 60 days after such request,
at the expense of the Parent Borrower, an environmental site assessment report
for the Properties which are the subject of such default prepared by an
environmental consulting firm acceptable to the U.S.
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Administrative Agent, indicating the presence or absence of Hazardous Materials
and the estimated cost of any Remedial Action required under any applicable
Environmental Law in connection with such Properties.
SECTION 5.11. Further Assurances. Execute any and all further documents,
financing statements, agreements and instruments, and take all further action
(including filing Uniform Commercial Code and other financing statements,
mortgages and deeds of trust), that may be required under applicable law, or
which the Collateral Agent may reasonably request, in order to effectuate the
transactions contemplated by the Loan Documents and in order to grant, preserve,
protect and perfect the validity and first priority (subject to Liens permitted
by Section 6.02) of the security interests created or intended to be created by
the Security Documents. In addition, from time to time, the Parent Borrower and
the Subsidiaries will, at their cost and expense, on or promptly (but in any
event within 10 Business Days) following (x) the date of creation or acquisition
by the Parent Borrower or any Subsidiary of any new Subsidiary (subject to the
receipt of any required consents from Governmental Authorities), promptly secure
the applicable Obligations by causing the following to occur: (i) promptly upon
creating or acquiring any additional Subsidiary, the Capital Stock of such
Subsidiary will (unless such Subsidiary is a Subsidiary of a non-Domestic
Subsidiary) be pledged pursuant to the applicable Pledge Agreement, provided
that no more than 65% of the Capital Stock of any non-Domestic Subsidiary shall
be required to be pledged pursuant to this Section 5.11, and (ii) such
Subsidiary will (A) (unless such Subsidiary is a non-Domestic Subsidiary or less
than 90% of the Capital Stock of such Subsidiary is owned by the Parent Borrower
and the Subsidiaries) become a party to the Security Agreement, the Intellectual
Property Security Agreement, the Pledge Agreement (if such Subsidiary owns
Capital Stock of any subsidiary), the Domestic Subsidiary Guarantee Agreement
and the Indemnity, Subrogation and Contribution Agreement as contemplated under
each such agreement, (B) if such Subsidiary is organized under the laws of the
United Kingdom and is not an Inactive U.K. Subsidiary, to the maximum extent
permitted by applicable law, become a party to the U.K. Subsidiary Guarantee
Agreement or if such Subsidiary is a subsidiary of the Canadian Borrower
organized under the laws of Canada, to the maximum extent permitted by
applicable law, become a party to the Canadian Subsidiary Guarantee Agreement
(and the Parent Borrower
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agrees that at such time as the Canadian Subsidiary Guarantee Agreement is first
entered into, it shall provide a legal opinion addressed to the Administrative
Agents, the Fronting Bank and the Lenders in form, substance and from counsel
reasonably satisfactory to the U.S. Administrative Agent, as to the
enforceability of the Canadian Subsidiary Guarantee Agreement and such other
matters as the U.S. Administrative Agent may reasonably request), provided that
any Subsidiary organized under the laws of Canada shall be a wholly owned
subsidiary of the Canadian Borrower unless, in the reasonable judgment of the
senior management of the Parent Borrower, a material tax or other material
economic or legal disadvantage to the Parent Borrower or any Subsidiary would
result therefrom, and (C) if such Subsidiary owns any individual parcels of real
property located in the United States having a value at the time of acquisition
of such Subsidiary in excess of $1,000,000, enter into and deliver to the
Collateral Agent a Mortgage in respect of such property or (y) the acquisition
by the Parent Borrower or any Domestic Subsidiary of any real property located
in the United States having a value at the time of acquisition of such property
in excess of $1,000,000, enter into and deliver to the Collateral Agent a
Mortgage in respect of such property. In addition, at the request of the U.S.
Administrative Agent or the Required Lenders, the Parent Borrower shall (a)
cause the pledge to the Collateral Agent of the Collateral (as defined in the
Intellectual Property Security Agreement) that (i) is identified in Schedules I,
II and III to the Intellectual Property Security Agreement and (ii) is issued or
registered in the United Kingdom or Canada, to be perfected by registering such
pledge in the appropriate offices in the United Kingdom or Canada, as
applicable, and (b) execute any and all further documents, financing statements,
agreements and instruments, and take all further action, that may be required
under applicable law, or which the Collateral Agent may reasonably request, in
order to grant, preserve, protect and perfect the validity and priority of the
security interest created or intended to be created by the Intellectual Property
Security Agreement in such Collateral. All the foregoing security interests and
Liens will be created under the Security Documents and other instruments and
documents in form and substance reasonably satisfactory to the Collateral Agent,
the Parent Borrower and the Subsidiaries shall deliver or cause to be delivered
to the U.S. Administrative Agent all such instruments and documents (including
legal opinions and lien searches) as the Required Lenders shall reasonably
request to
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evidence compliance with this Section 5.11. The Parent Borrower agrees to
provide, and to cause each Subsidiary to provide, such evidence as the
Collateral Agent shall reasonably request as to the perfection and priority
status of each such security interest and Lien. The Parent Borrower will not be
required to pledge its equity interest in any Subsidiary pursuant to this
Section 5.11 if the creation of such pledge would violate a contractual
obligation applicable to the Parent Borrower or any Subsidiary with respect to
which the Parent Borrower has been unable to obtain a waiver despite its use of
reasonable efforts to do so.
SECTION 5.12. Fiscal Year; Accounting. In the case of each of the Parent
Borrower and each of the Subsidiaries, cause its respective fiscal year to end
on December 31.
SECTION 5.13. Dividends. In the case of the Parent Borrower, permit the
Subsidiaries to pay dividends and cause such dividends to be paid to the extent
required to pay the monetary Obligations, subject to restrictions permitted by
Section 6.09(d) and to prohibitions imposed by applicable requirements of law.
SECTION 5.14. Interest/Exchange Rate Protection Agreements. In the case of
the Parent Borrower, as promptly as practicable and in any event within 60 days
after the Closing Date, enter into, and thereafter maintain in effect for a
period of at least four years following the Closing Date, one or more
Interest/Exchange Rate Protection Agreements with any of the Lenders or other
financial institutions reasonably satisfactory to the U.S. Administrative Agent,
the effect of which shall be to limit at all times the interest payable in
connection with Indebtedness having an aggregate outstanding principal amount
not less than an amount equal to 25% of the aggregate principal amount of Term
Borrowings to a maximum rate and on terms and conditions reasonably acceptable,
taking into account current market conditions, to the U.S. Administrative Agent,
and deliver evidence of the execution and delivery thereof to the U.S.
Administrative Agent.
SECTION 5.15. Surveys. Within 30 days after the Closing Date, for each
Mortgaged Property, the Parent Borrower shall deliver or cause to be delivered
an A.L.T.A. survey in form and substance reasonably satisfactory to the U.S.
Administrative Agent and endorsements to the title policies required by
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Section 4.02(i) providing for survey-related coverage reasonably satisfactory to
the U.S. Administrative Agent.
ARTICLE VI. NEGATIVE COVENANTS
The Parent Borrower covenants and agrees with each Lender that, so long as
this Agreement shall remain in effect and until the Commitments have been
terminated and the principal of and interest on each Loan, all Fees and all
other expenses or amounts payable under any Loan Document have been paid in full
and all Letters of Credit have been canceled or have expired and all amounts
drawn thereunder have been reimbursed in full, unless the Required Lenders shall
otherwise consent in writing, the Parent Borrower will not, and will not cause
or permit any of the Subsidiaries to:
SECTION 6.01. Indebtedness. Incur, create, assume or permit to exist any
Indebtedness, except:
(a) Indebtedness (other than Indebtedness of UK Newco) existing on the
date hereof and set forth in Schedule 6.01, but not any extensions,
renewals or replacements of such Indebtedness except (i) renewals and
extensions expressly provided for in the agreements evidencing any such
Indebtedness as the same are in effect on the date of this Agreement and
(ii) refinancings and extensions of any such Indebtedness if the average
life to maturity thereof is greater than or equal to that of the
Indebtedness being refinanced or extended, provided that such Indebtedness
permitted under clause (i) or clause (ii) above shall not be (A)
Indebtedness of an obligor that was not an obligor with respect to the
Indebtedness being extended, renewed or refinanced, (B) in a principal
amount which exceeds the Indebtedness being renewed, extended or refinanced
(plus unpaid accrued interest and premium thereon) or (C) incurred, created
or assumed if any Default or Event of Default has occurred and is
continuing or would result therefrom;
(b) Indebtedness created hereunder and under the other Loan Documents;
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(c) (i) in the case of the Parent Borrower, the Senior Subordinated
Notes or Senior Subordinated Exchange Notes in an aggregate principal
amount (the "Subordinated Principal") for all the foregoing not to exceed
the sum of (A) $125,000,000 and (B) the aggregate principal amount of
Senior Subordinated Notes and Senior Subordinated Exchange Notes issued
after the Closing Date in payment of interest thereon pursuant to the terms
thereof (less the principal amount of any Senior Subordinated Notes and
Senior Subordinated Exchange Notes that is repaid after the Closing Date)
and (ii) in the case of the Parent Borrower, Refinancing Notes in an
aggregate principal amount not to exceed the sum at the time immediately
prior to issuance and refinancing of (A) the Subordinated Principal and (B)
if the Refinancing Notes are issued at a time when there is accrued but
unpaid interest on the Subordinated Principal, the amount of such accrued
but unpaid interest;
(d) in the case of any Guarantor, the Guarantees under the Guarantee
Agreement to which such Guarantor is a party;
(e) Indebtedness of the Parent Borrower and the Subsidiaries (other
than UK Newco) pursuant to Interest/Exchange Rate Protection Agreements
entered into in order to fix the effective rate of interest, or to hedge
against currency fluctuations, on the Loans and other Indebtedness,
provided that such transactions shall be entered into to hedge actual
interest rate exposures or currency exchange rate exposures and not for the
purpose of speculation;
(f) Indebtedness (other than Indebtedness of UK Newco) owed to
(including obligations in respect of letters of credit for the benefit of)
any person providing worker's compensation, health, disability or other
employee benefits or property, casualty or liability insurance to the
Parent Borrower or any Subsidiary, pursuant to reimbursement or
indemnification obligations to such person;
(g) (i) Indebtedness of the Parent Borrower or any Wholly Owned
Subsidiary that is a Domestic Subsidiary Guarantor to any Subsidiary or to
the Parent Borrower; (ii) Indebtedness of the Parent Borrower or any Wholly
Owned Subsidiary that is not a Domestic Subsidiary Guarantor to
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any Subsidiary that is not a Domestic Subsidiary Guarantor, provided that,
if the Subsidiary that is the obligee in respect of such Indebtedness is a
Loan Party organized under the laws of the United Kingdom or Canada, the
Subsidiary that is the obligor in respect of such Indebtedness must be a
Loan Party organized under the laws of the same jurisdiction; (iii)
Indebtedness of any Subsidiary to the Parent Borrower or another Subsidiary
incurred pursuant to a Permitted Foreign Transfer; and (iv) Indebtedness of
any Subsidiary to the Parent Borrower or any other Subsidiary arising from
any transaction effected pursuant to Section 6.04(k) or (l), provided that
Indebtedness of UK Newco pursuant to this clause (g) shall be limited to
Indebtedness in respect of loans and advances made to UK Newco (A) by the
Parent Borrower on the Closing Date in an amount not to exceed the amount
to be paid on or before the Closing Date by UK Newco as consideration for
the capital stock of BDPHL and (B) after the Closing Date to the extent the
proceeds of such loans or advances are used on or before the second
Business Day following such advance to make Permitted Foreign Transfers to
UK Newco's subsidiaries;
(h) Indebtedness of the Parent Borrower or a Subsidiary which
represents the assumption by the Parent Borrower or such Subsidiary of
Indebtedness of a Subsidiary in connection with the permitted merger of
such Subsidiary with or into the assuming person or the permitted purchase
of all or substantially all the assets of such Subsidiary;
(i) Indebtedness of the Parent Borrower or the Subsidiaries (other
than UK Newco) in respect of performance bonds, bid bonds, appeal bonds,
surety bonds and similar obligations and trade-related letters of credit,
in each case provided in the ordinary course of business, including those
incurred to secure health, safety and environmental obligations in the
ordinary course of business, and any extension, renewal or refinancing
thereof to the extent not provided to secure the repayment of other
Indebtedness and to the extent that the amount of refinancing Indebtedness
is not greater than the amount of Indebtedness being refinanced;
(j) Indebtedness (other than Indebtedness of UK Newco) arising from
the honoring by a bank or other financial
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institution of a check, draft or similar instrument drawn against
insufficient funds in the ordinary course of business, provided that such
Indebtedness is extinguished within two Business Days of its incurrence;
(k) Indebtedness of a Subsidiary acquired after the date hereof and
Indebtedness of a corporation merged or consolidated with or into the
Parent Borrower or a Subsidiary after the date hereof, which Indebtedness
in each case exists at the time of such acquisition, merger, consolidation
or conversion into a Subsidiary and is not created in contemplation of such
event and where such acquisition, merger or consolidation is permitted by
this Agreement, provided that the aggregate principal amount of
Indebtedness under this paragraph (k) shall not at any time exceed
$5,000,000 for the Parent Borrower and all Subsidiaries;
(l) Capital Lease Obligations, mortgage financings and purchase money
Indebtedness incurred by the Parent Borrower or any Subsidiary (other than
UK Newco) prior to or within 270 days after a Capital Expenditure permitted
under Section 6.10 in order to finance such Capital Expenditure, and
extensions, renewals and refinancings thereof, in an aggregate principal
amount outstanding at any time not in excess of $10,000,000, provided that
such refinancing Indebtedness shall not be (i) Indebtedness of an obligor
that was not an obligor with respect to the Indebtedness being extended,
renewed or refinanced, (ii) in a principal amount which exceeds the
Indebtedness being renewed, extended or refinanced or (iii) incurred,
created or assumed if any Default or Event of Default has occurred and is
continuing or would result therefrom;
(m) Capital Lease Obligations incurred by the Parent Borrower or any
Subsidiary (other than UK Newco) in respect of any Sale and Leaseback
Transaction that is permitted under Section 6.03;
(n) Indebtedness of the Parent Borrower or any Subsidiary (other than
UK Newco) supported by a Letter of Credit, in a principal amount not in
excess of the stated amount of such Letter of Credit;
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(o) Guarantees in respect of the Senior Subordinated Notes, the Senior
Subordinated Exchange Notes or the Refinancing Notes, provided that no
Subsidiary shall Guarantee the Senior Subordinated Notes, the Senior
Subordinated Exchange Notes or the Refinancing Notes unless (i) it has also
Guaranteed the Obligations pursuant to a Guarantee Agreement, (ii) such
Guarantee of the Senior Subordinated Notes, the Senior Subordinated
Exchange Notes or the Refinancing Notes, as the case may be, is
subordinated to such Guarantee of the Obligations on terms no less
favorable to the Lenders than the subordination provisions of the Senior
Subordinated Notes, the Senior Subordinated Exchange Notes or the
Refinancing Notes, as applicable, and (iii) such Guarantee of the Senior
Subordinated Notes, the Senior Subordinated Exchange Notes or the
Refinancing Notes, as the case may be, provides for the release and
termination thereof, without any action of any party, upon (A) the sale
(including through merger or consolidation) of the Capital Stock, or all or
substantially all the assets, of the applicable Guarantor if (x) such sale
is made in compliance with the covenants relating to the sale of assets
under the Senior Subordinated Indenture or the Senior Subordinated Exchange
Indenture or any indenture in respect of any Refinancing Notes, as
applicable, and (y) such Guarantor is released from any Guarantee Agreement
and, if applicable, all Security Documents, to which it is a party or (B)
the applicable Guarantor ceasing to be a Subsidiary as a result of any
foreclosure of any pledge or security interest under any Security Document
or other exercise of remedies in respect thereof if such Guarantor is
released from any Guarantee Agreement and, if applicable, all Security
Documents, to which it is a party;
(p) other Indebtedness of the Parent Borrower and the Subsidiaries in
an aggregate principal amount at any time outstanding not in excess of
$5,000,000 incurred on an unsecured basis for working capital purposes,
provided that no more than $2,000,000 of such Indebtedness shall be
Indebtedness of non-Domestic Subsidiaries or Domestic Subsidiaries that are
not Loan Parties; and
(q) all premium (if any), interest (including post-petition interest),
fees, expenses, indemnities, charges and
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additional or contingent interest on obligations described in clauses (a)
through (p) above.
Notwithstanding anything to the contrary in this Agreement or any other Loan
Document, no Refinancing Notes shall be issued (and no Indebtedness shall be
incurred under the Refinancing Note Indenture) unless: (a) concurrently with the
issuance of any Refinancing Notes, Senior Subordinated Exchange Notes or Senior
Subordinated Notes in a principal amount equal to the principal amount of such
Refinancing Notes (less any amount issued pursuant to clause (ii)(B) of
paragraph (c) above) shall have been redeemed (or called for redemption, so long
as the redemption price has been indefeasibly deposited with the trustee in
respect of such Senior Subordinated Notes or Senior Subordinated Exchange Notes
(the "Trustee")) and canceled upon delivery to the Trustee, at a price not in
excess of 100% of the principal amount thereof (plus interest accrued to the
date of redemption and not paid in cash and plus any portion of any premium in
respect of such redemption to the extent paid with the proceeds of the issuance
of Capital Stock of the Parent Borrower (to the extent not previously used to
prepay Indebtedness (other than Revolving Credit Loans or Swingline Loans), make
any Investment or Capital Expenditure or otherwise for any purpose resulting in
a deduction to Excess Cash Flow in any fiscal year) issued after the Closing
Date), (b) the terms of the Refinancing Notes and the Refinancing Note Indenture
(other than the interest rate, the interest payment dates and any redemption
premiums, which shall be determined at the time of issuance of the Refinancing
Notes) shall be reasonably satisfactory to the Required Lenders (provided,
however, that such terms of the Refinancing Notes and the Refinancing Note
Indenture shall be deemed to be satisfactory to the Required Lenders if the
Refinancing Notes are issued with substantially the same terms as the Senior
Subordinated Exchange Notes or Senior Subordinated Notes that are being
refinanced (other than any changes thereto that are not adverse in any respect
to the interests of the Lenders)), (c) the interest rate of the Refinancing
Notes shall be a fixed, non-increasing interest rate per annum not in excess of
the rate payable in respect of the Senior Subordinated Notes or the Senior
Subordinated Exchange Notes, as applicable, payable on a principal amount of the
Refinancing Notes not in excess of the gross proceeds of the sale thereof and
interest on the Refinancing Notes shall be payable semiannually and (d) the
Refinancing Notes shall mature not earlier than the maturity date
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of the Senior Subordinated Notes or the Senior Subordinated Exchange Notes, as
applicable.
SECTION 6.02. Liens. Create, incur, assume or permit to exist any Lien on
any property or assets (including stock or other securities of any person,
including any Subsidiary) at the time owned by it or on any income or revenues
or rights in respect of any thereof, or sell or transfer any account receivable
or any right in respect thereof, except:
(a) Liens on property or assets of the Parent Borrower and the
Subsidiaries existing on the date hereof and set forth in Schedule 6.02
(including Liens disclosed by title insurance policies delivered pursuant
to Section 4.02), provided that such Liens shall secure only those
obligations which they secure on the date hereof (and extensions, renewals
and refinancings of such obligations permitted by Section 6.01(a)) and
shall not subsequently apply to any other property or assets of the Parent
Borrower or any Subsidiary (other than pursuant to existing
after-acquired-property clauses specifically described and set forth in
Schedule 6.02);
(b) any Lien created under the Loan Documents or permitted in respect
of any Mortgaged Property by the terms of the applicable Mortgage;
(c) any Lien existing on any property or asset of the Parent Borrower
or any Subsidiary prior to the acquisition thereof by the Parent Borrower
or any Subsidiary, provided that (i) such Lien is not created in
contemplation of or in connection with such acquisition and (ii) such Lien
does not apply to any other property or asset of the Parent Borrower or any
Subsidiary;
(d) any Lien on any property or asset of a Subsidiary securing
Indebtedness permitted by Section 6.01(k), provided that such Lien does not
apply to any other property or assets of the Parent Borrower or any
Subsidiary not securing such Indebtedness at the date of acquisition of
such property or asset (other than after acquired property of such
Subsidiary subjected to a Lien securing Indebtedness incurred prior to such
date and permitted hereunder which
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contains a requirement for the pledging of after acquired property and as
provided in clause (v) below);
(e) Liens for taxes, assessments or other governmental charges or
levies not yet delinquent, or which are for less than $1,000,000 in the
aggregate, or which are being contested in compliance with Section 5.03 or
for property taxes on property that the Parent Borrower or one of the
Subsidiaries has determined to abandon if the sole recourse for such tax,
assessment, charge, levy or claim is to such property;
(f) carriers', warehousemen's, mechanics', materialmen's, landlords',
repairmen's or other like Liens arising in the ordinary course of business
and securing obligations that are not due and payable or that are being
contested in good faith by appropriate proceedings and in respect of which,
if applicable, the Parent Borrower or the relevant Subsidiary shall have
set aside on its books reserves in accordance with GAAP;
(g) pledges and deposits made in the ordinary course of business in
compliance with the Federal Employers Liability Act or any other workmen's
compensation, unemployment insurance and other social security laws or
regulations and deposits securing liability to insurance carriers under
insurance or self-insurance arrangements in respect of such obligations;
(h) deposits to secure the performance of bids, trade contracts (other
than for Indebtedness), leases (other than leases constituting Indebtedness
or in respect of which the lessee claims the benefits of ownership for
federal income tax purposes), statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in
the ordinary course of business, including those incurred to secure health,
safety and environmental obligations in the ordinary course of business;
(i) zoning restrictions, easements, trackage rights, leases (other
than leases constituting Indebtedness or in respect of which the lessee
claims the benefits of ownership for federal income tax purposes),
licenses, special
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assessments, rights-of-way, restrictions on use of real property and other
similar encumbrances incurred in the ordinary course of business which, in
the aggregate, are not substantial in amount and do not materially detract
from the value of the property subject thereto or interfere with the
ordinary conduct of the business of the Parent Borrower or any of the
Subsidiaries;
(j) purchase money security interests in real property and
improvements thereto, equipment and improvements thereto or licenses
hereafter acquired (or, in the case of improvements, constructed or
installed) by the Parent Borrower or any Subsidiary (including the
interests of vendors and lessors under conditional sale and title retention
agreements and capital leases), provided that (i) such security interests
secure Indebtedness permitted by Section 6.01, (ii) such security interests
are incurred, and the Indebtedness secured thereby is created, within 270
days after such acquisition (or construction or installation), (iii) the
Indebtedness secured thereby does not exceed 100% of the cost of such real
property, equipment, improvements or licenses at the time of such
acquisition (or construction or installation), including transaction,
engineering, design, construction, installation and related costs incurred
by the Parent Borrower or any Subsidiary in connection with such
acquisition, construction, improvement or installation, as the case may be,
(iv) such expenditures are permitted by this Agreement and (v) such
security interests do not apply to any other property or assets of the
Parent Borrower or any Subsidiary (other than to accessions to such real
property, improvements or equipment and provided that individual financings
of equipment provided by a single lender may be cross-collateralized to
other financings of equipment provided solely by such lender);
(k) Liens securing reimbursement obligations in respect of
trade-related letters of credit permitted under Section 6.01 and covering
the goods (or the documents of title in respect of such goods) financed by
such letters of credit;
(l) Liens arising out of capitalized or operating lease transactions
permitted under Section 6.03, so long as such
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Liens (i) attach only to the property sold in such transaction and any
accessions thereto and (ii) could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect;
(m) Liens consisting of interests of lessors under capital leases
permitted by Section 6.01;
(n) Liens securing judgments for the payment of money in an aggregate
amount not in excess of $1,000,000 (except to the extent covered by
insurance), unless such judgments shall remain undischarged for a period of
more than 30 consecutive days during which execution shall not be
effectively stayed;
(o) any leases or subleases to other persons of properties or assets
owned or leased by the Parent Borrower or a Subsidiary;
(p) Liens that are contractual rights of setoff (i) relating to the
establishment of depository relations with banks not given in connection
with the issuance of Indebtedness or (ii) pertaining to pooled deposit
and/or sweep accounts of the Parent Borrower and/or any Subsidiary to
permit satisfaction of overdraft or similar obligations incurred in the
ordinary course of business of the Parent Borrower and the Subsidiaries;
(q) any Lien arising by operation of law pursuant to Section 107(l) of
the Comprehensive Environmental Response, Compensation and Liability Act,
41 U.S.C. ss. 9607(l), or pursuant to analogous state law, for costs or
damages which are not yet due (by virtue of a written demand for payment by
a Governmental Authority) or which are being contested in compliance with
the standard set forth in Section 5.03(a), or on property that the Parent
Borrower or a Subsidiary has determined to abandon if the sole recourse for
such costs or damages is to such property, provided that the liability of
the Parent Borrower and the Subsidiaries with respect to the matters giving
rise to all such Liens shall not, in the reasonable estimate of the Parent
Borrower (in light of all attendant circumstances, including the likelihood
of contribution by third parties), exceed $1,000,000;
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(r) other Liens with respect to property or assets of the Parent
Borrower and the Domestic Subsidiaries (other than UK Newco) not
constituting collateral for the Obligations with an aggregate fair market
value (valued at the time of the creation thereof) of not more than
$2,000,000 at any time;
(s) the sale of accounts receivable in connection with collection in
the ordinary course of business;
(t) Liens of landlords or mortgagees of landlords arising by operation
of law or under customary provisions of contracts entered into in the
ordinary course of business, provided that the rental payments secured
thereby are not yet due and payable;
(u) construction liens arising in the ordinary course of business,
including liens for work performed for which payment has not been made,
securing obligations that are not due and payable or are being contested in
good faith by appropriate proceedings and in respect of which, if
applicable, the Parent Borrower or the relevant Subsidiary shall have set
aside on its books reserves in accordance with GAAP;
(v) Liens on proceeds and products and (to the extent constituting a
trade-in, substitution or casualty replacement) replacements of, chattel
paper and other evidences of ownership of, and accessions to, and general
intangibles directly relating to, property to the extent they relate to
Liens on such property that are permitted by any other provision of this
Section 6.02; and
(w) the replacement, extension or renewal of any Lien permitted by
clause (c), (d) or (j) above, provided that such replacement, extension or
renewal Lien shall not cover any property other than the property that was
subject to such Lien prior to such replacement, extension or renewal; and
provided further that the Indebtedness and other obligations secured by
such replacement, extension or renewal Lien are permitted by this
Agreement.
SECTION 6.03. Sale and Lease-Back Transactions. Enter into any arrangement,
directly or indirectly, with any person
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whereby it shall sell or transfer any property, real or personal, used or useful
in its business, whether now owned or hereafter acquired, and thereafter rent or
lease such property or other property which it intends to use for substantially
the same purpose or purposes as the property being sold or transferred (a "Sale
and Lease-Back Transaction"), other than any Sale and Lease-Back Transaction
that involves a sale by the Parent Borrower or a Subsidiary solely for cash
consideration on terms not less favorable than would prevail in an arm's-length
transaction and which (a) results in a Capital Lease Obligation or an operating
lease, in either case entered into to finance a Capital Expenditure permitted by
Section 6.10 consisting of the initial acquisition by the Parent Borrower or
such Subsidiary of the property sold or transferred in such Sale and Lease-Back
Transaction, provided that such Sale and Lease-Back Transaction occurs within
270 days after such acquisition or (b) results in a Capital Lease Obligation or
an operating lease entered into for any other purpose, provided that the
proceeds of any such Sale and Lease-Back Transaction in reliance upon this
clause (b) shall be deemed subject to Section 2.12(d), provided further that
none of the Parent Borrower or any Subsidiary shall enter into any Sale and
Leaseback Transaction pursuant to clause (a) or (b) of this Section 6.03 if the
proceeds of such Sale and Leaseback Transaction, when aggregated with the
proceeds of each other Sale and Leaseback Transaction previously consummated
pursuant to this Section 6.03, would exceed $10,000,000.
SECTION 6.04. Investments, Loans and Advances. Purchase, hold or acquire
any capital stock, evidences of indebtedness or other securities of, make or
permit to exist any loans or advances to, or make or permit to exist any
investment or any other interest in, any other person (all of the foregoing,
collectively, "Investments"), except:
(a) Investments (i) existing on the date hereof in the capital stock
of the Subsidiaries after giving effect to all the Transactions; (ii) by
the Parent Borrower or any Subsidiary in any Wholly Owned Subsidiary (other
than UK Newco, unless all of such Investment shall be used by UK Newco on
or before the second Business Day following the making thereof to make a
Permitted Foreign Transfer) that is a Domestic Subsidiary Guarantor (so
long as such Domestic Subsidiary Guarantor shall remain a Wholly Owned
Subsidiary and a Domestic Subsidiary Guarantor after giving effect to
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such Investment); (iii) by any Wholly Owned Subsidiary (other than UK
Newco) in any Wholly Owned Subsidiary that is a Domestic Subsidiary
Guarantor; (iv) by any Subsidiary that is not a Domestic Subsidiary
Guarantor in any Wholly Owned Subsidiary that is not a Domestic Subsidiary
Guarantor (so long as (A) such second Subsidiary shall remain a Wholly
Owned Subsidiary after giving effect to such Investment and (B) if the
Subsidiary that is making such Investment is a Loan Party organized under
the laws of the United Kingdom or Canada, the Subsidiary in which such
investment is being made must be a Loan Party organized under the laws of
the same jurisdiction); or (v) that constitute Permitted Foreign Transfers;
(b) Permitted Investments and Investments that were Permitted
Investments when made;
(c) Investments arising out of the receipt by the Parent Borrower or
any Subsidiary of noncash consideration for the sale of assets permitted
under Section 6.05, provided that such consideration (if the stated amount
or value thereof is in excess of $1,000,000) is pledged upon receipt
pursuant to the Pledge Agreement to the extent required thereby (unless
such pledge would, in the reasonable judgment of the senior management of
the Parent Borrower, result in a material tax or other material economic or
legal disadvantage to the Parent Borrower or any Subsidiary);
(d) intercompany loans permitted to be incurred as Indebtedness under
Section 6.01;
(e) (i) loans and advances to employees of the Parent Borrower or the
Subsidiaries not to exceed $5,000,000 in the aggregate at any time
outstanding and (ii) advances of payroll payments and expenses to employees
in the ordinary course of business;
(f) (i) accounts receivable arising and trade credit granted in the
ordinary course of business and any securities received in satisfaction or
partial satisfaction thereof from financially troubled account debtors to
the extent reasonably necessary in order to prevent or limit loss and (ii)
prepayments and other credits to suppliers
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made in the ordinary course of business consistent with the past practices
of the businesses of the Parent Borrower and the Subsidiaries;
(g) Interest/Exchange Rate Protection Agreements permitted pursuant to
Section 6.01(e);
(h) Investments, other than investments listed in paragraphs (a)
through (g) of this Section, existing on the Closing Date and set forth on
Schedule 6.04;
(i) Investments resulting from pledges and deposits referred to in
Section 6.02(g), (h) or (p);
(j) Investments constituting Permitted Business Acquisitions in an
aggregate amount, which shall be deemed to include the principal amount of
Indebtedness that is assumed pursuant to Section 6.01 in connection with
such Permitted Business Acquisitions, not to exceed $10,000,000 (net of any
return representing return on capital in respect of any such Investment and
valued at the time of the making thereof);
(k) Investments in Permitted Business Acquisitions to the extent made
with proceeds of the issuance of Capital Stock of the Parent Borrower (to
the extent not previously used to prepay Indebtedness (other than Revolving
Credit Loans or Swingline Loans), make any Investment or Capital
Expenditure or otherwise for any purpose resulting in a deduction to Excess
Cash Flow in any fiscal year) issued after the Closing Date; and
(l) other Investments in an aggregate amount not to exceed $5,000,000
plus, the sum of the amounts with respect to each fiscal year of the Parent
Borrower ending after the Closing Date equal to the portion of Excess Cash
Flow for each such fiscal year not required to be applied to prepay Term
Loans pursuant to Section 2.12(d) (to the extent not previously used to
prepay Indebtedness (other than Revolving Credit Loans or Swingline Loans),
make any Investment or Capital Expenditure or otherwise for any purpose
resulting in a deduction to Excess Cash Flow in any fiscal year) (net of
any return representing return on capital in respect of
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any such Investment and valued at the time of the making thereof).
SECTION 6.05. Mergers, Consolidations, Sales of Assets and Acquisitions.
Merge into or consolidate with any other person, or permit any other person to
merge into or consolidate with it, or sell, transfer, lease or otherwise dispose
of (in one transaction or in a series of transactions) all or any substantial
part of its assets (whether now owned or hereafter acquired), or any Capital
Stock of any Subsidiary, or purchase, lease or otherwise acquire (in one
transaction or a series of transactions) all or any substantial part of the
assets of any other person, except that this Section shall not prohibit:
(a) the purchase and sale of inventory in the ordinary course of
business (including rotations and buy-outs of competitor inventory) by the
Parent Borrower or any Subsidiary or the acquisition of any asset of any
person in the ordinary course of business;
(b) if at the time thereof and immediately after giving effect thereto
no Event of Default or Default shall have occurred and be continuing (i)
the merger of any Subsidiary (other than UK Newco) into the Parent Borrower
in a transaction in which the Parent Borrower is the surviving corporation
and (ii) the merger or consolidation of any Subsidiary (other than UK
Newco) into or with any other Wholly Owned Subsidiary (other than UK Newco)
in a transaction in which the surviving entity is a Wholly Owned Subsidiary
(which shall be a Domestic Subsidiary if the non-surviving person shall be
a Domestic Subsidiary) and, (A) in the case of each of clauses (i) and
(ii), no person other than the Parent Borrower or a Wholly Owned Subsidiary
receives any consideration and (B) in the case of clause (ii), if any
non-surviving person was (x) a Domestic Subsidiary Guarantor the surviving
person must be a Domestic Subsidiary Guarantor, (y) a U.K. Subsidiary
Guarantor the surviving person must be the U.K. Borrower or a U.K.
Subsidiary Guarantor or (z) a Canadian Subsidiary Guarantor the surviving
person must be the Canadian Borrower or a Canadian Subsidiary Guarantor;
(c) Sale and Lease-Back Transactions permitted by Section 6.03;
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(d) Investments permitted by Section 6.04;
(e) subject to Section 6.07, sales, leases or transfers (i) from the
Parent Borrower or any Subsidiary to the Parent Borrower or to a Domestic
Wholly Owned Subsidiary (other than UK Newco), (ii) from any non-Domestic
Subsidiary to any non-Domestic Wholly Owned Subsidiary or to the Parent
Borrower so long as, if the Subsidiary that is making such sale, lease or
other transfer is a Loan Party organized under the laws of the United
Kingdom or Canada, any Subsidiary to which such sale, lease or other
transfer is being made is a Loan Party organized under the laws of the same
jurisdiction or (iii) constituting Permitted Foreign Transfers;
(f) sales, leases or other dispositions of equipment or real or
personal property (other than inventory) of the Parent Borrower or the
Subsidiaries determined by the Board of Directors or senior management of
the Parent Borrower to be no longer useful or necessary in the operation of
the business of the Parent Borrower or the Subsidiaries, provided that the
Net Proceeds thereof shall be applied in accordance with Section 2.12(c);
(g) sales, leases or other dispositions of inventory of the Parent
Borrower and the Subsidiaries not made in the ordinary course of business
determined by the Board of Directors or senior management of the Parent
Borrower to be no longer useful or necessary in the operation of the
business of the Parent Borrower and the Subsidiaries, provided that the Net
Proceeds thereof shall be applied in accordance with Section 2.12(c);
(h) the sale by the Parent Borrower of all the Capital Stock or all or
substantially all the assets of Xxxxxx for consideration equal to the fair
market value of such Capital Stock or assets (as determined in good faith
by the Board of Directors of the Parent Borrower) at least 85% of which is
in cash, provided that, prior to or substantially simultaneously with such
sale, the Xxxxxx Note shall have been paid in full without giving effect to
any amendment to the terms thereof adverse to the Lenders;
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(i) sales, leases or other dispositions of property having a net book
value not in excess of $1,000,000 in any fiscal year, provided that the Net
Proceeds thereof are applied in accordance with Section 2.12(c) or are used
within one year of the date of receipt thereof to purchase assets useful in
the business of the Parent Borrower and the Subsidiaries, and provided
further that no sale may be made of the Capital Stock of any Subsidiary
except in connection with the sale of all its outstanding Capital Stock
that is held by the Parent Borrower and any other Subsidiary;
(j) the sale of any Capital Stock of any Subsidiary in which less than
90% of the Capital Stock is owned by the Parent Borrower or a Domestic
Wholly Owned Subsidiary (other than UK Newco) and that was acquired
pursuant to Section 6.04(l);
(k) Capital Asset Exchanges; and
(l) Capital Expenditures permitted under Section 6.10.
SECTION 6.06. Dividends and Distributions. Declare or pay, directly or
indirectly, any dividend or make any other distribution (by reduction of capital
or otherwise), whether in cash, property, securities or a combination thereof,
with respect to any shares of its Capital Stock (other than dividends and
distributions on the common stock of the Parent Borrower payable solely by the
issuance of additional shares of common stock of the Parent Borrower) or
directly or indirectly redeem, purchase, retire or otherwise acquire for value
(or permit any Subsidiary to purchase or acquire) any shares of any class of its
Capital Stock or set aside any amount for any such purpose; provided, however,
that:
(a) any Subsidiary may declare and pay dividends to, repurchase its
Capital Stock from or make other distributions to the Parent Borrower or to
any Wholly Owned Subsidiary (or, in the case of non-Wholly Owned
Subsidiaries, to the Parent Borrower or any Subsidiary and to each other
owner of Capital Stock of such Subsidiary on a pro rata basis (or more
favorable basis from the perspective of the Parent Borrower or such
Subsidiary) based on their relative ownership interests); and
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(b) the Parent Borrower may declare and pay dividends to Holdings or
make other distributions to Holdings in respect of overhead, tax
liabilities, legal, accounting and other professional fees and expenses and
other fees and expenses in connection with the maintenance of its existence
and its ownership of the Parent Borrower;
(c) the Parent Borrower may purchase or redeem shares of Capital Stock
of the Parent Borrower (including related stock appreciation rights or
similar securities) held by present or former officers or employees of the
Parent Borrower or any Subsidiary or by any Plan upon such person's death,
disability, retirement or termination of employment or under the terms of
any such Plan or any other agreement under which such shares of stock or
related rights were issued, provided that the aggregate amount of such
purchases or redemptions under this paragraph (c) shall not exceed in any
calendar year $5,000,000, which, if not used in any year, may be carried
forward to any subsequent calendar year; provided, however, that the
aggregate amount of such purchases or redemptions that may be made pursuant
to this paragraph (c) shall not exceed $10,000,000 (plus the amount of net
proceeds received by the Parent Borrower after the date of this Agreement
from Employee Equity Sales).
SECTION 6.07. Transactions with Affiliates. (a) Sell or transfer any
property or assets to, or purchase or acquire any property or assets from, or
otherwise engage in any other transaction with, any of its Affiliates or any
known direct or indirect holder of 10% or more of any class of Capital Stock of
the Parent Borrower, unless such transaction is (i) otherwise permitted under
this Agreement and (ii) upon terms no less favorable to the Parent Borrower or
such Subsidiary, as the case may be, than it would obtain in a comparable
arm's-length transaction with a person which was not an Affiliate, provided that
the foregoing restriction shall not apply to (A) the payment to the Fund or any
of its Affiliates of the monitoring and management fees referred to in paragraph
(c) below or fees payable on the Closing Date, (B) the indemnification of
directors of the Parent Borrower and the Subsidiaries in accordance with
customary practice or (C) the transactions contemplated by the Xxxxxx Master
Customer Services Agreement between Xxxxxx and the Parent Borrower dated as of
the Closing Date.
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(b) The foregoing paragraph (a) shall not prohibit, to the extent otherwise
permitted under this Agreement, (i) any issuance of securities, or other
payments, awards or grants in cash, securities or otherwise pursuant to, or the
funding of, employment arrangements, stock options and stock ownership plans
approved by the Board of Directors of the Parent Borrower, (ii) loans or
advances to employees of the Parent Borrower or any Subsidiary in accordance
with Section 6.04(e), (iii) transactions among the Parent Borrower and Wholly
Owned Subsidiaries and transactions among Wholly Owned Subsidiaries otherwise
permitted by this Agreement, (iv) the payment of fees and indemnities to
directors, officers and employees of the Parent Borrower and the Subsidiaries in
the ordinary course of business, (v) transactions pursuant to permitted
agreements in existence on the Closing Date and set forth on Schedule 6.07, (vi)
any employment agreements entered into by the Parent Borrower or any of the
Subsidiaries in the ordinary course of business, (vii) dividends and repurchases
permitted under Section 6.06 and (viii) any purchase by the Investors of Capital
Stock of Holdings or any purchase by Holdings of Capital Stock of the Parent
Borrower or any contribution by Holdings to the equity capital of the Parent
Borrower, provided that any Capital Stock of the Parent Borrower purchased by
Holdings shall be pledged to the Collateral Agent on behalf of the Lenders
pursuant to the Pledge Agreement.
(c) Make any payment of or on account of monitoring or management fees
payable to the Fund or its Affiliates if a Default or Event of Default shall
have occurred and be continuing or would result therefrom, provided that the
aggregate amount of monitoring and management fees paid or payable to the Fund
and its Affiliates in any fiscal year shall not exceed $1,500,000 for 1998 and
for any subsequent year an amount equal to 105% of the maximum allowable
aggregate monitoring and management fee for the immediately preceding year,
provided that in the event that the maximum amount allowable for such monitoring
and management fee is not paid in any such year (the "Fee Shortfall") the
maximum amount allowable for such monitoring and management fee shall be an
amount equal to 105% of the maximum allowable aggregate monitoring and
management fee for the immediately preceding year plus the Fee Shortfall.
SECTION 6.08. Business of the Parent Borrower and the Subsidiaries. Engage
at any time in any business or business activity other than (a) in the case of
the Parent Borrower and
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the Subsidiaries, any business or business activity conducted by it on the date
hereof and any business or business activities incidental or related thereto and
(b) in the case of UK Newco, (i) the ownership of the capital stock of its
subsidiaries, (ii) the making of Permitted Foreign Transfers, (iii) the
performance of its obligations under and in connection with the Loan Documents
and any guarantee of the Senior Subordinated Notes, the Senior Subordinated
Exchange Notes or the Refinancing Notes permitted by this Agreement and (iv)
actions required by law to maintain its status as a corporation.
SECTION 6.09. Subordinated Indebtedness and Other Material Agreements. (a)
Amend or modify, or grant any waiver or release under, any instruments,
agreements or documents evidencing or related to the Senior Subordinated Notes,
the Senior Subordinated Exchange Notes or the Refinancing Notes in any manner
adverse to the Lenders.
(b) (i) Directly or indirectly make any payment, retirement, repurchase or
redemption on account of the principal of the Senior Subordinated Notes, the
Senior Subordinated Exchange Notes or the Refinancing Notes or directly or
indirectly prepay or defease any such Indebtedness prior to the stated maturity
date of such Indebtedness, (ii) make any payment or prepayment of any such
Indebtedness that would violate the terms of this Agreement or of such
Indebtedness, any agreement or document evidencing, related to or securing the
payment or performance of such Indebtedness or any subordination agreement or
provision applicable to such Indebtedness or (iii) pay in cash any amount in
respect of such Indebtedness that may at the Parent Borrower's option be paid in
kind thereunder; provided, however, that (a) the Senior Subordinated Exchange
Notes may be issued in exchange for, and satisfaction of, Senior Subordinated
Notes and (B) the proceeds of the Refinancing Notes may be applied to repay or
prepay Senior Subordinated Exchange Notes or Senior Subordinated Notes.
(c) Amend or modify in any manner adverse to the Lenders, or grant any
waiver or release under or terminate in any manner (if such action shall be
materially adverse to the Lenders), the certificate of incorporation, the
certificate of formation, any operating agreement or the bylaws of the Parent
Borrower or any Subsidiary or the Recapitalization Agreement or the Acquisition
Agreement.
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(d) Permit any Subsidiary to enter into any agreement or instrument which
by its terms restricts the payment of dividends or the making of cash advances
by such Subsidiary to the Parent Borrower or any Subsidiary that is a direct or
indirect parent of such Subsidiary other than those in effect on the Closing
Date and set forth on Schedule 6.09 (or replacements of such agreements on terms
no less favorable to the Lenders) and those arising under any Loan Document.
SECTION 6.10. Capital Expenditures. Permit the aggregate amount of Capital
Expenditures made by the Parent Borrower and the Subsidiaries in any fiscal year
to exceed the sum of (a) the amount set forth below as the "Base Amount" for
such fiscal year, (b) an amount equal to the lesser of (i) the total amount of
unused permitted Capital Expenditures for the immediately preceding year
(including the amount of any unused Capital Expenditures carried forward to such
preceding year pursuant to this proviso) and (ii) the Base Amount for the
immediately preceding year, and (c) the portion of the Excess Xxxxxx Proceeds
not theretofore applied (i) to prepay Term Borrowings pursuant to Section
2.12(c) or (e), (ii) to make Capital Expenditures pursuant to this Section 6.10
or (iii) otherwise for any purpose resulting in a deduction to Excess Cash Flow
in any fiscal year, provided, that, in the event the Parent Borrower effects
Gallery Concept Roll-outs after the Closing Date with respect to any stores, in
addition to the Capital Expenditures permitted pursuant to clauses (a), (b) and
(c) above, the Parent Borrower and the Subsidiaries shall be permitted to make
Capital Expenditures with respect to the Gallery Concept Roll-out in each such
store in an amount equal to $40,000, provided, further, that, during the term of
this Agreement, the aggregate increase in the amount of permitted Capital
Expenditures pursuant to this proviso shall not exceed $10,000,000 for all
stores.
Fiscal Year Base Amount
1998 55
1999 45
2000 and thereafter 25
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SECTION 6.11. Interest Coverage Ratio. Permit the ratio (the "Interest
Coverage Ratio") as of (a) September 30, 1998, for the two quarter period ended
as of such date of (i) Adjusted EBITDA of the Parent Borrower and the
Subsidiaries to (ii) Cash Interest Expense to be less than 1.60 to 1.00, (b)
December 31, 1998, for the three quarter period ended as of such date of (i)
Adjusted EBITDA of the Parent Borrower and the Subsidiaries to (ii) Cash
Interest Expense to be less than 1.60 to 1.00 or (c) the last day of any fiscal
quarter, which last day occurs in any period set forth below, for the four
quarter period ended as of such day of (a) Adjusted EBITDA of the Parent
Borrower and the Subsidiaries to (b) Cash Interest Expense to be less than the
ratio set forth below for such period:
Period: Ratio:
March 31, 1999, to March 31, 2000 1.70 to 1.00
June 30, 2000, to September 30, 2000 1.85 to 1.00
December 31, 2000, to September 30, 2002 2.00 to 1.00
December 31, 2002, to September 30, 2003 2.50 to 1.00
December 31, 2003, to September 30, 2004 3.00 to 1.00
December 31, 2004, to September 30, 2005 3.25 to 1.00
December 31, 2005 and thereafter 3.75 to 1.00
SECTION 6.12. Adjusted Net Leverage Ratio. Permit the Adjusted Net Leverage
Ratio as of the last day of December 31, 1998 (calculating Adjusted EBITDA, for
this purpose only, by adding (a) the product of (i) Adjusted EBITDA for the
three quarter period ended on such date, without giving effect to the synergy
addback allowances set forth for such period on Schedule B, and (ii) 4/3 and (b)
the synergy addback allowances set forth for the four quarter period ended
December 31, 1998, on Schedule B) to be in excess of 6.75 to 1.00 or permit the
Adjusted Net Leverage Ratio as of the last day of any fiscal quarter, which last
day occurs in any period or on any date set forth below, to be in excess of the
ratio set forth below for such period or date:
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Period: Ratio:
March 31, 1999 6.75 to 1.00
June 30, 1999, to March 31, 2000 6.50 to 1.00
June 30, 2000, to September 30, 2000 6.00 to 1.00
December 31, 2000, to March 31, 2001 5.50 to 1.00
June 30, 2001, to March 31, 2002 4.75 to 1.00
June 30, 2002, to March 31, 2003 4.25 to 1.00
June 30, 2003, to March 31, 2004 3.75 to 1.00
June 30, 2004, and thereafter 3.25 to 1.00
SECTION 6.13. Capital Stock of the Subsidiaries. Sell, transfer, lease or
otherwise dispose of, or make subject to any subscription, option, warrant,
call, right or other agreement or commitment of any nature, the Capital Stock of
any Subsidiary, other than (a) pursuant to the Loan Documents or pursuant to a
transaction permitted pursuant to Section 6.05 and subject to Section 2.12(c)
and (b) directors' qualifying shares.
ARTICLE VII. EVENTS OF DEFAULT
In case of the happening of any of the following events ("Events of
Default"):
(a) any representation or warranty made or deemed made by Holdings,
the Parent Borrower or any Loan Party in any Loan Document, or any
representation, warranty, statement or information contained in any report,
certificate, financial statement or other instrument furnished in
connection with or pursuant to any Loan Document, shall prove to have been
false or misleading in any material respect when so made, deemed made or
furnished by the Parent Borrower or any other Loan Party;
(b) default shall be made in the payment in the applicable currency of
any principal of any Loan or the reimbursement with respect to any L/C
Disbursement when and
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as the same shall become due and payable, whether at the due date thereof
or at a date fixed for prepayment thereof or by acceleration thereof or
otherwise;
(c) default shall be made in the payment of any interest on any Loan
or on any L/C Disbursement or in the payment of any Fee or any other amount
(other than an amount referred to in (b) above) due under any Loan
Document, when and as the same shall become due and payable, and such
default shall continue unremedied for a period of five Business Days;
(d) default shall be made in the due observance or performance by the
Parent Borrower or any Subsidiary of any covenant, condition or agreement
contained in Section 5.01(a) (with respect to the Parent Borrower), 5.05(a)
or 5.08 or in Article VI;
(e) default shall be made in the due observance or performance by
Holdings, the Parent Borrower or any Subsidiary of any covenant, condition
or agreement contained in any Loan Document (other than those specified in
(b), (c) or (d) above) and such default shall continue unremedied for a
period of 30 days after notice thereof from the U.S. Administrative Agent
or the Required Lenders to the Parent Borrower;
(f) the Parent Borrower or any Subsidiary shall fail to observe or
perform any term, covenant, condition or agreement contained in any
agreement or instrument evidencing or governing any Indebtedness (other
than any Indebtedness under any Loan Document) having an aggregate
principal or notional amount in excess of $3,000,000 if the effect of any
such failure is to cause, or to permit the holder or holders of such
Indebtedness or a trustee on its or their behalf to cause (all requisite
notices having been given and all applicable grace periods having expired),
such Indebtedness to become due prior to its stated maturity, or the Parent
Borrower or any Subsidiary shall fail to pay any principal in respect of
any such Indebtedness at the stated maturity thereof;
(g) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent
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jurisdiction seeking (i) relief in respect of Holdings, the Parent Borrower
or any Subsidiary, or of a substantial part of the property or assets of
Holdings, the
Parent Borrower or a Subsidiary, under Title 11 of the United States Code, as
now constituted or hereafter amended, or any other Federal, state or foreign
bankruptcy, insolvency, receivership or similar law, (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official for
Holdings, the Parent Borrower or any Subsidiary or for a substantial part of the
property or assets of the Parent Borrower or any Subsidiary or (iii) the
winding-up or liquidation of Holdings, the Parent Borrower or any Subsidiary;
and such proceeding or petition shall continue undismissed for 60 days or an
order or decree approving or ordering any of the foregoing shall be entered;
(h) Holdings, the Parent Borrower or any Subsidiary shall (i)
voluntarily commence any proceeding or file any petition seeking relief
under Title 11 of the United States Code, as now constituted or hereafter
amended, or any other Federal, state or foreign bankruptcy, insolvency,
receivership or similar law, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or the filing of
any petition described in (g) above, (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for Holdings, the Parent Borrower or any Subsidiary or for
a substantial part of the property or assets of Holdings, the Parent
Borrower or any Subsidiary, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make
a general assignment for the benefit of creditors, (vi) become unable,
admit in writing its inability or fail generally to pay its debts as they
become due or (vii) take any action for the purpose of effecting any of the
foregoing;
(i) one or more judgments for the payment of money in an aggregate
amount in excess of $3,000,000 (except to the extent covered by insurance
as to which the insurer has acknowledged in writing its obligation to
cover) shall be rendered against the Parent Borrower, any Subsidiary or any
combination thereof and the same shall remain undischarged for a period of
30 consecutive days during which execution shall not be effectively stayed,
or any action shall be
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legally taken by a judgment creditor to levy upon assets or properties of
the Parent Borrower or any Subsidiary to enforce any such judgment;
(j) (i) a Reportable Event or Reportable Events, or a failure to make
a required installment or other payment (within the meaning of Section
412(n)(1) of the Code), shall have occurred with respect to any Plan or
Plans, (ii) a trustee shall be appointed by a United States district court
to administer any Plan or Plans, (iii) the PBGC shall institute proceedings
(including giving notice of intent thereof) to terminate any Plan or Plans,
(iv) the Parent Borrower or any ERISA Affiliate shall have been notified by
the sponsor of a Multiemployer Plan that it has incurred Withdrawal
Liability to such Multiemployer Plan and the Parent Borrower or such ERISA
Affiliate does not have reasonable grounds for contesting such Withdrawal
Liability or is not contesting such Withdrawal Liability in a timely and
appropriate manner, (v) the Parent Borrower or any ERISA Affiliate shall
have been notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being terminated, within the
meaning of Title IV of ERISA, (vi) the Parent Borrower or any ERISA
Affiliate shall engage in any "prohibited transaction" (as defined in
Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (vii)
any other similar event or condition shall occur or exist with respect to a
Plan; and in each case in clauses (i) through (vii) above, such event or
condition, together with all other such events or conditions, if any, could
reasonably be expected to have a Material Adverse Effect;
(k) (i) any Loan Document shall for any reason be asserted by
Holdings, the Parent Borrower or any Subsidiary not to be a legal, valid
and binding obligation of any party thereto, (ii) any security interest
purported to be created by any Security Document and to extend to assets
that are not immaterial to Holdings, the Parent Borrower and the
Subsidiaries on a consolidated basis shall cease to be, or shall be
asserted by the Parent Borrower or any other Loan Party not to be, a valid,
perfected, first priority (except as otherwise expressly provided in this
Agreement or such Security Document) security interest in the securities,
assets or properties covered thereby, except to the extent
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that any such loss of perfection or priority results from the failure of
the Collateral Agent to maintain possession of certificates representing
securities pledged under the Pledge Agreements or to file UCC continuation
statements and except to the extent that such loss is covered by a lender's
title insurance policy and the related insurer promptly after such loss
shall have acknowledged in writing that such loss is covered by such title
insurance policy and the U.S. Administrative Agent shall be reasonably
satisfied with the credit of such insurer or (iii) the Obligations of the
Parent Borrower or the guarantee by the Domestic Subsidiary Guarantors
thereof pursuant to the Domestic Subsidiary Guarantee Agreement shall cease
to constitute senior indebtedness under the subordination provisions of any
document or instrument evidencing any permitted subordinated Indebtedness
or such subordination provisions shall be invalidated or otherwise cease to
be legal, valid and binding obligations of the parties thereto, enforceable
in accordance with their terms;
(l) there shall have occurred a Change in Control; or
(m) Holdings shall engage at any time in any business or business
activity or incur any Indebtedness (other than intercompany advances to the
Parent Borrower or Indebtedness in respect of liabilities incurred in
connection with the maintenance of its existence) other than (i) the
ownership of Capital Stock of the Parent Borrower, together with activities
directly related thereto, (ii) performance of its obligations under and in
connection with the Pledge Agreement and (iii) actions required by law to
maintain its status as a limited liability company;
then, and in every such event (other than an event with respect to any Borrower
described in paragraph (g) or (h) above), and at any time thereafter during the
continuance of such event, the U.S. Administrative Agent, at the request of the
Required Lenders, shall, by notice to the Parent Borrower, take any or all of
the following actions, at the same or different times: (i) terminate forthwith
the Commitments, (ii) declare the Loans then outstanding to be forthwith due and
payable in whole or in part and (iii) demand cash collateral pursuant to Section
2.20(g), whereupon the principal of the Loans so declared to be due and payable,
together with accrued interest thereon and
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any unpaid accrued Fees and all other liabilities of any Borrower accrued
hereunder and under any other Loan Document, shall become forthwith due and
payable, without presentment, demand, protest or any other notice of any kind,
all of which are hereby expressly waived by each Borrower, anything contained
herein or in any other Loan Document to the contrary notwithstanding; and in any
event with respect to any Borrower described in para graph (g) or (h) above, the
Commitments shall automatically terminate, the principal of the Loans then
outstanding, together with accrued interest thereon and any unpaid accrued Fees
and all other liabilities of each Borrower accrued hereunder and under any other
Loan Document, shall automatically become due and payable and the U.S.
Administrative Agent shall be deemed to have made a demand for cash collateral
to the full extent permitted under Section 2.20(g), without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived by each Borrower, anything contained herein or in any other Loan Document
to the contrary notwithstanding.
ARTICLE VIII. THE ADMINISTRATIVE AGENTS AND THE COLLATERAL AGENT
In order to expedite the transactions contemplated by this Agreement, The
Chase Manhattan Bank is hereby appointed to act as U.S. Administrative Agent and
Collateral Agent on behalf of the Term Lenders, the U.S. $ Revolving Credit
Lenders, the U.K. (pound) Revolving Credit Lenders and the Fronting Banks, and
The Chase Manhattan Bank of Canada is hereby appointed to act as Canadian
Administrative Agent on behalf of the C $ Revolving Credit Lenders (for purposes
of this Article VIII, the U.S. Administrative Agent, the Canadian Administrative
Agent and the Collateral Agent are referred to collectively as the "Agents").
Each of the Lenders and each assignee of any such Lender hereby irrevocably
authorizes the Agents to take such actions on behalf of such Lender or assignee
or the Fronting Bank and to exercise such powers as are specifically delegated
to the Agents by the terms and provisions hereof and of the other Loan
Documents, together with such actions and powers as are reasonably incidental
thereto. The U.S. Administrative Agent is hereby expressly authorized by the
Lenders and the Fronting Bank, without hereby limiting any implied authority,
(a) to receive on behalf of the Lenders and the Fronting Bank all payments of
principal of and interest on the Term Loans, U.S. $ Revolving Credit Loans, U.K.
(pound) Revolving Credit Loans and Swingline Loans,
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all payments in respect of L/C Disbursements and all other amounts due to the
Lenders and the Fronting Bank hereunder, and promptly to distribute to each
Lender or the Fronting Bank its proper share of each payment so received; (b) to
give notice on behalf of each of the Lenders to the Parent Borrower of any Event
of Default specified in this Agreement of which the U.S. Administrative Agent
has actual knowledge acquired in connection with its agency hereunder; and (c)
to distribute to each Lender copies of all notices, financial statements and
other materials delivered by any Borrower pursuant to this Agreement as received
by the U.S. Administrative Agent. The Canadian Administrative Agent is hereby
expressly authorized by the Lenders, without hereby limiting any implied
authority, (a) to receive on behalf of the C $ Revolving Credit Lenders all
payments of principal of and interest on C $ Revolving Credit Loans and all
other amounts due to the C $ Revolving Credit Lenders hereunder, and promptly
distribute to each such Lender its proper share of each payment so received; (b)
to give notice on behalf of each such Lender to the Parent Borrower or the
Canadian Borrower, as applicable, of any Event of Default specified in this
Agreement of which the Canadian Administrative Agent has actual knowledge
acquired in connection with its agency hereunder; and (c) to distribute to each
such Lender copies of all notices and other materials delivered by any Borrower
pursuant to this Agreement as received by the Canadian Administrative Agent.
Without limiting the generality of the foregoing, the Agents are hereby
expressly authorized to execute any and all documents (including releases) with
respect to the Collateral and the rights of the Secured Parties with respect
thereto, as contemplated by and in accordance with the provisions of this
Agreement and the Security Documents. In the event that any party other than the
Lenders and the Agents shall participate in all or any portion of the Collateral
pursuant to the Security Documents, all rights and remedies in respect of such
Collateral shall be controlled by the Collateral Agent.
The Collateral Agent in its capacity as trustee or otherwise under any Loan
Document (a) shall not be liable for any failure of, omission in or defect in
perfecting or registering the security constituted or created by (i) the U.K.
Borrower Pledge Agreement, (ii) the UK Newco Pledge Agreement, (iii) the U.K.
Subsidiary Guarantee Agreement or (iv) the UK Newco Guarantee Agreement (except
for gross negligence or wilful misconduct), (b) may accept without enquiry such
title as any
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Borrower or Subsidiary may have to any assets secured by the U.K. Borrower
Pledge Agreement or the UK Newco Pledge Agreement and (c) is not under any
obligation to hold any Loan Document or the assets secured by the U.K. Borrower
Pledge Agreement or the UK Newco Pledge Agreement (including title deeds) in its
own possession or to take any steps to protect or preserve the same. Except as
otherwise required in any Loan Document, the Collateral Agent may permit any
Borrower or Subsidiary to retain any Loan Document or other document in its
possession.
Neither the Agents nor any of their respective directors, officers,
employees or agents shall be liable as such for any action taken or omitted by
any of them except for its or his own gross negligence or wilful misconduct, or
be responsible for any statement, warranty or representation herein or the
contents of any document delivered in connection herewith, or be required to
ascertain or to make any inquiry concerning the performance or observance by the
Parent Borrower or any other Loan Party of any of the terms, conditions,
covenants or agreements contained in any Loan Document. The Agents shall not be
responsible to the Lenders for the due execution, genuineness, validity,
enforceability or effectiveness of this Agreement or any other Loan Documents or
other instruments or agreements. The Agents shall in all cases be fully
protected in acting, or refraining from acting, in accordance with written
instructions signed by the Required Lenders and, except as otherwise
specifically provided herein, such instructions and any action or inaction
pursuant thereto shall be binding on all the Lenders. Each Agent shall, in the
absence of knowledge to the contrary, be entitled to rely on any instrument or
document believed by it in good faith to be genuine and correct and to have been
signed or sent by the proper person or persons. Neither the Agents nor any of
their respective directors, officers, employees or agents shall have any
responsibility to the Parent Borrower or any other Loan Party on account of the
failure of or delay in performance or breach by any Lender or the Fronting Bank
of any of its obligations hereunder or to any Lender or the Fronting Bank on
account of the failure of or delay in performance or breach by any other Lender
or the Fronting Bank or the Parent Borrower or any other Loan Party of any of
their respective obligations hereunder or under any other Loan Document or in
connection herewith or therewith. Each of the Agents may execute any and all
duties hereunder by or through agents or employees and shall be entitled to rely
upon the advice of legal counsel selected by
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it with respect to all matters arising hereunder and shall not be liable for any
action taken or suffered in good faith by it in accordance with the advice of
such counsel.
The Lenders hereby acknowledge that no Agent shall be under any duty to
take any discretionary action permitted to be taken by it pursuant to the
provisions of this Agreement unless it shall be requested in writing to do so by
the Required Lenders. The Lenders further acknowledge and agree that so long as
an Agent shall make any determination to be made by it hereunder or under any
other Loan Document in good faith, such Agent shall have no liability in respect
of such determination to any person.
Subject to the appointment and acceptance of a successor Agent as provided
below, any Agent may resign at any time by notifying the Lenders and the Parent
Borrower. Upon any such resignation, the Required Lenders shall have the right
to appoint a successor with the consent of the Parent Borrower (not to be
unreasonably withheld or delayed), provided that Lenders holding a majority of
the C $ Revolving Credit Commitments shall have the right to appoint a successor
Canadian Administrative Agent. If no successor shall have been so appointed by
the Required Lenders (or the C $ Revolving Credit Lenders, in the case of the
Canadian Administrative Agent) and approved by the Parent Borrower and shall
have accepted such appointment within 30 days after the retiring Agent gives
notice of its resignation, then the retiring Agent may, on behalf of the Lenders
with the consent of the Parent Borrower (not to be unreasonably withheld or
delayed), appoint a successor Agent which shall be a bank with an office in New
York, New York, having a combined capital and surplus of at least $500,000,000
or an Affiliate of any such bank (or in the case of a successor to the Canadian
Administrative Agent, a Canadian bank with an office in Toronto having a
combined capital and surplus of at least $500,000,000). Upon the acceptance of
any appointment as Agent hereunder by a successor bank, such successor shall
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent and the retiring Agent shall be discharged from its duties
and obligations hereunder. After the Agent's resignation hereunder, the
provisions of this Article and Section 10.5 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.
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With respect to the Loans made by it hereunder, each Agent in its
individual capacity and not as Agent shall have the same rights and powers as
any other Lender and may exercise the same as though it were not an Agent, and
the Agents and their Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Parent Borrower or any
Subsidiary or other Affiliate thereof as if it were not an Agent.
Each Lender agrees (a) to reimburse the Agents, on demand, in the amount of
its pro rata share (based on its Commit ments hereunder (or if such Commitments
shall have expired or been terminated, in accordance with the respective
principal amounts of its applicable outstanding Loans or participations in L/C
Disbursements, as applicable)) of any reasonable expenses incurred for the
benefit of the Lenders by the Agents, including counsel fees and compensation of
agents and employees paid for services rendered on behalf of the Lenders, which
shall not have been reimbursed by any Borrower and (b) to indemnify and hold
harmless each Agent and any of its directors, officers, employees or agents, on
demand, in the amount of such pro rata share, from and against any and all
liabilities, taxes, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by or asserted against it in its capacity as Agent
or any of them in any way relating to or arising out of this Agreement or any
other Loan Document or any action taken or omitted by it or any of them under
this Agreement or any other Loan Document, to the extent the same shall not have
been xxxx bursed by any Borrower, provided that no Lender shall be liable to an
Agent for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the gross negligence or wilful misconduct of such Agent or any of its
directors, officers, employees or agents.
Each Lender acknowledges that it has, independently and without reliance
upon the Agents or any other Lender and based on such documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Lender also acknowledges that it will, independently
and without reliance upon the Agents or any other Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this
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Agreement or any other Loan Document, any related agreement or any document
furnished hereunder or thereunder.
As soon as practicable after it becomes aware of an Event of Default that
has occurred and is continuing, the U.S. Administrative Agent shall notify each
Lender thereof.
In its capacity as U.S. Administrative Agent hereunder, the U.S.
Administrative Agent will serve as Representative of the Bank Indebtedness under
the Senior Subordinated Indenture and the Senior Subordinated Exchange Indenture
and agrees to notify each Lender of any notice received by it as such
Representative.
ARTICLE IX. COLLECTION ALLOCATION MECHANISM
SECTION 9.01. Implementation of CAM. (a) On the CAM Exchange Date, (i) the
Commitments shall automatically and without further act be terminated as
provided in Article VII and (ii) the Lenders shall automatically and without
further act (and without regard to the provisions of Section 10.04) be deemed to
have exchanged interests in the Credit Facilities such that in lieu of the
interest of each Lender in each Credit Facility in which it shall participate as
of such date (including such Lender's interest in the Designated Obligations of
each Credit Party in respect of each such Credit Facility), such Lender shall
hold an interest in every one of the Credit Facilities (including the Designated
Obligations of each Credit Party in respect of each such Credit Facility and
each L/C Reserve Account established pursuant to Section 9.02 below), whether or
not such Lender shall previously have participated therein, equal to such
Lender's CAM Percentage thereof. Each Lender and each Credit Party hereby
consents and agrees to the CAM Exchange, and each Lender agrees that the CAM
Exchange shall be binding upon its successors and assigns and any person that
acquires a participation in its interests in any Credit Facility. Each Credit
Party agrees from time to time to execute and deliver to the Administrative
Agent all such Notes and other instruments and documents as the Administrative
Agent shall reasonably request to evidence and confirm the respective interests
of the Lenders after giving effect to the CAM Exchange, and each Lender agrees
to surrender any Notes originally received by it in connection with its Loans
hereunder to the Administrative Agent against delivery of new Notes evidencing
its interests in the Credit
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Facilities; provided, however, that the failure of any Credit Party to execute
or deliver or of any Lender to accept any such Note, instrument or document
shall not affect the validity or effectiveness of the CAM Exchange.
(b) As a result of the CAM Exchange, upon and after the CAM Exchange Date,
each payment received by the Administrative Agent or the Collateral Agent
pursuant to any Loan Document in respect of the Designated Obligations, and each
distribution made by the Collateral Agent pursuant to any Security Document in
respect of the Designated Obligations, shall be distributed to the Lenders pro
rata in accordance with their respective CAM Percentages. Any direct payment
received by a Lender upon or after the CAM Exchange Date, including by way of
setoff, in respect of a Designated Obligation shall be paid over to the
Administrative Agent for distribution to the Lenders in accordance herewith.
SECTION 9.02. Letters of Credit. (a) In the event that on the CAM Exchange
Date any Letter of Credit shall be outstanding and undrawn in whole or in part,
or any amount drawn under a Letter of Credit shall not have been reimbursed
either by the Parent Borrower or with the proceeds of a U.S. $ Revolving Credit
Borrowing, each U.S. $ Revolving Credit Lender shall promptly pay over to the
Administrative Agent, in immediately available funds, an amount equal to such
U.S. $ Revolving Credit Lender's Applicable Percentage of such undrawn face
amount or (to the extent it has not already done so) such unreimbursed drawing,
as the case may be, together with interest thereon from the CAM Exchange Date to
the date on which such amount shall be paid to the Administrative Agent at the
rate that would be applicable at the time to an ABR Revolving Credit Loan in a
principal amount equal to such amount. The Administrative Agent shall establish
a separate account or accounts for each Lender (each, an "L/C Reserve Account")
for the amounts received with respect to each such Letter of Credit pursuant to
the preceding sentence. The Administrative Agent shall deposit in each Lender's
L/C Reserve Account such Lender's CAM Percentage of the amounts received from
the U.S. $ Revolving Credit Lenders as provided above. The Administrative Agent
shall have sole dominion and control over each L/C Reserve Account, and the
amounts deposited in each L/C Reserve Account shall be held in such L/C Reserve
Account until withdrawn as provided in paragraph (b), (c), (d) or (e) below. The
Administrative Agent shall maintain records enabling
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it to determine the amounts paid over to it and deposited in the L/C Reserve
Accounts in respect of each Letter of Credit and the amounts on deposit in
respect of each Letter of Credit attributable to each Lender's CAM Percentage.
The amounts held in each Lender's L/C Reserve Account shall be held as a reserve
against the Revolving L/C Exposures, shall be the property of such Lender, shall
not constitute Loans to or give rise to any claim of or against any Loan Party
and shall not give rise to any obligation on the part of any Borrower to pay
interest to such Lender, it being agreed that the reimbursement obligations in
respect of Letters of Credit shall arise only at such times as drawings are made
thereunder, as provided in Section 2.20.
(b) In the event that after the CAM Exchange Date any drawing shall be made
in respect of a Letter of Credit, the Administrative Agent shall, at the request
of the Fronting Bank, withdraw from the L/C Reserve Account of each Lender any
amounts, up to the amount of such Lender's CAM Percentage of such drawing,
deposited in respect of such Letter of Credit and remaining on deposit and
deliver such amounts to the Fronting Bank in satisfaction of the reimbursement
obligations of the U.S. $ Revolving Credit Lenders under Section 2.20(a)(iv)
(but not of the Parent Borrower under Section 2.20(a)(v)). In the event any U.S.
$ Revolving Credit Lender shall default on its obligation to pay over any amount
to the Administrative Agent in respect of any Letter of Credit as provided in
this Section 9.02, the Fronting Bank shall, in the event of a drawing
thereunder, have a claim against such U.S. $ Revolving Credit Lender to the same
extent as if such Lender had defaulted on its obligations under Section
2.20(a)(iv), but shall have no claim against any other Lender in respect of such
defaulted amount, notwithstanding the exchange of interests in the Parent
Borrower's reimbursement obligations pursuant to Section 9.01. Each other Lender
shall have a claim against such defaulting U.S. $ Revolving Credit Lender for
any damages sustained by it as a result of such default, including, in the event
such Letter of Credit shall expire undrawn, its CAM Percentage of the defaulted
amount.
(c) In the event that after the CAM Exchange Date any Letter of Credit
shall expire undrawn, the Administrative Agent shall withdraw from the L/C
Reserve Account of each Lender the amount remaining on deposit therein in
respect of such Letter of Credit and distribute such amount to such Lender.
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(d) With the prior written approval of the Administrative Agent and the
Fronting Bank (not to be unreasonably withheld), any Lender may withdraw the
amount held in its L/C Reserve Account in respect of the undrawn amount of any
Letter of Credit. Any Lender making such a withdrawal shall be unconditionally
obligated, in the event there shall subsequently be a drawing under such Letter
of Credit, to pay over to the Administrative Agent, for the account of the
Fronting Bank, on demand, its CAM Percentage of such drawing.
(e) Pending the withdrawal by any Lender of any amounts from its L/C
Reserve Account as contemplated by the above paragraphs, the Administrative
Agent will, at the direction of such Lender and subject to such rules as the
Administrative Agent may prescribe for the avoidance of inconvenience, invest
such amounts in Permitted Investments (other than Permitted Investments
described in clause (f) of the definition of the term "Permitted Investments").
Each Lender which has not withdrawn its CAM Percentage of amounts in its L/C
Reserve Account as provided in paragraph (d) above shall have the right, at
intervals reasonably specified by the Administrative Agent, to withdraw the
earnings on investments so made by the Administrative Agent with amounts in its
L/C Reserve Account and to retain such earnings for its own account.
SECTION 9.03. Conversion. In the event the CAM Exchange Date shall occur,
Obligations owed by the Loan Parties denominated in any currency other than U.S.
Dollars shall, automatically and with no further act required, be converted to
obligations of the same Loan Parties denominated in U.S. Dollars. Such
conversion shall be effected based upon the Spot Exchange Rates in effect with
respect to the relevant currencies on the CAM Exchange Date. On and after any
such conversion, all amounts accruing and owed to any Lender in respect of its
Obligations shall accrue and be payable in U.S. Dollars at the rates otherwise
applicable hereunder (and, in the case of interest on Loans, at the default rate
applicable to ABR Loans hereunder). Notwithstanding the foregoing provisions of
this Section 9.03, any Lender may, by notice to the Parent Borrower and the
Administrative Agent prior to the CAM Exchange Date, elect not to have the
provisions of this Section 9.03 apply with respect to all Obligations owed to
such Lender immediately following the CAM Exchange Date, and, if such notice is
given, all Obligations owed
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to such Lender immediately following the CAM Exchange Date shall remain
designated in their original currencies.
ARTICLE X. MISCELLANEOUS
SECTION 10.01. Notices. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopy, as follows:
(a) if to the Parent Borrower, to it at 00000 Xxxxxxxxxx, Xxxxxxxxx,
Xxxx 00000, Attention of Xx. Xxxxx X. XxXxxxx (Telecopy No. (216)
765-8677), with a copy to The Blackstone Group, 000 Xxxx Xxxxxx, Xxx Xxxx,
XX 00000, Attention of Xx. Xxxxx X. Xxxxx, (Telecopy No. (212) 754- 8707);
(b) if to the U.K. Borrower, to it at 00000 Xxxxxxxxxx, Xxxxxxxxx,
Xxxx 00000, Attention of Xx. Xxxxx X. XxXxxxx, (Telecopy No. (216)
765-8677), with a copy to The Blackstone Group, 000 Xxxx Xxxxxx, Xxx Xxxx,
XX 00000, Attention of Xx. Xxxxx X. Xxxxx, (Telecopy No. (000) 000-0000);
(c) if to the Canadian Borrower, to it at 00000 Xxxxxxxxxx, Xxxxxxxxx,
Xxxx 00000, Attention of Xx. Xxxxx X. McAlsan (Telecopy No. (216)
765-8677), with a copy to The Blackstone Group, 000 Xxxx Xxxxxx, Xxx Xxxx,
XX 00000, Attention of Xx. Xxxxx X. Xxxxx, (Telecopy No. (212) 754- 8707);
(d) if to the U.S. Administrative Agent, to The Chase Manhattan Bank,
Loan and Agency Services Group, One Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention of Xx. Xxxxxx Xxxxxx (Telecopy No. (212)
270-5662), with a copy to The Chase Manhattan Bank, 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention of Xx. Xxxx Xxxxxx (Telecopy No. (212)
972-0009);
(e) if to the Canadian Administrative Agent, to The Chase Manhattan
Bank of Canada, 1 First Canadian Place, 000 Xxxx Xxxxxx Xxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxx M5X 1A4, Attention of Ms. Xxxxxxxxx Xxxx and Mr. Xxxxxxx
Xxxxxxx
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(Telecopy No. (000) 000-0000), with a copy to Ms. Xxxxxx Staff and Xx.
Xxxxxx Xxxxxx (Telecopy No. (000) 000-0000);
(f) if to the Fronting Bank to it at 000 Xxxxx Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000, Attention of Xxxxxxx X. Xxxxxxx (Telecopy No.
(000) 000-0000); and
(g) if to a Lender, to it at its address (or telecopy number) set
forth in the Administrative Questionnaire delivered to the U.S.
Administrative Agent by such Lender in connection with the execution of
this Agreement or in the Assignment and Acceptance pursuant to which such
Lender shall have become a party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy or on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 10.01 or in accordance with
the latest unrevoked direction from such party given in accordance with this
Section 10.01.
SECTION 10.02. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrowers and the Guarantors herein,
in the other Loan Documents and in the certificates or other instruments
prepared or delivered in connection with or pursuant to this Agreement or any
other Loan Document shall be considered to have been relied upon by the Lenders
and the Fronting Bank and shall survive the making by the Lenders of the Loans,
the execution and delivery to the Lenders of the Loan Documents and the issuance
of the Letters of Credit, regardless of any investigation made by the Lenders or
on their behalf, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or L/C Disbursement or any Fee
or any other amount payable under this Agreement or any other Loan Document is
outstanding and unpaid or any Letter of Credit is outstanding and so long as the
Commitments have not been terminated. Without prejudice to the survival of any
other agreements contained herein, indemnification and reimbursement obligations
contained herein (including pursuant to Sections 2.13, 2.15, 2.19 and 10.05)
shall survive the payment in full of the principal and interest
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hereunder, the expiration of the Letters of Credit and the termination of the
Commitments or this Agreement.
SECTION 10.03. Binding Effect. This Agreement shall become effective when
it shall have been executed by the Borrowers, and the Administrative Agents and
when the U.S. Administrative Agent shall have received copies hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the Borrowers, the
Fronting Bank, the Administrative Agents and each Lender and their respective
permitted successors and assigns.
SECTION 10.04. Successors and Assigns. (a) Whenever in this Agreement any
of the parties hereto is referred to, such reference shall be deemed to include
the permitted successors and assigns of such party; and all covenants, promises
and agreements by or on behalf of the Borrowers, the U.S. Administrative Agent,
the Canadian Administrative Agent, the Collateral Agent, the Fronting Bank or
the Lenders that are contained in this Agreement shall bind and inure to the
benefit of their respective successors and assigns.
(b) Each Lender may assign to one or more assignees all or a portion of its
interests, rights and obligations as a Lender under this Agreement (including
all or a portion of its Commitments, the Loans and L/C Disbursements at the time
owing to it and participations in Letters of Credit and Swingline Loans held by
it, it being understood that Lenders shall not be required to assign pro rata
amounts of their Loans, L/C Disbursements, Revolving Credit Commitments and Term
Commitments, except that except as provided in Section 2.09, assignments of U.S.
$ Revolving Credit Loans, L/C Disbursements and U.S. $ Revolving Credit
Commitments may only be assigned in pro rata amounts, assignments of C $
Revolving Credit Loans and C $ Revolving Credit Commitments may only be assigned
in pro rata amounts and assignments of U.K. (pound) Revolving Credit Loans and
U.K. (pound) Revolving Credit Commitments may only be assigned in pro rata
amounts); provided, however, that (i) except in the case of an assignment to
another Lender or an Affiliate of, or an Approved Fund with respect to, such
Lender, (A) in each case, the Parent Borrower and the U.S. Administrative Agent
(and, in the case of an assignment of C $ Revolving Credit Loans or C $
Revolving Credit Commitments, the Canadian Administrative Agent) must each
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give its prior written consent to such assignment (which consent shall not in
either case be unreasonably withheld or delayed) and (B) in the case of
participations in Letters of Credit or Revolving Credit Commitments, the
Fronting Bank must give its prior written consent to such assignment (which
consent shall not in any case be unreasonably withheld or delayed), (ii) except
in the case of an assignment made pursuant to Section 2.09 or to another Lender
or an Affiliate of, or an Approved Fund with respect to, such Lender, the amount
of the Loans, L/C Disbursements, Commitments or participations in Letters of
Credit or Swingline Loans of the assigning Lender subject to such assignment
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the U.S. Administrative Agent) shall be an amount not
less than $5,000,000 and an integral multiple of $1,000,000 unless each of the
Parent Borrower and the U.S. Administrative Agent shall have given its prior
written consent to the assignment of a lesser amount, or shall be the entire
remaining amount of such Loans, L/C Disbursements, Commitments or participations
in Letters of Credit or Swingline Loans held by such assigning Lender, (iii)
unless the assignor ceases to be a Lender, the aggregate amount of the Loans and
L/C Disbursements owing to and unused Commitments of such Lender after giving
effect to such assignment shall be not less than $5,000,000, (iv) the parties to
each such assignment shall execute and deliver to the U.S. Administrative Agent
(and, in the case of an assignment of C $ Revolving Credit Loans or C $
Revolving Credit Commitments, the Canadian Administrative Agent) an Assignment
and Acceptance, together with a processing and recordation fee of $3,500
(payable to the U.S. Administrative Agent, unless the Canadian Administrative
Agent was also required to receive an Assignment and Acceptance pursuant to this
Section 10.04(b), in which case it shall be payable to the Canadian
Administrative Agent in Canadian Dollars) and (v) the assignee, if it shall not
be a Lender, shall deliver to the U.S. Administrative Agent an Administrative
Questionnaire. Upon acceptance and recording pursuant to paragraph (e) of this
Section 10.04, subject to Section 2.09, from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be at
least five Business Days after the execution thereof unless agreed otherwise by
the applicable Administrative Agents, (i) the assignee thereunder shall be a
party hereto and, to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations, including all obligations under
Sections 2.09(e) and (f), of a
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Lender under this Agreement and (ii) the assigning Lender thereunder shall, to
the extent of the interest assigned by 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, if such Lender has no
remaining contingent obligations under Section 2.09(f) in respect of Revolving
Credit Commitments temporarily reduced pursuant to Section 2.09(e), such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.13, 2.15, 2.19 and 10.05, as well as to any Fees accrued
for its account and not yet paid).
(c) By executing and delivering an Assignment and Acceptance, the assigning
Lender thereunder and the assignee thereunder shall be deemed to confirm to and
agree with each other and the other parties hereto as follows: (i) such
assigning Lender warrants that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim and that its
Term Commitments and Revolving Credit Commitment, and the outstanding balances
of its Loans and L/C Disbursements and its participations in Letters of Credit
and Swingline Loans, in each case without giving effect to assignments thereof
that have not become effective, are as set forth in such Assignment and
Acceptance; (ii) except as set forth in clause (i) above, such assigning Lender
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 the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement, any other Loan Document or
any other instrument or document furnished pursuant hereto or thereto, or the
financial condition of the Parent Borrower or any Guarantor or the performance
or observance by the Parent Borrower or any Guarantor of any of its obligations
under this Agreement, any other Loan Document or any other instrument or
document furnished pursuant hereto or thereto; (iii) such assignee represents
and warrants that it is legally authorized to enter into such Assignment and
Acceptance; (iv) such assignee confirms that it has received copies of this
Agreement and the other Loan Documents, together with copies of the most recent
financial statements delivered pursuant to this Agreement and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such
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Assignment and Acceptance; (v) such assignee will independently and without
reliance upon either Administrative Agent, the Fronting Bank, such assigning
Lender 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; (vi) such assignee appoints
and authorizes the Administrative Agents and the Collateral Agent 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 the Administrative Agents and
the Collateral Agent by the terms hereof or thereof, together with such powers
as are reasonably incidental thereto; and (vii) such assignee agrees that it
will perform in accordance with their terms all the obligations which by the
terms of this Agreement are required to be performed by it as a Lender.
(d) The U.S. Administrative Agent and the Canadian Administrative Agent,
acting for this purpose as agents of the applicable Borrowers, shall maintain at
its address referred to in subsection 10.01 a copy of each Assignment and
Acceptance delivered to it and a register (each, a "Register") for the
recordation of the names and addresses of the Lenders and the Commitments of,
and principal amount of the Loans and L/C Disbursements owing to, each Lender
from time to time. The U.S. Administrative Agent shall also record the Revolving
L/C Exposure of each Lender in the Register. The entries in a Register shall be
conclusive, in the absence of manifest error, and the Borrowers, the
Administrative Agents, the Fronting Bank and the Lenders shall treat each person
whose name is recorded in a Register as the owner of Commitments and the Loans
and Revolving L/C Exposures recorded therein for all purposes of this Agreement.
Each Register shall be available for inspection by the Borrowers, the Fronting
Bank, any Lender and their representatives (including counsel and accountants),
at any reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and Acceptance executed
by an assigning Lender and an assignee, an Administrative Questionnaire
completed in respect of the assignee (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) above and, if required, the written consent of the Parent Borrower, the
Fronting Bank and the applicable
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Administrative Agents to such assignment, the U.S. Administrative Agent and, if
applicable, the Canadian Administrative Agent shall (i) accept such Assignment
and Acceptance, (ii) record the information contained therein in its Register
and (iii) give prompt notice thereof to the Lenders. Notwithstanding anything to
the contrary contained herein, no assignment under Section 10.04(b) of any
rights or obligations shall be effective unless and until the U.S.
Administrative Agent and, if applicable, the Canadian Administrative Agent shall
have recorded such assignment in its Register. The U.S. Administrative Agent
and, if applicable, the Canadian Administrative Agent shall record the name of
the transferor, the name of the transferee, and the amount of the transfer in
its Register after receipt of all documents required pursuant to this Section
10.04 and such other documents as the U.S. Administrative Agent and, if
applicable, the Canadian Administrative Agent may reasonably request.
(f) Each Lender may without the consent of any Borrower, the Fronting Bank
or either Administrative Agent sell participations to one or more banks or other
entities in all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitments, the Loans owing to it, its
Revolving L/C Exposure and the participations in Letters of Credit and Swingline
Loans, held by it); provided, however, that (i) such Lender's obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) the participating banks or other entities shall be entitled to the benefit
of the cost protection provisions contained in Sections 2.13, 2.15, 2.19 and
10.06 to the same extent as if they were Lenders, provided that no such
participating bank or entity shall be entitled to receive any greater amount
pursuant to such Sections than a Lender would have been entitled to receive in
respect of the amount of the participation sold by such Lender to such
participating bank or entity had no sale occurred, and (iv) the Borrowers, the
Administrative Agents, the Fronting Bank and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement, and such Lender shall retain the
sole right to enforce the obligations of the Borrowers or any other Loan Party,
as the case may be, relating to its Loans, Revolving L/C Exposure and
participations in Letters of Credit and Swingline Loans and Fees
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and to approve any amendment, modification or waiver of any provision of this
Agreement or any other Loan Document (other than amendments, modifications or
waivers decreasing any Fee payable hereunder or the amount of principal of or
the rate at which interest is payable on the Loans or L/C Disbursements,
extending any final maturity date or increasing any Commitment, in each case in
respect of an Obligation in which the relevant participating bank or entity is
participating, or releasing all or substantially all of the Collateral or any
Guarantor from its Guarantee Agreement unless all or substantially all the
Capital Stock of such Guarantor is sold in a transaction permitted by this
Agreement or as provided in Section 10.18). Each Lender will disclose the
identity of its participants to the Parent Borrower and Administrative Agents if
requested by the Parent Borrower or either Administrative Agent.
(g) Any Lender or participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
10.04, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrowers or any Guarantor furnished
to such Lender by or on behalf of the Borrowers or any Guarantor, provided that,
prior to any such disclosure, each such assignee or participant or proposed
assignee or participant shall execute an agreement whereby such assignee or
participant shall agree to be bound by Section 10.17.
(h) Any Lender may at any time assign all or any portion of its rights
under this Agreement to a Federal Reserve Bank, provided that no such assignment
shall release a Lender from any of its obligations hereunder. In order to
facilitate such an assignment to a Federal Reserve Bank, the applicable Borrower
shall, at the request of the assigning Lender, duly execute and deliver to the
assigning Lender a promissory note or notes evidencing the Loans made to such
Borrower by the assigning Lender hereunder.
(i) In the event that Standard & Poor's Ratings Group or Xxxxx'x Investors
Service, Inc. shall, after the date that any U.S. $ Revolving Credit Lender
becomes a Lender, downgrade the long-term certificate deposit ratings or
long-term senior unsecured debt ratings of such Lender (or the parent company
thereof), and the resulting ratings shall be BBB+ or Baa1 or lower, then the
Fronting Bank shall have the right, but not the
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obligation, at its own expense, upon notice to such Lender and the U.S.
Administrative Agent, to replace (or to request the Parent Borrower, at the sole
expense of the Fronting Bank, to use its reasonable efforts to replace) such
Lender with respect to such Lender's Revolving Credit Commitment with an
assignee (in accordance with and subject to the restrictions contained in
paragraph (b) above), and such Lender hereby agrees to transfer and assign
without recourse (in accordance with and subject to the restrictions contained
in paragraph (b) above) all its interests, rights and obligations in respect of
its Revolving Credit Commitment to such assignee; provided, however, that (i) no
such assignment shall conflict with any law, rule and regulation or order of any
Governmental Authority and (ii) such assignee shall pay to such Lender in
immediately available funds on the date of such assignment the principal of and
interest accrued to the date of payment on the Loans and L/C Disbursements of
such Lender hereunder and all other amounts accrued for such Lender's account or
owed to it hereunder.
(j) No Borrower shall assign or delegate any of its rights or duties
hereunder and any attempted assignment shall be null and void.
(k) Except as provided in Section 2.13(d), the Fronting Bank shall not
assign or delegate any of its interests, rights or obligations as a Fronting
Bank under this Agreement without the prior written consent of the Parent
Borrower, the U.S. Administrative Agent and the Required Lenders.
SECTION 10.05. Expenses; Indemnity. (a) The Parent Borrower agrees to pay
all reasonable out-of-pocket expenses incurred by the Administrative Agents and
the Collateral Agent in connection with the preparation of this Agreement and
the other Loan Documents, or by the Administrative Agents or the Collateral
Agent in connection with the syndication of the Commitments or the
administration of this Agreement (including expenses incurred in connection with
due diligence and initial and ongoing Collateral examination to the extent
incurred with the reasonable prior approval of the Parent Borrower) or in
connection with any amendments, modifications or waivers of the provisions
hereof or thereof (whether or not the transactions hereby contemplated shall be
consummated) or incurred by the U.S. Administrative Agent, the Collateral Agent
or any Lender in connection with the enforcement or protection of their rights
in connection with this
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Agreement and the other Loan Documents or in connection with the Loans made or
the Letters of Credit issued hereunder, including the reasonable fees, charges
and disbursements of Cravath, Swaine & Xxxxx, counsel for the U.S.
Administrative Agent and the Collateral Agent, and, in connection with any such
enforcement or protection, the reasonable fees, charges and disbursements of any
other counsel (including the reasonable allocated costs of internal counsel if a
Lender elects to use internal counsel in lieu of outside counsel) for the
Administrative Agents, the Fronting Bank or any Lender (but no more than one
such counsel for any Lender).
(b) The Parent Borrower agrees to indemnify the Administrative Agents, the
Collateral Agent, the Fronting Bank, each Lender and each of their respective
directors, trustees, officers, employees, affiliates and agents (each such
person being called an "Indemnitee") against, and to hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including reasonable counsel fees, charges and disbursements, incurred
by or asserted against any Indemnitee arising out of, in any way connected with,
or as a result of (i) the execution or delivery of this Agreement or any other
Loan Document or any agreement or instrument contemplated hereby or thereby, the
performance by the parties hereto and thereto of their respective obligations
thereunder or the consummation of the Transactions and the other transactions
contemplated hereby and thereby, (ii) the use of the proceeds of the Loans or
the use of any Letter of Credit or (iii) any claim, litigation, investigation or
proceeding relating to any of the foregoing, whether or not any Indemnitee is a
party thereto, provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses result from the gross negligence or wilful misconduct of such
Indemnitee (treating, for this purpose only, the applicable Administrative
Agent, the Fronting Bank or any Lender and its directors, trustees, officers and
employees as a single Indemnitee). Subject to and without limiting the
generality of the foregoing sentence, the Parent Borrower agrees to indemnify
each Indemnitee against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including reasonable
counsel or consultant fees, charges and disbursements, incurred by or asserted
against any Indemnitee arising out of, in any way connected with, or as a result
of (A) any Environmental Claim
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related in any way to the Parent Borrower or any Subsidiary, or (B) any actual
or alleged presence, Release or threatened Release of Hazardous Materials on any
Property or any property owned, leased or operated by any predecessor of the
Parent Borrower or any Subsidiary, provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are, determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or wilful misconduct of such Indemnitee or any of its directors,
trustees, officers or employees. The provisions of this Section 10.05 shall
remain operative and in full force and effect regardless of the expiration of
the term of this Agreement, the consummation of the transactions contemplated
hereby, the repayment of any of the Obligations, the invalidity or
unenforceability of any term or provision of this Agreement or any other Loan
Document, or any investigation made by or on behalf of either Administrative
Agent, the Fronting Bank or any Lender. All amounts due under this Section 10.05
shall be payable on written demand therefor.
(c) Unless an Event of Default shall have occurred and be continuing, the
Parent Borrower shall be entitled to assume the defense of any action for which
indemnification is sought hereunder with counsel of its choice at its expense
(in which case the Parent Borrower shall not thereafter be responsible for the
fees and expenses of any separate counsel retained by an Indemnitee except as
set forth below); provided, however, that such counsel shall be reasonably
satisfactory to each such Indemnitee. Notwithstanding the Parent Borrower's
election to assume the defense of such action, each Indemnitee shall have the
right to employ separate counsel and to participate in the defense of such
action, and the Parent Borrower shall bear the reasonable fees, costs and
expenses of such separate counsel, if (i) the use of counsel chosen by the
Parent Borrower to represent such Indemnitee would present such counsel with a
conflict of interest; (ii) the actual or potential defendants in, or targets of,
any such action include both the Parent Borrower and such Indemnitee and such
Indemnitee shall have reasonably concluded that there may be legal defenses
available to it that are different from or additional to those available to the
Parent Borrower (in which case the Parent Borrower shall not have the right to
assume the defense or such action on behalf of such Indemnitee); (iii) the
Parent Borrower shall not have employed counsel reasonably satisfactory to such
Indemnitee to represent
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it within a reasonable time after notice of the institution of such action; or
(iv) the Parent Borrower shall authorize such Indemnitee to employ separate
counsel at the Parent Borrower's expense. The Parent Borrower shall not, without
the consent of the affected Indemnitee, settle or compromise any claim or action
in a manner subjecting such Indemnitee to any monetary obligation (that has not
been paid or provided for) or any other obligation. The Parent Borrower will not
be liable under this Agreement for any amount paid by an Indemnitee to settle
any claims or actions if the settlement is entered into without the Parent
Borrower's consent, which consent may not be withheld or delayed unless such
settlement is unreasonable in light of such claims or actions against, and
defenses available to, such Indemnitee.
(d) Notwithstanding anything to the contrary in this Section 10.05, this
Section 10.05 shall not apply to taxes, it being understood that the Parent
Borrower's only obligations with respect to taxes shall arise under Sections
2.13 and 2.19.
SECTION 10.06. Right of Setoff. If an Event of Default shall have occurred
and be continuing, each Lender and the Fronting Bank is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such
Lender or the Fronting Bank to or for the credit or the account of any Borrower
against any of and all the obligations of such Borrower now or hereafter
existing under this Agreement or any other Loan Document held by such Lender or
the Fronting Bank, irrespective of whether or not such Lender or the Fronting
Bank shall have made any demand under this Agreement or such other Loan Document
and although such obligations may be unmatured. The rights of each Lender and
the Fronting Bank under this Section 10.06 are in addition to other rights and
remedies (including other rights of setoff) which such Lender or the Fronting
Bank may have. Notwithstanding anything in any of the Loan Documents, no
proceeds of the exercise of any such lien, setoff or similar right against the
U.K. Borrower or its subsidiaries, or the Canadian Borrower or its subsidiaries,
shall be applied to the payment of any amounts other than amounts owing by the
U.K. Borrower or the Canadian Borrower, respectively, hereunder in respect of
their respective U.K. (pound) Revolving Credit Borrowings or C $ Revolving
Credit Borrowings.
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SECTION 10.07. Applicable Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(OTHER THAN LETTERS OF CREDIT AND AS EXPRESSLY SET FORTH IN OTHER LOAN
DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK. EACH LETTER OF CREDIT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF
CREDIT, OR IF NO SUCH LAWS OR RULES ARE DESIGNATED, THE UNIFORM CUSTOMS AND
PRACTICE FOR DOCUMENTARY CREDITS (1993 REVISION), INTERNATIONAL CHAMBER OF
COMMERCE, PUBLICATION NO. 500 (THE "UNIFORM CUSTOMS") AND, AS TO MATTERS NOT
GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF THE STATE OF NEW YORK.
SECTION 10.08. Waivers; Amendment. (a) No failure or delay of the
Administrative Agents, the Collateral Agent, the Fronting Bank or any Lender in
exercising any right or power hereunder or under any Loan Document shall operate
as a waiver thereof, nor shall any single or partial exercise of any such right
or power, or any abandonment or discontinuance of steps to enforce such a right
or power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Administrative Agents, the
Collateral Agent, the Fronting Bank and the Lenders hereunder and under the
other Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of this
Agreement or any other Loan Document or consent to any departure by Holdings,
any Borrower or any Guarantor therefrom shall in any event be effective unless
the same shall be permitted by paragraph (b) below, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given. No notice or demand on Holdings, any Borrower or any Guarantor in
any case shall entitle such Borrower to any other or further notice or demand in
similar or other circumstances.
(b) Neither this Agreement nor any other Loan Document nor any provision
hereof or thereof may be waived, amended or modified except, in the case of this
Agreement, pursuant to an agreement or agreements in writing entered into by the
Borrowers and the Required Lenders or, in the case of any other Loan Document,
pursuant to an agreement or agreements in writing entered into by each party
thereto and the Collateral Agent and consented to by the Required Lenders;
provided, however, that no such agreement shall (i) decrease the principal
amount of, or
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extend the final maturity of, or decrease the rate of interest on, any Loan or
any L/C Disbursement, without the prior written consent of each Lender directly
affected thereby, (ii) extend any Installment Date (other than any final
maturity) or extend any date on which payment of interest on any Loan or any L/C
Disbursement is due, without the prior written consent of (A) in the case of
Term Loans, the Required Lenders and Lenders holding Term Loans representing at
least 80% of the aggregate principal amount of each Term Loan Credit Facility
affected by such action or (B) in the case of Loans under the Revolving Credit
Commitments and L/C Disbursements, Lenders with Revolving Credit Commitments
representing at least 80% of the aggregate Revolving Credit Commitments then in
effect, (iii) advance any Installment Date without the prior written consent of
Lenders holding Term Loans representing (A) at least 80% of the aggregate
principal amount of the then outstanding Tranche A Term Loans, (B) at least 80%
of the aggregate principal amount of the then outstanding Tranche B Term Loans
and (C) at least 80% of the aggregate principal amount of the then outstanding
Tranche C Term Loans, (iv) increase or extend the Commitment of any Lender or
decrease the Commitment Fees, Facility Fees, L/C Participation Fees or other
fees of any Lender without the prior written consent of such Lender, (v) effect
any waiver, amendment or modification that by its terms adversely affects the
rights in respect of payments or collateral of Lenders participating in any
Credit Facility differently from those of Lenders participating in other Credit
Facilities, without the consent of a majority in interest of the Lenders
participating in the adversely affected Credit Facility, or change the relative
rights in respect of payments or collateral of the Lenders participating in
different Credit Facilities without the consent of a majority in interest of
Lenders participating in each affected Credit Facility, (vi) amend Article IX in
a manner adverse to any Lender without the consent of such Lender or (vii) amend
or modify the provisions of Section 2.09(d), Section 2.11(b) or Section 2.16,
the provisions of this Section or the definition of the term "Required Lenders",
or release all or substantially all the Collateral or release any Guarantor from
its Guarantee Agreement unless all or substantially all the Capital Stock of
such Guarantor is sold in a transaction permitted by this Agreement or as
provided in Section 10.18, without the prior written consent of each Lender
adversely affected thereby, provided further that no such agreement shall amend,
modify or otherwise affect the rights or duties of either Administrative Agent
or the Fronting
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Bank hereunder without the prior written consent of the applicable
Administrative Agent or the Fronting Bank acting as such at the effective date
of such agreement, as the case may be. Each Lender shall be bound by any waiver,
amendment or modification authorized by this Section 10.08 and any consent by
any Lender pursuant to this Section 10.08 shall bind any assignee of such
Lender.
SECTION 10.09. Interest Rate Limitation. Notwithstanding anything herein to
the contrary, if at any time the applicable interest rate, together with all
fees and charges that are treated as interest under applicable law
(collectively, the "Charges"), as provided for herein or in any other document
executed in connection herewith, or otherwise contracted for, charged, received,
taken or reserved by any Lender or the Fronting Bank, shall exceed the maximum
lawful rate (the "Maximum Rate") that may be contracted for, charged, taken,
received or reserved by such Lender in accordance with applicable law, the rate
of interest payable hereunder, together with all Charges payable to such Lender
or the Fronting Bank, shall be limited to the Maximum Rate, provided that such
excess amount shall be paid to such Lender or the Fronting Bank on subsequent
payment dates to the extent not exceeding the legal limitation.
SECTION 10.10. Entire Agreement. This Agreement, the other Loan Documents
and the agreements regarding certain Fees referred to herein constitute the
entire contract between the parties relative to the subject matter hereof. Any
previous agreement among or representations from the parties with respect to the
subject matter hereof is superseded by this Agreement and the other Loan
Documents. Nothing in this Agreement or in the other Loan Documents, expressed
or implied, is intended to confer upon any party other than the parties hereto
and thereto any rights, remedies, obligations or liabilities under or by reason
of this Agreement or the other Loan Documents.
SECTION 10.11. 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 RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.
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
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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 AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.11.
SECTION 10.12. Severability. In the event any one or more of the provisions
contained in this Agreement or in any other Loan Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby. The parties shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
SECTION 10.13. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute but one contract, and shall become effective as
provided in Section 10.03.
SECTION 10.14. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 10.15. Jurisdiction; Consent to Service of Process. (a) Each
Borrower hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any
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such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that any Lender or the Fronting
Bank may otherwise have to bring any action or proceeding relating to this
Agreement or the other Loan Documents against any Borrower or any Guarantor or
their properties in the courts of any jurisdiction.
(b) Each Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the other Loan Documents in any
New York State or Federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of process
in the manner provided for notices in Section 10.01. Nothing in this Agreement
will affect the right of any party to this Agreement to serve process in any
other manner permitted by law.
SECTION 10.16. Judgment Currency. (a) The Borrowers' obligations hereunder
and the Borrowers' and the other Loan Parties' obligations under the other Loan
Documents to make payments in Dollars or in any Alternative Currency (the
"Obligation Currency") shall not be discharged or satisfied by any tender or
recovery pursuant to any judgment expressed in or converted into any currency
other than the Obligation Currency, except to the extent that such tender or
recovery results in the effective receipt by the applicable Administrative
Agent, the Collateral Agent or a Lender of the full amount of the Obligation
Currency expressed to be payable to the applicable Administrative Agent, the
Collateral Agent or such Lender under this Agreement or the other Loan
Documents. If, for the purpose of obtaining or enforcing judgment against any
Borrower or any other Loan Party in any court or in any jurisdiction, it becomes
necessary to convert into or from any currency other than the Obligation
Currency (such other currency being hereinafter referred to as the "Judgment
Currency") an amount due in the Obligation Currency, the conversion shall be
made, at the Dollar Equivalent of such amount, in the case of any Alternative
Currency or
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Dollars, and, in the case of other currencies, the rate of exchange (as quoted
by the U.S. Administrative Agent or if the U.S. Administrative Agent does not
quote a rate of exchange on such currency, by a known dealer in such currency
designated by the U.S. Administrative Agent) determined, in each case, as of the
date immediately preceding the day on which the judgment is given (such Business
Day being hereinafter referred to as the "Judgment Currency Conversion Date").
(b) If there is a change in the rate of exchange prevailing between the
Judgment Currency Conversion Date and the date of actual payment of the amount
due, the Borrowers covenant and agree to pay, or cause to be paid, such
additional amounts, if any (but in any event not a lesser amount), as may be
necessary to ensure that the amount paid in the Judgment Currency, when
converted at the rate of exchange prevailing on the date of payment, will
produce the amount of the Obligation Currency which could have been purchased
with the amount of Judgment Currency stipulated in the judgment or judicial
award at the rate of exchange prevailing on the Judgment Currency Conversion
Date.
(c) For purposes of determining the Dollar Equivalent or rate of exchange
for this Section, such amounts shall include any premium and costs payable in
connection with the purchase of the Obligation Currency.
SECTION 10.17. Confidentiality. Each of the Lenders, the Fronting Bank and
the Administrative Agents agrees that it shall maintain in confidence any
information relating to the Borrowers and the other Loan Parties furnished to it
by or on behalf of the Borrowers or the other Loan Parties (other than
information that (a) has become generally available to the public other than as
a result of a disclosure by such party, (b) has been independently developed by
such Lender, the Fronting Bank or such Administrative Agent without violating
this Section 10.17 or (c) was available to such Lender, the Fronting Bank or
such Administrative Agent from a third party having, to such person's knowledge,
no obligations of confidentiality to any Borrowers or any other Loan Party) and
shall not reveal the same other than (i) to its directors, trustees, officers,
employees and advisors with a need to know (so long as each such person shall
have been instructed to keep the same confidential in accordance with this
Section 10.17) and (ii) as contemplated by Section 10.04(g),
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except: (A) to the extent necessary to comply with law or any legal process or
the requirements of any Governmental Authority or of any securities exchange on
which securities of the disclosing party or any Affiliate of the disclosing
party are listed or traded, (B) as part of normal reporting or review procedures
to Governmental Authorities, (C) to its parent companies, Affiliates or auditors
(so long as each such person shall have been instructed to keep the same
confidential in accordance with this Section 10.17) and (D) in order to enforce
its rights under any Loan Document in a legal proceeding.
SECTION 10.18. Release of Liens and Guarantees. In the event that Holdings,
the Parent Borrower or any Subsidiary conveys, sells, leases, assigns, transfers
or otherwise disposes of all or any portion of any of the Capital Stock, assets
or property of the Parent Borrower or any of the Subsidiaries in a transaction
not prohibited by Section 6.05, the U.S. Administrative Agent and the Collateral
Agent shall promptly (and the Lenders hereby authorize the U.S. Administrative
Agent and the Collateral Agent to) take such action and execute any such
documents as may be reasonably requested by the Parent Borrower and at the
Parent Borrower's expense to release any Liens created by any Loan Document in
respect of such Capital Stock, assets or property, including the release and
satisfaction of record of any mortgage or deed of trust granted in connection
herewith, and, in the case of a disposition of all or substantially all the
Capital Stock or assets of any Subsidiary Guarantor, terminate such Subsidiary
Guarantor's obligations under the applicable Guarantee Agreement.
Notwithstanding the foregoing, neither the U.S. Administrative Agent nor the
Collateral Agent will have any obligation to release, in connection with any
conveyance, sale, lease, assignment, transfer or other disposition, any Lien
created under the Pledge Agreement with respect to the Capital Stock of the
Parent Borrower held by Holdings if such conveyance, sale, lease, assignment,
transfer or other disposition, would result in a Change in Control. In addition,
the U.S. Administrative Agent and the Collateral Agent agree to take such
actions as are reasonably requested by the Parent Borrower and at the Parent
Borrower's expense to terminate the Liens and security interests created by the
Loan Documents when all the Obligations are paid in full and all Letters of
Credit and Commitments are terminated. Any representation, warranty or covenant
contained in any Loan Document relating to any such Capital Stock, assets,
property or Subsidiary shall no longer be deemed to be made once
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such Capital Stock, assets or property is conveyed, sold, leased, assigned,
transferred or disposed of.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers or attorneys as of the day
and year first above written.
THE IMPERIAL HOME DECOR GROUP
INC.,
by
/S/ Xxxxx X. XxXxxxx
---------------------------------
Name: Xxxxx X. XxXxxxx
Title: Vice President
IMPERIAL HOME DECOR GROUP
HOLDINGS II LIMITED,
acting by Xxxxx X. XxXxxxx,
its duly appointed attorney
/s/ Xxxxx X. XxXxxxx
---------------------------------
THE IMPERIAL HOME DECOR GROUP
(CANADA) ULC,
by
/s/ Xxxxx X. XxXxxxx
---------------------------------
Name: Xxxxx X. XxXxxxx
Title: Vice President
214
THE CHASE MANHATTAN BANK,
by
/s/ Xxxxxxx Xxxxx
---------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
THE CHASE MANHATTAN BANK OF
CANADA,
by
/s/ Xxxxxxxxx Xxxx
---------------------------------
Name: Xxxxxxxxx Xxxx
Title: Vice President
CHASE MANHATTAN BANK DELAWARE,
by
/s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
BEAR XXXXXXX INVESTMENT
PRODUCTS INC.,
by
/S/ Xxxxx Xxxxxxxxx
---------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Authorized Signatory
CREDIT SUISSE FIRST BOSTON,
by
/s/ Xxxxxxx Xxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxx
Title: Vice President
215
/s/ Xxxx X. Xxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxx
Title: Assistant Vice President
FUJI BANK,
by
/s/ Xxxxx Xxxxxxxx
---------------------------------
Name: Xxxxx Xxxxxxxx
Title: Vice President &
Manager
KZH HOLDING CORPORATION III,
by
/s/ Xxxxxxxx Xxxxxx
---------------------------------
Name: Xxxxxxxx Xxxxxx
Title: Authorized Agent
XXXXXXX XXXXX SENIOR
FLOATING RATE FUND, INC.,
by
/s/Xxxx Xxxxxxxxx Xxxxxxxx
---------------------------------
Name: Xxxx Xxxxxxxxx
Xxxxxxxx
Title: Authorized
Signatory
PILGRIM AMERICA PRIME RATE
INCOME TRUST BY: PILGRIM
AMERICA INVESTMENTS INC. AS
ITS INVESTMENT MANAGER,
216
by
/s/ Xxxxxx Tiffen
---------------------------------
Name: Xxxxxx Tiffen
Title: Senior Vice
President
SOUTHERN PACIFIC BANK,
by
/s/ Southern Pacific Bank
---------------------------------
Name:Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice
President
THE LONG TERM CREDIT BANK OF
JAPAN, LIMITED, NEW YORK
BRANCH,
by
/s/ Xxxxxxx Xxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxx
Title: Deputy General
Manager
217
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PRICING ADJUSTMENTS
SCHEDULE
A
Revolving
Credit Loans,
Tranche A
LIBOR Margin Facility
and L/C Fee and
Leverage Participation Tranche B Tranche C Commitment
Level Ratio Fee(1) LIBOR Margin LIBOR Margin Fee
1 Greater than
or equal 2.50% 2.75% 3.00% 0.50%
to 4.50 to
1.00
2 Less than 2.25% 2.50% 2.75% 0.50%
4.50 to
1.00 but
greater than
or equal to
4.00 to 1.00
3 Less than 2.00% 2.50% 2.75% 0.375%
4.00 to 1.00
but greater
than or
equal to
3.50 to 1.00
4 Less than 1.75% 2.25% 2.50% 0.375%
3.50 to 1.00
The "LIBOR Margin", the "ABR Margin", the Facility Fee and the Commitment
Fee for any date shall be determined by reference to the Leverage Ratio as
of the last day of the fiscal quarter most recently ended as of such date
and any change shall become effective upon the delivery to the U.S.
Administrative Agent of a certificate of a Responsible Officer of the
Borrower with respect to the financial statements to be delivered pursuant
to Section 5.04 for the most recently ended fiscal quarter (a) setting
forth in reasonable detail the calculation of the Leverage Ratio for the
end of such fiscal quarter and (b) stating that the signer has reviewed the
terms of this Agreement and the other Loan Documents and has made, or
caused to be made under his or her supervision, a review in reasonable
detail of the transactions and condition of the Borrower and the
Subsidiaries during the accounting
--------
(1) The LIBOR Margin for any Borrowing that is a U.K. (pound) Revolving
Credit Borrowing and the LIBOR Margin and the ABR Margin for any Borrowing that
is a C $ Revolving Credit Borrowing set forth in this table must be adjusted as
provided for in the definition of the term "LIBOR Margin".
219
period, and that the signer does not have knowledge of the existence as at
the date of such officers' certificate of any Event of Default or Default.
It is understood that the foregoing certificate of a Responsible Officer
shall be permitted to be delivered prior to, but in no event later than,
the time of the actual delivery of the financial statements required to be
delivered pursuant to Section 5.04. Notwithstanding the foregoing, at any
time during which the Borrower has failed to deliver the certificate
required under Section 5.04(c) with respect to a fiscal quarter following
the date the delivery thereof is due, the Leverage Ratio shall be deemed,
solely for the purposes of this Schedule A, to be greater than 4.50 to
1.00, until such time as the Borrower shall deliver such certificate.
