EXHIBIT 4.8
CANADIAN REVOLVING CREDIT AGREEMENT
DATED AS OF DECEMBER 10, 2004
AMONG
EMS TECHNOLOGIES CANADA, LTD.,
EMS TECHNOLOGIES, INC.,
THE LENDERS FROM TIME TO TIME PARTY HERETO
AND
BANK OF AMERICA, NATIONAL ASSOCIATION (CANADA BRANCH)
AS CANADIAN ADMINISTRATIVE AGENT AND FUNDING AGENT
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SUNTRUST ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
(A DIVISION OF SUNTRUST CAPITAL MARKETS, INC.)
AS LEAD ARRANGER
BANK OF AMERICA, NATIONAL ASSOCIATION
(CANADA BRANCH)
AS SYNDICATION AGENT
TABLE OF CONTENTS
ARTICLE I DEFINITIONS; CONSTRUCTION....................................................................... 1
Section 1.1 Definitions............................................................................ 1
Section 1.2 Classifications of Loans and Borrowings................................................ 22
Section 1.3 Accounting Terms and Determination..................................................... 22
Section 1.4 Terms Generally; Rules of Interpretation............................................... 23
ARTICLE II AMOUNT AND TERMS OF THE COMMITMENTS............................................................ 23
Section 2.1 General Description of Facilities...................................................... 23
Section 2.2 Revolving Loans........................................................................ 24
Section 2.3 Procedure for Revolving Borrowings..................................................... 24
Section 2.4 Swingline Commitment................................................................... 24
Section 2.5 Procedure for Swingline Borrowing; Etc. ............................................... 25
Section 2.6 Funding of Borrowings.................................................................. 26
Section 2.7 Interest Elections; Conversions; Continuations......................................... 27
Section 2.8 Termination of Commitments............................................................. 28
Section 2.9 Repayment of Loans..................................................................... 28
Section 2.10 Evidence of Indebtedness........................................................... 29
Section 2.11 Optional and Mandatory Prepayments................................................. 29
Section 2.12 Interest on Loans.................................................................. 32
Section 2.13 Fees............................................................................... 33
Section 2.14 Effective Date for Adjustment to Applicable Percentage and Applicable Margin....... 34
Section 2.15 Inability to Determine Interest Rates.............................................. 34
Section 2.16 Illegality......................................................................... 35
Section 2.17 Increased Costs.................................................................... 35
Section 2.18 Funding Indemnity.................................................................. 37
Section 2.19 Taxes.............................................................................. 37
Section 2.20 Payments Generally; Pro Rata Treatment; Sharing of Set-offs........................ 39
Section 2.21 Mitigation of Obligations; Replacement of Lenders.................................. 41
Section 2.22 Letters of Credit.................................................................. 41
ARTICLE III CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT........................................... 46
Section 3.1 Conditions To Effectiveness............................................................ 46
Section 3.2 Each Credit Event...................................................................... 51
Section 3.3 Delivery of Documents.................................................................. 52
ARTICLE IV REPRESENTATIONS AND WARRANTIES................................................................. 52
Section 4.1 Existence; Power....................................................................... 52
Section 4.2 Organizational Power; Authorization.................................................... 53
Section 4.3 Governmental and Third Party Approvals; No Conflicts................................... 53
Section 4.4 Financial Statements................................................................... 53
Section 4.5 Litigation and Environmental Matters................................................... 54
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Section 4.6 Compliance with Laws and Agreements.................................................... 54
Section 4.7 Taxes.................................................................................. 54
Section 4.8 Canadian Welfare and Pension Plans..................................................... 55
Section 4.9 Ownership of Property.................................................................. 55
Section 4.10 Disclosure......................................................................... 56
Section 4.11 Labour Relations................................................................... 56
Section 4.12 Subsidiaries....................................................................... 56
Section 4.13 Solvency........................................................................... 56
Section 4.14 Indebtedness at Closing Date....................................................... 57
Section 4.15 OFAC............................................................................... 57
Section 4.16 Patriot Act........................................................................ 57
Section 4.17 Dormant Companies.................................................................. 57
ARTICLE V AFFIRMATIVE COVENANTS........................................................................... 57
Section 5.1 Financial Statements and Other Information............................................. 57
Section 5.2 Notices of Material Events............................................................. 59
Section 5.3 Existence.............................................................................. 60
Section 5.4 Compliance with Laws, Etc. ............................................................ 60
Section 5.5 Payment of Obligations................................................................. 60
Section 5.6 Books and Records...................................................................... 60
Section 5.7 Visitation, Inspection, Etc. .......................................................... 61
Section 5.8 Maintenance of Properties; Insurance................................................... 61
Section 5.9 Use of Proceeds and Letters of Credit.................................................. 61
Section 5.10 Additional Security................................................................ 61
Section 5.11 Amendment to U.S. Loan Documents................................................... 62
Section 5.12 Additional Real Property; Leased Locations......................................... 62
Section 5.13 Dispute Reserve.................................................................... 63
Section 5.14 Notices in Connection with ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Contract............................ 64
Section 5.15 Further Assurances................................................................. 64
ARTICLE VI FINANCIAL COVENANTS............................................................................ 65
Section 6.1 Leverage Ratio......................................................................... 65
Section 6.2 Fixed Charge Coverage Ratio............................................................ 65
Section 6.3 Minimum Net Worth...................................................................... 65
Section 6.4 Minimum EBITDA......................................................................... 66
ARTICLE VII NEGATIVE COVENANTS............................................................................ 66
Section 7.1 Indebtedness........................................................................... 66
Section 7.2 Negative Pledge........................................................................ 67
Section 7.3 Fundamental Changes.................................................................... 67
Section 7.4 Investments, Loans, Acquisitions, Etc. ................................................ 68
Section 7.5 Restricted Payments.................................................................... 69
Section 7.6 Sale of Assets......................................................................... 69
Section 7.7 Transactions with Affiliates........................................................... 70
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Section 7.8 Restrictive Agreements....................................................................... 70
Section 7.9 Sale and Leaseback Transactions.............................................................. 70
Section 7.10 Hedging Transactions..................................................................... 71
Section 7.11 Amendment to Organizational Documents.................................................... 71
Section 7.12 Accounting Changes; Change of Fiscal Year................................................ 71
Section 7.13 Location of Assets in Other Jurisdictions................................................ 71
ARTICLE VIII EVENTS OF DEFAULT.................................................................................. 72
Section 8.1 Events of Default............................................................................ 72
ARTICLE IX THE CANADIAN ADMINISTRATIVE AGENT AND FUNDING AGENT.................................................. 75
Section 9.1 Appointment of Canadian Administrative Agent................................................. 75
Section 9.2 Nature of Duties of Canadian Administrative Agent and Funding Agent.......................... 76
Section 9.3 Lack of Reliance on the Canadian Administrative Agent or the Funding Agent................... 76
Section 9.4 Certain Rights of the Canadian Administrative Agent and the Funding Agent.................... 77
Section 9.5 Reliance by Canadian Administrative Agent and the Funding Agent.............................. 77
Section 9.6 The Canadian Administrative Agent and the Funding Agent in their Individual Capacities....... 77
Section 9.7 Successor Canadian Administrative Agent and Successor Funding Agent.......................... 78
Section 9.8 Authorization to Execute other Loan Documents................................................ 78
Section 9.9 Acknowledgements Regarding Collateral Documents.............................................. 79
Section 9.10 Deliveries Under U.S. Revolving Credit Agreement......................................... 79
ARTICLE X NOTICES............................................................................................... 79
Section 10.1 Notices.................................................................................. 79
Section 10.2 Waiver; Amendments....................................................................... 82
Section 10.3 Expenses; Indemnification................................................................ 83
Section 10.4 Successors and Assigns................................................................... 85
Section 10.5 Governing Law; Jurisdiction; Consent to Service of Process............................... 88
Section 10.6 Right of Setoff.......................................................................... 88
Section 10.7 Counterparts; Integration................................................................ 89
Section 10.8 Survival................................................................................. 89
Section 10.9 Severability............................................................................. 89
Section 10.10 Interest Rate Limitation................................................................. 90
Section 10.11 Confidentiality.......................................................................... 90
Section 10.12 Waiver of Effect of Corporate Seal....................................................... 91
Section 10.13 Lenders' U.S. Revolving Credit Agreement Obligations..................................... 91
Section 10.14 Judgment Currency........................................................................ 91
Section 10.15 This Agreement to Govern................................................................. 92
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Schedules
Schedule I - Applicable Margin and Applicable Percentage
Schedule II - Real Property
Schedule 4.3 - Excluded Contractual Obligations
Schedule 4.5(a) - Litigation
Schedule 4.5(b) - Environmental Matters
Schedule 4.12 - Subsidiaries and Affiliates
Schedule 4.14 - Indebtedness
Schedule 4.17 - Assets and Liabilities of Dormant Companies
Schedule 7.2 - Existing Liens
Schedule 7.4 - Existing Investments
Exhibits
Exhibit A - Form of Assignment and Acceptance
Exhibit B-2 - Form of U.S. Pledge Agreement
Exhibit C - Form of Revolving Credit Note
Exhibit D-1A - Form of Canadian Security Agreement
Exhibit D-1B - Form of Deed of Movable Hypothec
Exhibit D-2 - Form of U.S. Security Agreement
Exhibit F - Form of Swingline Note
Exhibit G - Form of U.S. Trademark Security Agreement
Exhibit H - Form of U.S. Patent Security Agreement
Exhibit I - Form of Opinion of Counsel to Loan Parties
Exhibit 2.3 - Form of Notice of Revolving Borrowing
Exhibit 2.5 - Form of Notice of Swingline Borrowing
Exhibit 2.7 Form of Notice of Continuation/Conversion
CANADIAN REVOLVING CREDIT AGREEMENT
THIS CANADIAN REVOLVING CREDIT AGREEMENT (this "AGREEMENT") is made
and entered into as of December 10, 2004 by and among EMS TECHNOLOGIES CANADA,
LTD., a corporation incorporated under the laws of Canada (the "BORROWER"), EMS
TECHNOLOGIES, INC., a Georgia corporation (the "PARENT"), the several banks and
other financial institutions from time to time party hereto (the "LENDERS") and
BANK OF AMERICA, NATIONAL ASSOCIATION (CANADA BRANCH) in its capacity as Funding
Agent for the Lenders (the "FUNDING AGENT") and BANK OF AMERICA, NATIONAL
ASSOCIATION (CANADA BRANCH) in its capacity as Canadian Administrative Agent for
the Lenders (the "CANADIAN ADMINISTRATIVE AGENT").
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the Lenders establish a
U.S.$30,000,000 revolving credit facility in favour of the Borrower; and
WHEREAS, subject to the terms and conditions of this Agreement, the
Lenders severally, to the extent of their respective Commitments are willing to
establish the requested revolving credit facility for the Borrower;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Borrower, the Parent, the Lenders, the Funding
Agent and the Canadian Administrative Agent agree as follows:
ARTICLE I
DEFINITIONS; CONSTRUCTION
SECTION 1.1 DEFINITIONS
In addition to the other terms defined herein, the following terms used
herein shall have the meanings herein specified (to be equally applicable to
both the singular and plural forms of the terms defined):
"ACQUISITION" shall mean any acquisition, whether by stock or other equity
purchase, asset purchase, merger, amalgamation, consolidation or otherwise of a
Person, of all or substantially all of the assets of a Person or a business line
or division of a Person.
"ADJUSTED LIBOR" shall mean, with respect to each Interest Period for a
Eurodollar Borrowing, the rate per annum obtained by multiplying (a) LIBOR for
such Interest Period by (b) the Statutory Reserve Rate.
"ADMINISTRATIVE QUESTIONNAIRE" shall mean, with respect to each Lender, an
administrative questionnaire in the form provided by the Canadian Administrative
Agent and submitted to the Canadian Administrative Agent duly completed by such
Lender.
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"AFFILIATE" shall mean, as to any Person, any other Person that directly, or
indirectly through one or more intermediaries, Controls, is Controlled by, or is
under common Control with, such Person.
"AGGREGATE REVOLVING COMMITMENTS" shall mean the sum of the Revolving
Commitments of all Lenders at any time outstanding. On the Closing Date, the
Aggregate Revolving Commitments shall equal U.S.$30,000,000.
"APPLICABLE LAW" shall mean, in respect of any Person, property, transaction,
event or other matter, as applicable, all laws, rules, statutes, regulations,
treaties, orders, judgments and decrees and all official directives, rules,
guidelines, orders, policies and other requirements of any Governmental
Authority and shall also include any interpretation of the Law or any part of
the Law by any Person having jurisdiction over it or charged with its
administration or interpretation in each case having the force of law
(collectively the "Law") relating or applicable to such Person, property,
transaction, event or other matter.
"APPLICABLE LENDING OFFICE" shall mean, for each Lender and for each Type of
Loan, the "Lending Office" of such Lender (or an Affiliate of such Lender)
designated for such Type of Loan in the Administrative Questionnaire submitted
by such Lender or such other office of such Lender (or an Affiliate of such
Lender) as such Lender may from time to time specify to the Funding Agent and
the Borrower as the office by which its Loans of such Type are to be made and
maintained.
"APPLICABLE MARGIN" shall mean, as of any date, with respect to all Eurodollar
Loans and all Base Rate Loans outstanding on any date, the percentage per annum
determined by reference to the applicable Leverage Ratio in effect on such date
as set forth on Schedule I attached hereto, as adjusted and otherwise determined
from time to time in accordance with Section 2.14.
"APPLICABLE PERCENTAGE" shall mean, at any date, with respect to the commitment
fee or the letter of credit fee, as the case may be, the percentage per annum
determined by reference to the applicable Leverage Ratio in effect on such date
as set forth on Schedule I attached hereto, as adjusted and otherwise determined
from time to time in accordance with Section 2.14.
"APPLICABLE PLEDGE AMOUNT" shall mean, in respect of the amount of capital stock
or other equity interest of any Non-U.S. Subsidiary to be pledged to the U.S.
Collateral Agent, pursuant to the U.S. Pledge Agreement, the lesser of (a) 65%
of all outstanding capital stock or other equity interest of such Non-U.S.
Subsidiary and (b) the total amount of all outstanding capital stock or other
equity interest of such Non-U.S. Subsidiary owned by the Parent and its U.S.
Subsidiaries.
"APPROVED FUND" shall mean any Person (other than a natural Person) that is (or
will be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of its
business and that is administered or managed by (a) a Lender, (b) an Affiliate
of a Lender or (c) an entity or an Affiliate of an entity that administers or
manages a Lender.
"ASSET DISPOSITION" shall have the meaning assigned to that term in Section 7.6.
"ASSIGNMENT AND ACCEPTANCE" shall mean an assignment and acceptance entered into
by a Lender and an assignee (with the consent of any party whose consent is
required by Section 10.4(b)) and
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accepted by the Funding Agent, in the form of Exhibit A attached hereto or any
other form approved by the Funding Agent.
"AVAILABILITY PERIOD" shall mean the period from the Closing Date to the
Commitment Termination Date.
"BASE RATE" shall mean the higher of (a) the floating annual rate of interest
established by the Funding Agent from time to time as the reference rate it will
use to determine rates of interest on Canadian Dollar loans to customers in
Canada and designated as its prime rate, as in effect on such day (it being
acknowledged and agreed that such rate may not be the Funding Agent's best or
lowest rate); and (b) the CDOR Rate applicable on such day plus 1%.
"BORROWER" shall have the meaning given such term in the introductory paragraph
hereof.
"BORROWING" shall mean a borrowing consisting of (a) Loans of the same Class and
Type, made, converted or continued on the same date and in the case of
Eurodollar Loans, as to which a single Interest Period is in effect, or (b) a
Swingline Loan.
"BUSINESS DAY" shall mean (a) any day other than a Saturday or Sunday or other
day on which commercial banks in Toronto, Ontario are authorized or required by
law to close and (b) if such day relates to a Borrowing of, a payment or
prepayment of principal or interest on, a conversion of or into, or an Interest
Period for, a Eurodollar Loan or a notice with respect to the foregoing, any day
on which dealings in Canadian Dollars or U.S. Dollars are carried on the London
interbank market.
"CANADIAN ADMINISTRATIVE AGENT" shall have the meaning assigned to such term in
the opening paragraph hereof.
"CANADIAN COLLATERAL" shall mean all property with respect to which any Lien has
been granted (or purported to be granted) by the Borrower pursuant to the
Canadian Security Agreement.
"CANADIAN COLLATERAL AGENT" shall mean Bank of America, National Association
(Canada Branch) in its capacity as "Canadian Collateral Agent" under and as
defined in the Intercreditor Agreement, or any other successor who shall become
Canadian Collateral Agent pursuant to terms of the Intercreditor Agreement.
"CANADIAN DOLLAR(s)" and the sign "CDN. $" shall mean lawful money of Canada.
"CANADIAN DOLLAR EQUIVALENT" of any amount expressed in a currency that is not
Canadian Dollars, means, on any date, the equivalent amount of Canadian Dollars,
after giving effect to a conversion of such amount of such non-Canadian currency
to Canadian Dollars at the buy spot rate quoted for wholesale transactions by
the Funding Agent at approximately 11:00 a.m. on such date of determination in
accordance with its normal practices.
"CANADIAN INTELLECTUAL PROPERTY SECURITY AGREEMENT" shall mean an intellectual
property security agreement in form and content reasonably satisfactory to the
Canadian Administrative Agent.
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"CANADIAN PENSION PLAN" shall mean any "pension plan" or "plan" that is subject
to the funding requirements of the Pension Benefits Act (Ontario) or applicable
pension benefits legislation in any other Canadian jurisdiction and is
applicable to employees resident in Canada of the Borrower or its Subsidiaries.
"CANADIAN SECURITY AGREEMENTS" shall mean the Canadian Security Agreement in
favour of the Canadian Collateral Agent in substantially the form of Exhibit
D-1A and the Deed of Movable Hypothec (the "Deed of Movable Hypothec") in favour
of the Canadian Collateral Agent in substantially the form of Exhibit D-1B.
"CANADIAN WELFARE PLAN" shall mean any medical, health, hospitalization,
insurance or other employee benefit or welfare plan or arrangement, other than a
Canadian Pension Plan, applicable to employees resident in Canada of the
Borrower or its Subsidiaries, but excludes any statutory plans with which the
Borrower or its Subsidiaries are required to comply, including, without
limitation, the Canada Pension Plan, the Quebec Pension Plan and plans
administered pursuant to applicable provincial health, workers' compensation and
employment insurance legislation.
"CAPITAL LEASE OBLIGATIONS" of any Person shall mean all obligations of such
Person to pay rent or other amounts under any lease (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 the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"CASUALTY EVENT" shall mean, with respect to any property (including any
interest in property) of the Borrower or any of its Subsidiaries, any loss of,
damage to, or condemnation or other taking of, such property for which the
Borrower or such Subsidiary receives insurance proceeds, proceeds of a
condemnation award or other compensation.
"CDOR RATE" means on any day the annual rate of interest which is the rate
determined as being the arithmetic average of the quotations of all institutions
listed in respect of the "BA 1 Month" Rate for Canadian Dollar denominated
bankers' acceptances displayed and identified as such on the "Reuters Screen
CDOR Page" (as defined in the International Swap Dealer Association, Inc.
definitions, as modified and amended from time to time) as of 10:00 a.m.
Toronto, Ontario local time on such day and, if such day is not a Business Day,
then on the immediately preceding Business Day (as adjusted by the Funding Agent
after 10:00 a.m. Toronto, Ontario local time to reflect any error in a posted
rate of interest or in the posted average annual rate of interest); and if such
rates are not available on the Reuters Screen CDOR Page on any particular day,
then the CDOR Rate on that day shall be calculated as the 30 day rate applicable
to Canadian Dollar denominated bankers' acceptances quoted by the Funding Agent
as of 10:00 a.m. Toronto, Ontario local time on such day; or if such day is not
a Business Day, then as quoted by the Funding Agent on the immediately preceding
Business Day.
"CHANGE IN CONTROL" shall mean the occurrence of one or more of the following
events: (a) any sale, lease, exchange or other transfer (in a single transaction
or a series of related transactions) of all or substantially all of the assets
of the Borrower or the Parent to any Person or "group" (within the meaning of
the Securities Exchange Act of 1934 and the rules of the Securities and Exchange
Commission as in effect on the date hereof) (excluding, for greater certainty,
the sale of Space &
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Technology/Montreal), (b) the acquisition of ownership, directly or indirectly,
beneficially or of record, by any Person or "group" (within the meaning of the
U.S. Securities Exchange Act of 1934 and the rules of the Securities and
Exchange Commission thereunder as in effect on the date hereof) of 30% or more
of the outstanding shares of the voting stock of the Borrower or the Parent; or
(c) occupation of a majority of the seats (other than vacant seats) on the board
of directors of the Borrower or the Parent by Persons who were neither (i)
nominated by the then current board of directors or (ii) appointed by directors
so nominated.
"CHANGE IN LAW" shall mean (a) the adoption of any applicable law, rule or
regulation after the date of this Agreement, (b) any change in any applicable
law, rule or regulation, or any change in the interpretation or application
thereof, by any Governmental Authority after the date of this Agreement, or (c)
compliance by any Lender (or its Applicable Lending Office) or the Issuing Bank
(or for purposes of Section 2.17(b), by such Lender's or the Issuing Bank's
holding company, if applicable) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.
"CIBC" shall mean Canadian Imperial Bank of Commerce.
"CLASS", when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are Revolving Loans or Swingline
Loans and when used in reference to any Commitment, refers to whether such
Commitment is a Revolving Commitment or a Swingline Commitment.
"CLOSING DATE" shall mean December 13, 2004.
"CODE" shall mean the Internal Revenue Code of 1986, as amended and in effect
from time to time.
"COLLATERAL" shall mean any property directly or indirectly securing any of the
Obligations or any other obligation of a Person under or in respect of any Loan
Document to which it is a party, and includes without limitation, all
"Collateral" under and as defined in the Security Agreements and all "Pledged
Collateral" and "Collateral" under and as defined under the U.S. Pledge
Agreement and the Canadian Pledge Agreement, respectively.
"COLLATERAL DOCUMENTS" shall mean the Security Agreements, the Pledge
Agreements, each Real Estate Document, the Canadian Intellectual Property
Security Agreement, the U.S. Trademark Security Agreement or the U.S. Patent
Security Agreement, or any or all of the foregoing and any other agreement or
instrument now or hereafter existing pursuant to which Liens are granted to the
U.S. Administrative Agent, the U.S. Collateral Agent, the Funding Agent, the
Canadian Administrative Agent or the Canadian Collateral Agent to secure any of
the Obligations.
"COMMITMENT" shall mean a Revolving Commitment or a Swingline Commitment or any
combination thereof (as the context shall permit or require).
"COMMITMENT TERMINATION DATE" shall mean the earliest of (a) December 9, 2007
and (b) the date on which all amounts outstanding under this Agreement have been
declared or have automatically become due and payable (whether by acceleration
or otherwise).
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"CONSOLIDATED EBITDA" shall mean, for the Consolidated Parties for any period,
an amount equal to the sum of (a) Consolidated Net Income for such period plus
(b) without duplication and only to the extent deducted in determining
Consolidated Net Income for such period, (i) Consolidated Interest Expense, (ii)
income tax expense, (iii) depreciation and amortization, and (iv) such
"add-backs" or adjustments as are scheduled and approved by the Canadian
Administrative Agent in its sole discretion.
"CONSOLIDATED FIXED CHARGES" shall mean, for the Consolidated Parties for any
Test Period, the sum (without duplication) of: (a) Consolidated Interest Expense
for such Test Period, (b) scheduled principal payments (or the equivalent
thereof) made on or in respect of Consolidated Total Funded Debt during such
Test Period and (c) (i) dividends and other distributions to holders of capital
stock, options, warrants and related instruments of the Borrower and (ii)
payments made with respect to the purchase, redemption, retirement, defeasance
or other acquisition of capital stock, options, warrants and related instruments
of the Parent, made or paid during such Test Period.
"CONSOLIDATED INTEREST EXPENSE" shall mean, for the Consolidated Parties for any
period determined on a consolidated basis in accordance with GAAP, the sum of
(a) total cash interest expense, including without limitation the interest
component of any payments in respect of Capital Lease Obligations capitalized or
expensed during such period (whether or not actually paid during such period)
plus (b) the net amount payable (or minus the net amount receivable) under
Hedging Transactions relating to interest rate ▇▇▇▇▇▇ during such period
(whether or not actually paid or received during such period).
"CONSOLIDATED NET INCOME" shall mean, for any period, the net income (or loss)
of the Consolidated Parties for such period determined on a consolidated basis
in accordance with GAAP, but excluding therefrom (to the extent otherwise
included therein): (a) any extraordinary gains or losses, (b) any gains
attributable to write-ups of assets, (c) any equity interest of any Consolidated
Party in the unremitted earnings of any Person that is not a Subsidiary, (d) any
income (or loss) of any Person accrued prior to the date such Person becomes a
Subsidiary or is merged into or amalgamated or consolidated with the Parent or
any Subsidiary of the Parent or the date that such Person's assets are acquired
by the Parent or any such Subsidiary and (e) any income of any Subsidiary of the
Parent which is not the Borrower or a Guarantor to the extent the payment of
such income in the form of dividends or other distributions to either the Parent
or any Subsidiary of the Parent is then prohibited, whether on account of
restrictions in such Subsidiary's organizational documents or restrictions in
any agreement, document, contract, deed or other instrument applicable to such
Subsidiary.
"CONSOLIDATED PARTIES" shall mean, at any time, the Parent and each Consolidated
Subsidiary of the Parent.
"CONSOLIDATED SUBSIDIARY" shall mean, at any date, any Person that, in
accordance with GAAP, would or should be consolidated in the Parent's
consolidated financial statements on such date.
"CONSOLIDATED TOTAL FUNDED DEBT" shall mean, at any time, all then outstanding
obligations, liabilities and indebtedness of the Consolidated Parties on a
consolidated basis of the types described in the definition of Indebtedness
(other than clause (j) of the definition thereof), including, without
limitation, all Obligations under the Loan Documents; provided, however, that
Consolidated Total
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Funded Debt shall not included any obligations of the Borrower owing to CIBC
described in clause (n) of the defined term Permitted Encumbrances.
"CONTRACTUAL OBLIGATIONS" shall mean, as to any Person, any provision of any
security issued by such Person or any agreement, instrument or other undertaking
to which such Person is a party or by which such Person or any of its properties
is bound.
"CONTROL" shall mean the power, directly or indirectly, either to (a) vote 5% or
more of securities having ordinary voting power for the election of directors
(or persons performing similar functions) of a Person or (b) direct or cause the
direction of the management and policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise. The terms
"CONTROLLING", "CONTROLLED BY", and "UNDER COMMON CONTROL WITH" have meanings
correlative thereto.
"DEBT ISSUANCE" shall mean the issuance or sale by the Borrower or any of its
Subsidiaries of any debt securities or similar indebtedness, whether in a
private or public offering or otherwise; provided, however, that nothing
contained in this definition shall be deemed or construed to permit any Debt
Issuance that is not otherwise expressly permitted pursuant to the terms hereof.
"DEFAULT" shall mean any condition or event that, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
"DEFAULT INTEREST" shall have the meaning assigned to that term in Section
2.12(c).
"DEFAULTING LENDER" shall mean any Lender with respect to which a Lender Default
is in effect.
"DORMANT COMPANY" means Netsat 28 Company, LLC, a Delaware limited liability
company.
"ELIGIBLE ASSIGNEE" shall mean (a) a Lender; (b) an Affiliate of a Lender; (c)
an Approved Fund; and (d) any other Person (other than a natural Person)
approved by the Canadian Administrative Agent, and unless an Event of Default
has occurred and is continuing, the Borrower (each such approval not to be
unreasonably withheld or delayed). If the consent of the Borrower to an
assignment or to an Eligible Assignee is required hereunder (including a consent
to an assignment which does not meet the minimum assignment thresholds specified
in Section 10.4(b)), the Borrower shall be deemed to have given its consent five
Business Days after the date notice thereof has actually been delivered by the
assigning Lender (through the Canadian Administrative Agent) to the Borrower,
unless such consent is expressly refused by the Borrower prior to such fifth
Business Day.
"ENVIRONMENTAL LAWS" shall mean all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by or with any Governmental Authority, relating in
any way to the environment, preservation or reclamation of natural resources,
the management, Release or threatened Release of any Hazardous Material or to
health and safety matters.
"ENVIRONMENTAL LIABILITY" shall mean any liability, contingent or otherwise
(including any liability for damages, costs of environmental investigation and
remediation, costs of administrative oversight, fines, natural resource damages,
penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) any actual or alleged violation of
any Environmental
- 8 -
Law, (b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) any actual or alleged exposure to any
Hazardous Materials, (d) the Release or threatened Release of any Hazardous
Materials or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"EQUITY OFFERING" means a private or public offering of any capital stock of the
Parent, or any debt security convertible into or exchangeable for capital stock
of the Parent (whether conditionally or unconditionally convertible or
exchangeable or convertible currently or in the future), or any debt security
issued with a warrant or other instrument conferring upon its owner the right to
purchase capital stock of the Parent, in each case pursuant to an effective
registration statement filed with the Securities and Exchange Commission in
accordance with the Securities Act of 1933, as amended. In no event shall an
Equity Offering include any issuances of stock and stock options to employees
and directors of the Parent or its Subsidiaries.
"EURODOLLAR" when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, bears interest at a rate
determined by reference to the Adjusted LIBOR and the Applicable Margin.
"EVENT OF DEFAULT" shall have the meaning provided in Article VIII.
"EXCHANGE ACT" shall have the meaning provided in the defined term "Change of
Control".
"EXCLUDED TAXES" shall mean with respect to the Canadian Administrative Agent,
the Funding Agent, any Lender, the Issuing Bank or any other recipient of any
payment to be made by or on account of any obligation of the Borrower hereunder,
(a) income or franchise taxes imposed on (or measured by) its net income by the
Government of Canada, or by the jurisdiction under the laws of which such
recipient is organized or in which its principal office is located or, in the
case of any Lender, in which its applicable lending office is located, (b) any
branch profits taxes imposed by the Government of Canada or any similar tax
imposed by any other jurisdiction in which any Lender is located and (c) in the
case of a Foreign Lender, any withholding tax that (i) is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party
to this Agreement or (ii) is imposed on amounts payable to such Foreign Lender
at any time that such Foreign Lender designates a new lending office, other than
taxes that have accrued prior to the designation of such lending office that are
otherwise not Excluded Taxes and (iii) is attributable to such Foreign Lender's
failure to comply with Section 2.19(e). For greater certainty, for purposes of
item (c) above, a withholding tax includes any Tax that a Foreign Lender is
required to pay pursuant to Part XIII of the Income Tax Act (Canada) or any
successor provision thereto.
"EXISTING LENDERS" means each of SunTrust Bank and CIBC.
"FIXED CHARGE COVERAGE RATIO" shall mean, for any Test Period, the ratio of (a)
Consolidated EBITDA for such Test Period minus cash payments for all federal,
state, provincial, local, foreign and other income taxes paid by the Loan
Parties during such Test Period minus all capital expenditures (determined in
accordance with GAAP) for such Test Period to the extent paid in cash to (b)
Consolidated Fixed Charges for such Test Period.
"FOREIGN LENDER" means any Lender that is not organized under the laws of the
jurisdiction in which the Borrower is resident for tax purposes and that is not
otherwise considered or deemed in
- 9 -
respect of any amount payable to it hereunder or under any Loan Document to be
resident for income tax or withholding tax purposes in the jurisdiction in which
the Borrower is resident for tax purposes by application of the laws of that
jurisdiction. For purposes of this definition Canada and each Province and
Territory thereof shall be deemed to constitute a single jurisdiction and the
United States of America, each State thereof and the district of Columbia shall
be deemed to constitute a single jurisdiction.
"FOREIGN SUBSIDIARY" shall have the meaning assigned to such term in the U.S.
Revolving Credit Agreement.
"FUNDING AGENT" shall have the meaning assigned to such term in the opening
paragraph hereof.
"GAAP" shall mean generally accepted accounting principles in the United States
applied on a consistent basis and subject to the terms of Section 1.3.
"GOVERNMENTAL AUTHORITY" shall mean the government of Canada, any other foreign
country or nation or any political subdivision thereof, whether state,
provincial or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government (whether foreign or domestic).
"GUARANTEE" of or by any Person (the "GUARANTOR") shall mean any legally binding
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "PRIMARY OBLIGOR") in any manner, whether directly or
indirectly and including any obligation, direct or indirect, of the guarantor
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
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 other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued in support of
such Indebtedness or obligation; provided, that the term "Guarantee" shall not
include endorsements for collection or deposits in the ordinary course of
business. The amount of any Guarantee shall be deemed to be an amount equal to
the stated or determinable amount of the primary obligation in respect of which
Guarantee is made or, if not so stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to
perform thereunder) as determined by such Person in good faith. The term
"Guarantee" used as a verb has a corresponding meaning.
"GUARANTEE AGREEMENT" shall mean a guarantee agreement, guaranteeing the
Obligations, in form and content reasonably satisfactory to the Canadian
Administrative Agent, made by each Guarantor in favour of the Canadian
Collateral Agent for the benefit of the Lenders.
"GUARANTOR" shall mean the Parent, LXE Inc., EMS Holdings Inc., 990834 Ontario
Inc., and each other Subsidiary of the Parent that from time to time enters into
a Guarantee Agreement including in accordance with the requirement set forth in
Section 5.10.
- 10 -
"HAZARDOUS MATERIALS" means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos-containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.
"HEDGING OBLIGATIONS" of any Person shall mean any and all obligations of such
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired under (a) any and all Hedging Transactions, (b)
any and all cancellations, buy backs, reversals, terminations or assignments of
any Hedging Transactions and (c) any and all renewals, extensions and
modifications of any Hedging Transactions and any and all substitutions for any
Hedging Transactions.
"HEDGING TRANSACTION" of any Person shall mean any transaction (including an
agreement with respect thereto) now existing or hereafter entered into by such
Person that is a rate swap, basis swap, forward rate transaction, commodity
swap, interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collateral transaction, forward transaction, currency swap
transaction, cross-currency rate swap transaction, currency option or any other
similar transaction (including any option with respect to any of these
transactions) or any combination thereof, whether linked to one or more interest
rates, foreign currencies, commodity prices, equity prices or other financial
measures.
"INDEBTEDNESS" of any Person shall mean, without duplication: (a) obligations of
such Person for borrowed money, (b) obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (c) obligations of such
Person in respect of the deferred purchase price of property or services (other
than trade payables incurred in the ordinary course of business on terms
customary in the trade), (d) obligations of such Person under any conditional
sale or other title retention agreement(s) relating to property acquired by such
Person, (e) Capital Lease Obligations of such Person, (f) obligations,
contingent or otherwise, of such Person in respect of letters of credit,
acceptances or similar extensions of credit, (g) all indebtedness or other
obligations of another Person secured by any Lien on property owned by such
Person, whether or not such indebtedness or obligations have been assumed by
such Person, (h) all obligations of such Person, contingent or otherwise, to
purchase, redeem, retire or otherwise acquire for value any capital stock or
other security of such Person, (i) off-balance sheet liability retained in
connection with asset securitization programs, Synthetic Leases, sale and
leaseback transactions or other similar obligations arising with respect to any
other transaction which is the functional equivalent of or takes the place of
borrowing but which does not constitute a liability on the consolidated balance
sheet of such Person and its Subsidiaries, (j) obligations under any Hedging
Transaction or foreign exchange agreement, and (k) guaranties by such Person of
the type of indebtedness described in clauses (a) through (j) immediately above.
For purposes of determining Indebtedness under clause (j) the obligations of the
Borrower or any Subsidiary in respect to any Hedging Transaction at any time
shall be the maximum aggregate amount (giving effect to any netting agreements)
that the Borrower or such Subsidiary would be required to pay if such Hedging
Transaction were terminated at such time.
"INDEMNIFIED TAXES" shall mean Taxes other than Excluded Taxes.
"INTERCREDITOR AGREEMENT" shall mean that certain Intercreditor Agreement dated
as of the date hereof by and among SunTrust Bank, (in its capacities as U.S.
Administrative Agent, Issuing Bank under the U.S. Revolving Facility and
Swingline Lender under the U.S. Revolving Facility), Bank of
- 11 -
America, National Association (Canada branch) (in its capacities as Canadian
Collateral Agent, Administrative Agent, Issuing Bank and Swingline Lender), the
Lenders, the U.S. Lenders and the other parties thereto.
"INTEREST PERIOD" shall mean (a) with respect to any Eurodollar Borrowing, a
period of one, two, three or six months and (b) with respect to a Swingline
Loan, a period of such duration not to exceed 7 days, as the Borrower may
request and the Swingline Lender may agree in accordance with Section 2.5;
provided, that:
(a) the initial Interest Period for such Borrowing shall commence on the
date of such Borrowing (including the date of any conversion from a
Borrowing of another Type) and each Interest Period occurring
thereafter in respect of such Borrowing shall commence on the day on
which the next preceding Interest Period expires;
(b) if any Interest Period would otherwise end on a day other than a
Business Day, such Interest Period shall be extended to the next
succeeding Business Day, unless, in the case of a Eurodollar
Borrowing, such Business Day falls in another calendar month, in
which case such Interest Period would end on the next preceding
Business Day;
(c) any Interest Period in respect of a Eurodollar Borrowing which
begins on the last Business Day of a calendar month or on a day for
which there is no numerically corresponding day in the calendar
month at the end of such Interest Period shall end on the last
Business Day of such calendar month; and
(d) no Interest Period may extend beyond the Commitment Termination Date
or the Swingline Termination Date, as the case may be.
"INVESTMENT" shall have the meaning given such term in Section 7.4.
"ISSUING BANK" shall mean Bank of America, National Association (Canada branch)
in its capacity as an issuer of Letters of Credit pursuant to Section 2.22, and
its successors and assigns in such capacity.
"JUDGMENT CONVERSION DATE" shall have the meaning given such term in Section
10.14.
"JUDGMENT CURRENCY" shall have the meaning given such term in Section 10.14.
"LC COMMITMENT" shall mean that portion of the Aggregate Revolving Commitments
that may be used by the Borrower for the issuance of Letters of Credit in an
aggregate stated amount not to exceed U.S.$30,000,000.
"LC DISBURSEMENT" shall mean a payment made by the Issuing Bank pursuant to a
Letter of Credit.
"LC DOCUMENTS" shall mean the Letters of Credit and all applications, agreements
and instruments relating to the Letters of Credit.
"LC 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
amount of all LC Disbursements
- 12 -
that have not been reimbursed by or on behalf of the Borrower at such time. The
LC Exposure of any Lender shall be its Pro Rata Share of the total LC Exposure
at such time.
"LENDERS" shall have the meaning assigned to such term in the opening paragraph
of this Agreement and shall include, where appropriate, the Swingline Lender.
"LENDER DEFAULT" shall mean (a) the failure (which has not been cured) of any
Lender to make available its portion of any Borrowing or to fund its portion of
any unreimbursed payment under Section 2.22 or (b) a Lender having notified the
Funding Agent and/or the Borrower that it does not intend to comply with the
obligations under Section 2.2, Section 2.5, and Section 2.22.
"LETTER OF CREDIT" shall mean any standby letter of credit issued pursuant to
Section 2.22 by the Issuing Bank for the account of the Borrower pursuant to the
LC Commitment.
"LEVERAGE RATIO" shall mean, as of any date of determination, the ratio of (a)
Consolidated Total Funded Debt as of such date minus, for any period of
determination from December 31, 2004 through December 31, 2005, all cash and
Permitted Investments held by the Consolidated Parties (excluding (i) any such
cash and/or Permitted Investments subject to any Liens other than in favour of
the Collateral Agent or the Canadian Collateral Agent and (ii) any such cash
and/or Permitted Investments used to satisfy the dispute reserve requirement set
forth in Section 5.13 hereof) plus , any taxes or other costs incurred or to be
incurred by a Foreign Subsidiary in connection with the transfer or repatriation
of such cash and/or Permitted Investments to a Consolidated Party located in the
United States to (b) Consolidated EBITDA for the Test Period; provided, however,
for purposes of Section 2.14 and the defined terms "Applicable Margin" and
"Applicable Percentage", the immediately preceding clause (b) shall be
Consolidated EBITDA for the four fiscal quarters of the Parent ending on or most
recently preceding the date of determination.
"LIBOR" shall mean, for any applicable Interest Period with respect to any
Eurodollar Loan, a rate of interest per annum, calculated on the basis of a 360
day year, equal to:
(a) the simple average (rounded upward, if necessary, to the nearest
whole multiple of 1/100 of one percent) of the rates shown on the
display referred to as the "LIBOR Page" (or any display substituted
therefor) of the Reuters Domestic Money Service with respect to the
banks in the London interbank market named in the display as at
11:00 a.m. (London, England time) on the second Business Day prior
to the first day of the Interest Period, for a deposit period
comparable to the Interest Period; or
(b) if a rate is not determinable pursuant to clause (a) of this
definition at the relevant time, the rate expressed as a rate of
interest per annum on the basis of a year of 360 days, at which
Canadian Dollars are offered by the principal lending office in
London, England of the Funding Agent to prime banks in the London
interbank market at approximately 11:00 a.m. (London, England time)
on the second Business Day prior to the first day of the Interest
Period, in an amount similar to the LIBOR Loan and for a deposit
period comparable to the Interest Period; or
(c) if a rate is not determinable pursuant to clause (a) or (b) of this
definition at the relevant time, the Base Rate.
- 13 -
"LIEN" shall mean any mortgage, pledge, security interest, lien (statutory or
otherwise), charge, encumbrance, hypothecation, assignment, deposit arrangement,
or other arrangement having the practical effect of the foregoing or any
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including any conditional sale or other title
retention agreement and any capital lease having the same economic effect as any
of the foregoing).
"LOAN DOCUMENTS" shall mean, collectively, this Agreement, the Notes, the LC
Documents, all Notices of Borrowing, all Notices of Conversion/Continuation, all
Guarantee Agreements, the Collateral Documents required to be entered into
pursuant to the terms hereof, and any and all other instruments, agreements,
documents and writings executed in connection with any of the foregoing.
"LOAN PARTIES" shall mean the Borrower and the Guarantors.
"LOANS" shall mean all Revolving Loans and Swingline Loans in the aggregate or
any of them, as the context shall require.
"▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇" means ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ and Associates Ltd.
"▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ CONTRACT" means RADARSAT-2 Payload Subcontract
#SC29352RC/SC29352RC, as amended between the Borrower and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
originally entered into on September 1, 1998.
"MATERIAL ADVERSE EFFECT" shall mean, with respect to any event, act, condition
or occurrence of whatever nature (including any adverse determination in any
litigation, arbitration, or governmental investigation or proceeding), a
material adverse change in, or a material adverse effect on, (a) the business,
operations, condition (financial or otherwise), prospects, assets, income or
liabilities of the Consolidated Parties taken as a whole, (b) the ability of the
Borrower or any Guarantor to perform any of its respective obligations under the
Loan Documents, (c) the rights, remedies or benefits available to the Canadian
Administrative Agent, the Funding Agent, the Canadian Collateral Agent, the
Issuing Bank and/or the Lenders under any of the Loan Documents, (d) the
legality, validity, binding effect or enforceability of any of the Loan
Documents or (e) the attachment, perfection or priority of any Lien of the
Canadian Collateral Agent under the Security Agreements, the Pledge Agreements
or any other Loan Document.
"MATERIAL SUBSIDIARY" shall mean at any time of determination any direct or
indirect Subsidiary of the Parent having: (a) assets in an amount equal to
U.S.$1,000,000 or more; (b) revenues in an amount which equals or exceeds 2.5%
of the total revenues of the Parent and its Subsidiaries on a consolidated basis
for the 12-month period ending on the last day of the most recent fiscal quarter
of the Parent at such time; or (c) revenues in an amount which, together with
the revenues of all other direct or indirect Subsidiaries which are not Material
Subsidiaries, equals or exceeds 10% of the total revenues of the Parent and its
Subsidiaries on a consolidated basis for the 12-month period ending on the last
day of the most recent fiscal quarter of the Parent at such time.
"MOODY'S" shall mean ▇▇▇▇▇'▇ Investors Service, Inc.
"NET PROCEEDS" shall mean (a) in the case of any Debt Issuance, the aggregate
cash proceeds received by the Borrower and its Subsidiaries less Transaction
Costs, (b) in the case of any Casualty
- 14 -
Event, the aggregate cash proceeds of insurance, condemnation awards and other
compensation received by the Borrower and its Subsidiaries in respect of such
Casualty Event less reasonable fees and expenses incurred by the Borrower and
its Subsidiaries in connection therewith, (c) in the case of any Asset
Disposition, the aggregate amount of all cash payments at any time received by
the Borrower and its Subsidiaries in connection with such Asset Disposition less
(i) Transaction Costs, (ii) Indebtedness to the extent the amount thereof is
secured by a Lien on the property that is the subject of such Asset Disposition
and the transferee of (or holder of the Lien on) such property requires that
such Indebtedness be repaid as a condition to such Asset Disposition, and (iii)
any income or transfer taxes paid or reasonably estimated by the Borrower to be
payable by the Borrower and its Subsidiaries as a result of such Asset
Disposition and (d) in the case of any Equity Offering, the aggregate cash
proceeds received by the Borrower and its Subsidiaries less Transaction Costs.
"NET WORTH" shall mean, as of any date, the total shareholders' equity of the
Consolidated Parties that would be reflected on the Borrower's consolidated
balance sheet as of such date prepared in accordance with GAAP.
"NON-DEFAULTING LENDER" shall mean and include each Lender other than a
Defaulting Lender.
"NON-U.S. SUBSIDIARY" shall mean any direct or indirect Subsidiary of the Parent
that is organized under the laws of a jurisdiction other than United States of
America or any political subdivision thereof.
"NOTES" shall mean, collectively, the Revolving Credit Notes and the Swingline
Note.
"NOTICES OF BORROWING" shall mean, collectively, the Notices of Revolving
Borrowing and the Notices of Swingline Borrowing.
"NOTICE OF CONVERSION/CONTINUATION" shall mean the notice given by the Borrower
to the Funding Agent in respect of the conversion or continuation of an
outstanding Borrowing as provided in Section 2.10(b) hereof.
"NOTICE OF REVOLVING BORROWING" shall have the meaning as set forth in Section
2.3.
"NOTICE OF SWINGLINE BORROWING" shall have the meaning as set forth in Section
2.5.
"OBLIGATIONS" shall mean all amounts owing by the Borrower or the Guarantors to
the Canadian Administrative Agent, the Funding Agent, the Canadian Collateral
Agent, the Issuing Bank or any Lender (including the Swingline Lender) pursuant
to or in connection with this Agreement or any other Loan Document, including
without limitation, all principal, interest (including any interest accruing
after the filing of any petition in bankruptcy or the commencement of any
insolvency, reorganization or like proceeding relating to the Borrower, whether
or not a claim for post-filing or post-petition interest is allowed in such
proceeding), all reimbursement obligations, fees, expenses, indemnification and
reimbursement payments, costs and expenses (including all actual and reasonable
fees and expenses of counsel to the Canadian Administrative Agent, the Funding
Agent, the Canadian Collateral Agent and any Lender (including the Swingline
Lender) incurred pursuant to this Agreement or any other Loan Document), whether
direct or indirect, absolute or contingent, liquidated or unliquidated, now
existing or hereafter arising hereunder or thereunder, and all
- 15 -
Hedging Obligations owed to the Canadian Administrative Agent, the Funding
Agent, any Lender or any of their Affiliates incurred in compliance with Section
7.10 and all obligations and liabilities incurred in connection with collecting
and enforcing the foregoing, together with all renewals, extensions,
modifications or refinancings thereof.
"OTHER TAXES" shall mean any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement or any other Loan Document.
"PARENT" shall mean EMS Technologies, Inc.
"PARTICIPANT" shall have the meaning set forth in Section 10.4(d).
"PAYMENT OFFICE" shall mean the office of the Funding Agent located at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, or such other location as to which
the Funding Agent shall have given written notice to the Borrower and the other
Lenders.
"PAYOFF LETTER" means a letter, in form and substance reasonably satisfactory to
the Canadian Administrative Agent, from all Existing Lenders, notifying the
Canadian Administrative Agent and the Borrower of the amount necessary to repay
in full all of the obligations of the Borrower and its Subsidiaries to the
Existing Lenders and committing to terminate and release any and all Liens, if
any, existing in favour of the Existing Lenders in the properties and assets of
the Borrower or any Subsidiary.
"PERMITTED ENCUMBRANCES" shall mean:
(a) Liens imposed by law for taxes, rates, assessments or other charges
of Governmental Authorities not yet due or which are being contested
in good faith by appropriate proceedings and with respect to which
adequate reserves are being maintained in accordance with GAAP;
(b) inchoate or statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen, craftsmen, builders,
contractors, architects, engineers, subcontractors, and other Liens
imposed by law created in the ordinary course of business for
amounts not yet due or which are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves
are being maintained in accordance with GAAP;
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance,
employment insurance and other social security laws or regulations;
(d) deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature, in each case in the ordinary
course of business and Liens resulting therefrom;
- 16 -
(e) judgment and attachment liens not giving rise to an Event of Default
or Liens created by or existing from any litigation or legal
proceeding that are currently being contested in good faith by
appropriate proceedings and with respect to which adequate reserves
are being maintained in accordance with GAAP; and
(f) servitudes, easements, zoning restrictions, rights-of-way and
similar encumbrances on real property imposed by law or arising in
the ordinary course of business that do not secure any monetary
obligations and do not materially detract from the value of the
affected property or materially interfere with the ordinary conduct
of business of the Borrower and its Subsidiaries taken as a whole;
(g) title defects or irregularities which are of a minor nature and
which do not materially reduce the value of the affected asset or
materially interfere with the use of such asset;
(h) the reservations, limitations, provisos and conditions, if any,
expressed in any original grant from the Crown of any real property
or any interest therein which do not materially reduce the value of
the affected asset or materially interfere with the use of such
asset;
(i) Liens given to a public utility or any municipality or governmental
or other public authority when required by such utility or other
authority in connection with the operation of business or the
ownership of assets which do not materially reduce the value of the
affected asset or materially interfere with the use of such asset;
(j) the right reserved to or vested in any Government Authority by any
statutory provision or by the terms of any lease, licence,
franchise, grant or permit of the Person, to terminate any such
lease, licence, franchise, grant or permit, or to require annual or
other payments as a condition to the continuance thereof;
(k) Liens in favour of the Canadian Collateral Agent, U.S. Collateral
Agent or Canadian Administrative Agent created by the Collateral
Documents;
(l) the Liens disclosed in Schedule 7.2; provided that such Lien shall
not apply to any other property or asset of the Borrower or any
Subsidiary;
(m) other Liens not referred to in the preceding clauses which have been
expressly consented to in writing by the Canadian Administrative
Agent; and
(n) Liens in favour of CIBC in cash on deposit with CIBC in deposit
account number 05-59911 Transit #2 to secure obligations of the
Canadian Borrower described under that certain letter agreement
dated December 13, 2004 between CIBC and the Borrower; provided,
that such cash collateral shall not at any time exceed
U.S.$4,709,369.
"PERMITTED INVESTMENTS" shall mean:
- 17 -
(a) direct obligations of, or obligations the principal of and interest
on which are unconditionally guaranteed by, the United States or
Canada (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States or the
Government of Canada), in each case maturing within one year from
the date of acquisition thereof;
(b) commercial paper having the highest rating, at the time of
acquisition thereof, of S&P or ▇▇▇▇▇'▇ and in either case maturing
within 12 months from the date of acquisition thereof;
(c) certificates of deposit, bankers' acceptances and time deposits
maturing within 360 days of the date of acquisition thereof issued
or guaranteed by or placed with, and money market deposit accounts
issued or offered by, any domestic office of any commercial bank
organized under the laws of the United States or any state thereof
or the laws of Canada which has a combined capital and surplus and
undivided profits of not less than U.S.$500,000,000;
(d) fully collateralized repurchase agreements with a term of not more
than 30 days for securities described in clause (a) above and
entered into with a financial institution satisfying the criteria
described in clause (c) above;
(e) mutual funds investing solely in any one or more of the Permitted
Investments described in clauses (a) through (d) above; and
(f) Investments in CIBC to the extent provided in clause (n) of the
defined term Permitted Encumbrances.
"PERSON" shall mean any individual, partnership, firm, corporation, association,
joint venture, limited liability company, trust or other entity, or any
Governmental Authority.
"PLEDGE AGREEMENT" shall mean a securities pledge agreement in favour of the
Canadian Collateral Agent in form and content satisfactory to the Canadian
Administrative Agent.
"PLEDGE AGREEMENTS" shall mean the U.S. Pledge Agreement and the Pledge
Agreement.
"PRO RATA SHARE" shall mean, with respect to any Lender at any time, a
percentage, the numerator of which shall be the sum of such Lender's Revolving
Commitment and the denominator of which shall be the sum of all Lenders'
Revolving Commitments; or if the Revolving Commitments have been terminated or
expired or if the Loans have been declared to be due and payable, a percentage,
the numerator of which shall be such Lender's Revolving Credit Exposure and the
denominator of which shall be the aggregate Revolving Credit Exposure of all
Lenders.
"REAL ESTATE DOCUMENTS" shall mean collectively, all mortgages, deeds of trust,
deeds of hypothec, deeds to secure debt, assignments of rents and leases,
environmental indemnity agreements, and all other documents, instruments,
agreements and certificates executed and delivered by any Loan Party to the U.S.
Administrative Agent, the U.S. Collateral Agent, the Funding Agent, the Canadian
Administrative Agent or the Canadian Collateral Agent in connection with the
foregoing.
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"REAL PROPERTY" shall mean all real property owned or leased by the Borrower or
Guarantor.
"REGULATION D" shall mean Regulation D of the Board of Governors of the U.S.
Federal Reserve System, as the same may be in effect from time to time, and any
successor regulations.
"RELATED PARTIES" shall mean, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"RELEASE" shall mean any release, spill, emission, leaking, dumping, injection,
pouring, deposit, disposal, discharge, dispersal, leaching or migration into the
environment (including ambient air, surface water, groundwater, land surface or
subsurface strata) or within any building, structure, facility or fixture.
"REQUIRED LENDERS" shall mean, at any time, Non-Defaulting Lenders holding
66-2/3% or more of the aggregate outstanding Revolving Credit Exposures of all
Non-Defaulting Lenders at such time or if the Non-Defaulting Lenders have no
Revolving Credit Exposure outstanding, then Non-Defaulting Lenders holding
66-2/3% or more of the Aggregate Revolving Commitments of all Non-Defaulting
Lenders, provided however, that if only two (2) Non-Defaulting Lenders exist
hereunder, Required Lenders shall mean both such Non-Defaulting Lenders.
"REQUIREMENT OF LAW" for any Person shall mean the articles or certificate of
incorporation, bylaws, partnership certificate and agreement, or limited
liability company certificate of organization and agreement, as the case may be,
and other organizational and governing documents of such Person, and any law,
treaty, rule or regulation, or determination of a Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"RESPONSIBLE OFFICER" shall mean any of the president, the chief executive
officer, the chief operating officer, the chief financial officer, the
treasurer, controller or a vice president in the finance division of the
Borrower or such other representative of the Borrower as may be designated in
writing by any one of the foregoing with the consent of the Canadian
Administrative Agent; and, with respect to the financial covenants only, the
chief financial officer or the treasurer of the Borrower.
"RESTRICTED INVESTMENT" shall mean Investments in joint ventures and in
Subsidiaries of the Parent that are not Consolidated Subsidiaries.
"RESTRICTED PAYMENT" shall have the meaning set forth in Section 7.5.
"REVOLVING COMMITMENT" shall mean, with respect to each Lender, the obligation
of such Lender to make Revolving Loans to the Borrower and to participate in
Letters of Credit and Swingline Loans in an aggregate principal amount not
exceeding the amount set forth with respect to such Lender on the signature
pages to this Agreement, or in the case of a Person becoming a Lender after the
Closing Date, the amount of the assigned "Revolving Commitment" as provided in
the Assignment and Acceptance Agreement executed by such Person as an assignee,
as the same may be changed pursuant to the terms hereof.
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"REVOLVING CREDIT EXPOSURE" shall mean, with respect to any Lender at any time,
the sum at such time, without duplication, of (a) the outstanding principal
amount of such Lender's Revolving Loans, (b) such Lender's LC Exposure and (c)
such Lender's Swingline Exposure.
"REVOLVING CREDIT NOTE" shall mean a promissory note of the Borrower payable to
the order of a requesting Lender in the principal amount of such Lender's
Revolving Commitment, in substantially the form of Exhibit C.
"REVOLVING LOAN" shall mean a loan made by a Lender (other than the Swingline
Lender in its capacity as such) to the Borrower under its Revolving Commitment,
which may be either a Base Rate Loan or a Eurodollar Loan.
"S&P" shall mean Standard & Poor's.
"SALE AND PREPAYMENT EVENT" shall mean the consummation of the sale of Space &
Technology / Montreal and the making of the prepayment required under Section
2.11(b)(i).
"SECURITY AGREEMENTS" shall mean the U.S. Security Agreement and the Canadian
Security Agreements.
"SOLVENT" means, with respect to the Borrower as of a particular date, (a) the
Borrower is able to pay its debts and other liabilities, contingent obligations
and other commitments as they mature in the normal course of business, (b) the
Borrower does not intend to, and does not believe that it will, incur debts or
liabilities beyond the Borrower's ability to pay as such debts and liabilities
mature in their ordinary course, (c) the Borrower is not engaged in a business
or a transaction, and is not about to engage in a business or a transaction, for
which the Borrower's assets would constitute unreasonably small capital after
giving due consideration to the prevailing practice in the industry in which the
Borrower is engaged or is to engaged, and (d) the aggregate fair saleable value
of the assets of the Borrower will exceed its debts and other liabilities
(including contingent, subordinated, unmatured and unliquidated debts and
liabilities). For purposes of this definition, "debt" means any liability on a
claim, and "claim" means (i) a right to a payment or (ii) a right to an
equitable remedy for breach of performance, if in light of all of the facts and
circumstances existing at such time, such right can reasonably be expected to
give rise to an actual or matured liability.
"SPACE & TECHNOLOGY / MONTREAL" shall mean the Space & Technology / Montreal
division of the Borrower.
"STATEMENT OF FUNDS FLOW" shall mean that certain Statement of Funds Flow dated
as of December 13, 2004 executed by the Borrower and the Canadian Administrative
Agent on behalf of the Lenders.
"STATUTORY RESERVE RATE" shall mean the aggregate of the maximum reserve
percentages (including, without limitation, any emergency, supplemental, special
or other marginal reserves) expressed as a decimal (rounded upwards to the next
1/100th of 1%) in effect on any day to which any Lender is subject with respect
to the Adjusted LIBOR pursuant to either (i) regulations issued by the Board of
Governors of the Federal Reserve System (or any Governmental Authority
succeeding to any of its principal functions) with respect to eurocurrency
funding (currently referred to as "eurocurrency liabilities" under Regulation
D); or (ii) the capital adequacy guidelines issued from time to time by the
Office of the Superintendent of Financial Institutions Canada. Eurodollar Loans
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shall be deemed to constitute eurocurrency funding and to be subject to such
reserve requirements without benefit of or credit for proration, exemptions or
offsets that may be available from time to time to any Lender under Regulation D
or equivalent capital adequacy guidelines. The Statutory Reserve Rate shall be
adjusted automatically on and as of the effective date of any change in any
reserve percentage.
"STM PREPAYMENT AMOUNT" shall mean the U.S. Dollar Equivalent of the amount
prepaid by the Borrower in connection with the Sale and Prepayment Event;
provided that such U.S. Dollar Equivalent shall be rounded down to the nearest
multiple of U.S.$500,000.
"SUBSIDIARY" shall mean, with respect to any Person (the "PARENT"), any
corporation, partnership, joint venture, limited liability company, association
or other entity the accounts of which would or should be consolidated with those
of the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, partnership, joint venture, limited liability
company, association or other 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 in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, Controlled or held,
or (b) that is, as of such date, 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.
"SWINGLINE COMMITMENT" shall mean the commitment of the Swingline Lender to make
Swingline Loans in an aggregate principal amount at any time outstanding not to
exceed U.S.$30,000,000.
"SWINGLINE EXPOSURE" shall mean, with respect to each Lender, the principal
amount of the Swingline Loans as to which such Lender is legally obligated
either to make a Base Rate Loan or to purchase a participation in accordance
with Section 2.5, which shall equal such Lender's Pro Rata Share of all
outstanding Swingline Loans.
"SWINGLINE LENDER" shall mean Bank of America, National Association (Canada
branch) and its successors and assigns hereunder.
"SWINGLINE LOAN" shall mean a loan made to the Borrower by the Swingline Lender
under the Swingline Commitment.
"SWINGLINE NOTE" shall mean the promissory note of the Borrower payable to the
order of the Swingline Lender in the principal amount of the Swingline
Commitment, substantially the form of Exhibit F.
"SWINGLINE RATE" shall mean, for any Interest Period, the rate as offered by the
Swingline Lender and accepted by the Borrower in writing.
"SWINGLINE TERMINATION DATE" shall mean the date that is five Business Days
prior to the Commitment Termination Date.
"SYNTHETIC LEASE" shall mean a lease transaction under which the parties intend
that (a) the lease will be treated as an "operating lease" by the lessee
pursuant to Statement of Financial Accounting
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Standards No. 13, as amended and (b) the lessee will be entitled to various tax
and other benefits ordinarily available to owners (as opposed to lessees) of
like property.
"TAXES" shall mean any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.
"TEST PERIOD" shall mean, for purposes of calculating and determining compliance
with the financial covenants set forth in Section 6.1 and Section 6.2, a period
of four full fiscal quarters of the Parent, as selected by the Parent out of the
six most recently completed fiscal quarters of the Parent preceding the date of
determination; provided, however, that the Parent shall use the same four fiscal
quarters selected by the Parent when (a) determining and calculating compliance
with the Fixed Charge Coverage Ratio at any time and (b) determining and
calculating compliance with both the Leverage Ratio and the Fixed Charge
Coverage Ratio at any time; provided, further, that any particular quarter
selected by the Parent during any Test Period may only be used once during such
Test Period.
"TRANSACTION COSTS" shall mean, with respect to a given transaction, all
investment banking fees, legal fees, brokerage fees, finder's fees, printing
fees, filing fees and accountant's fees, in each case directly related to such
transaction, and other out-of-pocket costs and expenses incurred by a Loan Party
and directly related to such transaction; provided, that any such fees, costs
and expenses paid to an Affiliate of the Borrower shall be excluded from this
definition.
"TYPE", when used in reference to a Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBOR or the Base Rate.
"U.S. ADMINISTRATIVE AGENT" shall mean SunTrust Bank, in its capacity as
"Canadian Administrative Agent" under the U.S. Revolving Credit Agreement.
"U.S. COLLATERAL AGENT" shall mean SunTrust Bank, in its capacity as "U.S.
Collateral Agent" under and as defined in the Intercreditor Agreement, or any
other successor who shall become U.S. Collateral Agent pursuant to terms of the
Intercreditor Agreement.
"U.S. DOLLAR(s)" and the sign "U.S. $" shall mean lawful money of the United
States of America.
"U.S. DOLLAR EQUIVALENT" of any amount expressed in a currency that is not U.S.
Dollars, means, on any date, the equivalent amount of U.S. Dollars after giving
effect to a conversion of such amount of such non-U.S. currency to U.S. Dollars
at the buy spot rate quoted for wholesale transactions by the Funding Agent at
approximately 11:00 a.m. on such date of determination in accordance with its
normal practices.
"U.S. FACILITY INDEBTEDNESS" shall mean the Indebtedness of the Parent and the
Subsidiary Loan Parties (as defined in the U.S. Revolving Credit Agreement)
owing to the "Lenders" under and as defined in the U.S. Revolving Credit
Agreement.
"U.S. LENDERS" shall mean each of SunTrust Bank and Bank of America, National
Association and their respective assigns under the U.S. Revolving Credit
Agreement.
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"U.S. LOAN DOCUMENTS" shall mean any or all of the "Loan Documents" (as defined
in the U.S. Revolving Credit Agreement).
"U.S. PATENT SECURITY AGREEMENT" shall have the meaning provided in Section
3.1(b)(xi).
"U.S. PLEDGE AGREEMENT" shall mean the Pledge Agreement in favour of the U.S.
Collateral Agent in substantially the form of Exhibit B-2.
"U.S. REVOLVING CREDIT AGREEMENT" shall mean that certain U.S. Revolving Credit
Agreement dated as December 10, 2004 among the Parent, the U.S. Lenders and
SunTrust Bank, as administrative agent.
"U.S. SECURITY AGREEMENT" shall mean the Security Agreement in favour of the
U.S. Collateral Agent in substantially the form of Exhibit D-2.
"U.S. SUBSIDIARY" shall mean any direct or indirect Subsidiary of the Parent
that is organized under the laws of the United States of America or any
political subdivision thereof.
"U.S. TRADEMARK SECURITY AGREEMENT" has the meaning provided in Section
3.1(b)(xi).
"WHOLLY-OWNED SUBSIDIARY" shall mean any Subsidiary all of the shares of capital
stock or other ownership interests of which (except directors' qualifying
shares, or, in the case of any Subsidiary which is not organized or created
under the laws of the United States of America or any political subdivision
thereof, such nominal ownership interests as are required to be held by third
parties under the laws of the foreign jurisdiction under which such Subsidiary
was incorporated or organized) are at the time directly or indirectly owned by
the Borrower.
SECTION 1.2 CLASSIFICATIONS OF LOANS AND BORROWINGS
For purposes of this Agreement, Loans may be classified and referred
to by Class (e.g. a "Revolving Loan") or by Type (e.g. a "Eurodollar Loan" or
"Base Rate Loan") or by Class and Type (e.g. "Revolving Eurodollar Loan").
Borrowings also may be classified and referred to by Class (e.g. "Revolving
Borrowing") or by Type (e.g. "Eurodollar Borrowing") or by Class and Type (e.g.
"Revolving Eurodollar Borrowing").
SECTION 1.3 ACCOUNTING TERMS AND DETERMINATION
Unless otherwise defined or specified herein, all accounting terms
used herein shall be interpreted, all accounting determinations hereunder shall
be made, and all financial statements required to be delivered hereunder shall
be prepared, in accordance with GAAP as in effect from time to time, applied on
a basis consistent (except for such changes approved by the Parent's independent
public accountants) with the most recent audited consolidated financial
statement of the Parent delivered pursuant to Section 5.1(a); provided, that all
such accounting terms interpreted and accounting determinations made shall, in
any event, include all activities, operations and financial results of Space
&Technology / Montreal and any other discontinued operations of the Parent or
its Subsidiaries as if such division or other discontinued operations were
continuing operations (other than accounting for depreciation and valuation
allowances of such discontinued operations); provided further, that if the
Borrower notifies the Canadian Administrative Agent that the Borrower
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wishes to amend any covenant in Article VI to eliminate the effect of any change
in GAAP on the operation of such covenant (or if the Canadian Administrative
Agent notifies the Borrower that the Required Lenders wish to amend Article VI
for such purpose), then the 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 either such notice is withdrawn or such covenant
is amended in a manner satisfactory to the Borrower and the Required Lenders.
SECTION 1.4 TERMS GENERALLY; RULES OF INTERPRETATION
The definitions of terms herein shall apply equally to the singular
and plural forms of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms.
The words "include", "includes" and "including" shall be deemed to be followed
by the phrase "without limitation". The word "will" shall be construed to have
the same meaning and effect as the word "shall". In the computation of periods
of time from a specified date to a later specified date, the word "from" means
"from and including" and the word "to" means "to but excluding". Unless the
context requires otherwise (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as it was originally executed or as it
may from time to time be amended, restated, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein), (b) any reference herein to any Person shall be construed to
include such Person's successors and permitted assigns, (c) the words "hereof",
"herein" and "hereunder" and words of similar import shall be construed to refer
to this Agreement as a whole and not to any particular provision hereof, (d) all
references to Articles, Sections, Exhibits and Schedules shall be construed to
refer to Articles, Sections, Exhibits and Schedules to this Agreement, (e) the
words "asset" and "property" shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights, and (f)
all references to a specific time shall be construed to refer to the time in the
city and province of the Funding Agent's principal office, unless otherwise
indicated. To the extent that any of the representations and warranties
contained in Section IV under this Agreement or in any of the other Loan
Documents is qualified by "Material Adverse Effect", then the qualifier "in all
material respects" contained in Section 3.2(b) and the qualifier "in any
material respect" contained in Section 8.1(c) shall not apply. Unless otherwise
indicated, all references to time are references to Eastern Standard Time or
Eastern Daylight Savings Time, as the case may be. Unless otherwise specified in
this Agreement, all references to dollar amounts (without further description)
will mean Canadian Dollars.
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENTS
SECTION 2.1 GENERAL DESCRIPTION OF FACILITIES
Subject to and upon the terms and conditions herein set forth, (a)
the Lenders hereby establish in favour of the Borrower a revolving credit
facility pursuant to which the Lenders severally agree (to the extent of each
Lender's Pro Rata Share up to such Lender's Revolving Commitment) to make
Revolving Loans to the Borrower in accordance with Section 2.2, (b) the Issuing
Bank agrees to issue Letters of Credit in accordance with Section 2.22, (c) the
Swingline Lender agrees to make Swingline Loans in accordance with Section 2.4
and (d) each Lender agrees
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to purchase a participation interest in the Letters of Credit and the Swingline
Loans pursuant to the terms and conditions hereof; provided, that in no event
shall the aggregate principal amount of all outstanding Revolving Loans,
Swingline Loans and outstanding LC Obligations exceed at any time the Aggregate
Revolving Commitments from time to time in effect.
SECTION 2.2 REVOLVING LOANS
Subject to the terms and conditions set forth herein, each Lender
severally agrees to make Revolving Loans to the Borrower from time to time on
any Business Day during the Availability Period, in an aggregate principal
amount outstanding at any time that will not result in (a) such Lender's
Revolving Credit Exposure exceeding such Lender's Revolving Commitment or (b)
the sum of the principal amount of all outstanding Revolving Loans, Swingline
Loans and LC Obligations of all Lenders exceeding the Aggregate Revolving
Commitments. During the Availability Period, the Borrower shall be entitled to
borrow, prepay and reborrow Revolving Loans in accordance with the terms and
conditions of this Agreement.
SECTION 2.3 PROCEDURE FOR REVOLVING BORROWINGS
The Borrower shall give the Funding Agent written notice (or
telephonic notice promptly confirmed in writing) of each Revolving Borrowing
substantially in the form of Exhibit 2.3 attached hereto (a "NOTICE OF REVOLVING
BORROWING") (i) prior to 11:00 a.m. (Toronto, Ontario time) one Business Day
prior to the requested date of each Base Rate Borrowing and (ii) prior to 11:00
a.m. (Toronto, Ontario time) three Business Days prior to the requested date of
each Eurodollar Borrowing. Each Notice of Revolving Borrowing shall be
irrevocable and shall specify: (i) the aggregate principal amount of such
Borrowing, (ii) the date of such Borrowing (which shall be a Business Day),
(iii) the Type of such Revolving Loan comprising such Borrowing, and (iv) in the
case of a Eurodollar Borrowing, the duration of the initial Interest Period
applicable thereto (subject to the provisions of the definition of Interest
Period). Each Revolving Borrowing shall consist entirely of Base Rate Loans or
Eurodollar Loans, as the Borrower may request. The aggregate principal amount of
each Eurodollar Borrowing shall be not less than $1,000,000 or a larger multiple
of $500,000, and the aggregate principal amount of each Base Rate Borrowing
shall not be less than $500,000 or a larger multiple of $100,000; provided, that
Base Rate Loans made pursuant to Section 2.5 or Section 2.22(d) may be made in
lesser amounts as provided therein. At no time shall the total number of
Eurodollar Borrowings outstanding at any time exceed six. Promptly following the
receipt of a Notice of Revolving Borrowing in accordance herewith, the Funding
Agent shall advise each Lender of the details thereof and the amount of such
Lender's Revolving Loan to be made as part of the requested Revolving Borrowing.
SECTION 2.4 SWINGLINE COMMITMENT
Subject to the terms and conditions set forth herein, the Swingline
Lender agrees to make Swingline Loans to the Borrower, from time to time from
the Closing Date to the Swingline Termination Date, in an aggregate principal
amount outstanding at any time not to exceed the lesser of (a) the Swingline
Commitment then in effect and (b) the difference between U.S. $30,000,000 and
the aggregate Revolving Credit Exposures of all Lenders. The Borrower shall be
entitled to borrow, repay and reborrow Swingline Loans in accordance with the
terms and conditions of this Agreement. Notwithstanding anything herein to the
contrary, the Borrower is under no obligation to accept any
- 25 -
offer by the Swingline Lender to make a Swingline Loan, and the Swingline Lender
is under no obligation whatsoever to offer to make a Swingline Loan to the
Borrower.
SECTION 2.5 PROCEDURE FOR SWINGLINE BORROWING; ETC.
(a) the Borrower shall give the Funding Agent written notice (or
telephonic notice promptly confirmed in writing) of each Swingline
Borrowing substantially in the form of Exhibit 2.5 attached hereto
("NOTICE OF SWINGLINE BORROWING") prior to 11:00 a.m. (Toronto,
Ontario time) on the requested date of each Swingline Borrowing.
Each Notice of Swingline Borrowing shall be irrevocable and shall
specify: (i) the principal amount of such Swingline Loan, (ii) the
date of such Swingline Loan (which shall be a Business Day) and
(iii) the account to which the proceeds of such Swingline Loan
should be credited. The Funding Agent will promptly advise the
Swingline Lender of each Notice of Swingline Borrowing. Each
Swingline Loan shall accrue interest at the Swingline Rate and shall
have an Interest Period (subject to the definition thereof) as
agreed between the Borrower and the Swingline Lender. The aggregate
principal amount of each Swingline Loan shall be not less than
$500,000 or a larger multiple of $100,000, or such other minimum
amounts agreed to by the Swingline Lender and the Borrower. The
Swingline Lender will make the proceeds of each Swingline Loan
available to the Borrower in Canadian Dollars in immediately
available funds at the account specified by the Borrower in the
applicable Notice of Swingline Borrowing not later than 3:00 p.m.
(Toronto, Ontario time) on the requested date of such Swingline
Loan. The Funding Agent will notify the Lenders on a quarterly basis
if any Swingline Loans occurred during such quarter.
(b) If (i) any Swingline Loan matures and remains unpaid; (ii) any
Default or Event of Default occurs or (iii) the Swingline Lender's
total amount of outstanding aggregate Revolving Credit Exposures and
Swingline Loans exceed the Swingline Lender's Revolving Commitment,
the Swingline Lender may, on behalf of the Borrower (which hereby
irrevocably authorizes and directs the Swingline Lender to act on
its behalf), give a Notice of Revolving Borrowing to the Funding
Agent requesting the Lenders (including the Swingline Lender) to
make Base Rate Loans in an amount equal to the unpaid principal
amount of any Swingline Loan. Each Lender will make the proceeds of
its Base Rate Loan included in such Borrowing available to the
Funding Agent for the account of the Swingline Lender in accordance
with Section 2.6, which will be used solely for the repayment of
such Swingline Loan.
(c) If for any reason a Base Rate Borrowing may not be (as determined in
the sole discretion of the Funding Agent), or is not, made in
accordance with the foregoing provisions, then each Lender (other
than the Swingline Lender) shall purchase an undivided participating
interest in such Swingline Loan in an amount equal to its Pro Rata
Share thereof on the date that such Base Rate Borrowing should have
occurred. On the date of such required purchase, each Lender shall
promptly transfer, in immediately available funds, the amount of its
participating interest to the Funding Agent for the account of the
Swingline Lender. If such Swingline Loan bears interest at a rate
other than the Base Rate, such Swingline Loan shall automatically
- 26 -
become a Base Rate Loan on the effective date of any such
participation and interest shall become payable on demand.
(d) Each Lender's obligation to make a Base Rate Loan pursuant to
Section 2.5(b) or to purchase the participating interests pursuant
to Section 2.5(c) shall be absolute and unconditional and shall not
be affected by any circumstance, including without limitation (i)
any setoff, counterclaim, recoupment, defense or other right that
such Lender or any other Person may have or claim against the
Swingline Lender, the Borrower or any other Person for any reason
whatsoever, (ii) the existence of a Default or an Event of Default
or the termination of any Lender's Revolving Commitment, (iii) the
existence (or alleged existence) of any event or condition which has
had or could reasonably be expected to have a Material Adverse
Effect, (iv) any breach of this Agreement or any other Loan Document
by the Borrower, the Funding Agent or any Lender or (v) any other
circumstance, happening or event whatsoever, whether or not similar
to any of the foregoing. If such amount is not in fact made
available to the Swingline Lender by any Lender, the Swingline
Lender shall be entitled to recover such amount on demand from such
Lender, together with accrued interest thereon for each day from the
date of demand thereof at the Funding Agent's cost of funds rate.
Until such time as such Lender makes its required payment, the
Swingline Lender shall be deemed to continue to have outstanding
Swingline Loans in the amount of the unpaid participation for all
purposes of the Loan Documents. In addition, such Lender shall be
deemed to have assigned any and all payments made of principal and
interest on its Loans and any other amounts due to it hereunder, to
the Swingline Lender to fund the amount of such Lender's
participation interest in such Swingline Loans that such Lender
failed to fund pursuant to this Section, until such amount has been
purchased in full.
SECTION 2.6 FUNDING OF BORROWINGS
(a) Each Lender will make available each Borrowing in Canadian Dollars
of Revolving Loans to be made by it hereunder on the proposed date
thereof by wire transfer in immediately available funds by 11:00
a.m. (Toronto, Ontario time) to the Funding Agent at the Payment
Office. Swingline Loans will be made as set forth in Section 2.5.
The Funding Agent will make such Loans available to the Borrower by
promptly crediting the amounts that it receives, in like funds by
the close of business on such proposed date, to an account
maintained with the Funding Agent or, at the Borrower's option, by
effecting a wire transfer of such amounts to an account designated
by the Borrower to the Funding Agent.
(b) Unless the Funding Agent shall have been notified by any Lender
prior to 3:00 p.m. (Toronto, Ontario time) one Business Day prior to
the date of a Borrowing in which such Lender is participating that
such Lender will not make available to the Funding Agent such
Lender's share of such Borrowing, the Funding Agent may assume that
such Lender has made such amount available to the Funding Agent on
such date, and the Funding Agent, in reliance on such assumption,
may make available to the Borrower on such date a corresponding
amount. If such corresponding amount is not in fact made available
to the Funding Agent by such Lender on the date of such
- 27 -
Borrowing, the Funding Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with
interest at a rate per annum equal to the Funding Agent's cost of
funds for such amount for up to two days and thereafter at the rate
specified for such Borrowing. If such Lender does not pay such
corresponding amount forthwith upon the Funding Agent's demand
therefor and the Funding Agent has made the amount of such Borrowing
available to the Borrower, the Funding Agent shall promptly notify
the Borrower, and the Borrower shall immediately pay such
corresponding amount to the Funding Agent together with interest at
the rate specified for such Borrowing. Nothing in this subsection
shall be deemed to relieve any Lender from its obligation to fund
its Pro Rata Share of any Borrowing hereunder or to prejudice any
rights which the Borrower may have against any Lender as a result of
any default by such Lender hereunder.
(c) All Revolving Loans shall be made by the Lenders on the basis of
their respective Pro Rata Shares. No Lender shall be responsible for
any default by any other Lender in its obligations hereunder, and
each Lender shall be obligated to make its Loans provided to be made
by it hereunder, regardless of the failure of any other Lender to
make its Loans hereunder.
SECTION 2.7 INTEREST ELECTIONS; CONVERSIONS; CONTINUATIONS
(a) Each Borrowing initially shall be of the Type specified in the
applicable Notice of Borrowing, and in the case of a Eurodollar
Borrowing, shall have an initial Interest Period as specified in
such Notice of Borrowing. Thereafter, the Borrower may elect to
convert such Borrowing into a different Type or to continue such
Borrowing (subject to satisfaction of any conditions applicable to
Borrowings of that Type), and in the case of a Eurodollar Borrowing,
may elect Interest Periods therefor, all as provided in this
Section. The Borrower may elect different options with respect to
different portions of the affected Borrowing, in which case each
such portion shall be allocated ratably among the Lenders holding
Loans comprising such Borrowing, and the Loans comprising each such
portion shall be considered a separate Borrowing. This Section shall
not apply to Swingline Borrowings, which may not be converted or
continued.
(b) To make an election pursuant to this Section, the Borrower shall
give the Funding Agent prior written notice (or telephonic notice
promptly confirmed in writing) of each Borrowing substantially in
the form of Exhibit 2.7 attached hereto (a "NOTICE OF
CONVERSION/CONTINUATION") that is to be converted or continued, as
the case may be, (x) prior to 11:00 a.m. (Toronto, Ontario time) one
Business Day prior to the requested date of a conversion into a Base
Rate Borrowing and (y) prior to 11:00 a.m. (Toronto, Ontario time)
three Business Days prior to a continuation of or conversion into a
Eurodollar Borrowing. Each such Notice of Conversion/Continuation
shall be irrevocable and shall specify (i) the Borrowing to which
such Notice of Continuation/Conversion applies and if different
options are being elected with respect to different portions
thereof, the portions thereof that are to be allocated to each
resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) shall be specified for each
resulting
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Borrowing); (ii) the effective date of the election made pursuant to
such Notice of Continuation/Conversion, which shall be a Business
Day, (iii) whether the resulting Borrowing is to be a Base Rate
Borrowing or a Eurodollar Borrowing; and (iv) if the resulting
Borrowing is to be a Eurodollar Borrowing and the duration of the
Interest Period applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of
"Interest Period". If any such Notice of Continuation/Conversion
requests a Eurodollar Borrowing but does not specify an Interest
Period, the Borrower shall be deemed to have selected an Interest
Period of one month. The principal amount of any resulting Borrowing
shall satisfy the minimum borrowing amount for Eurodollar Borrowings
and Base Rate Borrowings set forth in Section 2.3.
(c) If, on the expiration of any Interest Period in respect of any
Eurodollar Borrowing, the Borrower shall have failed to deliver a
Notice of Conversion/Continuation, then, unless such Borrowing is
repaid as provided herein, the Borrower shall be deemed to have
elected to convert such Borrowing to a Base Rate Borrowing. No
Borrowing may be converted into, or continued as, a Eurodollar
Borrowing if a Default or an Event of Default exists, unless the
Funding Agent and each of the Lenders shall have otherwise consented
in writing. Further, any Eurodollar Borrowing that may not be
continued as a Eurodollar Borrowing as a result of a Default or
Event of Default shall automatically convert to a Base Rate
Borrowing at the end of then applicable Interest Period, and such
Borrowing shall be subject to the increased interest rate specified
under Section 2.12(c) both before and after the conversion thereof,
such increased interest rate commencing on and as of the date of
such Default or Event of Default. No conversion of any Eurodollar
Loans shall be permitted except on the last day of the Interest
Period in respect thereof.
(d) Upon receipt of any Notice of Conversion/Continuation, the Funding
Agent shall promptly notify each Lender of the details thereof and
of such Lender's portion of each resulting Borrowing.
SECTION 2.8 TERMINATION OF COMMITMENTS
Unless previously terminated, all Revolving Commitments shall
terminate on the Commitment Termination Date, except that the Swingline
Commitment shall terminate on the Swingline Termination Date.
SECTION 2.9 REPAYMENT OF LOANS
(a) The outstanding principal amount of all Revolving Loans shall be due
and payable (together with accrued and unpaid interest thereon) on
the Commitment Termination Date.
(b) The principal amount of each Swingline Loan shall be due and payable
(together with accrued interest thereon) on the earlier of (i) the
last day of the Interest Period applicable to such Loan and (ii) the
Swingline Termination Date.
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SECTION 2.10 EVIDENCE OF INDEBTEDNESS
(a) Each Lender shall maintain in accordance with its usual practice
appropriate records evidencing the Indebtedness of the Borrower to
such Lender resulting from each Loan made by such Lender from time
to time, including the amounts of principal and interest payable
thereon and paid to such Lender from time to time under this
Agreement. The Funding Agent shall maintain appropriate records in
which shall be recorded (i) the Revolving Commitment of each Lender,
(ii) the amount of each Loan made hereunder by each Lender, the
Class and Type thereof and the Interest Period applicable thereto,
(iii) the date of each continuation thereof pursuant to Section 2.7,
(iv) the date of each conversion of all or a portion thereof to
another Type pursuant to Section 2.7, (v) the date and amount of any
principal or interest due and payable or to become due and payable
from the Borrower to each Lender hereunder in respect of such Loans
and (vi) both the date and amount of any sum received by the Funding
Agent hereunder from the Borrower in respect of the Loans and each
Lender's Pro Rata Share thereof. The entries made in such records
shall be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, that the
failure or delay of any Lender or the Funding Agent in maintaining
or making entries into any such record or any error therein shall
not in any manner affect the obligation of the Borrower to repay the
Loans (both principal and unpaid accrued interest) of such Lender in
accordance with the terms of this Agreement.
(b) At the request of any Lender (including the Swingline Lender) at any
time, the Borrower agrees that it will execute and deliver to such
Lender a Revolving Credit Note and, in the case of the Swingline
Lender only, a Swingline Note, payable to the order of such Lender,
and such Lender agrees, upon receipt of such new Note and request of
the Borrower, such Lender will promptly cancel and return any Note
replaced by such new Note to the Borrower.
SECTION 2.11 OPTIONAL AND MANDATORY PREPAYMENTS
(a) Optional Prepayment. The Borrower shall have the right at any time
and from time to time to prepay any Borrowing, in whole or in part,
without premium or penalty, by giving irrevocable written notice (or
telephonic notice promptly confirmed in writing) to the Funding
Agent no later than (i) in the case of prepayment of any Eurodollar
Borrowing, 11:00 a.m. (Toronto, Ontario time) not less than three
Business Days prior to any such prepayment, (ii) in the case of any
prepayment of any Base Rate Borrowing, not less than one Business
Day prior to the date of such prepayment, and (iii) in the case of
Swingline Borrowings, prior to 11:00 a.m. (Toronto, Ontario time) on
the date of such prepayment. Each such notice shall be irrevocable
and shall specify the proposed date of such prepayment and the
principal amount of each Borrowing or portion thereof to be prepaid.
Upon receipt of any such notice, the Funding Agent shall promptly
notify each affected Lender of the contents thereof and of such
Lender's Pro Rata Share of any such prepayment. If such notice is
given, the aggregate amount specified in such notice shall be due
and payable on the date designated in such notice, together with
accrued interest to such date on the amount so prepaid in accordance
with Section 2.12(d); provided, that if a Eurodollar
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Borrowing is prepaid on a date other than the last day of an
Interest Period applicable thereto, the Borrower shall also pay all
amounts required pursuant to Section 2.18. Each partial prepayment
of any Loan (other than a Swingline Loan) shall be in minimum
amounts of $500,000 or larger multiples of $100,000. Each prepayment
of a Borrowing shall be applied ratably to the Loans comprising such
Borrowing.
(b) Mandatory Prepayment
(i) Immediately upon the closing of the sale of Space & Technology
/ Montreal, (a) the Aggregate Revolving Commitment will be
reduced to U.S.$15,000,000 and the Borrower shall forthwith
repay Revolving Loans by the amount, if any, that the
aggregate of (x) the U.S. Dollar Equivalent of Borrowings in
Canadian Dollars then outstanding as Revolving Loans and as
Swingline Loans together with the face amount of all Letters
of Credit issued in any currency other than U.S. Dollars, and
(y) the face amount of all Letters of Credit issued in U.S.
Dollars then outstanding exceeds U.S.$15,000,000; and (b) the
Canadian Administrative Agent and the Canadian Collateral
Agent will, at the request and expense of the Borrower,
complete, execute or deliver such reasonable discharges,
releases and other documents or things as may be necessary to
discharge and release the Liens of the Administrative Agent
and the Canadian Collateral Agent in the property and assets
of the Borrower that were disposed of under or in connection
with the sale of Space & Technology/Montreal.
(ii) Promptly upon (and in any event not later than five Business
Days after) its receipt thereof, the Borrower shall, subject
to clause (v) immediately below, prepay or cause to be prepaid
the outstanding principal amount of Revolving Loans in an
amount equal to 100% of the Net Proceeds from any Debt
Issuance made after the Closing Date, and will deliver to the
Funding Agent, concurrently with such prepayment, a
certificate signed by the Chief Financial Officer of the
Borrower in form and substance satisfactory to the Funding
Agent and setting forth the calculation of such Net Proceeds.
Notwithstanding the foregoing, nothing in this subsection (ii)
shall be deemed to permit any Debt Issuance not expressly
permitted under Section 7.1.
(iii) Promptly upon (and in any event not later than five Business
Days after) its receipt thereof, the Borrower shall, subject
to clause (v) immediately below, prepay or cause to be prepaid
the outstanding principal amount of Revolving Loans in an
amount equal to 50% of the Net Proceeds from any Asset
Disposition (other than the Sale and Prepayment Event and any
other Asset Disposition under Section 7.6(b)) and will deliver
to the Funding Agent, concurrently with such prepayment, a
certificate signed by the Chief Financial Officer of the
Borrower in form and substance satisfactory to the Funding
Agent and setting forth the calculation of such Net Proceeds.
Notwithstanding the foregoing, nothing in this subsection
(iii) shall be
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deemed to permit any Asset Disposition not expressly permitted
under Section 7.6.
(iv) Not later than thirty days after its receipt of any proceeds
of insurance, condemnation award or other compensation in
respect of any Casualty Event (and in any event upon its
determination not to repair or replace any property subject to
such Casualty Event), the Borrower shall, subject to clause
(v) immediately below, prepay or cause to be prepaid the
outstanding principal amount of Revolving Loans in an amount
equal to 100% of the Net Proceeds from such Casualty Event
(less any amounts theretofore applied, to be applied or
contractually committed to be applied within 180 days after
the occurrence of such Casualty Event to the repair or
replacement of property subject to such Casualty Event) and
will deliver to the Funding Agent, concurrently with such
prepayment, a certificate signed by the Chief Financial
Officer of the Borrower in form and substance satisfactory to
the Funding Agent and setting forth the calculation of such
Net Proceeds.
(v) Each prepayment of Revolving Loans made pursuant to clauses
(ii) through (iv) above shall be applied to reduce the
outstanding principal amount of Revolving Loans, with a
corresponding permanent reduction to the Revolving Commitment
in an amount equal to the amount of the prepayment required by
this subsection (b) until such time as the Aggregate Revolving
Commitment equals U.S.$15,000,000; provided, however, that so
long as a prepayment of the U.S. Facility Indebtedness for the
events described under clauses (ii) through (iv) above would
not have an adverse tax consequence for the Borrower or the
Parent (as reasonably determined by the Parent), each
prepayment of Revolving Loans required to be made pursuant to
clauses (ii) through (iv) above shall be applied to reduce the
outstanding principal amount of Revolving Loans and the
"Revolving Loans" under and as defined in the U.S. Revolving
Credit Agreement, pro rata based on the then outstanding
principal amount under this Agreement and the U.S. Revolving
Credit Agreement, with a corresponding permanent reduction to
the Revolving Commitment hereunder and a corresponding
permanent reduction to the "Revolving Commitment" under and as
defined in the U.S. Revolving Credit Agreement, in each case,
in an amount equal to the amount so prepaid; provided,
further, that the STM Prepayment Amount shall be applied
solely towards the prepayment of the Revolving Loans.
(vi) Each prepayment of Loans made pursuant to this subsection (b)
shall be first applied to the repayment of Base Rate Loans
until all Base Rate Loans are paid in full, and then to
Eurodollar Loans. Each prepayment of a Eurodollar Loan made
pursuant to the provisions of this subsection (b) on a day
other than the last day of the Interest Period applicable
thereto shall be made together with all amounts required under
Section 2.18.
(vii) If the Funding Agent determines that on any day as a result of
currency fluctuations the aggregate of (a) the U.S. Dollar
Equivalent of Borrowings in
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Canadian Dollars then outstanding as Revolving Loans and as
Swingline Loans together with the face amount of all Letters
of Credit issued in currencies other than U.S. Dollars, and
(b) the face amount of all Letters of Credit issued in U.S.
Dollars then outstanding on such day exceeds the Aggregate
Revolving Commitments then in effect, the Funding Agent shall
notify the Borrower that such an event has occurred, and the
Borrower shall immediately upon receipt of such notice, (i)
repay Revolving Loans in an amount equal to such excess; or
(ii) deposit with the Funding Agent cash or cash equivalents
in an amount of such excess, provided that if it is determined
on any subsequent day that the amount of the deposited amounts
exceeds the amount of such excess, the Borrower may withdraw
the amount by which such excess has been reduced.
(c) Additional Mandatory Reduction and Permanent Repayment. Commencing
December 31, 2005 and on every June 30 and December 31 thereafter,
the Aggregate Revolving Commitment shall be reduced by
U.S.$1,250,000 (or by a lesser amount if applicable) until such time
as the Aggregate Revolving Commitment equals U.S.$22,500,000; for
greater certainty this obligation shall cease at such time, if ever,
that the Revolving Commitment is reduced to U.S.$15,000,000 in
accordance with Section 2.11(b)(i) hereof. If after such reduction
the aggregate amount of Revolving Loans and Swingline Loans together
with the face amount of issued but undrawn Letters of Credit exceeds
the Aggregate Revolving Commitment, the Borrower shall forthwith
prepay Loans in an amount equal to such excess. Each prepayment of
Loans made pursuant to this subsection (c) shall be first applied to
the repayment of Base Rate Loans until all Base Rate Loans are paid
in full, and then to Eurodollar Loans. Each prepayment of a
Eurodollar Loan made pursuant to the provisions of this subsection
(c) on a day other than the last day of the Interest Period
applicable thereto shall be made together with all amounts required
under Section 2.18.
SECTION 2.12 INTEREST ON LOANS
(a) The Borrower shall pay interest (i) on each Base Rate Loan at the
Base Rate in effect from time to time plus the Applicable Margin in
effect from time to time for Base Rate Loans, and (ii) on each
Eurodollar Loan at the Adjusted LIBOR for the applicable Interest
Period then in effect for such Eurodollar Loan plus the Applicable
Margin in effect from time to time for Eurodollar Loans.
(b) The Borrower shall pay interest on each Swingline Loan at the
Swingline Rate in effect from time to time.
(c) While an Event of Default exists or after acceleration, at the
option of the Required Lenders, the Borrower shall pay interest
("DEFAULT INTEREST") with respect to all Eurodollar Loans at the
rate otherwise applicable for the then-current Interest Period plus
an additional 2% per annum until the last day of such Interest
Period, and thereafter, and with respect to all Base Rate Loans and
all other Obligations hereunder (other than Loans), at the Base Rate
then in effect for Base Rate Loans plus the Applicable Margin for
Base Rate Loans plus an additional 2.0% per annum.
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While an Event of Default exists and after acceleration, the
Applicable Percentage for the letter of credit fees provided for
under Section 2.13(d) shall be increased by 2.0%. Notwithstanding
anything to the contrary contained in any Loan Document, to the
extent that the charges and security interest created by the
Collateral Documents charge real property or any interest therein
such charges and security interest shall secure interest after the
occurrence of an Event of Default at the same rates as those in
effect prior to such occurrence.
(d) Interest on the principal amount of all Loans shall accrue from and
including the date such Loans are made to but excluding the date of
any repayment thereof, provided such Loans are repaid within the
times provided for hereunder. Interest on all outstanding Base Rate
Loans shall be payable quarterly in arrears on the last day of each
March, June, September and December and on the Commitment
Termination Date. Interest on all outstanding Eurodollar Loans shall
be payable on the last day of each Interest Period applicable
thereto, and, in the case of any Eurodollar Loans having an Interest
Period in excess of three months or 90 days, respectively, on each
day which occurs every three months or 90 days, as the case may be,
after the initial date of such Interest Period, and on the
Commitment Termination Date. Interest on each Swingline Loan shall
be payable on the maturity date of such Loan, which shall be the
last day of the Interest Period applicable thereto, and on the
Swingline Termination Date. Interest on any Loan which is converted
into a Loan of another Type or which is repaid or prepaid shall be
payable on the date of such conversion or on the date of any such
repayment or prepayment (on the amount repaid or prepaid) thereof.
All Default Interest and increased letter of credit fees payable
under subsection (c) of this Section shall be payable on demand.
(e) The Funding Agent shall determine each interest rate applicable to
the Loans hereunder and shall promptly notify the Borrower and the
Lenders of such rate in writing (or by telephone, promptly confirmed
in writing). Any such determination shall be conclusive and binding
for all purposes, absent manifest error.
SECTION 2.13 FEES
(a) Funding Agent's Fees. The Borrower shall pay to the Funding Agent
for its own account fees in the amounts and at the times previously
agreed upon by the Borrower and the Funding Agent.
(b) Canadian Administrative Agent's Fees. The Borrower shall pay to the
Canadian Administrative Agent for its own account, on the Closing
Date and on each anniversary of the Closing Date, an annual agency
fee of U.S.$30,000.
(c) Commitment Fee. The Borrower agrees to pay to the Funding Agent for
the account of each Lender a commitment fee, which fee shall accrue
at the Applicable Percentage on the average daily amount of the
unused Revolving Commitment of such Lender during the Availability
Period. Accrued commitment fees shall be payable in arrears on the
last day of each March, June, September and December of each year
and on the Commitment Termination Date, commencing on the first such
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date after the Closing Date. For purposes of computing commitment
fees with respect to the Revolving Commitments, the Revolving
Commitment of each Lender shall be deemed used to the extent of the
outstanding Revolving Loans and LC Exposure of such Lender. Any
Swingline Loans outstanding shall be treated as if such Loan were
unused for purposes of this subsection (b).
(d) Letter of Credit Fees. The Borrower agrees to pay (i) to the Funding
Agent, for the account of each Lender, a letter of credit fee with
respect to its participation in each Letter of Credit, which shall
accrue at the Applicable Percentage then in effect on the average
daily amount of such Lender's LC Exposure (excluding any portion
thereof attributable to unreimbursed LC Disbursements) attributable
to such Letter of Credit during the period from and including the
date of issuance of such Letter of Credit to but excluding the date
on which such Letter of Credit expires or is drawn in full
(including without limitation any LC Exposure that remains
outstanding after the Commitment Termination Date) and (ii) to the
Issuing Bank for its own account a fronting fee, which shall accrue
at the rate of 0.125% per annum on the average daily amount of the
LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the Availability Period (or
until the date that such Letter of Credit is irrevocably cancelled,
whichever is later), as well as the Issuing Bank's standard fees
with respect to issuance, amendment, renewal or extension of any
Letter of Credit or processing of drawings thereunder.
(e) Payments. Accrued fees (other than the Canadian Administrative
Agent's and the Funding Agent's fees in subsection (a) above) shall
be payable quarterly in arrears on the last day of each of March,
June, September and December, commencing on the first such date
after the Closing Date and on the Commitment Termination Date (and
if later, the date the Loans and LC Exposure shall be repaid in
their entirety).
SECTION 2.14 EFFECTIVE DATE FOR ADJUSTMENT TO APPLICABLE PERCENTAGE AND
APPLICABLE MARGIN
The Applicable Percentage and Applicable Margin shall be determined
and adjusted quarterly on the date that is two Business Days after the date on
which the Borrower provides the officer's certificate in accordance with the
provisions of Section 5.1(c) (each "Margin Calculation Date"); provided, however
that (i) the Applicable Percentage and the Applicable Margin from the Closing
Date until the first Margin Calculation Date subsequent to the Closing Date
shall be at Level V (as set forth in Schedule I), and, thereafter, such level
shall be determined by the then current Leverage Ratio, and (ii) if the Borrower
fails to provide the officer's certificate to the Canadian Administrative Agent
by the date such certificate is required to be delivered under Section 5.1(c),
the Applicable Percentage and the Applicable Margin from such date shall be at
Level V until such time as an appropriate officer's certificate is provided,
whereupon the level shall be determined by the then current Leverage Ratio.
Except as set forth above, the Applicable Percentage and the Applicable Margin
shall be effective from one Margin Calculation Date until the next Margin
Calculation Date.
SECTION 2.15 INABILITY TO DETERMINE INTEREST RATES.
If prior to the commencement of any Interest Period for any
Eurodollar Borrowing,
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(i) the Funding Agent shall have determined (which determination
shall be conclusive and binding upon the Borrower) that, by
reason of circumstances affecting the relevant interbank
market, adequate means do not exist for ascertaining the LIBOR
for such Interest Period, or
(ii) the Funding Agent shall have received notice from the Required
Lenders that the Adjusted LIBOR does not adequately and fairly
reflect the cost to such Lenders of making, funding or
maintaining their Eurodollar Loans for such Interest Period,
the Funding Agent shall give written notice (or telephonic notice, promptly
confirmed in writing) to the Borrower and to the Lenders as soon as practicable
thereafter. In the case of Eurodollar Loans, until the Funding Agent shall
notify the Borrower and the Lenders that the circumstances giving rise to such
notice no longer exist, (A) the obligations of the Lenders to make Eurodollar
Revolving Loans or to continue or convert outstanding Loans as or into
Eurodollar Loans shall be suspended and (B) all such affected Loans shall be
converted into Base Rate Loans on the last day of the then current Interest
Period applicable thereto unless the Borrower repays or prepays such Loans in
accordance with this Agreement. Unless the Borrower notifies the Funding Agent
at least one Business Day before the date of any Eurodollar Borrowing for which
a Notice of Revolving Borrowing has previously been given that it elects not to
borrow on such date, then such Borrowing shall be made as a Base Rate Borrowing.
SECTION 2.16 ILLEGALITY
If any Change in Law shall make it unlawful or impossible for any
Lender to make, maintain or fund any Eurodollar Loan and such Lender shall so
notify the Funding Agent, the Funding Agent shall promptly give notice thereof
to the Borrower and the other Lenders, whereupon until such Lender notifies the
Funding Agent and the Borrower that the circumstances giving rise to such
suspension no longer exist, the obligation of such Lender to make Eurodollar
Revolving Loans or to continue or convert outstanding Loans as or into
Eurodollar Loans shall be suspended. In the case of the making of a Eurodollar
Borrowing, such Lender's Revolving Loan shall be made as a Base Rate Loan as
part of the same Borrowing for the same Interest Period and if the affected
Eurodollar Loan is then outstanding, such Loan shall be converted to a Base Rate
Loan either (i) on the last day of the then current Interest Period applicable
to such Eurodollar Loan if such Lender may lawfully continue to maintain such
Loan to such date or (ii) immediately if such Lender shall determine that it may
not lawfully continue to maintain such Eurodollar Loan to such date.
Notwithstanding the foregoing, the affected Lender shall, prior to giving such
notice to the Funding Agent, designate a different Applicable Lending Office if
such designation would avoid the need for giving such notice and if such
designation would not otherwise be disadvantageous to such Lender in the good
faith exercise of its discretion.
SECTION 2.17 INCREASED COSTS
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit
or similar requirement that is not otherwise included in the
determination of the
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Adjusted LIBOR hereunder against assets of, deposits with or
for the account of, or credit extended by, any Lender (except
any such reserve requirement reflected in the Adjusted LIBOR )
or the Issuing Bank; or
(ii) impose on any Lender or on the Issuing Bank or the Eurodollar
interbank market any other condition affecting this Agreement
or any Eurodollar Loans made by such Lender or any Letter of
Credit or any participation therein;
and the result of the foregoing is to increase the cost to such Lender of
making, converting into, continuing or maintaining a Eurodollar Loan, or to
increase the cost to such Lender or the Issuing Bank of participating in or
issuing any Letter of Credit or to reduce the amount received or receivable by
such Lender or the Issuing Bank hereunder (whether of principal, interest or any
other amount), then the Borrower shall promptly pay, upon written notice from
and demand by such Lender on the Borrower (with a copy of such notice and demand
to the Funding Agent), to the Funding Agent for the account of such Lender,
within five Business Days after the date of such notice and demand, additional
amount or amounts sufficient to compensate such Lender or the Issuing Bank, as
the case may be, for such additional costs incurred or reduction suffered.
(b) If any Lender or the Issuing Bank shall have determined that on or
after the date of this Agreement any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of
return on such Lender's or the Issuing Bank's capital (or on the
capital of such Lender's or the Issuing Bank's parent corporation)
as a consequence of its obligations hereunder or under or in respect
of any Letter of Credit to a level below that which such Lender or
the Issuing Bank or such Lender's or the Issuing Bank's parent
corporation could have achieved but for such Change in Law (taking
into consideration such Lender's or the Issuing Bank's policies or
the policies of such Lender's or the Issuing Bank's parent
corporation with respect to capital adequacy) then, from time to
time, within five Business Days after receipt by the Borrower of
written demand by such Lender (with a copy thereof to the Funding
Agent), the Borrower shall pay to such Lender such additional
amounts as will compensate such Lender or the Issuing Bank or such
Lender's or the Issuing Bank's parent corporation for any such
reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or the Issuing
Bank or such Lender's or the Issuing Bank's holding company, as the
case may be, specified in paragraph (a) or (b) of this Section shall
be delivered to the Borrower (with a copy to the Funding Agent) and
shall be conclusive, absent manifest error. The Borrower shall pay
any such Lender or the Issuing Bank, as the case may be, such amount
or amounts within 10 days after receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation pursuant to this Section shall not constitute a
waiver of such Lender's or the Issuing Bank's right to demand such
compensation; provided, that the Borrower shall not be required to
compensate a Lender or the Issuing Bank under this Section for any
increased costs or reductions incurred more than six months prior to
the date that such Lender or the Issuing Bank notifies the Borrower
of such
- 37 -
increased costs or reductions and of such Lender's or the Issuing
Bank's intention to claim compensation therefore; provided further,
that if the Change in Law giving rise to such increased costs or
reductions is retroactive, then such six-month period shall be
extended to include the period of such retroactive effect.
SECTION 2.18 FUNDING INDEMNITY
In the event of (a) the payment of any principal of a Eurodollar
Loan other than on the last day of the Interest Period applicable
thereto (including as a result of an Event of Default), (b) the
conversion or continuation of a Eurodollar Loan other than on the
last day of the Interest Period applicable thereto or (c) the
failure by the Borrower to borrow, prepay, convert or continue any
Eurodollar Loan on the date specified in any applicable notice
(regardless of whether such notice is withdrawn or revoked), then,
in any such event, the Borrower shall compensate each Lender,
within five Business Days after written demand from such Lender,
for any loss, cost or expense attributable to such event. In the
case of a Eurodollar Loan, such loss, cost or expense shall be
deemed to include an amount determined by such Lender to be the
excess, if any, of (i) the amount of interest that would have
accrued on the principal amount of such Eurodollar Loan if such
event had not occurred at the Adjusted LIBOR applicable to such
Eurodollar Loan for the period from the date of such event to the
last day of the then current Interest Period therefor (or in the
case of a failure to borrow, convert or continue, for the period
that would have been the Interest Period for such Eurodollar Loan)
over (ii) the amount of interest that would accrue on the principal
amount of such Eurodollar Loan for the same period if the Adjusted
LIBOR were set on the date such Eurodollar Loan was prepaid or
converted or the date on which the Borrower failed to borrow,
convert or continue such Eurodollar Loan. A certificate as to any
additional amount payable under this Section 2.18 submitted to the
Borrower by any Lender shall be conclusive, absent manifest error.
SECTION 2.19 TAXES.
(a) Any and all payments by or on account of any obligation of the
Borrower hereunder shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided, that
if the Borrower shall be required to deduct any Indemnified Taxes
or Other Taxes from such payments, then (i) the sum payable shall
be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums
payable under this Section) the Canadian Administrative Agent, the
Funding Agent, any Lender or the Issuing Bank (as the case may be)
shall receive an amount equal to the sum it would have received had
no such deductions been made, (ii) the Borrower shall make such
deductions and (iii) the Borrower shall pay the full amount
deducted to the relevant Governmental Authority in accordance with
Applicable Law.
(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with Applicable Law.
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(c) The Borrower shall indemnify the Canadian Administrative Agent, the
Funding Agent, each Lender and the Issuing Bank, within five
Business Days after written demand therefor, for the full amount of
any Indemnified Taxes or Other Taxes paid by the Canadian
Administrative Agent, the Funding Agent, such Lender or the Issuing
Bank, as the case may be, on or with respect to any payment by or on
account of any obligation of the Borrower hereunder (including
Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) and any
penalties, interest and reasonable expenses arising therefrom or
with respect thereto, whether or not such Indemnified Taxes or Other
Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such
payment or liability delivered to the Borrower by a Lender, the
Issuing Bank, or the Canadian Administrative Agent or by the Funding
Agent on its own behalf or on behalf of a Lender or the Issuing
Bank, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower to a Governmental Authority, the
Borrower shall deliver to the Funding Agent the original or a
certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such payment
or other evidence of such payment reasonably satisfactory to the
Funding Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in
which the Borrower is resident for tax purposes, or any treaty to
which such jurisdiction is a party, with respect to payments under
this Agreement shall deliver to the Borrower (with a copy to the
Funding Agent), at the time or times prescribed by Applicable Law,
such properly completed and executed documentation prescribed by
Applicable Law or reasonably requested by the Borrower as will
permit such payments to be made without withholding or at a reduced
rate of withholding. In addition, (i) any Lender, if requested by
the Borrower or the Funding Agent, shall deliver such other
documentation prescribed by Applicable Law or reasonably requested
by the Borrower or the Funding Agent as will enable the Borrower or
the Funding Agent to determine whether or not such Lender is subject
to withholding or information reporting requirements, and (ii) any
Lender that ceases to be, or to be deemed to be, resident in Canada
for purposes of Part XIII of the Income Tax Act (Canada) or any
successor provision thereto shall within five days thereof notify
the Borrower and the Funding Agent in writing.
(f) If the Borrower pays any additional amounts under this Section 2.19
to a Lender and such Lender reasonably determines that it has
actually received or realized in connection therewith any refund or
any reduction of, or credit against, its Tax liabilities in or with
respect to the taxable year in which the additional amount is paid
(a "Tax Benefit"), such Lender shall pay to the Borrower an amount
that such Lender shall reasonably determine is equal to the net
benefit, after tax, which was obtained by such Lender in such year
as a consequence of such Tax Benefit; provided, however, that (i)
any Lender may reasonably determine whether to seek a Tax Benefit,
(ii) any Taxes that are imposed on a Lender as a result of a
disallowance or reduction (including through the expiration of any
tax credit carryover or carryback
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of such Lender that otherwise would not have expired) of any Tax
Benefit with respect to which such Lender has made a payment to the
Borrower pursuant to this Section shall be treated as a Tax for
which the Borrower is obligated to indemnify such Lender pursuant
to this Section without any exclusions or defenses and (iii)
nothing in this Section shall require any Lender to disclose any
confidential information to the Borrower (including, without
limitation, its tax returns). If the Borrower determines in good
faith that a reasonable basis exists for contesting any Taxes for
which indemnification has been demanded hereunder, the relevant
Lender or the Funding Agent, as applicable, shall cooperate with
the Borrower in challenging such Taxes at the Borrower's sole cost
and expense if so requested by the Borrower in writing.
SECTION 2.20 PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF SET-OFFS
(a) The Borrower shall make each payment required to be made hereunder
(whether of principal, interest, fees or reimbursement of LC
Disbursements, or of amounts payable under Section 2.17, Section
2.18 or Section 2.19, or otherwise) prior to 12:00 noon (Toronto,
Ontario time) on the date when due, in immediately available funds,
free and clear of any claims or defenses, and without deduction,
withholding, set-off or counterclaim of any kind. Any amounts
received after such time on any date may, in the discretion of the
Funding Agent, be deemed to have been received on the next
succeeding Business Day for purposes of calculating interest
thereon. All such payments shall be made to the Funding Agent at
the Payment Office, except payments to be made directly to the
Issuing Bank or Swingline Lender as expressly provided herein and
except that payments pursuant to Section 2.17, Section 2.18,
Section 2.19 and Section 10.3, shall be made directly to the
Persons entitled thereto. The Funding Agent shall distribute any
such payments received by it for the account of any other Person to
the appropriate recipient promptly following receipt thereof. If
any payment hereunder shall be due on a day that is not a Business
Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest,
interest thereon shall be made payable for the period of such
extension. All payments hereunder shall be made in Canadian
Dollars.
(b) If at any time insufficient funds are received by and available to
the Funding Agent to pay fully all amounts of principal,
unreimbursed LC Disbursements, interest and fees then due
hereunder, such funds shall be applied (i) first, towards payment
of interest and fees then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of interest and
fees then due to such parties, and (ii) second, towards payment of
principal and unreimbursed LC Disbursements then due hereunder,
ratably among the parties entitled thereto in accordance with the
amounts of principal and unreimbursed LC Disbursements then due to
such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of its Revolving Loans or
participations in LC Disbursements or Swingline Loans that would
result in such Lender receiving payment of a greater proportion of
the aggregate amount of its
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Revolving Loans and participations in LC Disbursements and Swingline
Loans and accrued interest thereon than the proportion received by
any other Lender, then the Lender receiving such greater proportion
shall purchase (for cash at face value) participations in the
Revolving Loans and participations in LC Disbursements and Swingline
Loans of other Lenders to the extent necessary so that the benefit
of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued
interest on their respective Revolving Loans and participations in
LC Disbursements and Swingline Loans; provided, that (i) if any such
participations are purchased and all or any portion of the payment
giving rise thereto is recovered, such participations shall be
rescinded and the purchase price restored to the extent of such
recovery, without interest, and (ii) the provisions of this
paragraph shall not be construed to apply to any payment made by the
Borrower pursuant to and in accordance with the express terms of
this Agreement or any payment obtained by a Lender as consideration
for the assignment of or sale of a participation in any of its Loans
or participations in LC Disbursements or Swingline Loans to any
assignee or participant, other than to the Borrower or any
Subsidiary or Affiliate thereof (as to which the provisions of this
paragraph shall apply). The Borrower consents to the foregoing and
agrees, to the extent it may effectively do so under applicable law,
that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such
Lender were a direct creditor of the Borrower in the amount of such
participation.
(d) Unless the Funding Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the
Funding Agent for the account of the Lenders or the Issuing Bank
hereunder that the Borrower will not make such payment, the Funding
Agent may assume that the Borrower has made such payment on such
date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders or the Issuing Bank, as the
case may be, the amount or amounts due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders
or the Issuing Bank, as the case may be, severally agrees to repay
to the Funding Agent forthwith on demand the amount so distributed
to such Lender or Issuing Bank with interest thereon, for each day
from and including the date such amount is distributed to it to but
excluding the date of payment to the Funding Agent, at the greater
of the Funding Agent's cost of funds and a rate determined by the
Funding Agent in accordance with banking industry rules on interbank
compensation.
(e) If any Lender shall fail to make any payment required to be made by
it pursuant to Section 2.5(b), Section 2.6, Section 2.20(d), Section
2.22(d), or Section 10.3(d), then the Funding Agent may, in its
discretion (notwithstanding any contrary provision hereof), apply
any amounts thereafter received by the Funding Agent for the account
of such Lender to satisfy such Lender's obligations under such
Sections until all such unsatisfied obligations are fully paid.
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SECTION 2.21 MITIGATION OF OBLIGATIONS; REPLACEMENT OF LENDERS
(a) If any Lender requests compensation under Section 2.17, or if the
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 sole
judgment of such Lender, such designation or assignment (i) would
eliminate or reduce amounts payable under Section 2.17 or Section
2.19, as the case may be, 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. The Borrower hereby
agrees to pay all reasonable costs and expenses incurred by any
Lender in connection with such designation or assignment made with
the knowledge or at the request of the Borrower.
(b) If any Lender requests compensation under Section 2.17, or if the
Borrower is required to pay any additional amount to any Lender or
any Governmental Authority of the account of any Lender pursuant
to, Section 2.19 or any Lender is unable to make Eurodollar Loans
for the reasons set forth in Section 2.16 or if any Lender defaults
in its obligation to fund Loans hereunder, then the Borrower may,
at its sole expense and effort, upon notice to such Lender and the
Funding Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions set
forth in Section 10.4(b)) all its interests, rights and obligations
under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender); provided, that
(i) the Borrower shall have received the prior written consent of
the Funding Agent, which consent shall not be unreasonably
withheld, (ii) such Lender shall have received payment of an amount
equal to the outstanding principal amount of all Loans owed to it,
accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (in the case of such
outstanding principal and accrued interest) and from the Borrower
(in the case of all other amounts) and (iii) in the case of a claim
for compensation under Section 2.17 or payments required to be made
pursuant to Section 2.19, such assignment will result in a
reduction in such compensation or payments. A Lender shall not be
required to make any such assignment and delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and
delegation cease to apply.
SECTION 2.22 LETTERS OF CREDIT
(a) During the Availability Period, the Issuing Bank, in reliance upon
the agreements of the other Lenders pursuant to Section 2.22(d),
agrees to issue, at the request of the Borrower, Letters of Credit
for the account of the Borrower on the terms and conditions
hereinafter set forth; provided, that (i) each Letter of Credit
shall be a standby letter of credit which shall expire on the
earlier of (A) the date one year after the date of issuance of such
Letter of Credit (or in the case of any renewal or extension
thereof, one year after such renewal or extension) and (B) the date
that is
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five Business Days prior to the Commitment Termination Date; (ii)
each Letter of Credit shall be in such currencies as the Issuing
Lender will from time to time permit in a stated amount of at least
the Canadian Dollar Equivalent of $50,000; and (iii) the Borrower
may not request any Letter of Credit, if, after giving effect to
such issuance (A) the aggregate LC Exposure would exceed the LC
Commitment or (B) thereafter the aggregate LC Exposure, plus the
aggregate outstanding Swingline Loans, plus the aggregate
outstanding Revolving Loans of all Lenders would exceed
U.S.$30,000,000. Upon the issuance of each Letter of Credit, each
Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the Issuing Bank without
recourse a participation in such Letter of Credit equal to such
Lender's Pro Rata Share of the aggregate amount available to be
drawn under such Letter of Credit. Each issuance of a Letter of
Credit shall be deemed to utilize the Revolving Commitment of each
Lender by an amount equal to the amount of such participation.
(b) To request the issuance of a Letter of Credit (or any amendment,
renewal or extension of an outstanding Letter of Credit), the
Borrower shall give the Issuing Bank and the Funding Agent
irrevocable written notice at least three Business Days prior to
the requested date of such issuance specifying the date (which
shall be a Business Day) such Letter of Credit is to be issued (or
amended, extended or renewed, as the case may be), the expiration
date of such Letter of Credit, the amount and currency of such
Letter of Credit, the name and address of the beneficiary thereof
and such other information as shall be necessary to prepare, amend,
renew or extend such Letter of Credit. In addition to the
satisfaction of the conditions in Article III, the issuance of such
Letter of Credit (or any amendment which increases the amount of
such Letter of Credit) will be subject to the further conditions
that such Letter of Credit shall be in such form and contain such
terms as the Issuing Bank shall approve and that the Borrower shall
have executed and delivered any additional applications, agreements
and instruments relating to such Letter of Credit as the Issuing
Bank shall reasonably require; provided, that in the event of any
conflict between such applications, agreements or instruments and
this Agreement, the terms of this Agreement shall control.
(c) At least two Business Days prior to the issuance of any Letter of
Credit, the Issuing Bank will confirm with the Funding Agent (by
telephone or in writing) that the Funding Agent has received such
notice and if not, the Issuing Bank will provide the Funding Agent
with a copy thereof. Unless the Issuing Bank has received notice
from the Funding Agent on or before the Business Day immediately
preceding the date the Issuing Bank is to issue the requested
Letter of Credit directing the Issuing Bank not to issue the Letter
of Credit because such issuance is not then permitted hereunder
because of the limitations set forth in Section 2.22(a) or that one
or more conditions specified in Article III are not then satisfied,
then, subject to the terms and conditions hereof, the Issuing Bank
shall, on the requested date, issue such Letter of Credit in
accordance with the Issuing Bank's usual and customary business
practices.
(d) The Issuing Bank shall examine all documents purporting to
represent a demand for payment under a Letter of Credit promptly
following its receipt thereof. The Issuing
- 43 -
Bank shall notify the Borrower and the Funding Agent of such demand
for payment and whether the Issuing Bank has made or will make a LC
Disbursement thereunder; provided, that any failure to give or
delay in giving such notice shall not relieve the Borrower of its
obligation to reimburse the Issuing Bank and the Lenders with
respect to such LC Disbursement. The Borrower shall be irrevocably
and unconditionally obligated to reimburse the Issuing Bank for any
LC Disbursements paid by the Issuing Bank in respect of such
drawing, without presentment, demand or other formalities of any
kind. Unless the Borrower shall have notified the Issuing Bank and
the Funding Agent prior to 11:00 a.m. (Toronto, Ontario time) on
the Business Day immediately prior to the date on which such
drawing is honoured that the Borrower intends to reimburse the
Issuing Bank for the amount of such drawing in funds other than
from the proceeds of Revolving Loans, the Borrower shall be deemed
to have timely given a Notice of Revolving Borrowing to the Funding
Agent requesting the Lenders to make a Base Rate Borrowing on the
date on which such drawing is honoured in an exact amount due to
the Issuing Bank; provided, that for purposes solely of such
Borrowing, the conditions precedent set forth in Section 3.2 hereof
shall not be applicable. The Funding Agent shall notify the Lenders
of such Borrowing in accordance with Section 2.3, and each Lender
shall make the proceeds of its Base Rate Loan included in such
Borrowing available to the Funding Agent for the account of the
Issuing Bank in accordance with Section 2.6. The proceeds of such
Borrowing shall be applied directly by the Funding Agent to
reimburse the Issuing Bank for such LC Disbursement.
(e) If for any reason a Base Rate Borrowing may not be (as determined
in the sole discretion of the Funding Agent), or is not, made in
accordance with the foregoing provisions, then each Lender (other
than the Issuing Bank) shall be obligated to fund the participation
that such Lender purchased pursuant to subsection (a) in an amount
equal to its Pro Rata Share of such LC Disbursement on and as of
the date which such Base Rate Borrowing should have occurred. Each
Lender's obligation to fund its participation shall be absolute and
unconditional and shall not be affected by any circumstance,
including without limitation (i) any setoff, counterclaim,
recoupment, defense or other right that such Lender or any other
Person may have against the Issuing Bank or any other Person for
any reason whatsoever, (ii) the existence of a Default or an Event
of Default or the termination of the Aggregate Revolving
Commitments, (iii) any adverse change in the condition (financial
or otherwise) of the Borrower or any Subsidiary, (iv) any breach of
this Agreement by the Borrower or any other Lender, (v) any
amendment, renewal or extension of any Letter of Credit or (vi) any
other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing. On the date that such
participation is required to be funded, each Lender shall promptly
transfer, in immediately available funds, the amount of its
participation to the Funding Agent for the account of the Issuing
Bank. Whenever, at any time after the Issuing Bank has received
from any such Lender the funds for its participation in a LC
Disbursement, the Issuing Bank (or the Funding Agent on its behalf)
receives any payment on account thereof, the Funding Agent or the
Issuing Bank, as the case may be, will distribute to such Lender
its Pro Rata Share of such payment; provided, that if such payment
is required to be returned for any reason to the Borrower or to a
trustee, receiver, liquidator, custodian or similar
- 44 -
official in any bankruptcy proceeding, such Lender will return to
the Funding Agent or the Issuing Bank any portion thereof
previously distributed by the Funding Agent or the Issuing Bank to
it.
(f) To the extent that any Lender shall fail to pay any amount required
to be paid pursuant to paragraph (e) of this Section 2.22 on the
due date therefor, such Lender shall pay interest to the Issuing
Bank (through the Funding Agent) on such amount from such due date
to the date such payment is made at a rate per annum equal to the
Funding Agent's cost of funds; provided, that if such Lender shall
fail to make such payment to the Issuing Bank within three Business
Days of such due date, then, retroactively to the due date, such
Lender shall be obligated to pay interest on such amount at the
Default Rate.
(g) If any Event of Default shall occur and be continuing, on the
Business Day that the Borrower receives notice from the Funding
Agent or the Required Lenders demanding the deposit of cash
collateral pursuant to this paragraph, the Borrower shall deposit
in an account with the Funding Agent, in the name of the Funding
Agent and for the benefit of the Lenders, an amount in cash equal
to the LC Exposure as of such date plus any accrued and unpaid
interest thereon; provided, that the obligation to deposit such
cash collateral shall become effective immediately, and such
deposit shall become immediately due and payable, with demand or
notice of any kind, upon the occurrence of any Event of Default
with respect to the Borrower described in subsection (g) or (h) of
Section 8.1. Such deposit shall be held by the Funding Agent as
collateral in an interest bearing account (which account shall be
chosen in the sole discretion of the Funding Agent and at the
Borrower's risk and expense) for the payment and performance of the
obligations of the Borrower under this Agreement. The Funding Agent
shall have exclusive dominion and control, including the exclusive
right of withdrawal, over such account. Interest and profits on
such investments shall accumulate in such account. Moneys in such
account shall be applied by the Funding Agent to reimburse the
Issuing Bank for LC Disbursements for which it had not been
reimbursed and to the extent not so applied, shall be held for the
satisfaction of the reimbursement obligations of the Borrower for
the LC Exposure at such time or, if the maturity of the Loans has
been accelerated, with the consent of the Required Lenders, be
applied to satisfy other obligations of the Borrower under this
Agreement. If the 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 so applied as aforesaid)
shall be returned to the Borrower within three Business Days after
all Events of Default have been cured or waived.
(h) Promptly following the end of each fiscal quarter, the Issuing Bank
shall deliver (through the Funding Agent) to each Lender and the
Borrower a report describing the aggregate Letters of Credit
outstanding at the end of such fiscal quarter. Upon the request of
any Lender from time to time, the Issuing Bank shall deliver to
such Lender any other information reasonably requested by such
Lender with respect to each Letter of Credit then outstanding.
- 45 -
(i) The Borrower's obligation to reimburse LC Disbursements hereunder
shall be absolute, unconditional and irrevocable and shall be
performed strictly in accordance with the terms of this Agreement
under all circumstances whatsoever and irrespective of any of the
following circumstances:
(i) Any lack of validity or enforceability of any Letter of Credit
or this Agreement;
(ii) The existence of any claim, set-off, defense or other right
which the Borrower or any Subsidiary or Affiliate of the
Borrower may have at any time against a beneficiary or any
transferee of any Letter of Credit (or any Persons or entities
for whom any such beneficiary or transferee may be acting),
any Lender (including the Issuing Bank) or any other Person,
whether in connection with this Agreement or the Letter of
Credit or any document related hereto or thereto or any
unrelated transaction;
(iii) Any draft or other document presented under a Letter of Credit
proving to be forged, fraudulent or invalid in any respect or
any statement therein being untrue or inaccurate in any
respect;
(iv) Payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document to the Issuing Bank
that does not comply with the terms of such Letter of Credit;
(v) Any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the
provisions of this Section, constitute a legal or equitable
discharge of, or provide a right of setoff against, the
Borrower's obligations hereunder; or
(vi) The existence of a Default or an Event of Default.
Neither the Canadian Administrative Agent, the Funding Agent, the Issuing Bank,
the Lenders nor any Related Party of any of the foregoing shall have any
liability or responsibility by reason of or in connection with the issuance or
transfer of any Letter of Credit or any payment or failure to make any payment
thereunder (irrespective of any of the circumstances referred to above), or any
error, omission, interruption, loss or delay in transmission or delivery of any
draft, notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), any error in
interpretation of technical terms or any consequence arising from causes beyond
the control of the Issuing Bank; provided, that nothing in this Agreement, any
Letter of Credit or any other Loan Document shall be construed to excuse the
Issuing Bank from liability to the Borrower to the extent of any direct damages
(as opposed to consequential damages, claims in respect of which are hereby
waived by the Borrower to the extent permitted by applicable law) suffered by
the Borrower that are caused by the Issuing Bank's failure to exercise care when
determining whether drafts or other documents presented under a Letter of Credit
comply with the terms thereof. The parties hereto expressly agree, that in the
absence of gross negligence or wilful misconduct on the part of the Issuing Bank
(as finally determined by a court of competent jurisdiction), the Issuing Bank
shall be deemed to have exercised care in each such determination. In
- 46 -
furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented that appear on their
face to be in substantial compliance with the terms of a Letter of Credit, the
Issuing Bank may, in its sole discretion, either accept and make payment upon
such documents without responsibility for further investigation, regardless of
any notice or information to the contrary, or refuse to accept and make payment
upon such documents if such documents are not in strict compliance with the
terms of such Letter of Credit.
Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a
Letter of Credit is issued and subject to applicable laws, performance under
Letters of Credit by the Issuing Bank, its correspondents, and the beneficiaries
thereof will be governed by the rules of the "International Standby Practices
1998" (ISP98) (or such later revision as may be published by the Institute of
International Banking Law & Practice on any date any Letter of Credit may be
issued) and to the extent not inconsistent therewith, the governing law of this
Agreement set forth in Section 10.5.
ARTICLE III
CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT
SECTION 3.1 CONDITIONS TO EFFECTIVENESS
The obligations of the Lenders (including the Swingline Lender) to
make Loans and the obligation of the Issuing Bank to issue any Letter of Credit
hereunder shall not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section 10.2):
(a) The Canadian Administrative Agent shall have received all fees and
other amounts due and payable on or prior to the Closing Date,
including reimbursement or payment of all out-of-pocket expenses
(including reasonable fees, charges and disbursements of counsel to
the Canadian Administrative Agent) required to be reimbursed or
paid by the Borrower hereunder, under any other Loan Document and
under any agreement with the Canadian Administrative Agent or
SunTrust ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, as Lead Arranger.
(b) The Canadian Administrative Agent (or its counsel) shall have
received the following, each in form and substance satisfactory to
the Canadian Administrative Agent, on or prior to the Closing Date:
(i) a counterpart of this Agreement signed by or on behalf of each
party hereto or written evidence satisfactory to the Canadian
Administrative Agent (which may include telecopy transmission
of a signed signature page of this Agreement) that such party
has signed a counterpart of this Agreement;
(ii) duly executed Notes payable to each Lender, as applicable;
(iii) a duly executed Guarantee Agreement from each Guarantor;
(iv) a U.S. Pledge Agreement duly executed by the Parent and each
Subsidiary of the Parent (other than the Non-U.S.
Subsidiaries) covering (A) the Applicable Pledge Amount of the
capital stock of each Non-U.S. Subsidiary of the
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Parent and such Subsidiary, together with delivery of the
original stock certificates evidencing such shares and
undated stock powers executed in blank, and such documents
shall be accompanied by such other documents as the Canadian
Administrative Agent may reasonably request (including
without limitation, certificates of incorporation,
incumbency certificates of such entities, articles of
incorporation, bylaws, other organizational documents,
membership operating agreements, opinion letters and
appropriate resolutions of the Board of Directors or other
governing body of any such Non-U.S. Subsidiary) and (B) 100%
of the capital stock of each Subsidiary (other than Non-U.S.
Subsidiaries) of the Parent, together with delivery of the
original stock certificates evidencing such shares, undated
stock powers executed in blank;
(v) a Pledge Agreement duly executed by the Parent and each
Subsidiary of the Parent (other than the Non-U.S.
Subsidiaries) covering the capital stock (other than the
Applicable Pledge Amount) of each direct and indirect
Non-U.S. Subsidiary of the Parent, together with delivery of
the original stock certificates evidencing such shares and
undated stock powers executed in blank, and such documents
shall be accompanied by such other documents as the Canadian
Administrative Agent may reasonably request (including
without limitation, certificates of incorporation,
incumbency certificates of such entities, articles of
incorporation, bylaws, other organizational documents,
membership operating agreements, opinion letters and
appropriate resolutions of the Board of Directors or other
governing body of any such Non-U.S. Subsidiary);
(vi) a Pledge Agreement duly executed by 990834 Ontario Inc.
covering all of the capital stock of the Borrower, together
with delivery of the original stock certificates evidencing
such shares and undated stock powers executed in blank, and
such documents shall be accompanied by such other documents
as the Canadian Administrative Agent may personally request;
(vii) such landlord waivers, consents and/or estoppel certificates
as the Canadian Administrative Agent may have reasonably
requested with respect to Real Property leased by a Loan
Party;
(viii) a U.S. Security Agreement duly executed by the Parent and
each of its Subsidiaries (other than the Non-U.S.
Subsidiaries), together with:
(A) proper Financing Statements (Form UCC-1 or the
equivalent) fully completed and authorized for filing
under the UCC with the Secretary of State of the
debtor's state of organization or other appropriate
filing offices of each jurisdiction as may be necessary
or, in the reasonable opinion of the Canadian
Administrative Agent, desirable to perfect the security
interests purported to be created by the U.S. Security
Agreement;
- 48 -
(B) certified copies of search results, or equivalent
reports, listing all effective financing statements
that name the Parent or any of its Subsidiaries (other
than Non-U.S. Subsidiaries) as debtor and that are
filed in the jurisdictions referred to in clause A
above, together with copies of such other financing
statements that name Parent or any of its Subsidiaries
(other than Non-U.S. Subsidiaries) as debtor (none of
which shall cover the Collateral of such entities
except to the extent evidencing Permitted Encumbrances
or in respect of which the Canadian Administrative
Agent shall have received UCC termination statements);
(C) evidence of the completion of all other recordings and
filings of, or with respect to, the U.S. Security
Agreement and the other Collateral Documents as may be
necessary or, in the reasonable opinion of the Canadian
Collateral Agent, desirable to perfect the security
interests intended to be created by the U.S. Security
Agreement and such other Collateral Documents;
(ix) Canadian Security Agreements duly executed by each of the
Borrower and 990834 Ontario Inc.;
(A) evidence of filing of proper financing statements under
relevant personal property security legislation
necessary or, in the reasonable opinion of the Canadian
Administrative Agent, desirable to perfect the security
interests purported to be created by such Canadian
Security Agreements;
(B) certified copies of search results, or equivalent
reports, listing all effective financing statements
that name the Borrower or any of its Subsidiaries or
Affiliates as debtor and that are filed in the
jurisdictions referred to in clause A above, together
with copies of such other financing statements that
name Borrower or any of its Subsidiaries or Affiliates
as debtor (none of which shall cover the Collateral of
such entity except to the extent evidencing Permitted
Encumbrances);
(C) evidence of the completion of all other recordings and
filings of, or with respect to, the Canadian Security
Agreements and the other Collateral Documents as may be
necessary or, in the reasonable opinion of the Canadian
Administrative Agent, desirable to perfect the security
interests intended to be created by the Canadian
Security Agreements and such other Collateral
Documents;
(x) a Deed of Movable Hypothec duly executed by the Borrower in
respect of its movable property located in the Province of
Quebec;
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(A) evidence of registration of such notices under the laws
of the Province of Quebec necessary or, in the
reasonable opinion of the Canadian Administrative
Agent, desirable for the hypothec intended to be
created by the Deed of Movable Hypothec to be opposable
to third parties;
(B) certified copies of search results, or equivalent
reports, listing all effective registrations in the
name of the Borrower or any of its Subsidiaries or
Affiliates in the Register of Personal and Movable Real
Rights, together with copies of such other
registrations that name Borrower or any of its
Subsidiaries or Affiliates as debtor (none of which
shall cover the Collateral except to the extent
evidencing Permitted Encumbrances);
(C) evidence of the completion of all other registrations,
recordings and filings of, or with respect to, the Deed
of Movable Hypothec as may be necessary or, in the
reasonable opinion of the Canadian Administrative
Agent, desirable for the hypothec intended to be
created by the Deed of Movable Hypothec to be opposable
to third parties;
(xi) a duly executed (x) Trademark Security Agreement in the
form of Exhibit G (the "U.S. TRADEMARK SECURITY
AGREEMENT"); and (y) Patent Security Agreement in the form
of Exhibit H (the "U.S. PATENT SECURITY AGREEMENT") in each
case executed by the Parent and LXE Inc. covering all of
such Person's present and future Intellectual Property (as
defined in the U.S. Security Agreement), together with:
(A) proper Financing Statements (Form UCC-1 or the
equivalent), in each case fully completed and
authorized for filing under the UCC with the Secretary
of State of the debtor's state of organization or other
appropriate filing offices (including, without
limitation, the United States Patent and Trademark
Office) as may be necessary or, in the reasonable
opinion of the Canadian Administrative Agent, desirable
to perfect the security interests purported to be
created by the U.S. Trademark Security Agreement and
the U.S. Patent Security Agreement; and
(B) evidence of the completion of, or satisfactory
arrangements for, all other recordings and filings of,
or with respect to, the U.S. Trademark Security
Agreement and the U.S. Patent Security Agreement as may
be necessary or, in the reasonable opinion of the
Administrative Agent, desirable to perfect the security
interests intended to be created by the U.S. Trademark
Security Agreement and the U.S. Patent Security
Agreement;
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(xii) a duly executed Canadian Intellectual Property Security
Agreement executed by the Borrower and covering all of the
Borrower's present and future intellectual property
together with evidence of the completion of, or
satisfactory arrangements for, all other recordings and
filings at, or with respect to, the Canadian Intellectual
Property Security Agreement;
(xiii) duly executed Payoff Letters, executed by each of the
Existing Lenders;
(xiv) a duly executed Intercreditor Agreement;
(xv) a certificate of the Secretary or Assistant Secretary of
each Loan Party, attaching and certifying copies of its
bylaws, partnership or operating agreement, as the case may
be, and of the resolutions of its boards of directors,
board of managers or partnership resolutions, as the case
may be, authorizing the execution, delivery and performance
of the Loan Documents to which it is a party and certifying
the name, title and true signature of each officer of such
Loan Party executing the Loan Documents to which it is a
party;
(xvi) certified copies of the certificate or articles of
incorporation or other documents of formation or
organization of each Loan Party, together with certificates
of good standing or existence, as may be available from the
Secretary of State or equivalent Governmental Authority of
the jurisdiction of organization of such Loan Party and
each other jurisdiction where the ownership of property or
the conduct of its business require such Loan Party to be
qualified, except where a failure to be so qualified would
not have a Material Adverse Effect;
(xvii) a favourable written opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP,
counsel to the Loan Parties, a favourable written opinion
of ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP counsel to the Parent and a
favourable written opinion of the general counsel of the
Parent, in each case, addressed to the Canadian
Administrative Agent and each of the Lenders and, in each
case, in form and content reasonably satisfactory to the
Administrative Agent;
(xviii) a certificate, dated the date hereof and signed by a
Responsible Officer of the Borrower, confirming, among
other things, compliance with the conditions of Section 3.1
and compliance with the conditions set forth in paragraphs
(a), (b) and (c) of Section 3.2;
(xix) duly executed Notices of Borrowing, and duly executed
Statement of Funds Flow;
(xx) (A) the consolidated financial statements of the Parent and
its Consolidated Subsidiaries for the fiscal year ended
December 31, 2003 including balance sheets, income and cash
flow statements audited by KPMG LLP and the consolidating
financial statements prepared internally with respect to
such audited financial statements, each prepared in
accordance with GAAP, and
- 51 -
(B) the consolidated and consolidating financial statements
of the Parent and its Consolidated Subsidiaries for the
fiscal quarter ending June 30, 2004, certified by the chief
financial officer of the Parent and prepared in conformity
with GAAP, and such other financial information as the
Canadian Administrative Agent may request;
(xxi) delivery of certified copies of all consents, approvals,
authorizations, registrations, or filings required to be
made or obtained by the Parent and any Guarantor in
connection with the Loan Documents and the other
transactions contemplated herein;
(xxii) certificates of insurance complying with the requirements
of Section 5.8 for the business and properties of the
Borrower and its Subsidiaries, describing in reasonable
detail the types and amounts of insurance (property and
liability) maintained by the Loan Parties, and naming the
Canadian Collateral Agent as an additional insured and as
loss payee, as applicable, and stating that such insurance
shall not be cancelled without at least 30 days prior
written notice by the respective insurer to the Canadian
Collateral Agent;
(xxiii) a fully executed copy of the U.S. Revolving Credit
Agreement and the other "Loan Documents" (as defined in the
U.S. Revolving Credit Agreement) with evidence that all
conditions precedent to the effectiveness of the U.S.
Revolving Credit Agreement have been satisfied; and
(xxiv) such other documents, certificates or information with
respect to any Loan Party as the Canadian Administrative
Agent or the Required Lenders may reasonably request.
SECTION 3.2 EACH CREDIT EVENT
The obligation of each Lender to make a Loan on the occasion of any
Borrowing and of the Issuing Bank to issue, amend, renew or extend any Letter of
Credit is subject to the satisfaction of the following conditions:
(a) at the time of and immediately after giving effect to such Borrowing
or the issuance, amendment, renewal or extension of such Letter of
Credit, as applicable, no Default or Event of Default shall exist;
(b) at the time of and immediately after giving effect to such Borrowing
or the issuance, amendment, renewal or extension of such Letter of
Credit, as applicable, all representations and warranties of each
Loan Party set forth in the Loan Documents shall be true and correct
in all material respects before and after giving effect thereto
(except for such representations and warranties which relate to an
earlier date or such changes in factual circumstances as are
expressly permitted under the Loan Documents);
- 52 -
(c) since the date of the most recent financial statements of the Parent
described in Section 5.1(a), there shall have been no event,
circumstance, condition or change which has had or could reasonably
be expected to have a Material Adverse Effect;
(d) without limiting the generality of Section 3.2(c), the Lenders shall
not have determined, in their unfettered discretion, that any event,
circumstance, condition or change shall have occurred in connection
with the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Contract or in the relationship between
the parties thereto that could result in a Material Adverse Effect;
(e) there shall not have been filed or commenced any action, suit or
proceeding by or before any arbitrator or Governmental Authority
against the Borrower or the Parent, in connection with the ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ Contract;
(f) the Borrower shall provide evidence satisfactory to the Canadian
Administrative Agent of the Borrower's compliance with Section 5.13
after giving effect to the requested Borrowing or the requested
issuance of the Letter of Credit unless and until the Borrower has
delivered a copy of the letter delivered to the Borrower by
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ as provided in Section 5.13 and
(g) delivery of such other documents, certificates, or information as
the Canadian Administrative Agent or the Required Lenders may
reasonably request.
Each Borrowing and each issuance, amendment, extension or renewal of any Letter
of Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in this Section 3.2.
SECTION 3.3 DELIVERY OF DOCUMENTS
All of the Loan Documents, certificates, legal opinions and other
documents and papers referred to in this Article III, unless otherwise
specified, shall be delivered to the Canadian Administrative Agent for the
account of each of the Lenders and, except for the Notes, in sufficient
counterparts or copies for each of the Lenders and shall be in form and
substance satisfactory in all respects to the Canadian Administrative Agent.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Parent and the Borrower represent and warrant to the Canadian
Administrative Agent, the Funding Agent and each Lender as follows:
SECTION 4.1 EXISTENCE; POWER
The Parent and each of its Subsidiaries (other than Dormant
Companies) (a) is duly organized or formed, validly existing and in good
standing as a corporation, limited liability company or partnership, as the case
may be, under the laws of the jurisdiction of its organization or formation, (b)
has all requisite power and authority to carry on its business and to execute,
deliver and perform its respective obligations under each Loan Document to which
it is a party, and (c) is
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duly qualified to transact business, and is in good standing, in each
jurisdiction where such qualification is required, except in the case of clause
(c), where a failure to be so qualified could not reasonably be expected to
result in a Material Adverse Effect.
SECTION 4.2 ORGANIZATIONAL POWER; AUTHORIZATION
The execution, delivery and performance by each Loan Party of the
Loan Documents to which it is a party are within such Loan Party's
organizational powers and have been duly authorized by all necessary
organizational, and if required, shareholder, member or partner, action. This
Agreement has been duly executed and delivered by the Borrower and the Parent,
and constitutes, and each other Loan Document to which any Loan Party is a
party, when executed and delivered by such Loan Party, will constitute, valid
and binding obligations of the Borrower, the Parent or such other Loan Party (as
the case may be), enforceable against it in accordance with their respective
terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium, or similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity.
SECTION 4.3 GOVERNMENTAL AND THIRD PARTY APPROVALS; NO CONFLICTS
The execution, delivery and performance by the Borrower and the
Parent of this Agreement, and by each Loan Party of the other Loan Documents to
which it is a party (a) do not require any consent or approval of, registration
or filing with, or any action by, any Governmental Authority or any other
Person, except those as have been obtained or made and are in full force and
effect, (b) will not violate any Requirements of Law applicable to the Borrower,
the Parent or any of its Subsidiaries or any judgment, order or ruling (c) will
not violate or result in a default under any indenture, material Contractual
Obligation binding on the Borrower, the Parent or any Subsidiary or any of its
respective assets or give rise to a right thereunder to require any payment to
be made by the Borrower or any Subsidiary and (d) will not result in the
creation or imposition of any Lien on any asset of the Borrower, the Parent or
any Subsidiary, except Liens (if any) created under the Loan Documents. Other
than as described on Schedule 4.3 hereto, no Loan Party is in default under any
Contractual Obligations referenced to in subsection (c) immediately above.
SECTION 4.4 FINANCIAL STATEMENTS
The Borrower has furnished to the Canadian Administrative Agent and
each Lender (a) the audited consolidated balance sheet of the Parent and its
Subsidiaries as of December 31, 2003 and the related audited consolidated
statements of income, changes in shareholders' equity and cash flows for the
fiscal year then ended prepared by KPMG accompanied by an internally prepared
consolidating balance sheet of the Parent and its Subsidiaries as of such date
and related consolidating statements of income, stockholders' equity and cash
flows for the fiscal year then ended and (b) the unaudited consolidated and
consolidating balance sheet of the Parent and its Subsidiaries as at the end of
June 30, 2004, and the related unaudited consolidated and consolidating
statements of income and cash flows for the fiscal quarter and year-to-date
period then ending, certified by the chief financial officer or treasurer of the
Parent. Such financial statements fairly present in all material respects the
consolidated and consolidating financial condition of the Parent and its
Subsidiaries as of such dates and the consolidated results of operations for
such periods in conformity with GAAP consistently applied, subject to year-end
audit adjustments and the absence
- 54 -
of footnotes in the case of the statements
referred to in subsection (b). Since December 31, 2003, there have been no
changes, events, acts, conditions or occurrences of any nature, singly or in the
aggregate that have had or could reasonably be expected to have a Material
Adverse Effect. Since December 31, 2003, no Consolidated Party has made any
Restricted Payment except as permitted pursuant to Section 7.5.
SECTION 4.5 LITIGATION AND ENVIRONMENTAL MATTERS
(a) Except for matters set forth on Schedule 4.5(a), no litigation,
investigation or proceeding of or before any arbitrators or
Governmental Authorities is pending against or, to the knowledge of
the Borrower, threatened against or affecting the Borrower or any of
its Subsidiaries (i) as to which there is a reasonable possibility
of an adverse determination that could reasonably be expected to
have, either individually or in the aggregate, a Material Adverse
Effect or (ii) which in any manner challenges the validity or
enforceability of this Agreement or any other Loan Document. With
respect to any pending litigation, investigation or proceeding of or
before any arbitrators or Governmental Authorities, no events, acts
or conditions have occurred in respect of or in relation to any such
pending litigation, investigation or proceeding that could
reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect.
(b) Except for the matters set forth on Schedule 4.5(b) and except for
matters which could not reasonably be expected to have a Material
Adverse Effect, neither the Borrower nor any of its Subsidiaries (i)
has failed to comply with any Environmental Law or to obtain,
maintain or comply with any permit, license or other approval
required under any Environmental Law, (ii) has become subject to any
Environmental Liability, (iii) has received notice of any claim with
respect to any Environmental Liability or (iv) knows of any basis
for any Environmental Liability in each case.
SECTION 4.6 COMPLIANCE WITH LAWS AND AGREEMENTS
Except where non-compliance, either singly or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect and
except as disclosed on Schedule 4.3 with respect to clause (b) immediately
below, the Borrower and each of its Subsidiaries is in compliance with (a) all
Requirements of Law and all judgments, decrees and orders of any Governmental
Authority, and (b) all Contractual Obligations of such Consolidated Parties.
SECTION 4.7 TAXES
The Borrower and its Subsidiaries and each other Person for whose
taxes the Borrower or any of its Subsidiaries are liable, have timely filed or
caused to be filed all federal, provincial and foreign tax returns and all other
tax returns or reports that are required to be filed by them, and have paid all
taxes shown to be due and payable on such returns or reports or on any
assessments made against it or its property and all other taxes, fees or other
charges imposed on it or any of its property by any Governmental Authority,
except where the same are currently being contested in good faith by appropriate
proceedings and for which the Borrower or such Subsidiary,
- 55 -
as the case may be, has set aside on its books adequate reserves. The
charges, accruals and reserves on the books of the Borrower and its Subsidiaries
in respect of such taxes are adequate, and no tax liabilities that could be
materially in excess of the amount so provided are anticipated.
SECTION 4.8 CANADIAN WELFARE AND PENSION PLANS
Each Canadian Welfare Plan has been administered and is in
compliance in all material respects with Applicable Law, including, without
limitation, all requirements relating to employee participation, funding,
investment of funds, benefits and transactions with the Borrower, its
Subsidiaries and persons related to them. The Borrower and its Subsidiaries do
not have any material liabilities with respect to any post-retirement benefits
under Canadian Welfare Plans. With respect to Canadian Pension Plans: (a) no
steps have been instituted to terminate any Canadian Pension Plan (wholly or in
part) which could result in the Borrower or its Subsidiaries being required to
make an additional contribution to the Canadian Pension Plan; (b) no failure to
remit a contribution in accordance with the terms of any Canadian Pension Plan
or applicable pension benefits laws has occurred with respect to any Canadian
Pension Plan sufficient to give rise to a material lien or charge under any
applicable pension benefits laws of any jurisdiction; and (c) no condition
exists and no event or transaction has occurred with respect to any Canadian
Pension Plan that is reasonably likely to result in the Borrower or its
Subsidiaries incurring any material liability, fine or penalty. In respect of
each Canadian Pension Plan: (i) all contributions (including employee
contributions made by authorized payroll deductions or other withholdings)
required to be made to the appropriate funding agent in accordance with all
Applicable Law and the terms of each Canadian Pension Plan have been made in all
material respects in accordance with all Applicable Law and the terms of each
Canadian Pension Plan; and (ii) no event has occurred and no conditions exist
with respect to any Canadian Pension Plan that has resulted or could reasonably
be expected to result in any Canadian Pension Plan having its registration
revoked or refused by any administration of any relevant pension benefits
regulatory authority or being required to pay any material taxes or penalties
under any applicable pension benefits or tax laws.
SECTION 4.9 OWNERSHIP OF PROPERTY.
(a) The Borrower and each of its Subsidiaries has good title to, or
valid leasehold interests in, all of its real and personal property
material to the operation of its business free and clear of all
Liens prohibited by this Agreement.
(b) The Borrower and each of its Subsidiaries owns, or is licensed, or
otherwise has the right, to use, all patents, trademarks, service
marks, trade names, copyrights and other intellectual property
material to its business, and the use thereof by the Borrower and
each of its Subsidiaries does not infringe on the rights of any
other Person, except for any such infringements that, individually
or in the aggregate, would not have a Material Adverse Effect.
(c) The properties of the Borrower and its Subsidiaries are insured with
financially sound and reputable insurance companies which are not
Affiliates of the Borrower, in such amounts with such deductibles
and covering such risks as are customarily carried by companies
engaged in similar businesses and owning similar properties in
localities where the Borrower or any of its Subsidiaries operate.
- 56 -
SECTION 4.10 DISCLOSURE
The Borrower has disclosed to the Canadian Administrative Agent and
the Lenders, all agreements, instruments, and corporate or other restrictions to
which the Borrower or any Subsidiary is subject, and all other matters known to
any of them, with respect to any of the foregoing, that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.
No reports, financial statements, certificates or other information furnished by
or on behalf of the Borrower to the Canadian Administrative Agent or any Lender
in connection with the negotiation or syndication of this Agreement or any other
Loan Document or delivered hereunder or thereunder (as modified or supplemented
by any other information so furnished) contains any material misstatement of
fact or omits to state any material fact necessary to make the statements
therein, taken as a whole, in light of the circumstances under which they were
made, not misleading.
SECTION 4.11 LABOUR RELATIONS
There are no strikes, lockouts or other labour disputes or
grievances against the Borrower or any of its Subsidiaries, or, to the
Borrower's knowledge, threatened against or affecting the Borrower or any of its
Subsidiaries, including any material grievance or arbitration arising out of or
under any collective bargaining agreement and no significant unfair labour
practice or employment discrimination practice, charges or other grievances are
pending against the Borrower or any of its Subsidiaries, or to the Borrower's
knowledge, threatened against any of them before any Governmental Authority that
could reasonably be expected to have a Material Adverse Effect. All payments due
from the Borrower or any of its Subsidiaries pursuant to the provisions of any
collective bargaining agreement have been paid or accrued as a liability on the
books of such Borrower or any such Subsidiary, except where the failure to do so
could not reasonably be expected to have a Material Adverse Effect.
SECTION 4.12 SUBSIDIARIES
As of the Closing Date, Schedule 4.12 sets forth the exact legal
name of, the percentage and type of ownership interest in, the name of the
Person who is the record owner of, the jurisdiction of incorporation or
formation of, the chief executive office and all places of business and, if the
same is different, the address at which its books and records are located and
the address from which its invoices and accounts are issued of, and the type of,
each Subsidiary and Affiliate of the Parent, and identifies each Subsidiary that
is a Guarantor, in each case, as of the Closing Date.
SECTION 4.13 SOLVENCY
The Borrower is Solvent (including after giving effect to all
Borrowings on the Closing Date).
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SECTION 4.14 INDEBTEDNESS AT CLOSING DATE
As of the Closing Date, neither the Borrower nor any of its
Subsidiaries has any Indebtedness except as set forth on Schedule 4.14.
SECTION 4.15 OFAC
No Loan Party (a) is a person whose property or interest in property
is blocked or subject to blocking pursuant to Section 1 of Executive Order 13224
of September 23, 2001 Blocking Property and Prohibiting Transactions With
Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079
(2001)), (b) engages in any dealings or transactions prohibited by Section 2 of
such executive order, or is otherwise associated with any such person in any
manner violative of Section 2, or (c) is a person on the list of Specially
Designated Nationals and Blocked Persons or subject to the limitations or
prohibitions under any other U.S. Department of Treasury's Office of Foreign
Assets Control regulation or executive order.
SECTION 4.16 PATRIOT ACT
Each Loan Party is in compliance, in all material respects, with the
(i) the Trading with the Enemy Act, as amended, and each of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) and any other enabling legislation or executive order
relating thereto, and (ii) the Uniting And Strengthening America By Providing
Appropriate Tools Required To Intercept And Obstruct Terrorism (USA Patriot Act
of 2001). No part of the proceeds of the Loans will be used, directly or
indirectly, for any payments to any governmental official or employee, political
party, official of a political party, candidate for political office, or anyone
else acting in an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage, in violation of the United States
Foreign Corrupt Practices Act of 1977, as amended.
SECTION 4.17 DORMANT COMPANIES
Except as set forth on Schedule 4.17, the Dormant Company does not
own any material assets or have any outstanding Indebtedness or other material
liabilities. The aggregate revenues and assets of the Dormant Company is less
than 1% of the aggregate revenues and assets of the Parent and its Subsidiaries
on a consolidated basis.
ARTICLE V
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that, from and after the Closing
Date, so long as any Lender has a Commitment hereunder or any Obligation remains
unpaid or any Letter of Credit remains outstanding:
SECTION 5.1 FINANCIAL STATEMENTS AND OTHER INFORMATION.
The Borrower or the Parent will deliver to the Canadian
Administrative Agent and to each Lender:
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(a) as soon as available and in any event within 90 days after the end
of each fiscal year of the Parent, a copy of the annual audited
report for such fiscal year for the Parent and its Subsidiaries,
containing a consolidated balance sheet of the Parent and its
Consolidated Subsidiaries as of the end of such fiscal year and the
related consolidated statements of income, stockholders' equity and
cash flows (together with all footnotes thereto) of the Parent and
its Consolidated Subsidiaries for such fiscal year, setting forth in
each case in comparative form the figures for the previous fiscal
year, all in reasonable detail and reported on by KPMG LLP or other
independent public accountants of nationally recognized standing
(without a "going concern" or like qualification, exception or
explanation and without any qualification or exception as to scope
of such audit), accompanied by (i) a certificate from such
accountants to the effect that such financial statements present
fairly in all material respects the financial condition and the
results of operations of the Parent and its Consolidated
Subsidiaries (including Space & Technology / Montreal and any other
discontinued operations) for such fiscal year on a consolidated
basis in accordance with GAAP and that the examination by such
accountants in connection with such consolidated financial
statements has been made in accordance with generally accepted
auditing standards and (ii) an internally prepared consolidating
balance sheet and related consolidating statements of income,
stockholders' equity and cash flows of the Parent and its
Consolidated Subsidiaries for such fiscal year;
(b) as soon as available and in any event within 45 days after the end
of each of the first three fiscal quarters of each fiscal year of
the Parent, an unaudited consolidated and consolidating balance
sheet of the Parent and its Consolidated Subsidiaries as of the end
of such fiscal quarter and the related unaudited consolidated and
consolidating statements of income and cash flows of the Parent and
its Consolidated Subsidiaries for such fiscal quarter and the then
elapsed portion of such fiscal year, setting forth in each case in
comparative form the figures for the corresponding quarter and the
corresponding portion of the Parent's previous fiscal year, all
certified by the chief financial officer or treasurer of the Parent
as presenting fairly in all material respects the financial
condition and results of operations of the Parent and its
Consolidated Subsidiaries (including Space & Technology / Montreal
and any other discontinued operations) on a consolidated basis in
accordance with GAAP, subject to normal year-end audit adjustments
and the absence of footnotes;
(c) concurrently with the delivery of the financial statements referred
to in subsections (a) and (b) above, a certificate of the Chief
Financial Officer or treasurer of the Borrower, (i) certifying as to
whether there exists a Default or Event of Default on the date of
such certificate, and if a Default or an Event of Default then
exists, specifying the details thereof and the action which the
Borrower has taken or proposes to take with respect thereto, (ii)
setting forth in reasonable detail calculations demonstrating
compliance with Article VI and (iii) stating whether any change in
GAAP or the application thereof has occurred since the date of the
Parent's audited financial statements referred to in Section 4.4
and, if any change has occurred, specifying the effect of such
change on the financial statements accompanying such certificate;
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(d) concurrently with the delivery of the financial statements referred
to in subsection (a) above, a certificate of the accounting firm
that reported on such financial statements stating whether they
obtained any knowledge during the course of their examination of
such financial statements of any Default or Event of Default (which
certificate may be limited to the extent required by accounting
rules or guidelines);
(e) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials
filed with the Securities and Exchange Commission, or any
Governmental Authority succeeding to any or all functions of said
Commission, or with any national securities exchange, or with any
provincial securities commission or distributed by the Parent to its
shareholders generally, as the case may be;
(f) promptly after delivery to the recipient thereof, copies of all
notices and financial information relating to any Consolidated Party
delivered to any Person in accordance with the U.S. Revolving Credit
Agreement; and
(g) promptly following any request therefor, such other information
regarding the results of operations, business affairs and financial
condition of the Parent or any Subsidiary as the Canadian
Administrative Agent or any Lender may reasonably request.
SECTION 5.2 NOTICES OF MATERIAL EVENTS
The Borrower or the Parent will furnish to the Canadian
Administrative Agent and each Lender prompt written notice of the following:
(a) the occurrence of any Default or Event of Default;
(b) the occurrence of any "Default" or "Event of Default" under and as
defined in the U.S. Revolving Credit Agreement;
(c) the closing of the sale of Space & Technology / Montreal;
(d) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or, to the
knowledge of the Borrower, affecting the Borrower, the Parent or any
Consolidated Subsidiary which, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect;
(e) the occurrence of any event or any other development (which
individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect) by which the Borrower, the
Parent or any Consolidated Subsidiary (i) fails to comply with any
Environmental Law or to obtain, maintain or comply with any permit,
license or other approval required under any Environmental Law, (ii)
becomes subject to any Environmental Liability, (iii) receives
notice of any claim with respect to any Environmental Liability, or
(iv) becomes aware of any basis for any Environmental Liability; and
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(f) any development that results in, or could reasonably be expected to
result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a
written statement of a Responsible Officer setting forth the details of the
event or development requiring such notice and, if applicable, any action taken
or proposed to be taken with respect thereto.
SECTION 5.3 EXISTENCE
The Borrower will, and will cause each of its Subsidiaries to, do or
cause to be done all things necessary to preserve, renew and maintain in full
force and effect its legal existence and its respective rights, licenses,
permits, privileges, franchises, patents, copyrights, trademarks and trade names
material to the conduct of its business; provided, that nothing in this Section
shall prohibit any merger, amalgamation, consolidation, liquidation or
dissolution permitted under Section 7.3 or any disposition permitted by Section
7.6.
SECTION 5.4 COMPLIANCE WITH LAWS, ETC.
The Borrower will, and will cause each of its Subsidiaries to,
comply with all laws, rules, regulations and requirements of any Governmental
Authority applicable to its business and properties, including, without
limitation, all Environmental Laws, except where the failure to do so, either
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
SECTION 5.5 PAYMENT OF OBLIGATIONS
(a) The Borrower will duly and punctually pay or cause to be paid the
principal and interest on the Loans and all other Obligations
provided for in this Agreement and the other Loan Documents to which
the Borrower is a party, all in accordance with the terms of this
Agreement and such other Loan Documents.
(b) The Borrower will, and will cause each of its Subsidiaries to, pay
and discharge at or before maturity, all Indebtedness and other
monetary obligations and liabilities (including without limitation
all tax liabilities and claims that could result in a statutory
Lien) before the same shall become delinquent or in default, except
where (i) the validity or amount thereof is being contested in good
faith by appropriate proceedings, (ii) the Borrower or such
Subsidiary has set aside on its books adequate reserves with respect
thereto in accordance with GAAP and (iii) the failure to make
payment could not reasonably be expected to result in a Material
Adverse Effect.
SECTION 5.6 BOOKS AND RECORDS
The Borrower will, and will cause each of its Subsidiaries to, keep
proper books of record and account in which full, true and correct entries shall
be made of all material dealings and transactions in relation to its business
and activities to the extent necessary to prepare the consolidated financial
statements of the Parent in conformity with GAAP.
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SECTION 5.7 VISITATION, INSPECTION, ETC.
The Borrower will, and will cause each of its Subsidiaries to,
permit any representative of the Canadian Administrative Agent or any Lender to
visit and inspect its properties, to examine its books and records and to make
copies and take extracts therefrom, and to discuss its affairs, finances and
accounts with any of its officers and with its independent certified public
accountants, all at such reasonable times and as often as the Canadian
Administrative Agent or any Lender may reasonably request after reasonable prior
notice to the Borrower.
SECTION 5.8 MAINTENANCE OF PROPERTIES; INSURANCE
The Borrower will, and will cause each of its Subsidiaries to, (a)
keep and maintain all property material to the conduct of its business in good
working order and condition, ordinary wear and tear excepted, except where the
failure to do so, either individually or in the aggregate, could not reasonably
be expected to result in a Material Adverse Effect and (b) maintain with
financially sound and reputable insurance companies, insurance with respect to
its properties and business, and the properties and business of its
Subsidiaries, against loss or damage of the kinds customarily insured against by
companies in the same or similar businesses operating in the same or similar
locations.
SECTION 5.9 USE OF PROCEEDS AND LETTERS OF CREDIT
The Borrower will use the proceeds of all Loans solely to refinance
Indebtedness owing to the Persons referenced in the Statement of Funds Flow on
the Closing Date, and thereafter to finance working capital needs and capital
expenditures of the Borrower and its Subsidiaries and for other general
corporate purposes of the Borrower and its Subsidiaries. Notwithstanding the
foregoing, no Loan Party will, directly or indirectly, use the proceeds of any
Loan or any Letter of Credit to make any loan or other advance to, or Investment
in, the Dormant Company. All Letters of Credit will be used solely for general
corporate purposes. No part of the proceeds of any Loan will be used, whether
directly or indirectly, for any purpose that would violate any rule or
regulation of the Board of Governors of the Federal Reserve System, including
Regulations T, U or X.
SECTION 5.10 ADDITIONAL SECURITY
(a) At any time following and during the continuance of an Event of
Default, the Required Lenders may require the Borrower and/or the
Parent to (x) forthwith cause any or all Subsidiaries of the Parent
not then Guarantors to become Guarantors and cause each such
Subsidiary to become a party to each of the Collateral Documents, or
enter into such guarantee and security documents of similar effect
in its jurisdiction of incorporation, (y) cause each such Subsidiary
to deliver simultaneously therewith similar documents applicable to
such Subsidiary required under Section 3.1 as reasonably requested
by the Canadian Administrative Agent, and (z) forthwith deliver to
the Collateral Agent such documents as are necessary to effect an
assignment of all Crown Debts of the Borrower in accordance with the
Financial Administration Act (Canada).
(b) Forthwith upon any Subsidiary of the Parent not then a Guarantor
hereunder entering into a guarantee of the obligations under the
U.S. Revolving Credit Agreement, the
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Borrower (x) will cause such Subsidiary of the Parent to become a
Guarantor and will cause such Subsidiary of the Parent to become a
party to each of the Collateral Documents, or enter into such
guarantee and security documents of similar effect in its
jurisdiction of incorporation, and (y) will cause such Subsidiary of
the Parent to deliver simultaneously therewith similar documents
applicable to such Subsidiary of the Parent required under Section
3.1 as reasonably requested by the Canadian Administrative Agent.
SECTION 5.11 AMENDMENT TO U.S. LOAN DOCUMENTS
If at any time on or after the Closing Date the Parent or any
Subsidiary enters into, assumes or otherwise becomes bound or obligated under,
or agrees to, any new agreement with the holders of the U.S. Facility
Indebtedness or, without derogating from any of the restrictions contained
herein, any amendment, modification or supplement of any agreement which relates
to the U.S. Loan Documents in any manner the effect of which would be (a) to
create, amend or add covenants or obligations of the Parent and the Subsidiaries
which are in addition to those contained herein or (b) more restrictive on the
Parent or any Subsidiary than are the covenants contained in the Loan Documents,
then this Agreement and the other Loan Documents shall, without any further
action on the part of the Borrower, the Parent, any Subsidiary, the Funding
Agent, the Canadian Administrative Agent or any Lender, be deemed to be amended
automatically to include each such additional covenant or provision. The
Borrower and the Parent further covenant to promptly, and in any event within 15
Business Days, execute and deliver, or to cause to be executed and delivered, at
the Borrower's expense (including, without limitation, the fees and expenses of
counsel for the Canadian Administrative Agent) a document or documents which
amend this Agreement and the other Loan Documents in form and substance
satisfactory to the Canadian Administrative Agent to reflect any amendment,
modification or supplement of any covenants or provision in this Agreement or
the other Loan Documents pursuant to this Section 5.11, provided that the
execution and delivery of such document shall not be a precondition to the
effectiveness of such amendment, modification or supplement. The provisions of
this Section 5.11 shall apply successively to each amendment, modification or
supplement so that the Lenders shall have the benefit of every such amendment,
modification or supplement. In the event that the terms of any U.S. Loan
Documents are amended, modified or supplemented, the Borrower or the Parent
shall promptly deliver, or cause to be delivered, to the Canadian Administrative
Agent a certified copy of such amendment, modification or supplement.
SECTION 5.12 ADDITIONAL REAL PROPERTY; LEASED LOCATIONS
(a) To the extent otherwise permitted hereunder, if, after the Closing
Date, any Loan Party proposes to acquire (i) a fee ownership in Real
Property or (ii) a leasehold interest in Real Property pursuant to
which the lease agreement governing such leasehold interest requires
the payment of annual rent in excess of $100,000, such Loan Party
shall at the time of such acquisition provide to the Canadian
Administrative Agent all Real Estate Documents requested by the
Canadian Administrative Agent granting the Canadian Collateral Agent
a first priority Lien on such Real Property, together with
environmental audits, mortgage title insurance commitment, real
property survey, local counsel opinion(s) and, if required by the
Canadian Administrative Agent, supplemental casualty insurance and
flood
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insurance, and such other documents, instruments or agreements
reasonably requested by the Canadian Administrative Agent, in each
case, in form and substance reasonably satisfactory to the Canadian
Administrative Agent.
(b) To the extent otherwise permitted hereunder, if any Loan Party
proposes to lease any Real Property where Collateral with an
aggregate value of $250,000 or more will be located, it shall first
provide to the Canadian Administrative Agent a copy of such lease
and a landlord's agreement or bailee letter, as applicable, from the
landlord of any leased property or bailee with respect to any
warehouse, processor converter facility or other location where such
Collateral will be stored or located, which agreement or letter
shall be reasonably satisfactory in form and substance to the
Canadian Administrative Agent.
(c) If the sale of Space & Technology / Montreal has not occurred on or
before 90 days following the Closing Date then the Borrower shall
provide to the Canadian Administrative Agent all Real Estate
Documents requested by the Canadian Administrative Agent necessary
or desirable to grant the Canadian Collateral Agent a first priority
Lien on all Real Property of the Borrower located in the Province of
Quebec; thereafter if the sale of Space & Technology / Montreal has
not occurred on or before 120 days following the Closing Date, the
Borrower shall register, file or record all such Real Estate
Documents in all offices of public record necessary or desirable in
the opinion of the Canadian Administrative Agent to preserve and
protect the hypothecs purported to be created by the Real Estate
Documents and cause to be provided to the Canadian Administrative
Agent all environmental audits, mortgage title insurance
commitments, real property surveys, local counsel opinions and, if
required by the Canadian Administrative Agent, supplemental casualty
insurance and flood insurance, and such other documents, instruments
or agreements reasonably requested by the Canadian Administrative
Agent, in each case, in form and substance reasonably satisfactory
to the Canadian Administrative Agent in respect of such Real
Property.
SECTION 5.13 DISPUTE RESERVE
The Borrower shall ensure that the aggregate of: (x) the unused
Revolving Commitment of all Lenders hereunder; (y) the unused "Revolving
Commitment" (as such term is defined in the U.S. Revolving Credit Agreement) of
all U.S. Lenders under the U.S. Revolving Credit Agreement; and (z) all amounts
held in cash or maintained in Permitted Investments by the Consolidated Parties
minus, if applicable, any taxes or other costs incurred or to be incurred by a
Foreign Subsidiary in connection with the transfer or repatriation of such
amounts to a Consolidated Party located in the United States, at all times
equals or exceeds U.S.$5,000,000 until such time as ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ has
provided the Borrower with a letter, in form and content satisfactory to the
Canadian Administrative Agent in its sole discretion, rescinding any notices
and/or declarations by ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ that the Borrower is in default or
breach under the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Contract.
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SECTION 5.14 NOTICES IN CONNECTION WITH ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ CONTRACT
Until such time as ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ has provided the Borrower
with a "no default" letter as described in Section 5.13, the Borrower or the
Parent, as applicable, will promptly furnish, or cause to be furnished, to the
Canadian Administrative Agent and each Lender:
(a) all material correspondence between the Borrower, and/or the Parent
and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ in connection with the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Contract;
(b) notice of any failure by either party to the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Contract to effect timely performance of its obligations thereunder;
(c) notice of all material events in connection with the ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ Contract, including, without limitation, meetings between
senior management of the Borrower and/or the Parent and ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ to discuss performance under or settlement of claims under
the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Contract;
(d) copies of each weekly report issued by the Borrower pursuant to the
letter dated October 21, 2004 between the Borrower and ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇;
(e) notice of any dispute or other matter in connection with the
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Contract that has had or is likely to have a
Material Adverse Effect;
(f) notice of the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority
against the Borrower or the Parent in connection with the ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ Contract;
(g) unless otherwise provided in compliance with Section 3.2(f) hereof
within the immediately preceding 30 days, on the first day of each
month, evidence, satisfactory to the Canadian Administrative Agent,
of the Borrower's compliance with Section 5.13; and
(h) such other information in connection with the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Contract as the Canadian Administrative Agent may from time to time
reasonably request.
SECTION 5.15 FURTHER ASSURANCES
The Borrower and the Parent will, and will cause each Guarantor to,
execute any and all further documents, agreements and instruments, and take all
such further actions which may be required under any Applicable Law, or which
the Canadian Administrative Agent or the Required Lenders may reasonably
request, to effectuate the transactions contemplated by the Loan Documents.
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ARTICLE VI
FINANCIAL COVENANTS
The Borrower and the Parent covenant and agree that, from and after
the Closing Date, so long as any Lender has a Commitment hereunder or any
Obligations remain unpaid or any Letter of Credit remains outstanding:
SECTION 6.1 LEVERAGE RATIO
The Parent will not permit the Leverage Ratio, as at the end of each
fiscal quarter of the Parent set forth below, to exceed the ratio set forth
opposite such period:
PERIOD RATIO
------------------------- ------------
December 31, 2004 3.25 to 1.00
March 31, 2005 3.15 to 1.00
June 30, 2005 through 3.00 to 1.00
September 30, 2005
December 31, 2005 through 2.75 to 1.00
September 30, 2006
December 31, 2006 and 2.50 to 1.00
thereafter
SECTION 6.2 FIXED CHARGE COVERAGE RATIO
The Parent will not permit the Fixed Charge Coverage Ratio, as at
the end of each fiscal quarter of the Parent, to be less than 1.50 to 1.00. The
foregoing covenant shall be calculated and tested quarterly on the last day of
each fiscal quarter of the Parent commencing with the fiscal quarter ending
December 31, 2004.
SECTION 6.3 MINIMUM NET WORTH
The Parent will maintain a Net Worth in an amount equal to or
greater than the sum of (a) U.S.$113,000,000, plus (b) 50% of cumulative
positive Consolidated Net Income accrued after April 3, 2004, plus (c) 100% of
the Net Proceeds from any Equity Offering; provided, that the Net Proceeds of an
Equity Offering of a debt security that is convertible into or exchangeable for
capital stock of the Parent or a debt security that is issued with a warrant or
other instrument to purchase capital stock of the Parent shall not be required
to be added under this clause (c) unless and until such debt security is
converted into or exchanged for, or such warrant or other instrument is
exercised for, capital stock of the Parent. The foregoing covenant shall be
calculated and tested
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quarterly on the last day of each fiscal quarter of the Parent commencing with
the fiscal quarter ending December 31, 2004.
SECTION 6.4 MINIMUM EBITDA
The Parent will not permit Consolidated EBITDA for the nine-month
period ending on September 30, 2004 to be less than U.S.$12,500,000.
For purposes of calculating and determining compliance with the financial
covenants in this Article VI, all activities, operations and financial results
of Space & Technology / Montreal and any other discontinued operations of the
Consolidated Parties shall be included as if such division or other discontinued
operations were continuing operations of the Consolidated Parties at all times.
ARTICLE VII
NEGATIVE COVENANTS
The Borrower covenants and agrees that, from and after the Closing
Date, so long as any Lender has a Commitment hereunder or any Obligation remains
unpaid or any Letter of Credit remains outstanding:
SECTION 7.1 INDEBTEDNESS
The Borrower will not, and will not permit its Subsidiaries to,
create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness created pursuant to the Loan Documents;
(b) Indebtedness existing on the Closing Date and set forth on Schedule
4.14;
(c) Indebtedness of the Borrower and its Subsidiaries incurred to
finance the acquisition, construction or improvement of any fixed or
capital assets (including Capital Lease Obligations) and any
extensions, renewals, and replacements of any such Indebtedness that
do not increase the outstanding principal amount thereof
(immediately prior to giving effect to such extension, renewal or
replacement) or shorten the maturity or the weighted average life
thereof; provided, that such Indebtedness permitted by this
subsection (c), (i) shall be incurred prior to or within 90 days
after such acquisition or the completion of such construction or
improvements and (ii) does not, in the aggregate, exceed
U.S.$2,000,000 at any time outstanding;
(d) Indebtedness of any Loan Party owing to another Loan Party;
(e) Guarantees by any Subsidiary of Indebtedness of the Borrower or the
Parent and guarantees by the Borrower of Indebtedness of any of its
Subsidiaries or the Parent; provided, that any Indebtedness of the
Borrower which is guaranteed by a Subsidiary and any Indebtedness of
any Subsidiary which is guaranteed by the Borrower must otherwise be
permitted under this Section 7.1;
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(f) Indebtedness of the Borrower in respect of obligations under Hedging
Transactions permitted by Section 7.10; and
(g) other unsecured Indebtedness of the Borrower and its Subsidiaries in
an aggregate principal amount not to exceed U.S.$2,500,000 at any
time outstanding.
SECTION 7.2 NEGATIVE PLEDGE
The Borrower will not, and will not permit any of its Subsidiaries
to, create, incur, assume or suffer to exist any Lien on any of its assets or
property now owned or hereafter acquired or, except:
(a) Permitted Encumbrances and Liens in favour of the Canadian
Collateral Agent or the Lenders under the Loan Documents;
(b) any Liens on any property or asset of the Borrower or any Subsidiary
existing on the Closing Date set forth on Schedule 7.2 and any other
Liens on any property of the Borrower existing on the Closing Date
and undertaken to be discharged in accordance with an undertaking
delivered by the Borrower on such date, so long as same are
discharged in accordance with such undertaking; provided, that such
Lien shall not apply to any other property or asset of the Borrower
or any Subsidiary;
(c) purchase money Liens, reservations of ownership, rights of the
lessor or other similar title retention devices to secure
indebtedness permitted pursuant to Section 7.1(c); provided, that
(i) such Lien attaches to such asset concurrently or within 90 days
after the acquisition, improvement or completion of the construction
thereof and (ii) such Lien does not extend to any other asset; and
(d) extensions, renewals, or replacements of any Lien referred to in
paragraphs (a) through (c) of this Section; provided, that the
Indebtedness secured thereby is not increased and that any such
extension, renewal or replacement is limited to the assets
originally encumbered thereby.
SECTION 7.3 FUNDAMENTAL CHANGES
(a) The Borrower will not, and will not permit any of its Subsidiaries
to, merge into, or consolidate or amalgamate into any other Person,
or permit any other Person to merge into or consolidate or
amalgamate with it, or sell, lease, transfer or otherwise dispose of
(in a single transaction or a series of transactions) all or
substantially all of its assets (in each case, whether now owned or
hereafter acquired) or all or substantially all of the stock of any
of its Subsidiaries (in each case, whether now owned or hereafter
acquired) or liquidate or dissolve; provided, that if at the time
thereof and immediately after giving effect thereto, no Default or
Event of Default shall have occurred and be continuing (i) any
Subsidiary may amalgamate with or into the Borrower if the Borrower
is the surviving Person, (ii) any Subsidiary may amalgamate into
another Subsidiary; provided, that if any party to such amalgamation
is a Guarantor, the Guarantor shall be the surviving Person, (iii)
any Subsidiary may sell, transfer, lease or otherwise dispose of all
or substantially all of
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its assets to the Borrower or to a Subsidiary; provided, that a
Guarantor may only sell, lease or otherwise dispose of all or
substantially all of its assets to the Borrower or another
Guarantor, (iv) any Subsidiary may liquidate or dissolve if the
Borrower determines in good faith that such liquidation or
dissolution is in the best interests of the Borrower and is not
materially disadvantageous to the Lenders and (v) any Subsidiary may
be sold so long as such sale is permitted under Section 7.6;
provided, that any amalgamation involving a Person that is not a
Wholly-Owned Subsidiary immediately prior to such merger shall not
be permitted unless also permitted by Section 7.4.
(b) The Borrower will not, and will not permit any Subsidiary to, engage
in any business other than businesses of the type conducted by the
Borrower and the Subsidiaries on the Closing Date and businesses
reasonably related thereto.
SECTION 7.4 INVESTMENTS, LOANS, ACQUISITIONS, ETC
The Borrower will not, and will not permit any of its Subsidiaries
to, purchase, hold or acquire (including pursuant to any amalgamation with any
Person that was not a Wholly-Owned Subsidiary prior to such amalgamation), any
capital stock, evidence of Indebtedness or other securities (including any
option, warrant, or other right to acquire any of the foregoing) of, make or
permit to exist any loans or advances to (including intercompany loans or
advances), Guarantee any obligations of, or make or permit to exist any
investment or any other interest in, any Person (all of the foregoing being
collectively called "INVESTMENTS"), or consummate any Acquisitions or make any
Restricted Investments, except:
(a) Permitted Investments;
(b) Guarantees or Indebtedness permitted by Section 7.1;
(c) Investments made by any Subsidiary of the Borrower in or to any Loan
Party;
(d) Investments made by the Borrower in the form of Indebtedness of any
Guarantor owing to the Borrower;
(e) loans or advances to employees, officers or directors of the
Borrower or any of its Subsidiaries either (i) in the ordinary
course of business for travel, relocation and other business related
expenses or (ii) for purposes of retention or bonuses which, in the
case of both clause (i) and (ii) immediately above, do not to exceed
an aggregate amount of U.S.$500,000 (determined without regard to
any write-downs, write-offs or forgiveness of the principal amount
of any such loans) in any fiscal year;
(f) Hedging Obligations permitted by Section 7.10;
(g) Investments (other than Permitted Investments) existing on the
Closing Date and set forth on Schedule 7.4 (including Investments in
Consolidated Subsidiaries); provided, that, with respect to any
Investment set forth on Schedule 7.4 in or to a Subsidiary that is
not a Guarantor, such Investment may not be increased;
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(h) Investments in the Borrower's Subsidiaries that are organized in
Canada, Australia or the United Kingdom in an aggregate amount not
to exceed U.S.$2,000,000 in any fiscal year of the Borrower;
provided, that, if, in any fiscal year of the Borrower, the Borrower
sells Space & Technology / Montreal, such Investments under this
clause (h) may be in an aggregate amount not to exceed
U.S.$10,000,000 in such fiscal year and any fiscal year thereafter;
and
(i) other Investments (other than Investments in the Borrower's
Subsidiaries that are organized in Canada) which in the aggregate do
not exceed U.S.$2,500,000 in any fiscal year of the Borrower.
Notwithstanding the foregoing, no Investment shall be made, directly or
indirectly, by the Borrower or any of its Subsidiaries in the Dormant Company.
SECTION 7.5 RESTRICTED PAYMENTS
The Borrower will not, and will not permit any of its Subsidiaries
to, declare or make, or agree to pay or make, directly or indirectly, any
dividend on any class of its stock, or make any payment or prepayment on account
of, or set apart assets for a sinking or other analogous fund for, the purchase,
redemption, retirement, defeasance or other acquisition of, any shares of
capital stock, or Indebtedness subordinated in any manner to the Obligations, or
any options, warrants, or other rights to purchase such capital stock or such
Indebtedness, whether now or hereafter outstanding (each, a "RESTRICTED
PAYMENT"), except for (a) dividends payable by the Borrower; and (b) Restricted
Payments made by any Subsidiary to the Borrower or to another Subsidiary of the
Borrower.
SECTION 7.6 SALE OF ASSETS
The Borrower will not, and will not permit any of its Subsidiaries
to, convey, sell, lease, assign, transfer or otherwise dispose of, any of its
respective assets, business or property, whether now owned or hereafter
acquired, or, in the case of any Subsidiary, issue or sell any shares of such
Subsidiary's capital stock to any Person other than the Borrower or any
Wholly-Owned Subsidiary of the Borrower (or to qualify directors if required by
applicable law) (each of the foregoing, an "Asset Disposition"), except:
(a) the sale or other disposition for fair market value of obsolete or
worn-out property or other property not necessary for operations
disposed of in the ordinary course of business;
(b) the sale of inventory and Permitted Investments in the ordinary
course of business;
(c) the sale of Space & Technology / Montreal; and
(d) the sale or other disposition of such assets in an aggregate amount
in any fiscal year of the Borrower not to exceed U.S.$2,500,000.
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SECTION 7.7 TRANSACTIONS WITH AFFILIATES
The Borrower will not, and will not permit any of its Subsidiaries
to, sell, lease or otherwise transfer any property or assets to, or purchase,
lease or otherwise acquire any property or assets from, or otherwise engage in
any other transactions with, any of its Affiliates, except (a) in the ordinary
course of business at prices and on terms and conditions not less favourable to
the Borrower or such Subsidiary than could be obtained on an arm's-length basis
from unrelated third parties, (b) transactions between or among the Borrower and
Wholly-Owned Subsidiaries of the Parent not involving any other Affiliates
(subject to limitations in Section 7.4) and (c) any Restricted Payment permitted
by Section 7.5. Notwithstanding the foregoing, the Borrower will not, and will
not permit any of its Subsidiaries to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, the Dormant
Company.
SECTION 7.8 RESTRICTIVE AGREEMENTS
The Borrower will not, and will not permit any of its Subsidiaries
to, directly or indirectly, enter into, incur or permit to exist any Contractual
Obligation that prohibits, restricts or imposes any condition upon (a) the
ability of the Borrower or any such Subsidiary to create, incur or permit any
Lien upon any of its assets or properties, whether now owned or hereafter
acquired, or (b) the ability of any such Subsidiary to pay dividends or other
distributions with respect to its capital stock, to make or repay loans or
advances to the Borrower or any other Subsidiary of the Borrower, to Guarantee
Indebtedness of the Borrower or any other Subsidiary of the Borrower or to
transfer any of its property or assets to the Borrower or any Subsidiary of the
Borrower; provided, that (i) the foregoing shall not apply to restrictions or
conditions imposed by law or by this Agreement, or any other Loan Document or
the U.S. Revolving Credit Agreement as in existence on the Closing Date, (ii)
the foregoing shall not apply to customary restrictions and conditions contained
in agreements relating to the sale of a Subsidiary pending such sale, provided
such restrictions and conditions apply only to the Subsidiary that is sold and
such sale is permitted hereunder, and (iii) subsection (a) immediately above
shall not apply to restrictions or conditions imposed by any agreement relating
to secured Indebtedness permitted by this Agreement if such restrictions and
conditions apply only to the property or assets securing such Indebtedness.
SECTION 7.9 SALE AND LEASEBACK TRANSACTIONS.
The Borrower will not, and will not permit any of its Subsidiaries
to, enter into any arrangement, directly or indirectly, whereby it shall sell or
transfer any property, real or personal, used or useful in its business, whether
now owned or hereinafter acquired, and thereafter rent or lease such property or
other property that it intends to use for substantially the same purpose or
purposes as the property sold or transferred, except for any such sale of any
fixed or capital assets that is made for cash consideration in an amount not
less than the cost of such fixed or capital asset and is consummated within 90
days after the Borrower or such Subsidiary acquires or completes the
construction of such fixed or capital asset.
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SECTION 7.10 HEDGING TRANSACTIONS
The Borrower will not, and will not permit any of its Subsidiaries
to, enter into any Hedging Transaction, other than Hedging Transactions entered
into in the ordinary course of business to hedge or mitigate risks to which the
Borrower or any such Subsidiary is exposed in the conduct of its business or the
management of its liabilities. Solely for the avoidance of doubt, the Borrower
acknowledges that a Hedging Transaction entered into for speculative purposes or
of a speculative nature (which shall be deemed to include any Hedging
Transaction under which the Borrower or any of its Subsidiaries is or may become
obliged to make any payment (i) in connection with the purchase by any third
party of any common stock or any Indebtedness or (ii) as a result of changes in
the market value of any common stock or any Indebtedness) is not a Hedging
Transaction entered into in the ordinary course of business to hedge or mitigate
risks.
SECTION 7.11 AMENDMENT TO ORGANIZATIONAL DOCUMENTS
The Borrower will not, and will not permit any Guarantor to, amend,
modify or waive any of its rights in a manner materially adverse to the Lenders
under its articles or certificate of incorporation, bylaws or other
organizational documents.
SECTION 7.12 ACCOUNTING CHANGES; CHANGE OF FISCAL YEAR
Neither the Borrower nor the Parent will, and the Parent will not
permit any of its Subsidiaries to, make any significant change in accounting
treatment or reporting practices, except as required by GAAP, or change the
fiscal year of the Parent or any such Subsidiary, except to change the fiscal
year of a Subsidiary to conform to that of the Parent.
SECTION 7.13 LOCATION OF ASSETS IN OTHER JURISDICTIONS
(a) Except for any Canadian Collateral being delivered to a customer in
the ordinary course of business of the Borrower or its Subsidiaries
as part of the performance of their obligations, or the provision of
their services, to such customer under a contract entered into with
such customer in the ordinary course of business of the Borrower or
its Subsidiaries, store any Canadian Collateral outside of the
jurisdictions identified in Schedule II or move any Canadian
Collateral from one jurisdiction to another jurisdiction where the
movement of such Canadian Collateral would cause the Lien of the
Canadian Security Agreement over such Canadian Collateral to cease
to be perfected under Applicable Law, or knowingly suffer or permit
in any other manner any of its Canadian Collateral to not be subject
to the Lien of the Canadian Security Agreement or to be or become
located in a jurisdiction as a result of which the Lien of the
Canadian Security Agreement over such Canadian Collateral is not
perfected, unless (x) the Borrower has first given thirty (30) days
prior written notice thereof to the Canadian Administrative Agent,
and (y) the Borrower has first executed and delivered to the
Canadian Administrative Agent all security documentation and all
financing or registration statements in form and substance
satisfactory to the Canadian Administrative Agent which the Canadian
Administrative Agent or its counsel, acting reasonably, from time to
time deem necessary or advisable to ensure that the Canadian
Security Agreement at all times constitutes a perfected first
priority
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Lien (subject only to Permitted Encumbrances) over such Canadian
Collateral notwithstanding the movement or location of such Canadian
Collateral as aforesaid together with such supporting certificates,
resolutions, opinions and other documents as the Canadian
Administrative Agent may deem necessary or desirable in connection
with such security and registrations.
(b) The Borrower will not, and will not permit the Parent or any
Subsidiary of the Parent to, store, keep or otherwise locate any
Collateral having an aggregate fair market value in excess of
U.S.$500,000 at its facility located at 2800 Colonnades Court,
Building ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇, unless the
Borrower has delivered a landlord's agreement from the landlord with
respect to such location to the U.S. Administrative Agent, which
agreement shall be reasonably satisfactory in form and substance to
the U.S. Administrative Agent.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1 EVENTS OF DEFAULT
If any of the following events (each an "EVENT OF DEFAULT") shall
occur:
(a) the Borrower shall fail to pay any principal of any Loan or of any
reimbursement obligation in respect of any LC Disbursement when and
as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment or otherwise; or
(b) the Borrower shall fail to pay any interest on any Loan or any fee
or any other amount (other than an amount payable under subsection
(a) of this Article) payable under this Agreement or any other Loan
Document, when and as the same shall become due and payable, and
such failure shall continue unremedied for a period of three
Business Days; or
(c) any representation or warranty made or deemed made by or on behalf
of the Borrower, the Parent or any Subsidiary in or in connection
with this Agreement or any other Loan Document (including the
Schedules attached thereto) and any amendments or modifications
hereof or waivers hereunder, or in any certificate, report,
financial statement or other document submitted to the Canadian
Administrative Agent, the Funding Agent, the Canadian Collateral
Agent or the Lenders by the Borrower, the Parent or any Subsidiary
or any representative of the Borrower, the Parent or any Subsidiary
pursuant to or in connection with this Agreement or any other Loan
Document shall prove to be incorrect in any material respect when
made or deemed made or submitted; or
(d) the Borrower or the Parent shall fail to observe or perform any
covenant or agreement contained in Section 5.1, Section 5.2, Section
5.3(with respect to the Borrower's existence), Section 5.10, Section
5.11 or Article VI or Article VII; or
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(e) the Borrower, the Parent or any Subsidiary shall fail to observe or
perform any covenant or agreement contained in this Agreement or any
other Loan Document (other than those referred to in subsections
(a), (b) and (d) above), and such failure shall remain unremedied
for 30 days after the earlier of (i) any Responsible Officer of the
Borrower becomes aware of such failure, or (ii) notice thereof shall
have been given to the Borrower by the Canadian Administrative
Agent, the Funding Agent, or any Lender; or
(f) any Consolidated Party (whether as primary obligor or as guarantor
or other surety) shall fail to pay any principal of or premium or
interest on any Indebtedness which exceeds U.S.$1,000,000
individually or in the aggregate, when and as the same shall become
due and payable (whether at scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the
agreement or instrument evidencing such Indebtedness; or any other
event shall occur or condition shall exist under any agreement or
instrument relating to such Indebtedness and shall continue after
the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to
accelerate, or permit the acceleration of, the maturity of such
Indebtedness; or any such Indebtedness shall be declared to be due
and payable; or required to be prepaid or redeemed (other than by a
regularly scheduled required prepayment or redemption), purchased or
defeased, or any offer to prepay, redeem, purchase or defease such
Indebtedness shall be required to be made, in each case prior to the
stated maturity thereof; or
(g) the Borrower, the Parent or any Material Subsidiary shall, under the
Companies' Creditors Arrangement Act (Canada), the Bankruptcy and
Insolvency Act (Canada), the United States Bankruptcy Code or the
Winding-Up and Restructuring Act (Canada) or any other bankruptcy,
insolvency or analogous laws, (i) commence a voluntary case or other
proceeding or file any petition seeking liquidation, reorganization
or other relief under any federal, state, provincial or foreign
bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a custodian, trustee, receiver,
liquidator or other similar official of it or any substantial part
of its property, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or
petition described in clause (i) of this subsection, (iii) apply for
or consent to the appointment of a custodian, trustee, receiver,
liquidator or other similar official for the Borrower, the Parent or
any such Material Subsidiary or for a substantial part of its
assets, (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, or (vi) take any action for
the purpose of effecting any of the foregoing; or
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking, under the Companies' Creditors
Arrangement Act (Canada), the Bankruptcy and Insolvency Act
(Canada), the United States Bankruptcy Code or the Winding-Up and
Restructuring Act (Canada) or any other bankruptcy, insolvency or
analogous laws, (i) liquidation, reorganization or other relief in
respect of the Borrower, the Parent or any Material Subsidiary or
its debts, or any substantial part
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of its assets, or (ii) the appointment of a custodian, trustee,
receiver, liquidator or other similar official for the Borrower, the
Parent or any Material Subsidiary or for a substantial part of its
assets, and in any such case, such proceeding or petition shall
remain undismissed for a period of 60 days or an order or decree
approving or ordering any of the foregoing shall be entered; or
(i) the Borrower, the Parent or any Material Subsidiary shall become
unable to pay, shall admit in writing its inability to pay, or shall
fail generally to pay, its debts as they become due; or
(j) any judgment or order for the payment of money in excess of
U.S.$1,000,000 shall be rendered against the Borrower, the Parent or
any Consolidated Subsidiary, and either (i) enforcement proceedings
shall have been commenced by any creditor upon such judgment or
order or (ii) there shall be a period of 30 consecutive days during
which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect; or
(k) any non-monetary judgment shall have been rendered against any
Consolidated Party that could reasonably be expected to have a
Material Adverse Effect and there shall be a period of 30
consecutive days during which a stay of enforcement of such judgment
or order, by reason of a pending appeal or otherwise, shall not be
in effect; or
(l) a Change in Control shall occur or exist; or
(m) a Consolidated Party is enjoined, restrained or in any way prevented
by the order of any Governmental Authority from conducting all of a
material part of its business and such order continues for 30 or
more days; or
(n) an "Event of Default" under and as defined in the U.S. Revolving
Credit Agreement shall have occurred; or
(o) the Guarantee Agreements or any Collateral Document shall for any
reason cease to be valid and binding on, or enforceable against, any
Loan Party, or any Loan Party shall so state in writing, or any Loan
Party or other Person shall challenge the validity of or seek to
terminate any such Collateral Document or Guarantee Agreement, any
provision of this Agreement or any other Loan Document; or
(p) the Borrower, any of its Subsidiaries or any applicable regulatory
authority institute any steps to terminate a Canadian Pension Plan
(wholly or in part) if, as a result of such termination, the
Borrower or any of its Subsidiaries may be required to make an
additional contribution to such Canadian Pension Plan, or to incur
an additional liability or obligation to such Canadian Pension Plan,
equal to or in excess of U.S.$1,000,000 or the equivalent thereof in
another currency;
then, and in every such event (other than an event with respect to the Borrower
described in subsection (g) or (h) of this Section) and at any time thereafter
during the continuance of such event, the Canadian Administrative Agent or the
Canadian Collateral Agent, as applicable, may, and upon
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the written request of the Required Lenders shall, by notice to the Borrower,
take any or all of the following actions, at the same or different times: (i)
terminate the Commitments, whereupon the Commitment of each Lender shall
terminate immediately; (ii) declare the principal of and any accrued interest on
the Loans, and all other Obligations owing hereunder, to be, whereupon the same
shall become due and payable immediately, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrower and
(iii) exercise all remedies contained in any other Loan Document; and that, if
an Event of Default specified in either subsection (g) or (h) shall occur, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon, and all fees, and all other
Obligations shall automatically become due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower.
ARTICLE IX
THE CANADIAN ADMINISTRATIVE AGENT AND FUNDING AGENT
SECTION 9.1 APPOINTMENT OF CANADIAN ADMINISTRATIVE AGENT
(a) Each Lender irrevocably appoints Bank of America, National
Association (Canada branch) as the Canadian Administrative Agent and
the Funding Agent and authorizes it to take such actions on its
behalf and to exercise such powers as are delegated to the Canadian
Administrative Agent and the Funding Agent under this Agreement and
the other Loan Documents, together with all such actions and powers
that are reasonably incidental thereto. The Canadian Administrative
Agent or the Funding Agent may perform any of its duties hereunder
or under the other Loan Documents by or through any one or more
sub-agents or attorneys-in fact appointed by the Canadian
Administrative Agent or the Funding Agent, as applicable. The
Canadian Administrative Agent, the Funding Agent and any such
sub-agent or attorney-in-fact may perform any and all of its duties
and exercise its rights and powers through their respective Related
Parties. The exculpatory provisions set forth in this Article shall
apply to any such sub-agent or attorney-in-fact and the Related
Parties of the Canadian Administrative Agent and the Funding Agent
and any such sub-agent and any such attorney-in-fact and shall apply
to their respective activities in connection with the syndication of
the credit facilities provided for herein as well as activities as
Canadian Administrative Agent or the Funding Agent, as applicable.
The Canadian Administrative Agent or the Canadian Collateral Agent
is authorized to hold any Lien on behalf of the Lenders as security
for any of the Obligations and to execute in the name of the Lenders
any Loan Document.
(b) The Issuing Bank shall act on behalf of the Lenders with respect to
any Letters of Credit issued by it and the documents associated
therewith until such time and except for so long as the Funding
Agent may agree at the request of the Required Lenders to act for
the Issuing Bank with respect thereto; provided, that the Issuing
Bank shall have all the benefits and immunities (i) provided to the
Canadian Administrative Agent in this Article IX with respect to any
acts taken or omissions suffered by the Issuing Bank in connection
with Letters of Credit issued by it or proposed to be issued by it
and the application and agreements for letters of credit pertaining
to the Letters of Credit as fully as if the term "Canadian
Administrative Agent" as used in
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this Article IX included the Issuing Bank with respect to such acts
or omissions and (ii) as additionally provided in this Agreement
with respect to the Issuing Bank.
SECTION 9.2 NATURE OF DUTIES OF CANADIAN ADMINISTRATIVE AGENT AND FUNDING AGENT
Neither the Canadian Administrative Agent nor the Funding Agent
shall have any duties or obligations except those expressly set forth in this
Agreement and the other Loan Documents. Without limiting the generality of the
foregoing, (a) neither the Canadian Administrative Agent nor the Funding Agent
shall be subject to any fiduciary or other implied duties, regardless of whether
a Default or an Event of Default has occurred and is continuing, (b) neither the
Canadian Administrative Agent nor the Funding Agent shall have any duty to take
any discretionary action or exercise any discretionary powers, except those
discretionary rights and powers expressly contemplated by the Loan Documents
that the Canadian Administrative Agent or the Funding Agent, as applicable, is
required to exercise in writing by the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 10.2), and (c) except as expressly set forth in the Loan
Documents, neither the Canadian Administrative Agent nor the Funding Agent shall
have any duty to disclose, and shall not be liable for the failure to disclose,
any information relating to the Borrower, the Parent or any of its Subsidiaries
that is communicated to or obtained by the Canadian Administrative Agent, the
Funding Agent or any of their Affiliates in any capacity. Neither the Canadian
Administrative Agent nor the Funding Agent shall be liable for any action taken
or not taken by it, its sub-agents or attorneys-in-fact with the consent or at
the request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in Section
10.2) or in the absence of its own gross negligence or wilful misconduct.
Neither the Canadian Administrative Agent nor the Funding Agent shall be
responsible for the negligence or misconduct of any sub-agents or
attorneys-in-fact selected by it with reasonable care. Neither the Canadian
Administrative Agent nor the Funding Agent shall be deemed to have knowledge of
any Default or Event of Default unless and until written notice thereof (which
notice shall include an express reference to such event being a "Default" or
"Event of Default" hereunder) is given to the Canadian Administrative Agent or
the Funding Agent, as applicable, by the Borrower or any Lender, and neither the
Canadian Administrative Agent nor the Funding Agent shall be responsible for or
have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with any Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements, or other terms and conditions
set forth in any Loan Document, (iv) the validity, enforceability, effectiveness
or genuineness of any Loan Document or any other agreement, instrument or
document, or (v) the satisfaction of any condition set forth in Article III or
elsewhere in any Loan Document, other than to confirm receipt of items expressly
required to be delivered to the Canadian Administrative Agent. The Canadian
Administrative Agent and the Funding Agent may consult with legal counsel
(including counsel for the Borrower) concerning all matters pertaining to such
duties.
SECTION 9.3 LACK OF RELIANCE ON THE CANADIAN ADMINISTRATIVE AGENT OR THE FUNDING
AGENT
Each of the Lenders, the Swingline Lender and the Issuing Bank
acknowledges that it has, independently and without reliance upon the Canadian
Administrative Agent, the Funding Agent or any other Lender and based on such
documents and information as it has deemed
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appropriate, made its own credit analysis and decision to enter into this
Agreement. Each of the Lenders, the Swingline Lender and the Issuing Bank also
acknowledges that it will, independently and without reliance upon the Canadian
Administrative Agent, the Funding Agent or any other Lender and based on such
documents and information as it has deemed appropriate, continue to make its own
decisions in taking or not taking of any action under or based on this
Agreement, any related agreement or any document furnished hereunder or
thereunder.
SECTION 9.4 CERTAIN RIGHTS OF THE CANADIAN ADMINISTRATIVE AGENT AND THE FUNDING
AGENT
If the Canadian Administrative Agent or the Funding Agent shall
request instructions from the Required Lenders with respect to any action or
actions (including the failure to act) in connection with this Agreement, the
Canadian Administrative Agent or the Funding Agent shall be entitled to refrain
from such act or taking such act, unless and until it shall have received
instructions from such Lenders; and neither the Canadian Administrative Agent
nor the Funding Agent shall incur liability to any Person by reason of so
refraining. Without limiting the foregoing, no Lender shall have any right of
action whatsoever against the Canadian Administrative Agent or the Funding Agent
as a result of the Canadian Administrative Agent or the Funding Agent acting or
refraining from acting hereunder in accordance with the instructions of the
Required Lenders where required by the terms of this Agreement.
SECTION 9.5 RELIANCE BY CANADIAN ADMINISTRATIVE AGENT AND THE FUNDING AGENT
The Canadian Administrative Agent and the Funding Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement, instrument, document or other
writing believed by it to be genuine and to have been signed, sent or made by
the proper Person. The Canadian Administrative Agent and the Funding Agent may
also rely upon any statement made to it orally or by telephone and believed by
it to be made by the proper Person and shall not incur any liability for relying
thereon. The Canadian Administrative Agent and the Funding Agent may consult
with legal counsel (including counsel for the Borrower), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or not taken by it in accordance with the advice of such counsel,
accountants or experts.
SECTION 9.6 THE CANADIAN ADMINISTRATIVE AGENT AND THE FUNDING AGENT IN THEIR
INDIVIDUAL CAPACITIES
The bank serving as the Canadian Administrative Agent and the bank
serving as the Funding Agent shall have the same rights and powers under this
Agreement and any other Loan Document in its capacity as a Lender as any other
Lender and may exercise or refrain from exercising the same as though it were
not the Canadian Administrative Agent or the Funding Agent, as applicable; and
the terms "Lenders", "Required Lenders", "holders of Notes", or any similar
terms shall, unless the context clearly otherwise indicates, include the
Canadian Administrative Agent and the Funding Agent in their individual
capacities. The bank acting as the Canadian Administrative Agent and the bank
serving as the Funding Agent and their Affiliates may accept deposits from, lend
money to, and generally engage in any kind of business with the Borrower, the
Parent or any Subsidiary or Affiliate of the Borrower as if it were not the
Canadian Administrative Agent or the Funding Agent, as applicable, hereunder.
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SECTION 9.7 SUCCESSOR CANADIAN ADMINISTRATIVE AGENT AND SUCCESSOR FUNDING AGENT
(a) The Canadian Administrative Agent may resign at any time by giving
notice thereof to the Lenders and the Borrower. Upon any such
resignation or removal, the Required Lenders shall have the right to
appoint a successor Canadian Administrative Agent, subject to the
approval by the Borrower provided that no Default or Event of
Default shall exist at such time. If no successor Canadian
Administrative Agent shall have been so appointed, and shall have
accepted such appointment within 30 days after the retiring Canadian
Administrative Agent gives notice of resignation, then the retiring
Canadian Administrative Agent may, on behalf of the Lenders and the
Issuing Bank, appoint a successor Canadian Administrative Agent,
which shall be a commercial bank organized under the laws of Canada
or a bank which maintains an office in Canada, having a combined
capital and surplus of at least U.S.$500,000,000.
(b) Upon the acceptance of its appointment as the Canadian
Administrative Agent hereunder by a successor, such successor
Canadian Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the
retiring Canadian Administrative Agent, and the retiring Canadian
Administrative Agent shall be discharged from its duties and
obligations as such under this Agreement and the other Loan
Documents. If within 45 days after written notice is given of the
retiring Canadian Administrative Agent's resignation under this
Section 9.7 no successor Canadian Administrative Agent shall have
been appointed and shall have accepted such appointment, then on
such 45th day (i) the retiring Canadian Administrative Agent's
resignation shall become effective, (ii) the retiring Canadian
Administrative Agent shall thereupon be discharged from its duties
and obligations as such under the Loan Documents and (iii) the
Required Lenders shall thereafter perform all duties of the retiring
Canadian Administrative Agent under the Loan Documents until such
time as the Required Lenders appoint a successor Canadian
Administrative Agent as provided above. After any retiring Canadian
Administrative Agent's resignation hereunder, the provisions of this
Article IX shall continue in effect for the benefit of such retiring
Canadian Administrative Agent and its representatives and agents in
respect of any actions taken or not taken by any of them while it
was serving as the Canadian Administrative Agent.
(c) All matters concerning the resignation, removal or appointment of a
successor Funding Agent shall be dealt with in accordance with
Section 9.7(a) and (b) mutatis mutandis.
SECTION 9.8 AUTHORIZATION TO EXECUTE OTHER LOAN DOCUMENTS
Each Lender hereby authorizes the Canadian Administrative Agent to
execute on behalf of all Lenders all Loan Documents other than this Agreement.
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SECTION 9.9 ACKNOWLEDGEMENTS REGARDING COLLATERAL DOCUMENTS
For greater certainty, and without limiting the powers of the
Canadian Administrative Agent or the Canadian Collateral Agent hereunder or
under any of the other Loan Documents, it is hereby acknowledged and agreed that
the Borrower may issue and pledge to the Canadian Collateral Agent, as security
for any of its indebtedness and liabilities under any of the Loan Documents,
bonds or debentures (any such bond or debenture so issued and pledged,
individually, a "Collateral Debenture" and, collectively, the "Collateral
Debentures") secured by a hypothec charging any and all of the Borrower's
movable and immovable property and granted pursuant to the laws of the Province
of Quebec to a fonde de pouvoir (holder of the power of attorney) of the
holder(s) of the related Collateral Debentures. In that respect, each Lender
acknowledges and agrees that the Canadian Collateral Agent shall hold each of
the Collateral Debentures so issued to it in pledge for its benefit and for the
benefit of each of the Lenders, and to the full extent necessary, each Lender,
acting in the aforesaid manner, hereby appoints the Canadian Collateral Agent
for such purposes. Each assignee of any Lender shall be deemed to have confirmed
and ratified the constitution of the Canadian Collateral Agent to act in the
manner set out in this Section 9.9 upon becoming a Lender under this Agreement.
Notwithstanding the provisions of Section 32 of An Act Respecting the Special
Powers of Legal Persons (Quebec), the fonde de pouvoir (person holding the power
of attorney) of the holder(s) of any of the Collateral Debentures in whose
favour a hypothec securing any such Collateral Debenture is granted may (but
need not) be the Canadian Collateral Agent to whom such Collateral Debenture has
been issued and pledged. Each Lender (by accepting the benefits of each Loan
Document) acknowledges that each Collateral Debenture constitutes a title of
indebtedness, as such term is used in Article 2692 of the Civil Code of Quebec,
as amended.
SECTION 9.10 DELIVERIES UNDER U.S. REVOLVING CREDIT AGREEMENT
The parties acknowledge that certain items to be delivered by the
Borrower to the Canadian Administrative Agent hereunder, including, without
limitation, deliveries pursuant to Section 5.1, Section 5.2 and Section 5.14,
are also required to be delivered by the Parent to the U.S. Administrative Agent
under the U.S. Revolving Credit Agreement. The parties agree that the
performance of the Parent of its delivery obligations in accordance with the
terms of the U.S. Revolving Credit Agreement shall fulfill the same delivery
obligations of the Borrower hereunder. For greater certainty no consent granted
by the U.S. Administrative Agent or exercise of any right of approval by the
U.S. Administrative Agent under the terms of the U.S. Revolving Credit Agreement
shall be deemed to be a consent granted or exercise of right of approval
hereunder.
ARTICLE X
NOTICES
SECTION 10.1 NOTICES
Except in the case of notices and other communications expressly
permitted to be given by telephone, all notices and other communications to any
party herein to be effective 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:
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To the Borrower: EMS Technologies Canada, Ltd.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
To the Parent: EMS Technologies, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: EMS Technologies, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
To the Canadian Administrative Agent Bank of America,
and/or the Funding Agent: National Association (Canada branch)
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: Associate, GCIB - Portfolio
Management
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Bank of America
Atlanta Plaza Building
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Senior Vice President
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
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To the Issuing Bank: Bank of America,
National Association (Canada branch)
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: Associate, GCIB - Portfolio
Management
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Bank of America
Atlanta Plaza Building
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Senior Vice President
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
To the Swingline Lender: Bank of America,
National Association (Canada branch)
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: Associate, GCIB - Portfolio
Management
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Bank of America
Atlanta Plaza Building
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Senior Vice President
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
(a) Any party hereto may change its address or telecopy number for
notices and other communications hereunder by notice to the other
parties hereto. All such notices and other communications shall,
when transmitted by overnight delivery, or faxed, be effective when
actually delivered by overnight (next-day) delivery, or when
transmitted in legible form by facsimile machine, respectively, or
if mailed, upon the third Business Day after the date deposited into
the mails or if delivered, upon delivery; provided, that notices
delivered to the Canadian Administrative Agent, the Funding Agent,
the Issuing Bank or the Swingline Bank shall not be effective until
actually received by such Person at its address specified in this
Section.
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(b) Any agreement of the Canadian Administrative Agent, the Funding
Agent and the Lenders herein to receive certain notices by
telephone or facsimile is solely for the convenience and at the
request of the Borrower. The Canadian Administrative Agent, the
Funding Agent and the Lenders shall be entitled to rely on the
authority of any Person purporting to be a Person authorized by the
Borrower to give such notice and the Canadian Administrative Agent,
the Funding Agent and Lenders shall not have any liability to the
Borrower or other Person on account of any action taken or not
taken by the Canadian Administrative Agent, the Funding Agent or
the Lenders in reliance upon such telephonic or facsimile notice.
The obligation of the Borrower to repay the Loans and all other
Obligations hereunder shall not be affected in any way or to any
extent by any failure of the Canadian Administrative Agent, the
Funding Agent and the Lenders to receive written confirmation of
any telephonic or facsimile notice or the receipt by the Canadian
Administrative Agent, the Funding Agent and the Lenders of a
confirmation which is at variance with the terms understood by the
Canadian Administrative Agent, the Funding Agent and the Lenders to
be contained in any such telephonic or facsimile notice.
SECTION 10.2 WAIVER; AMENDMENTS
(a) No failure or delay by the Canadian Administrative Agent, the
Funding Agent and the Issuing Bank or any Lender in exercising any
right or power hereunder or any other Loan Document, and no course
of dealing between the Borrower and the Canadian Administrative
Agent, the Funding Agent or any Lender, 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 right or power, preclude any other or further exercise thereof
or the exercise of any other right or power hereunder or
thereunder. The rights and remedies of the Canadian Administrative
Agent, the Funding Agent and the Issuing Bank and the Lenders
hereunder and under the other Loan Documents are cumulative and are
not exclusive of any rights or remedies provided by law. No waiver
of any provision of this Agreement or any other Loan Document or
consent to any departure by the Borrower therefrom shall in any
event be effective unless the same shall be permitted by paragraph
(b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for
which given. Without limiting the generality of the foregoing, the
making of a Loan or the issuance of a Letter of Credit shall not be
construed as a waiver of any Default or Event of Default,
regardless of whether the Canadian Administrative Agent, the
Funding Agent any Lender or the Issuing Bank may have had notice or
knowledge of such Default or Event of Default at the time.
(b) No amendment or waiver of any provision of this Agreement or the
other Loan Documents, nor consent to any departure by the Borrower
therefrom, shall in any event be effective unless the same shall be
in writing and signed by the Borrower, the Parent and the Required
Lenders or the Borrower, the Parent and the Canadian Administrative
Agent with the consent of the Required Lenders and then such waiver
or consent shall be effective only in the specific instance and for
the specific purpose for which given; provided, that no amendment
or waiver shall: (i) increase the Commitment of any Lender without
the written consent of such Lender, (ii) reduce
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the principal amount of any Loan or LC Disbursement or reduce the
rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby, (iii)
postpone the date fixed for any payment of any principal of, or
interest on, any Loan or LC Disbursement or interest thereon or any
fees hereunder or reduce the amount of, waive or excuse any such
payment, or postpone the scheduled date for the termination or
reduction of any Commitment, without the written consent of each
Lender affected thereby, (iv) change Section 2.20(b) or (c) in a
manner that would alter the pro rata sharing of payments required
thereby, without the written consent of each Lender, (v) change any
of the provisions of this Section or the definition of "Required
Lenders" or any other provision hereof specifying the number or
percentage of Lenders which are required to waive, amend or modify
any rights hereunder or make any determination or grant any consent
hereunder, without the consent of each Lender; and (vi) release any
guarantor or limit the liability of any such guarantor under any
guaranty agreement without the written consent of each Lender; or
(vii) release all or substantially all collateral (if any) securing
any of the Obligations, without the written consent of each Lender;
provided, further, that no such agreement shall amend, modify or
otherwise affect the rights, duties or obligations of the Canadian
Administrative Agent, the Funding Agent, the Swingline Bank or the
Issuing Bank without the prior written consent of such Person. No
amendment which adversely affects the Borrower shall be entered
into without the Borrower's written consent.
SECTION 10.3 EXPENSES; INDEMNIFICATION
(a) The Borrower shall pay (i) all reasonable out-of-pocket costs and
expenses of the Canadian Administrative Agent and its Affiliates,
including the reasonable fees, charges and disbursements of outside
counsel for the Canadian Administrative Agent and its Affiliates in
connection with the syndication of the credit facilities provided
for herein, the preparation and administration of the Loan
Documents and any amendments, modifications or waivers thereof
(whether or not the transactions contemplated in this Agreement or
any other Loan Document shall be consummated), (ii) all reasonable
out-of-pocket expenses incurred by the Issuing Bank in connection
with the issuance, amendment, renewal or extension of any Letter of
Credit or any demand for payment thereunder and (iii) all
out-of-pocket costs and expenses (including, without limitation,
the fees, charges and disbursements of outside counsel actually
incurred) incurred by the Canadian Administrative Agent, the
Funding Agent, the Issuing Bank or any Lender in connection with
the enforcement or protection of its rights in connection with this
Agreement, including its rights under this Section, or in
connection with the Loans made or any Letters of Credit issued
hereunder, including all such out-of-pocket expenses incurred
during any workout, restructuring or negotiations in respect of
such Loans or Letters of Credit.
(b) The Borrower shall indemnify the Canadian Administrative Agent (and
any sub-agent thereof), the Funding Agent, each Lender and the
Issuing Bank, and each Related Party of any of the foregoing
Persons (each such Person being called an "INDEMNITEE") against,
and hold each Indemnitee harmless from, any and all losses,
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claims, damages, liabilities and related expenses (including the
reasonable fees, charges and disbursements of any counsel for any
Indemnitee), incurred by any Indemnitee or asserted against any
Indemnitee by any third party, the Borrower or any other Loan Party
arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement, any other Loan Document or
any agreement or instrument contemplated hereby or thereby, the
performance by the parties hereto of their respective obligations
hereunder or thereunder or the consummation of the transactions
contemplated hereby or thereby, (ii) any Loan or Letter of Credit
or the use or proposed use of the proceeds therefrom (including any
refusal by the Issuing Bank to honour a demand for payment under a
Letter of Credit if the documents presented in connection with such
demand do not strictly comply with the terms of such Letter of
Credit), (iii) any actual or alleged presence or Release of
Hazardous Materials on or from any property owned or operated by
the Borrower, the Parent or any of its Subsidiaries, or any
Environmental Liability related in any way to the Borrower, the
Parent or any of its Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating
to any of the foregoing, whether based on contract, tort or any
other theory, whether brought by any third party, the Borrower or
any other Loan Party, and regardless of whether 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 (x) 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 (y) result from a claim brought by the Borrower
or any other Loan Party against an Indemnitee for a material breach
of such Indemnitee's obligations hereunder or under any other Loan
Document, if the Borrower or such Loan Party has obtained a final
and nonappealable judgment in its favour on such claim as
determined by a court of competent jurisdiction. The Borrower
appoints the Canadian Administrative Agent as the trustee for the
Indemnitees of this covenant of the Borrower with respect to the
Indemnitees and the Canadian Administrative Agent accepts such
appointment.
(c) The Borrower shall pay, and hold the Canadian Administrative Agent,
the Funding Agent and each of the Lenders harmless from and
against, any and all present and future stamp, documentary, and
other similar taxes with respect to this Agreement and any other
Loan Documents, any collateral that may be granted by Borrower, the
Parent or a Subsidiary of the Parent, or any payments due
thereunder, and, if the Borrower fails to pay any stamp,
documentary, and other similar taxes with respect to this Agreement
and any other Loan Documents when due, or fails to remit to the
Canadian Administrative Agent, the Funding Agent or any Lender any
such tax with respect to which the Canadian Administrative Agent,
the Funding Agent or such Lender has demanded repayment from the
Borrower, the Borrower shall save the Canadian Administrative
Agent, the Funding Agent and each Lender harmless from and against
any and all liabilities with respect to or resulting from any delay
or omission to pay such taxes.
(d) To the extent that the Borrower fails to pay any amount required to
be paid to the Canadian Administrative Agent, the Funding Agent,
the Issuing Bank or the
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Swingline Lender under subsections (a), (b) or (c) hereof, each
Lender severally agrees to pay to the Canadian Administrative
Agent, the Funding Agent, the Issuing Bank or the Swingline Lender,
as the case may be, such Lender's Pro Rata Share (determined as of
the time that the unreimbursed expense or indemnity payment is
sought) of such unpaid amount; provided, that the unreimbursed
expense or indemnified payment, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against
the Canadian Administrative Agent, the Funding Agent, the Issuing
Bank or the Swingline Lender in its capacity as such.
(e) To the extent permitted by applicable law, the Borrower shall not
assert, and the Borrower hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to actual or direct
damages) arising out of, in connection with or as a result of, this
Agreement or any agreement or instrument contemplated hereby, the
transactions contemplated therein, any Loan or any Letter of Credit
or the use of proceeds thereof.
(f) All amounts due under this Section shall be payable promptly after
written demand therefor.
SECTION 10.4 SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors
and assigns permitted hereby, except that the Borrower may not
assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by the Borrower without such
consent shall be null and void). Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and
assigns permitted hereby and, to the extent expressly contemplated
hereby, the Related Parties of each of the Canadian Administrative
Agent, the Funding Agent and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans and LC
Exposure at the time owing to it); provided that (i) except in the
case of an assignment of the entire remaining amount of the
assigning Lender's Commitment and the Loans at the time owing to it
or in the case of an assignment to a Lender, an Affiliate of a
Lender or an Approved Fund with respect to a Lender, the aggregate
amount of the Commitment (which for this purpose includes Loans
outstanding thereunder and the LC Exposure) of the assigning Lender
subject to each such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is
delivered to the Funding Agent) shall not be less than
U.S.$1,000,000, in the case of any assignment of a Commitment,
unless each of the Funding Agent and, so long as no Event of
Default has occurred and is continuing, the Borrower otherwise
consents (each such consent not to be unreasonably withheld or
delayed), (ii) each partial assignment
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shall be made as an assignment of a proportionate part of all the
assigning Lender's rights and obligations under this Agreement with
respect to the Loan or the Commitment assigned, except that this
clause (ii) shall not prohibit any Lender from assigning all or a
portion of its rights and obligations among separate Commitments on
a non-pro rata basis, and (iii) the parties to each assignment
shall execute and deliver to the Funding Agent an Assignment and
Acceptance, together with a processing and recordation fee of
$1,000, and the Eligible Assignee, if it shall not be a Lender,
shall deliver to the Funding Agent an Administrative Questionnaire.
Upon (i) the execution and delivery of the Assignment and
Acceptance by the assigning Lender and assignee Lender, (ii)
acceptance and recording thereof by the Canadian Administrative
Agent pursuant to paragraph (c) of this Section, (iii) consent
thereof from the Borrower to the extent required pursuant to this
subsection (b), and (iv) if such assignee Lender is a Foreign
Lender, compliance by such Person with Section 2.19(e), from and
after the effective date specified in each Assignment and
Acceptance, the Eligible 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 of a
Lender under this Agreement, and 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 of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but
shall continue to be entitled to the benefits of Section 2.16,
Section 2.17, Section 2.18 and Section 10.3). Any assignment or
transfer by a Lender of rights or obligations under this Agreement
that does not comply with this paragraph shall be treated for
purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with
paragraph (d) of this Section.
(c) The Funding Agent, acting solely for this purpose as an agent of
the Borrower, shall maintain at one of its offices in Toronto,
Ontario a copy of each Assignment and Acceptance delivered to it
and a register for the recordation of the names and addresses of
the Lenders, and the Revolving Commitments of, and principal amount
of the Loans owing to, each Lender pursuant to the terms hereof
from time to time (the "REGISTER"). The entries in the Register
shall be conclusive, and the Borrower, the Funding Agent and the
Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary.
The Register shall be available for inspection by the Borrower and
any Lender, at any reasonable time and from time to time upon
reasonable prior notice.
(d) Any Lender may at any time, without the consent of or notice to the
Borrower, the Canadian Administrative Agent, the Funding Agent, the
Issuing Bank or the Swingline Lender, sell participations to one or
more banks listed on Schedule I, II or III of the Bank Act (Canada)
or other entities (a "PARTICIPANT") in all or a portion of such
Lender's rights and obligations under this Agreement (including all
or a portion of its Commitment, the Loans owing to it and its LC
Exposure); provided, that (i) such Lender's obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance
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of its obligations hereunder, and (iii) the Borrower, the Canadian
Administrative Agent, the Funding Agent, the Swingline Bank, the
Issuing 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 the other Loan
Documents. Any agreement or instrument pursuant to which a Lender
sells such a participation shall provide that such Lender shall
retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide
that such Lender will not, without the consent of the Participant,
agree to any amendment, modification or waiver with respect to the
following to the extent affecting such Participant: (A) increase
the Revolving Commitment of any Lender without the written consent
of such Lender, (B) reduce the principal amount of any Loan or
reduce the rate of interest thereon, or reduce any fees payable
hereunder, without the written consent of each Lender affected
thereby, (C) postpone the date fixed for any payment of any
principal of, or interest on, any Loan or interest thereon or any
fees hereunder or reduce the amount of, waive or excuse any such
payment, or postpone the scheduled date for the termination or
reduction of any Revolving Commitment, without the written consent
of each Lender affected thereby, (D) change Section 2.20(b) or (c)
in a manner that would alter the pro rata sharing of payments
required thereby, without the written consent of each Lender, (E)
change any of the provisions of this Section or the definition of
"Required Lenders" or any other provision hereof specifying the
number or percentage of Lenders which are required to waive, amend
or modify any rights hereunder or make any determination or grant
any consent hereunder, without the consent of each Lender; (F)
release any Guarantor or limit the liability of any such Guarantor
under any Guarantee Agreement without the written consent of each
Lender except to the extent such release is expressly provided
under the terms of such Guarantee Agreement; or (G) release all or
substantially all collateral (if any) securing any of the
Obligations. Subject to paragraph (e) of this Section, the Borrower
agrees that each Participant shall be entitled to the benefits of
Section 2.17, Section 2.18 and Section 2.19 to the same extent as
if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section, provided such
Participant agrees to be subject to Section 2.21 as though it were
a Lender hereunder. To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 10.7
as though it were a Lender, provided such Participant agrees to be
subject to Section 10.7 as though it were a Lender.
(e) A Participant shall not be entitled to receive any greater payment
under Section 2.17 and Section 2.19 than the applicable Lender
would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Borrower's prior
written consent. A Participant that would be a Foreign Lender if it
were a Lender shall not be entitled to the benefits of Section 2.19
unless the Borrower is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the
Borrower, to comply with Section 2.19 as though it were a Lender.
(f) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure
obligations of such Lender, including
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without limitation, any pledge or assignment to secure obligations
to a Federal Reserve Bank; provided, that no such pledge or
assignment of a security interest shall release a Lender from any
of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.
SECTION 10.5 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS
(a) This Agreement and the other Loan Documents shall be construed in
accordance with and be governed by the law of the Province of
Ontario and the laws of Canada applicable in the Province of
Ontario.
(b) The Borrower and the Parent each hereby irrevocably and
unconditionally submits, for itself and its property, to the
non-exclusive jurisdiction of the Courts of the Province of
Ontario, in any action or proceeding arising out of or relating to
this Agreement or any other Loan Document or the transactions
contemplated hereby or thereby, 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 court or,
to the extent permitted by Applicable Law, such Ontario court. Each
of the parties hereto agrees that a final judgment in any 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 or any other Loan
Document shall affect any right that the Canadian Administrative
Agent, the Funding Agent, the Issuing Bank or any Lender may
otherwise have to bring any action or proceeding relating to this
Agreement or any other Loan Document against the Borrower or its
properties in the courts of any jurisdiction in which the property
that is the subject of such action or proceeding is located.
(c) The Borrower irrevocably and unconditionally waives any objection
which it may now or hereafter have to the laying of venue of any
such suit, action or proceeding described in paragraph (b) of this
Section and brought in any court referred to in paragraph (b) of
this Section. Each of the parties hereto irrevocably waives, to the
fullest extent permitted by Applicable Law, the defense of an
inconvenient forum to the maintenance of such action or proceeding
in any such court.
(d) Each party to this Agreement irrevocably consents to the service of
process in the manner provided for notices in Article X. Nothing in
this Agreement or in any other Loan Document will affect the right
of any party hereto to serve process in any other manner permitted
by law.
SECTION 10.6 RIGHT OF SETOFF
In addition to any rights now or hereafter granted under Applicable
Law and not by way of limitation of any such rights, each Lender and the Issuing
Bank shall have the right, at any time or from time to time upon the occurrence
and during the continuance of an Event of Default, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the extent
permitted by Applicable Law, to set off and apply against all deposits (general
or special, time
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or demand, provisional or final) of the Borrower at any time held
or other obligations at any time owing by such Lender and the
Issuing Bank to or for the credit or the account of the Borrower
against any and all Obligations held by such Lender or the Issuing
Bank, as the case may be, irrespective of whether such Lender or
the Issuing Bank shall have made demand hereunder and although such
Obligations may be unmatured. Each Lender and the Issuing Bank
agree promptly to notify the Funding Agent and the Borrower after
any such set-off and any application made by such Lender and the
Issuing Bank, as the case may be; provided, that the failure to
give such notice shall not affect the validity of such set-off and
application.
SECTION 10.7 COUNTERPARTS; INTEGRATION
This Agreement may be executed by one or more of the parties to
this Agreement on any number of separate counterparts (including by telecopy),
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument. This Agreement, the other Loan Documents, and any
separate letter agreement(s) relating to any fees payable to the Canadian
Administrative Agent and/or the Funding Agent constitute the entire agreement
among the parties hereto and thereto regarding the subject matters hereof and
thereof and supersede all prior agreements and understandings, oral or written,
regarding such subject matters.
SECTION 10.8 SURVIVAL
All covenants, agreements, representations and warranties made by
the Borrower or the Parent herein and in the certificates or other instruments
delivered in connection with or pursuant to this Agreement shall be considered
to have been relied upon by the other parties hereto and shall survive the
execution and delivery of this Agreement and the making of any Loans and
issuance of any Letters of Credit, regardless of any investigation made by any
such other party or on its behalf and notwithstanding that the Canadian
Administrative Agent, the Funding Agent, the Issuing Bank or any Lender may have
had notice or knowledge of any Default or incorrect representation or warranty
at the time any credit is extended hereunder, and shall continue in full force
and effect as long as the principal of or any accrued interest on any Loan or
any fee or any other amount payable under this Agreement is outstanding and
unpaid or any Letter of Credit is outstanding and so long as the Commitments
have not expired or terminated. The provisions of Section 2.17, Section 2.18,
Section 2.19 and Section 10.3 and Article IX shall survive and remain in full
force and effect regardless of the consummation of the transactions contemplated
hereby, the repayment of the Loans, the expiration or termination of the Letters
of Credit and the Commitments or the termination of this Agreement or any
provision hereof. All representations and warranties made herein, in the
certificates, reports, notices, and in other documents delivered pursuant to
this Agreement shall survive the execution and delivery of this Agreement and
the other Loan Documents, and the making of the Loans and the issuance of the
Letters of Credit.
SECTION 10.9 SEVERABILITY
Any provision of this Agreement or any other Loan Document held to
be illegal, invalid or unenforceable in any jurisdiction, shall, as to such
jurisdiction, be ineffective to the extent of such illegality, invalidity or
unenforceability without affecting the legality, validity or enforceability of
the remaining provisions hereof or thereof; and the illegality, invalidity or
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unenforceability of a particular provision in a particular jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.
SECTION 10.10 INTEREST RATE LIMITATION
(1) All interest payments to be made under this Agreement will be paid
without allowance or deduction for deemed re-investment or otherwise, both
before and after maturity and before and after default and/or judgment, if any,
until payment of the amount on which such interest is accruing, and interest
will accrue on overdue interest, if any.
(2) Unless otherwise stated, wherever in this Agreement reference is
made to a rate of interest or rate of fees "per annum" or a similar expression
is used, such interest or fees will be calculated on the basis of a calendar
year of 365 days or 366 days, as the case may be, and using the nominal rate
method of calculation, and will not be calculated using the effective rate
method of calculation or on any other basis that gives effect to the principle
of deemed re-investment of interest.
(3) For the purposes of the Interest Act (Canada) and disclosure under
such act, whenever interest to be paid under this Agreement is to be calculated
on the basis of a year of 365 days or 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 365, 360 or such other period of
time, as the case may be.
(4) In calculating interest or fees payable under this Agreement for
any period, unless otherwise specifically stated, the first day but not the last
day of such period shall be included.
(5) Notwithstanding anything herein to the contrary, in no event shall
any interest rate or rates referred to herein (together with other fees payable
hereunder which are construed by a court of competent jurisdiction to be
interest or in the nature of interest) exceed the maximum interest rate
permitted by Applicable Law. If such maximum interest rate would be exceeded by
the terms hereof, the rates of interest payable hereunder shall be reduced to
the extent necessary so that such rates (together with other fees which are
construed by a court of competent jurisdiction to be interest or in the nature
of interest) equal the maximum interest rate permitted by Applicable Law, and
any overpayment of interest received by the Canadian Administrative Agent, the
Funding Agent or the Lenders theretofore shall be applied, forthwith after
determination of such overpayment, to pay all then outstanding interest, and
thereafter to pay outstanding principal, as if the same were a prepayment of
principal and treated accordingly hereunder.
SECTION 10.11 CONFIDENTIALITY
Each of the Canadian Administrative Agent, the Funding Agent and
each Lender agrees to take normal and reasonable precautions to maintain the
confidentiality of (i) any information designated in writing as confidential, or
that should reasonably be understood by the Canadian Administrative Agent, the
Funding Agent and such Lender to be confidential and provided to the Canadian
Administrative Agent, the Funding Agent or such Lender in writing by the
Borrower, the Parent or any Subsidiary, or (ii) any information designated as
confidential which is otherwise provided to the Canadian Administrative Agent,
the Funding Agent or such Lender, except
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that such information may be disclosed (a) to any Related Party of the Canadian
Administrative Agent, the Funding Agent or any such Lender, including without
limitation accountants, legal counsel and other advisors, so long as such
information remains confidential, (b) to the extent required by applicable laws
or regulations or by any subpoena or similar legal process, (c) to the extent
required by any regulatory agency or authority, (d) to the extent that such
information becomes publicly available other than as a result of a breach of
this Section, or which becomes available to the Canadian Administrative Agent,
the Funding Agent, any Lender or any Related Party of any of the foregoing on a
nonconfidential basis from a source other than the Borrower, (e) in connection
with the exercise of any remedy hereunder or any suit, action or proceeding
relating to this Agreement or the enforcement of rights hereunder, (f) subject
to provisions substantially similar to this Section, to any actual or
prospective assignee or Participant or to any prospective contractual
counterparty (or its advisor) to any securitization, hedge or other derivative
transaction, or (g) with the consent of the Borrower. Any Person required to
maintain the confidentiality of any information as provided for in this Section
shall be considered to have complied with its obligation to do so if such Person
has exercised the same degree of care to maintain the confidentiality of such
information as such Person would reasonably accord its own confidential
information.
SECTION 10.12 WAIVER OF EFFECT OF CORPORATE SEAL
The Borrower represents and warrants that neither the Borrower nor
any other Loan Party is required to affix its corporate seal to this Agreement
or any other Loan Document pursuant to any requirement of law or regulation,
agrees that this Agreement is delivered by the Borrower under seal and waives
any shortening of the statute of limitations that may result from not affixing
the corporate seal to this Agreement or such other Loan Documents.
SECTION 10.13 LENDERS' U.S. REVOLVING CREDIT AGREEMENT OBLIGATIONS
Each Lender hereby acknowledges and agrees, for itself and its
affiliates, to the obligations of such Lender under Section 2.6 of the U.S.
Revolving Credit Agreement.
SECTION 10.14 JUDGMENT CURRENCY
(1) If for the purpose of obtaining or enforcing judgment against the
Borrower under or in connection with the Loan Documents in any court in any
jurisdiction, it becomes necessary to convert into any other currency (such
other currency being hereinafter in this Section 10.14 referred to as the
"JUDGMENT CURRENCY") an amount due in Canadian Dollars or United States Dollars
under this Agreement, the conversion shall be made at the rate of exchange
prevailing on the Business Day immediately preceding:
(a) the date of actual payment of the amount due, in the case of any
proceeding in the courts of the Province of Ontario or in the
courts of any other jurisdiction that will give effect to such
conversion being made on such date; or
(b) the date on which the judgment is given, in the case of any
proceeding in the courts of any other jurisdiction (the date as of
which such conversion is made pursuant to this Section 10.14(1)(b)
being hereinafter in this Section 10.14 referred to as the
"JUDGMENT CONVERSION DATE").
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(2) If, in the case of any proceeding in the court of any jurisdiction
referred to in Section 10.14(1)(b), there is a change in the rate of exchange
prevailing between the Judgment Conversion Date and the date of actual payment
of the amount due, the Borrower shall pay such additional amount (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 Canadian Dollars or United
States Dollars, as the case may be, which could have been purchased with the
amount of Judgment Currency stipulated in the judgment or judicial order at the
rate of exchange prevailing on the Judgment Conversion Date.
(3) Any amount due from a Borrower under the provisions of Section
10.14 shall be due as a separate debt and shall not be affected by judgment
being obtained for any other amounts due under or in respect of this Agreement.
(4) The term "rate of exchange" in this Section 10.14 means the noon
rate of exchange based on Canadian interbank transactions in Canadian Dollars or
United States Dollars, as the case may be, in the Judgment Currency published or
quoted by the Bank of Canada for the day in question, or if such rate is not so
published or quoted by the Bank of Canada, such term shall mean the Equivalent
Amount of the Judgment Currency.
SECTION 10.15 THIS AGREEMENT TO GOVERN
In the event of any conflict or inconsistency between the terms of
this Agreement and the terms of any other Loan Document (other than the
Intercreditor Agreement which shall govern the relationship between the parties
thereto), the provisions of this Agreement shall govern to the extent necessary
to remove the conflict or inconsistency.
(remainder of page left intentionally blank)
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed under seal in the case of the Borrower and the Parent by its
authorized officer as of the day and year first above written.
EMS TECHNOLOGIES CANADA, LTD.
By: ________________________________________________
Name:
Title
EMS TECHNOLOGIES, INC.
By: ________________________________________________
Name:
Title
BANK OF AMERICA, NATIONAL ASSOCIATION,
CANADA BRANCH
AS CANADIAN ADMINISTRATIVE AGENT, AS FUNDING AGENT,
AS ISSUING BANK, AS SWINGLINE LENDER AND AS A LENDER
By: ________________________________________________
Name:
Title:
Revolving Commitment: U.S.$30,000,000
LC commitment: U.S$30,000,000
Swingline Commitment: U.S$30,000,000