Exhibit 10.2
EXECUTION COPY
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U.S.$160,000,000
C$10,000,000
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of March 20, 2003
among
NORCROSS SAFETY PRODUCTS L.L.C.,
NORTH SAFETY PRODUCTS INC., and
MORNING PRIDE MANUFACTURING L.L.C.,
as U.S. Borrowers,
NORTH SAFETY PRODUCTS LTD.,
as Canadian Borrower,
The Several Lenders
from Time to Time Parties Hereto,
FLEET NATIONAL BANK,
as Administrative Agent,
CANADIAN IMPERIAL BANK OF COMMERCE,
as Syndication Agent and Canadian Lender,
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Documentation Agent
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FLEET SECURITIES, INC. and CIBC WORLD MARKETS CORP.,
as Co-Lead Arrangers and Joint Bookrunners
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS......................................................................................1
1.1 Defined Terms......................................................................................1
1.2 Other Definitional Provisions.....................................................................27
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS.................................................................27
2.1 Term Commitments; Procedure for Term Loan Borrowing...............................................27
2.2 Repayment of Term Loans...........................................................................28
2.3 Revolving Commitments.............................................................................28
2.4 Procedure for Revolving Loan Borrowing............................................................29
2.5 U.S. Swingline Commitment; Procedure for U.S. Swingline Borrowing;
Refunding of U.S. Swingline Loans...............................................................30
2.6 Commitment Fees, etc..............................................................................32
2.7 Termination or Reduction of Revolving Commitments.................................................32
2.8 Optional Prepayments..............................................................................33
2.9 Mandatory Prepayments and Commitment Reductions...................................................33
2.10 Conversion and Continuation Options..............................................................35
2.11 Limitations on Eurodollar Tranches...............................................................36
2.12 Interest Rates and Payment Dates.................................................................36
2.13 Computation of Interest and Fees.................................................................37
2.14 Inability to Determine Interest Rate.............................................................37
2.15 Pro Rata Treatment and Payments..................................................................38
2.16 Requirements of Law..............................................................................39
2.17 Taxes............................................................................................41
2.18 Indemnity........................................................................................43
2.19 Change of Lending Office.........................................................................43
2.20 Replacement of Lenders under Certain Circumstances...............................................43
2.21 Bankers' Acceptances Under the Canadian Facility.................................................44
2.22 Repayment and Renewal of Bankers' Acceptances....................................................45
2.23 Power of Attorney for the Execution of Bankers' Acceptances......................................45
2.24 Circumstances Making Bankers' Acceptances Unavailable............................................46
2.25 Increases of the Facilities......................................................................46
SECTION 3. LETTERS OF CREDIT...............................................................................49
3.1 U.S. L/C Commitment...............................................................................49
3.2 Procedure for Issuance of U.S. Letter of Credit...................................................49
3.3 Fees and Other Charges............................................................................49
3.4 U.S. L/C Participations...........................................................................50
3.5 Reimbursement Obligations of U.S. Borrowers.......................................................51
3.6 Obligations Absolute..............................................................................51
3.7 U.S. Letter of Credit Payments....................................................................51
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Page
3.8 Applications......................................................................................52
3.9 Canadian L/C Commitment...........................................................................52
SECTION 4. REPRESENTATIONS AND WARRANTIES..................................................................52
4.1 Financial Condition...............................................................................52
4.2 No Change.........................................................................................53
4.3 Existence; Compliance with Law....................................................................53
4.4 Power; Authorization; Enforceable Obligations.....................................................53
4.5 No Legal Bar......................................................................................53
4.6 No Material Litigation............................................................................54
4.7 No Default........................................................................................54
4.8 Ownership of Property; Liens......................................................................54
4.9 Intellectual Property.............................................................................54
4.10 Taxes............................................................................................54
4.11 Federal Regulations..............................................................................54
4.12 Labor Matters....................................................................................55
4.13 ERISA............................................................................................55
4.14 Investment Company Act; Other Regulations........................................................55
4.15 Subsidiaries.....................................................................................55
4.16 Use of Proceeds..................................................................................55
4.17 Environmental Matters............................................................................56
4.18 Accuracy of Information, etc.....................................................................57
4.19 Security Documents...............................................................................57
4.20 Solvency.........................................................................................58
4.21 Senior Indebtedness..............................................................................58
4.22 Regulation H.....................................................................................58
4.23 Certain Documents................................................................................58
4.24 Capital Structure................................................................................58
4.25 Mortgaged Properties.............................................................................58
SECTION 5. CONDITIONS PRECEDENT............................................................................59
5.1 Conditions to Initial Extension of Credit.........................................................59
5.2 Conditions to Each Extension of Credit............................................................61
SECTION 6. AFFIRMATIVE COVENANTS...........................................................................61
6.1 Financial Statements..............................................................................61
6.2 Certificates; Other Information...................................................................63
6.3 Payment of Obligations............................................................................64
6.4 Maintenance of Existence; Compliance..............................................................64
6.5 Maintenance of Property; Insurance................................................................64
6.6 Inspection of Property; Books and Records; Discussions............................................64
6.7 Notices...........................................................................................64
6.8 Environmental Laws................................................................................65
6.9 Additional Collateral, etc........................................................................66
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Page
6.10 Real Estate Documentation........................................................................68
6.11 Maintenance of Ratings...........................................................................68
6.12 Post-Closing Matters.............................................................................68
SECTION 7. NEGATIVE COVENANTS..............................................................................69
7.1 Financial Condition Covenants.....................................................................69
7.2 Indebtedness......................................................................................70
7.3 Liens.............................................................................................71
7.4 Fundamental Changes...............................................................................73
7.5 Disposition of Property...........................................................................74
7.6 Restricted Payments...............................................................................74
7.7 Capital Expenditures..............................................................................75
7.8 Investments.......................................................................................76
7.9 Optional Payments and Modifications of Certain Debt Instruments...................................77
7.10 Transactions with Affiliates.....................................................................78
7.11 Sales and Leasebacks.............................................................................78
7.12 Changes in Fiscal Periods........................................................................78
7.13 Negative Pledge Clauses..........................................................................78
7.14 Clauses Restricting Subsidiary Distributions.....................................................78
7.15 Lines of Business................................................................................79
7.16 Limitation on Lease Expense......................................................................79
7.17 Change of Name...................................................................................79
SECTION 8. EVENTS OF DEFAULT...............................................................................79
SECTION 9. THE AGENTS......................................................................................83
9.1 Appointment.......................................................................................83
9.2 Delegation of Duties..............................................................................83
9.3 Exculpatory Provisions............................................................................83
9.4 Reliance by Administrative Agent and Syndication Agent............................................84
9.5 Notice of Default.................................................................................84
9.6 Non-Reliance on Agents and Other U.S. Lenders.....................................................84
9.7 Indemnification...................................................................................85
9.8 Agent in Its Individual Capacity..................................................................85
9.9 Successor Administrative Agent....................................................................86
9.10 Authorization to Release Guarantees and Liens....................................................86
9.11 Documentation Agent..............................................................................86
SECTION 10. MISCELLANEOUS..................................................................................86
10.1 Amendments and Waivers...........................................................................86
10.2 Notices..........................................................................................87
10.3 No Waiver; Cumulative Remedies...................................................................88
10.4 Survival of Representations and Warranties.......................................................89
10.5 Payment of Expenses and Taxes....................................................................89
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Page
10.6 Successors and Assigns; Participations and Assignments...........................................90
10.7 Adjustments; Set-off.............................................................................92
10.8 Counterparts.....................................................................................92
10.9 Severability.....................................................................................93
10.10 Integration.....................................................................................93
10.11 GOVERNING LAW...................................................................................93
10.12 Submission To Jurisdiction; Waivers.............................................................93
10.13 Acknowledgements................................................................................94
10.14 Confidentiality.................................................................................94
10.15 Joint and Several Obligations...................................................................95
10.16 WAIVERS OF JURY TRIAL...........................................................................95
10.17 Canadian Amendments and Waivers.................................................................95
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ANNEX:
A Pricing Grid
SCHEDULES:
1.1A Commitments
1.1B Mortgaged Property
1.1C Individual Investors
4.4 Consents, Authorizations, Filings and Notices
4.15 Subsidiaries
4.19(a) UCC Filing Jurisdictions
4.19(b) Mortgage Filing Jurisdictions
4.19(c) Canadian Filing Jurisdictions
4.24(b) Capital Structure
7.2(e) Existing Indebtedness
7.3(f) Existing Liens
7.8(p) Permitted Investments
EXHIBITS:
A Form of Guarantee and Collateral Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D-1 Form of Fee Mortgage
D-2 Form of Leasehold Mortgage
E Form of Assignment and Acceptance
F-1 Form of Legal Opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
F-2 Form of Legal Opinion of ▇▇▇▇▇▇▇▇▇ Katznelson Montiguy, S.E.N.C.
G Form of Prepayment Option Notice
H Form of Exemption Certificate
I Form of Notice of Canadian Loan Utilization by way of Bankers' Acceptances
J-1 Form of Hypothec on Movables
J-2 Form of Assignment of Inventory
J-3 Form of Immovable Hypothec
J-4 Form of General Security Agreement
K Form of Group Banking Agreement
L Form of Overdraft Agreement
M Form of Canadian L/C Agreement
N Form of Termination of Group Banking Agreement
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SECOND AMENDED AND RESTATED
CREDIT AGREEMENT, dated as of March 20,
2003, among NORCROSS SAFETY PRODUCTS L.L.C., a Delaware limited liability
company ("NSP"), NORTH SAFETY PRODUCTS INC., a Delaware corporation ("NORTH
SAFETY"), MORNING PRIDE MANUFACTURING L.L.C., a Delaware limited liability
company ("MORNING PRIDE," together with NSP and North Safety, the "U. S.
BORROWERS"), NORTH SAFETY PRODUCTS LTD., a company organized and existing under
the laws of Canada ("NORTH SAFETY CANADA" or the "CANADIAN BORROWER"), the
several banks and other financial institutions or entities from time to time
parties to this Agreement (the "U. S. LENDERS"), CANADIAN IMPERIAL BANK OF
COMMERCE (the "CANADIAN LENDER"), GENERAL ELECTRIC CAPITAL CORPORATION, as
documentation agent (in such capacity, the "DOCUMENTATION AGENT"), CANADIAN
IMPERIAL BANK OF COMMERCE, as syndication agent (in such capacity, the
"SYNDICATION AGENT") and FLEET NATIONAL BANK, as administrative agent (in such
capacity, the "ADMINISTRATIVE AGENT").
W I T N E S S E T H:
WHEREAS, the US Borrowers, the Canadian Borrower, the Lenders that are
parties thereto (the "EXISTING LENDERS") and the Administrative Agent are
parties to the Amended and Restated
Credit Agreement, dated as of April 19, 2000
(as amended, supplemented or otherwise modified prior to the date hereof, the
"EXISTING
CREDIT AGREEMENT"); and
WHEREAS, the Borrowers have requested that the Existing
Credit
Agreement be amended and restated in its entirety as more fully set forth
herein, and the Existing Lenders, the Administrative Agent and the Canadian
Lender are willing, upon and subject to the terms and conditions hereof, so to
amend and restate the Existing
Credit Agreement;
NOW, THEREFORE, in consideration of the premises and the agreements
hereinafter set forth, the parties hereto hereby agree that on the Closing Date
(as hereinafter defined) the Existing
Credit Agreement shall be amended and
restated to read in its entirety as follows:
SECTION 1. DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the terms listed in
this Section 1.1 shall have the respective meanings set forth in this
Section 1.1.
"ABR": for any day, a rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate in effect on
such day and (b) the Federal Funds Effective Rate in effect on such day PLUS 1/2
of 1%. For purposes hereof: PRIME RATE shall mean the rate of interest per annum
publicly announced from time to time by the Administrative Agent as its prime
rate in effect at its principal office in New York City (the Prime Rate not
being intended to be the lowest rate of interest charged by the Administrative
Agent in connection with extensions of credit to debtors); the effective date of
any change in the Prime Rate shall be the date of announcement of such change.
Any change in the ABR due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective as of the opening of business on the effective
day of such change in the Prime Rate or the Federal Funds Effective Rate,
respectively.
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"ABR LOANS": U.S. Loans the rate of interest applicable to which is
based upon the ABR.
"ACCEPTANCE FEE": the fee payable in C$ to the Canadian Lender in
respect of Bankers' Acceptances computed in accordance with Section 2.21.
"ADJUSTMENT DATE": as defined in the Pricing Grid.
"AFFILIATE": as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, control of a Person means the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.
"AGENTS": the collective reference to the Syndication Agent, the
Documentation Agent and the Administrative Agent.
"AGGREGATE EXPOSURE": with respect to any U.S. Lender at any time, an
amount equal to the sum of (i) the aggregate then unpaid principal amount of
such Lender's Term Loans and (ii) the amount of such Lender's U.S. Revolving
Commitment then in effect or, if the U.S. Revolving Commitments have been
terminated, the amount of such Lender's U.S. Revolving Extensions of Credit then
outstanding.
"AGGREGATE EXPOSURE PERCENTAGE": with respect to any U.S. Lender at
any time, the ratio (expressed as a percentage) of such Lender's Aggregate
Exposure at such time to the Aggregate Exposure of all U.S. Lenders at such
time.
"AGREEMENT": this Second Amended and Restated
Credit Agreement, as
amended, supplemented or otherwise modified from time to time.
"APPLICABLE BA DISCOUNT RATE": in respect of Bankers' Acceptances, the
CDOR Rate at approximately 10:00 A.M. (Montreal time) on such Borrowing Date for
bankers' acceptances having a comparable maturity date as the maturity date of
such Bankers' Acceptance.
"APPLICABLE MARGIN": for each Type of Loan, the rate per annum set
forth under the relevant column heading below:
Eurodollar Loans
ABR Loans and and Bankers'
C$ Prime Loans Acceptances
U.S. Revolving Loans and
Canadian Loans 2.50% 3.50%
Term Loans 3.25% 4.25%;
PROVIDED, that on and after each Adjustment Date to occur after the completion
of two full fiscal quarters of NSP following the Closing Date, the Applicable
Margin with respect to U.S. Revolving Loans, U.S. Swingline Loans and Canadian
Loans will be determined pursuant to the Pricing Grid.
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"APPLICATION": an application, in such form as the U.S. Issuing Lender
may specify from time to time, requesting the U.S. Issuing Lender to open a U.S.
Letter of Credit.
"APPROVED FUND": any Person (other than a natural person) that is
engaged in making, purchasing, holding or investing in bank loans and similar
extensions of credit in the ordinary course of its business and that is
administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an
entity or an Affiliate of an entity that administers or manages a Lender.
"ARKON NOTE": the promissory note of Holdco issued to the sellers
listed on the Schedule of Sellers attached thereto pursuant to the acquisition
by NSP of the Capital Stock of Arkon Safety Equipment Inc. and in the aggregate
principal amount of C$5,470,000.
"ASSET SALE": any Disposition of property or series of related
Dispositions of property (excluding any such Disposition permitted by clauses
(a) through (g) of Section 7.5) that yields gross proceeds to NSP or any of its
Subsidiaries (valued at the initial principal amount thereof in the case of
non-cash proceeds consisting of notes or other debt securities and valued at
fair market value in the case of other non-cash proceeds) in excess of
$1,000,000.
"ASSIGNEE": as defined in Section 10.6(c).
"ASSIGNMENT AND ACCEPTANCE": an Assignment and Acceptance,
substantially in the form of Exhibit E.
"ASSIGNMENT OF INVENTORY": the Assignment of Inventory under Section
427 of the Bank Act (Canada) executed by the Canadian Borrower and its
Subsidiaries dated as of April 19, 2000, as amended, supplemented or otherwise
modified from time to time.
"ASSIGNOR": as defined in Section 10.6(c).
"AVAILABLE U.S. REVOLVING COMMITMENT": as to any U.S. Revolving Lender
at any time, an amount equal to the excess, if any, of (a) such Lender's U.S.
Revolving Commitment then in effect OVER (b) such Lender's U.S. Revolving
Extensions of Credit then outstanding; PROVIDED, that in calculating any
Lender's U.S. Revolving Extensions of Credit for the purpose of determining such
Lender's Available U.S. Revolving Commitment pursuant to the definition of
"Commitment Fee Rate" and Section 2.6(a), the aggregate principal amount of U.S.
Swingline Loans then outstanding shall be deemed to be zero.
"BANKERS' ACCEPTANCE": a Draft denominated in C$ drawn by any of the
Canadian Borrower and accepted by the Canadian Lender in accordance with the
provisions of Section 2.21 hereof.
"BENEFITED LENDER": as defined in Section 10.7(a).
"BOARD": the Board of Governors of the Federal Reserve System of the
United States (or any successor).
4
"BORROWERS": the collective reference to the U. S. Borrowers and the
Canadian Borrower.
"BORROWING DATE": with respect to the U.S. Loans, any Business Day
specified by NSP as a date on which NSP requests the relevant Lenders to make
Loans hereunder and with respect to the Canadian Loans, any day on which the
Canadian Borrower requests the Canadian Lender to make C$ Loans hereunder.
"BUSINESS": as defined in Section 4.17(b).
"BUSINESS DAY": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
close, PROVIDED, that with respect to notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, such day is
also a day for trading by and between banks in Dollar deposits in the London
interbank eurodollar market and PROVIDED FURTHER, that with respect to notices
and determinations in connection with, and payments of principal and interest on
a Canadian Loan, a day on which Canadian chartered banks are open for business
in Montreal, Canada, but excluding Saturday, Sunday and any other day on which
Canadian chartered banks are authorized or required by law to close in Montreal,
Canada.
"CDOR RATE": the per annum rate of interest which is the rate based on
the rate applicable to bankers' acceptances for a term of 30 days (in the case
of the definition of C$ Prime Rate) or for a term equivalent to the term of, and
for amounts comparable to the amount of, the relevant Bankers' Acceptances (in
the case of the definition of Applicable BA Discount Rate) appearing on the
Reuters Screen CDOR Page (as defined in the International Swap Dealer
Association, Inc. definitions, as modified and amended from time to time) for
acceptances of Schedule I banks under the Bank Act (Canada) as of 10:00 A.M.,
Montreal time, on such date, or if such date is not a Business Day, then on the
immediately preceding Business Day; PROVIDED, HOWEVER, that if no such rate
appears on the Reuters Screen CDOR Page as contemplated, then the CDOR Rate on
any date shall be calculated as the arithmetic mean of the rates for the term
and amount referred to above applicable to bankers' acceptances quoted by the
Canadian Lender as of 10:00 A.M., Montreal time, on such date or, if such date
is not a Business Day, then on the immediately preceding Business Day.
"CANADIAN BORROWER": as defined in the preamble hereto.
"CANADIAN COMMITMENT": the Commitment of the Canadian Lender to make
extensions of credit to the Canadian Borrower pursuant to Sections 2.3(c) and
3.9 hereof and the Canadian Loan Documents in an aggregate amount not to exceed
C$10,000,000 at any one time outstanding, as such Commitment may otherwise be
reduced or terminated pursuant to the provisions hereof.
"CANADIAN COMMITMENT PERIOD": the period from and including the
Closing Date to the Revolving Termination Date.
"CANADIAN DOLLARS and "C$": dollars in lawful currency of Canada.
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"C$ PRIME LOANS": Canadian Loans at such time as they bear interest at
a rate based upon the C$ Prime Rate.
"C$ PRIME RATE": the greater of (a) the annual rate of interest
announced from time to time by the Canadian Lender as its reference rate then in
effect for determining interest rates on C$ denominated commercial loans in
Canada and (b) the annual rate of interest equal to the sum of (i) the CDOR Rate
and (ii) 0.50% per annum.
"CANADIAN EXTENSIONS OF CREDIT": as to the Canadian Lender at any
time, an amount equal to the sum of the aggregate principal amount of (a) all
Canadian Loans outstanding and (b) the Canadian L/C Obligations then
outstanding.
"CANADIAN FACILITY": as defined in the definition of "Facility".
"CANADIAN L/C AGREEMENTs": the various agreements regarding
applications for letters of credit and indemnification agreements to be entered
into among the Canadian Lender and the Canadian Borrower in substantially the
forms attached hereto as Exhibit M, which forms are generally used by the
Canadian Lender in connection with the issue by it of letters of credit or
guarantees on behalf of its customers, as such agreements are amended,
supplemented or otherwise modified from time to time.
"CANADIAN L/C COMMITMENT": C$1,000,000.
"CANADIAN L/C OBLIGATIONS": at any time, an amount equal to the sum of
(a) the aggregate then undrawn and unexpired amount of the then outstanding
Canadian Letters of Credit and (b) the aggregate amount of drawings under
Canadian Letters of Credit that have not then been reimbursed pursuant to the
Canadian L/C Agreements.
"CANADIAN LENDER": as defined in the preamble hereto.
"CANADIAN LETTERS OF CREDIT": letters of credit issued by the Canadian
Lender at the request of the Canadian Borrower or any of them pursuant to the
provisions hereof.
"CANADIAN LOAN DOCUMENTS": the Canadian L/C Agreements, the Overdraft
Agreement, the Group Banking Agreement, the Canadian Security Documents and any
and all other agreements or instruments executed after the Closing Date from
time to time by the Canadian Borrower with or in favor of the Canadian Lender in
connection with this Agreement.
"CANADIAN LOANS": as defined in Section 2.3(c).
"CANADIAN REIMBURSEMENT OBLIGATION": the obligation of the Canadian
Borrower to reimburse the Canadian Lender pursuant to the Canadian L/C
Agreements for amounts drawn under Canadian Letters of Credit.
"CANADIAN SECURITY DOCUMENTS": the Hypothec on Movables, the
Assignment of Inventory, the Immovable Hypothec and the General Security
Agreement to be granted by the Canadian Borrower in favor of the Canadian Lender
in substantially the forms attached hereto as Exhibit ▇-▇, ▇-▇, ▇-▇ ▇▇▇ ▇-▇
respectively, as amended, supplemented or otherwise modified from
6
time to time, and the Mortgages and all other security documents heretofore and
hereafter delivered to the Canadian Lender granting a Lien on any property of
the Canadian Borrower or any Subsidiary thereof to secure the obligations and
liabilities of the Canadian Borrower or any Subsidiary thereof to the Canadian
Lender.
"CANADIAN SUBSIDIARY GUARANTOR": each Subsidiary of North Safety
Canada that is incorporated in Canada.
"CANADIAN WHOLLY OWNED SUBSIDIARY": as to any Person, any other Person
all of the Capital Stock of which (other than directors' qualifying shares
required by law) is owned by such Person directly and/or through other Canadian
Wholly Owned Subsidiaries.
"CANADIAN WHOLLY OWNED SUBSIDIARY GUARANTOR": any Canadian Subsidiary
Guarantor that is a Wholly Owned Subsidiary of the Canadian Borrower.
"CAPITAL EXPENDITURES": for any period, with respect to any Person,
the aggregate, without duplication, of all expenditures by such Person and its
Subsidiaries for the acquisition or leasing (pursuant to a capital lease) of
fixed or capital assets or additions to equipment (including replacements,
capitalized repairs and improvements during such period) that should be
capitalized under GAAP on a consolidated balance sheet of such Person and its
Subsidiaries (excluding (i) any such asset acquired in connection with normal
replacement and maintenance programs properly charged to current operations,
(ii) expenditures made with the proceeds of insurance and awards of condemnation
and (iii) Permitted Acquisitions).
"CAPITAL LEASE OBLIGATIONS": as to any Person, the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP and, for the purposes of
this Agreement, the amount of such obligations at any time shall be the
capitalized amount thereof at such time determined in accordance with GAAP.
"CAPITAL STOCK": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
"CASH EQUIVALENTS": (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government (or in the case of
any Foreign Subsidiary, the government of the country where such Foreign
Subsidiary is organized) or issued by any agency thereof and backed by the full
faith and credit of the United States (or in the case of any Foreign Subsidiary,
the country where such Foreign Subsidiary is organized), in each case maturing
within one year from the date of acquisition; (b) certificates of deposit, time
deposits, eurodollar time deposits or overnight bank deposits having maturities
of six months or less from the date of acquisition issued by any Lender or by
any commercial bank organized under the laws of (i) the United States or any
state thereof or (ii) in the case of any Foreign Subsidiary, the country where
such Foreign Subsidiary is organized, having combined capital and surplus of not
less than $500,000,000, or, in the case of a Foreign Subsidiary, the equivalent
thereof; (c)
7
commercial paper of an issuer rated at least A-1 by Standard & Poor's Ratings
Services (S&P) or P-1 by ▇▇▇▇▇'▇ Investors Service, Inc. (MOODY'S), or carrying
an equivalent rating by a nationally recognized rating agency, if both of the
two named rating agencies cease publishing ratings of commercial paper issuers
generally, and maturing within six months from the date of acquisition; (d)
repurchase obligations of any Lender or of any commercial bank satisfying the
requirements of clause (b) of this definition, having a term of not more than 90
days, with respect to securities issued or fully guaranteed or insured by the
United States government; (e) securities with maturities of one year or less
from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States, by any political subdivision or
taxing authority of any such state, commonwealth or territory or by any foreign
government, the securities of which state, commonwealth, territory, political
subdivision, taxing authority or foreign government (as the case may be) are
rated at least A by S&P or A by Moody's; (f) securities with maturities of six
months or less from the date of acquisition backed by standby letters of credit
issued by any Lender or any commercial bank satisfying the requirements of
clause (b) of this definition; or (g) shares of money market mutual or similar
funds which invest exclusively in assets satisfying the requirements of clauses
(a) through (f) of this definition.
"CLOSING DATE": the date on which the conditions precedent set forth
in Section 5.1 shall have been satisfied.
"CODE": the Internal Revenue Code of 1986, as amended from time to
time.
"CO-LEAD ARRANGERS": Fleet Securities, Inc. and CIBC World Markets
Corp.
"COLLATERAL": all property of the Loan Parties, now owned or hereafter
acquired, upon which a Lien is purported to be created by any Security Document.
"COMMITMENT FEE RATE": 0.75%, PROVIDED that such rate shall be reduced
to 0.50% at any time when, in the case of commitment fees payable pursuant to
(a) Section 2.6(a) in respect of the U.S. Revolving Facility, the then Available
U.S. Revolving Commitment is less than 50% of the then Total U.S. Revolving
Commitments or (b) Section 2.6(c) in respect of the Canadian Facility, the then
aggregate Canadian Extensions of Credit are greater than 50% of the then
Canadian Commitment, and PROVIDED, FURTHER, that on or after each Adjustment
Date to occur after the completion of two full fiscal quarters of NSA following
the Closing Date, the Commitment Fee Rate will be determined pursuant to the
Pricing Grid.
"COMMITMENTS": the collective reference to the U.S. Commitments and
the Canadian Commitments.
"COMMONLY CONTROLLED ENTITY": an entity, whether or not incorporated,
that is under common control with NSP within the meaning of Section 4001 of
ERISA or is part of a group that includes NSP and that is treated as a single
employer under Section 414 of the Code.
"COMPLIANCE CERTIFICATE": a certificate duly executed by a Responsible
Officer substantially in the form of Exhibit B.
"CONSOLIDATED CURRENT ASSETS": at any date, all amounts (other than
cash and Cash Equivalents) that would, in conformity with GAAP, be set forth
opposite the caption "total
8
current assets" (or any like caption) on a consolidated balance sheet of NSP and
its Subsidiaries at such date.
"CONSOLIDATED CURRENT LIABILITIES": at any date, all amounts that
would, in conformity with GAAP, be set forth opposite the caption "total current
liabilities" (or any like caption) on a consolidated balance sheet of NSP and
its Subsidiaries at such date, but excluding (a) the current portion of any
Funded Debt of NSP and its Subsidiaries and (b) without duplication of clause
(a) above, all Indebtedness consisting of U.S. Revolving Loans, U.S. Swingline
Loans or Canadian Loans to the extent otherwise included therein.
"CONSOLIDATED EBITDA": for any period, Consolidated Net Income for
such period PLUS, without duplication and to the extent reflected as a charge in
the statement of such Consolidated Net Income for such period, the sum of (a)
provision for income tax expense (including any franchise taxes imposed in lieu
of income taxes and any income taxes that would be payable if the entity were to
become a taxable entity for purposes of Federal, state or local income taxes),
(b) interest expense, amortization or writeoff of debt discount and debt
issuance costs and commissions, discounts and other fees and charges associated
with Indebtedness (including the Loans and Letters of Credit) and Hedge
Agreements, (c) amortization or writeoff of deferred financing fees, debt
discount and debt issuance costs and commissions, discounts and other fees and
charges associated with Indebtedness (including the Loans and the Letters of
Credit) and Hedge Agreements, (d) depreciation and amortization expense, (e)
amortization of intangibles (including, but not limited to, goodwill) and
organization costs, (f) any extraordinary, unusual or non-recurring expenses or
losses (including, (x) whether or not otherwise includable as a separate item in
the statement of such Consolidated Net Income for such period, losses on sales
of assets outside of the ordinary course of business, and (y) in the case of the
fiscal quarter ending March 31, 2002 and December 31, 2002, the $2,800,000 and
$9,500,000, respectively, extraordinary charges taken in such quarters),
PROVIDED, that the amounts referred to in this clause (f) (other than the amount
set forth in subclause (y) above, which amount is not subject to the limitations
imposed by this proviso) shall not, in the aggregate, exceed (A) $1,500,000 for
any fiscal year of NSP in the case of extraordinary, unusual or non-recurring
cash expenses or losses (including cash losses on sales of assets outside of the
ordinary course of business but excluding those described in clause (B)
immediately following) or (B) $1,000,000 for any fiscal year of NSP in the case
of extraordinary, unusual or non-recurring restructuring charges arising out of
Permitted Acquisitions and (g) any other non-cash charges, and MINUS, to the
extent included in the statement of such Consolidated Net Income for such
period, the sum of (a) interest income, (b) any extraordinary, unusual or
non-recurring income or gains (including, whether or not otherwise includable as
a separate item in the statement of such Consolidated Net Income for such
period, gains on the sales of assets outside of the ordinary course of business)
and (c) any other non-cash income, all as determined on a consolidated basis.
For the purposes of calculating Consolidated EBITDA for any period of four
consecutive fiscal quarters (each a "REFERENCE PERIOD") pursuant to any
determination of the Consolidated Total Leverage Ratio or the Consolidated
Senior Leverage Ratio, (i) if at any time during such Reference Period NSP or
any Subsidiary shall have made any Material Disposition, the Consolidated EBITDA
for such Reference Period shall be reduced by an amount equal to the
Consolidated EBITDA (if positive) attributable to the property that is the
subject of such Material Disposition for such Reference Period or increased by
an amount equal to the Consolidated EBITDA (if negative) attributable thereto
for such Reference Period and (ii) if during such Reference Period NSP or any
Subsidiary
9
shall have made a Material Acquisition, Consolidated EBITDA for such Reference
Period shall be calculated after giving PRO FORMA effect thereto as if such
Material Acquisition occurred on the first day of such Reference Period. As used
in this definition, MATERIAL ACQUISITION means any acquisition of property or
series of related acquisitions of property that (a) constitutes assets
comprising all or substantially all of an operating unit of business or
constitutes all or substantially all of the common stock of a Person and (b)
involves the payment of consideration by NSP and its Subsidiaries in excess of
$1,000,000; and MATERIAL DISPOSITION means any Disposition of property or series
of related Dispositions of property that yields gross proceeds to NSP or any of
its Subsidiaries in excess of $1,000,000.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO": for any period, the ratio
of (a) Consolidated EBITDA for such period less the aggregate amount actually
paid by the Borrower and its Subsidiaries during such period on account of
Capital Expenditures to (b) Consolidated Fixed Charges for such period.
"CONSOLIDATED FIXED CHARGES": for any period, the sum (without
duplication) of (a) Consolidated Interest Expense for such period, (b) scheduled
payments made during such period on account of principal of Indebtedness of
Holdco or any of its Subsidiaries (including scheduled principal payments in
respect of the Term Loans), (c) payments made by Holdco and its Subsidiaries
during such period on account of income taxes (including any franchise taxes
imposed in lieu of income taxes) and (d) the aggregate amount of Restricted
Payments made during such period as permitted by Sections 7.6(b), (c) and (f).
"CONSOLIDATED INTEREST COVERAGE RATIO": for any period, the ratio of
(a) Consolidated EBITDA for such period to (b) Consolidated Interest Expense for
such period.
"CONSOLIDATED INTEREST EXPENSE": for any period, the excess, if any,
of (a) total cash interest expense (including that attributable to Capital Lease
Obligations) of Holdco and its Subsidiaries for such period with respect to all
outstanding Indebtedness of Holdco and its Subsidiaries (including all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing and net costs under Hedge Agreements
in respect of interest rates to the extent such net costs are allocable to such
period in accordance with GAAP) over (b) total cash interest income of Holdco
and its Subsidiaries for such period.
"CONSOLIDATED NET INCOME": for any period, the consolidated net income
(or loss) of NSP and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP; PROVIDED that there shall be excluded (a) the income (or
loss) of any Person accrued prior to the date it becomes a Subsidiary of NSP or
is merged into or consolidated with NSP or any of its Subsidiaries, (b) the
income (or loss) of any Person (other than a Subsidiary of NSP) in which NSP or
any of its Subsidiaries has an ownership interest, except to the extent that any
such income is actually received by NSP or such Subsidiary in the form of
dividends or similar distributions and (c) the undistributed earnings of any
Subsidiary of NSP to the extent that the declaration or payment of dividends or
similar distributions by such Subsidiary is not at the time permitted by the
terms of any Contractual Obligation (other than under any Loan Document) or
Requirement of Law applicable to such Subsidiary.
10
"CONSOLIDATED SENIOR DEBT": all Consolidated Total Debt other than the
Senior Subordinated Notes and any other Indebtedness of NSP or the Canadian
Borrower that, by its terms or the terms of any applicable subordination
agreement, is subordinated to the prior payment in full of the Obligations.
"CONSOLIDATED SENIOR LEVERAGE RATIO": as at the last day of any
period, the ratio of (a) Consolidated Senior Debt on such day to (b)
Consolidated EBITDA for such period.
"CONSOLIDATED TOTAL DEBT": at any date, the excess, if any, of (a) the
aggregate principal amount of all Funded Debt of NSP and its Subsidiaries at
such date, determined on a consolidated basis in accordance with GAAP over (b)
the aggregate amount (but in no event more than $10,000,000) of cash and Cash
Equivalents held by NSP and its Subsidiaries in the United States on such date.
"CONSOLIDATED TOTAL LEVERAGE RATIO": as at the last day of any period,
the ratio of (a) Consolidated Total Debt on such day to (b) Consolidated EBITDA
for such period.
"CONSOLIDATED WORKING CAPITAL": at any date, the excess of
Consolidated Current Assets on such date over Consolidated Current Liabilities
on such date.
"CONTRACTUAL OBLIGATION": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"DEFAULT": any of the events specified in Section 8, whether or not
any requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
"DISPOSITION": with respect to any property, any sale, lease, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof. The
terms DISPOSE and DISPOSED OF shall have correlative meanings.
"DOCUMENTATION AGENT": as defined in the preamble hereto.
"DOLLARS" and "$": dollars in lawful currency of the United States.
"DOMESTIC SUBSIDIARY": any Subsidiary of NSP organized under the laws
of any jurisdiction within the United States.
"DRAFT": a blank non-interest bearing ▇▇▇▇ of exchange, within the
meaning of the Bills of Exchange Act (Canada), or a blank depository ▇▇▇▇ within
the meaning of the Depository Bills and Notes Act (Canada), as applicable, drawn
by any of the Canadian Borrower and addressed to the Canadian Lender,
denominated in and bearing such distinguishing letters and numbers as the
Canadian Lender may determine, but which at such time, except as otherwise
provided herein, has not been completed or accepted by the Canadian Lender.
"ECF PERCENTAGE": for any fiscal year of NSP, (a) 25%, if the
Consolidated Total Leverage Ratio as at the last day of such fiscal year is less
than 3.0 to 1.0, (b) 50%, if the
11
Consolidated Total Leverage Ratio as at the last day of such fiscal year is less
than 3.5 to 1.0 and equal to or greater than 3.0 to 1.0 or (c) 75%, otherwise.
"ENVIRONMENTAL LAWS": any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of the environment or protection of
human health as it relates to environmental hazards, as now or may at any time
hereafter be in effect.
"EQUIVALENT": on any date, the amount of Canadian Dollars into which a
specified amount of Dollars may be converted or, as the case may be, the amount
of Dollars into which a specified amount of Canadian Dollars may be converted,
in each case at the applicable Bank of Canada noon rate on such date as
published on the Reuters Screen page BOFC.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"EUROCURRENCY RESERVE REQUIREMENTS": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such day
(including basic, supplemental, marginal and emergency reserves under any
regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as Eurocurrency Liabilities in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System.
"EURODOLLAR BASE RATE": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum determined on the
basis of the rate for deposits in Dollars for a period equal to such Interest
Period commencing on the first day of such Interest Period appearing on Page
3750 of the Dow ▇▇▇▇▇ Markets screen as of 11:00 A.M., London time, two Business
Days prior to the beginning of such Interest Period. In the event that such rate
does not appear on Page 3750 of the Dow ▇▇▇▇▇ Markets screen (or otherwise on
such screen), the EURODOLLAR BASE RATE shall be determined by reference to such
other comparable publicly available service for displaying eurodollar rates as
may be selected by the Administrative Agent or, in the absence of such
availability, by reference to the rate at which the Administrative Agent is
offered Dollar deposits at or about 11:00 A.M., London time, two Business Days
prior to the beginning of such Interest Period in the London interbank
eurodollar market where its eurodollar and foreign currency and exchange
operations are then being conducted for delivery on the first day of such
Interest Period for the number of days comprised therein.
"EURODOLLAR LOANS": U.S. Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"EURODOLLAR RATE": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for such day
in accordance with the following formula (rounded upward to the nearest 1/100th
of 1%):
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Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"EURODOLLAR TRANCHE": the collective reference to Eurodollar Loans the
then current Interest Periods with respect to all of which begin on the same
date and end on the same later date (whether or not such Loans shall originally
have been made on the same day).
"EVENT OF DEFAULT": any of the events specified in Section 8, PROVIDED
that any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"EXCESS CASH FLOW": for any fiscal year of NSP, the excess, if any, of
(a) the sum, without duplication, of (i) Consolidated Net Income for such fiscal
year, (ii) the provision for income tax expense (including any franchise taxes
imposed in lieu of income taxes and any income taxes that would be payable if
the entity were to become a taxable entity for purposes of federal, state or
local income taxes) deducted in arriving at such Consolidated Net Income, (iii)
the amount of all non-cash charges (including depreciation and amortization)
deducted in arriving at such Consolidated Net Income, (iv) decreases in
Consolidated Working Capital for such fiscal year and (v) the aggregate net
amount of non-cash loss on the Disposition of property by NSP and its
Subsidiaries during such fiscal year (other than sales of inventory in the
ordinary course of business), to the extent deducted in arriving at such
Consolidated Net Income OVER (b) the sum, without duplication, of (i) the amount
of all non-cash items included in arriving at such Consolidated Net Income, (ii)
the aggregate amount actually paid by NSP and its Subsidiaries in cash during
such fiscal year on account of Capital Expenditures (excluding the principal
amount of Indebtedness incurred in connection with such Expenditures and any
such expenditures financed with the proceeds of any Reinvestment Deferred
Amount), (iii) the aggregate amount actually paid by NSP and its Subsidiaries
during such fiscal year on account of Investments permitted by Section 7.8(h),
(j) or (n) (excluding the principal amount of Indebtedness incurred to finance
such Investments), (iv) the aggregate amount of all prepayments of U.S.
Revolving Loans, U.S. Swingline Loans and Canadian Loans during such fiscal year
to the extent accompanying permanent optional reductions of the U.S. Revolving
Commitments or Canadian Commitment, as the case may be, and all optional
prepayments of the Term Loans during such fiscal year, (v) the aggregate amount
of all regularly scheduled principal payments of Funded Debt (including the Term
Loans) of NSP and its Subsidiaries made during such fiscal year (other than in
respect of any revolving credit facility to the extent there is not an
equivalent permanent reduction in commitments thereunder), (vi) increases in
Consolidated Working Capital for such fiscal year, (vii) the aggregate net
amount of non-cash gain on the Disposition of property by NSP and its
Subsidiaries during such fiscal year (other than sales of inventory in the
ordinary course of business), to the extent included in arriving at such
Consolidated Net Income, (viii) any cash payments made during such fiscal year
in respect of non-cash charges described in clause (a)(iii) or (v) above that
were deducted in determining Consolidated Net Income for a prior fiscal year,
(ix) the aggregate amount of Restricted Payments made during such fiscal year as
permitted by Section 7.6(b), (c) or (g), (x) amounts paid in cash during such
fiscal year by NSP and its Subsidiaries in respect of taxes based upon income
(including any franchise taxes imposed in lieu of income taxes), (xi) cash
earnout and royalty payments made during such fiscal year to former owners of
acquired businesses that were not deducted as expenses in determining such
Consolidated Net Income, (xii) Permitted Tax Distributions made during such
fiscal year and (xiii) dividends paid by NSP during such fiscal year as
permitted by Section 7.6(f)(i).
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"EXCLUDED FOREIGN SUBSIDIARY": any Foreign Subsidiary in respect of
which either (a) the pledge of all of the Capital Stock of such Subsidiary as
Collateral or (b) the guaranteeing by such Subsidiary of the Obligations, would,
in the good faith judgment of NSP, result in adverse tax consequences to NSP.
"EXISTING
CREDIT AGREEMENT": as defined in the recitals hereto.
"EXISTING LENDERS": as defined in the recitals hereto.
"FACILITY": each of (a) the Term Commitments and the Term Loans made
thereunder (the "TERM FACILITY"), (b) the U.S. Revolving Commitments and the
extensions of credit made thereunder (the "U.S. REVOLVING FACILITY") and (c) the
Canadian Commitment and the Canadian Extensions of Credit made thereunder (the
"CANADIAN FACILITY").
"FEDERAL FUNDS EFFECTIVE RATE": for any day, the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for the day of such transactions received by the Administrative Agent
from three federal funds brokers of recognized standing selected by it.
"FOREIGN SUBSIDIARY": any Subsidiary of NSP that is not a Domestic
Subsidiary.
"FUNDED DEBT": as to any Person, all Indebtedness of such Person other
than that described in clause (f) of the definition of the term "Indebtedness"
in respect of letters of credit.
"FUNDING OFFICE": the office of the Administrative Agent or the
Canadian Lender, as specified in Section 10.2 or such other office as may be
specified from time to time by the Administrative Agent or the Canadian Lender,
as the case may be, as its funding office by written notice to NSP and the U.S.
Lenders or the Canadian Borrower, as the case may be.
"GAAP": generally accepted accounting principles in the United States
as in effect from time to time, except that for purposes of Section 7.1, GAAP
shall be determined on the basis of such principles in effect on the date hereof
and consistent with those used in the preparation of the most recent audited
financial statements delivered pursuant to Section 4.1. In the event that any
Accounting Change (as defined below) shall occur and such change results in a
change in the method of calculation of financial covenants, standards or terms
in this Agreement, then NSP and the Administrative Agent agree to enter into
negotiations in order to amend such provisions of this Agreement so as to
equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating NSP's financial condition shall be the same after such
Accounting Changes as if such Accounting Changes had not been made. Until such
time as such an amendment shall have been executed and delivered by NSP, the
Administrative Agent and the U.S. Required Lenders, all financial covenants,
standards and terms in this Agreement shall continue to be calculated or
construed as if such Accounting Changes had not occurred. Accounting Changes
refers to changes in accounting principles required by the promulgation of any
rule, regulation, pronouncement or opinion by the Financial Accounting Standards
Board of the American Institute of Certified Public Accountants or, if
applicable, the Securities and Exchange Commission (or successors thereto or
agencies with similar functions).
14
"GENERAL SECURITY AGREEMENT": the General Security Agreement, dated as
of March 20, 2003, as amended, supplemented or otherwise modified from time to
time.
"GOVERNMENTAL AUTHORITY": any nation or government, any state,
province or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government (including the National Association of Insurance
Commissioners).
"GROUP BANKING AGREEMENT": the Group Banking Agreement entered into
among the Canadian Lender and the Canadian Borrower in substantially the form
attached hereto as Exhibit K, as terminated by the Termination of Group Banking
Agreement in substantially the form attached hereto as Exhibit N.
"GROUP PROPERTIES": as defined in Section 4.17(a).
"GUARANTEE AND COLLATERAL AGREEMENT": the Second Amended and Restated
Guarantee and Collateral Agreement to be executed and delivered by Holdco, NSP
and each U.S. Subsidiary Guarantor, substantially in the form of Exhibit A, as
the same may be amended, supplemented or otherwise modified from time to time.
"GUARANTEE OBLIGATION": as to any Person (the "GUARANTEEING PERSON"),
any obligation of (a) the guaranteeing person or (b) another Person (including
any bank under any letter of credit) to induce the creation of which the
guaranteeing person has issued a reimbursement, counterindemnity or similar
obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "PRIMARY OBLIGATIONS")
of any other third Person (the "PRIMARY OBLIGOR") in any manner, whether
directly or indirectly, including any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (1) for the purchase or payment of any such primary obligation or
(2) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
thereof; PROVIDED, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection or customary contractual
indemnities entered into, in each case in the ordinary course of business. The
amount of any Guarantee Obligation of any guaranteeing person shall be deemed to
be the lower of (a) an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Guarantee Obligation is made and (b)
the maximum amount for which such guaranteeing person may be liable pursuant to
the terms of the instrument embodying such Guarantee Obligation, unless such
primary obligation and the maximum amount for which such guaranteeing person may
be liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by NSP in good faith.
15
"GUARANTORS": the collective reference to Holdco and the U.S.
Subsidiary Guarantors.
"HEDGE AGREEMENTS": all interest rate or currency swaps, caps or
collar agreements or similar arrangements or foreign exchange contracts
providing for protection against fluctuations in interest rates or currency
exchange rates or the exchange of nominal interest obligations, either generally
or under specific contingencies.
"HOLDCO": NSP Holdings L.L.C., a Delaware limited liability company.
"HOLDCO L.L.C. AGREEMENT": the Limited Liability Company Operating
Agreement of Holdco, dated as of the Original Closing Date, as amended,
supplemented or otherwise modified to and including the date hereof.
"HYPOTHEC ON MOVABLES": the Hypothec on Movables executed by the
Canadian Borrower and its Subsidiaries, dated as of April 19, 2000, as amended,
supplemented or otherwise modified from time to time.
"IMMOVABLE HYPOTHEC": the Immovable Hypothec executed by the Canadian
Borrower, dated as of March 20, 2003, as amended, supplemented or otherwise
modified from time to time.
"INDEBTEDNESS": of any Person at any date, without duplication, (a)
all indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (other than
current accounts or trade payables and accrued expenses incurred in the ordinary
course of such Person's business), (c) all obligations of such Person evidenced
by notes, bonds, debentures or other similar instruments, (d) all indebtedness
created or arising under any conditional sale or other title retention agreement
with respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), (e) all Capital Lease
Obligations of such Person, (f) the face amount of all obligations of such
Person, contingent or otherwise, as an account party under acceptance, letter of
credit or similar facilities, (g) all Guarantee Obligations of such Person in
respect of obligations of the kind referred to in clauses (a) through (f) above,
(h) all obligations of the kind referred to in clauses (a) through (g) above
secured by (or for which the holder of such obligation has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including
accounts and contract rights) owned by such Person, whether or not such Person
has assumed or become liable for the payment of such obligation, and (i) for the
purposes of Section 8(e) only, all obligations of such Person in respect of
Hedge Agreements. The amount of any Indebtedness at any date under (x) clause
(h) shall be equal to the lesser of (A) the then stated amount of the relevant
obligations and (B) the then fair market value of the property subject to the
relevant Lien and (y) clause (i) shall be the net amount, including any net
termination payments, that would be required to be paid to a counterparty on
such date if a termination of the applicable Hedge Agreement were to occur on
such date, rather than the notional amount thereof.
16
"INDEBTEDNESS FOR BORROWED MONEY": of any Person at any date, without
duplication, all Indebtedness of such Person of a type described in clauses (a)
and (c) of the definition of the term "Indebtedness".
"INDIVIDUAL INVESTORS": the individuals listed on Schedule 1.1C.
"INSOLVENCY": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"INSOLVENT": pertaining to a condition of Insolvency.
"INTELLECTUAL PROPERTY": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including
copyrights, copyright licenses, patents, patent licenses, patent applications,
trademarks, trademark licenses, trademark applications, technology, know-how and
processes, and all rights to ▇▇▇ at law or in equity for any infringement or
other impairment thereof, including the right to receive all proceeds and
damages therefrom.
"INTEREST PAYMENT DATE": (a) as to any ABR Loan (other than any
Swingline Loan), the last day of each March, June, September and December to
occur while such Loan is outstanding and the final maturity date of such Loan,
(b) as to any Eurodollar Loan having an Interest Period of three months or less,
the last day of such Interest Period, (c) as to any Eurodollar Loan having an
Interest Period longer than three months, (i) each day that is three months, or
a whole multiple thereof, after the first day of such Interest Period and (ii)
the last day of such Interest Period, (d) as to any C$ Prime Loans, the last day
of each calendar month, (e) as to any Loan (other than any U.S. Revolving Loan
that is an ABR Loan and any Swingline Loan), the date of any repayment or
prepayment made in respect thereof and (f) as to any Swingline Loan, the day
that such Loan is required to be repaid.
"INTEREST PERIOD": as to any Eurodollar Loan, (a) initially, the
period commencing on the borrowing or conversion date, as the case may be, with
respect to such Eurodollar Loan and ending one, two, three, six or (if available
to all Lenders under the relevant Facility) nine or twelve months thereafter, as
selected by NSP in its notice of borrowing or notice of conversion, as the case
may be, given with respect thereto; and (b) thereafter, each period commencing
on the last day of the next preceding Interest Period applicable to such
Eurodollar Loan and ending one, two, three, six months or (if available to all
Lenders under the relevant Facility) nine or twelve months thereafter, as
selected by NSP by irrevocable notice to the Administrative Agent not less than
three Business Days prior to the last day of the then current Interest Period
with respect thereto; PROVIDED that, all of the foregoing provisions relating to
Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day that is not
a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business Day;
17
(ii) NSP may not select an Interest Period under a particular
Facility that would extend beyond the Revolving Termination Date or beyond
the date final payment is due on the Term Loans, as the case may be;
(iii) any Interest Period that 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 a calendar month; and
(iv) NSP shall select Interest Periods so as not to require a payment
or prepayment of any Eurodollar Loan during an Interest Period for such
Loan in connection with any scheduled payment of principal with respect
thereto.
"INVENSYS": Invensys PLC (formerly ▇▇▇▇▇ PLC), a public limited
company organized and existing under the laws of England and Wales, ▇▇▇▇▇
International Limited, a private limited company organized and existing under
the laws of England and Wales, Deutsche ▇▇▇▇▇ GMBH, a private company organized
under the laws of Germany and ▇▇▇▇▇ Inc., a Delaware corporation, collectively.
"INVESTMENTS": as defined in Section 7.8.
"L.L.C. AGREEMENT": the Second Amended and Restated Limited Liability
Company Agreement of NSP, dated October 2, 1998.
"LEASE EXPENSE": for any period, the aggregate amount of fixed and
contingent rentals payable by NSP and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP, for such period with respect to
operating leases of real and personal property.
"LENDERS": the collective reference to the U.S. Lenders and the
Canadian Lender.
"LETTERS OF CREDIT: the collective reference to U.S. Letters of Credit
and Canadian Letters of Credit.
"LIEN": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), prior claim, charge or
other security interest 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
substantially the same economic effect as any of the foregoing).
"LOAN": any loan or advance made by any Lender pursuant to this
Agreement which includes any advance made by way of acceptance of a Draft.
"LOAN DOCUMENTS": this Agreement, the Security Documents and any Notes
and the Canadian Loan Documents.
"LOAN PARTIES": Holdco, the U.S. Borrowers, the Canadian Borrower and
each Subsidiary of NSP that is party to a Loan Document.
18
"MANAGEMENT NOTES": the promissory notes of certain current officers
of NSP issued to Holdco for the sole purpose of purchasing equity of Holdco and
not to exceed the aggregate principal amount of $1,900,000 at any one time
outstanding.
"MATERIAL ADVERSE EFFECT": a material adverse effect on (a) the
business, property, operations or condition (financial or otherwise) of NSP and
its Subsidiaries taken as a whole or (b) the validity or enforceability of this
Agreement or any of the other Loan Documents or the rights or remedies, taken as
a whole, of the Administrative Agent, the Syndication Agent or the Lenders
hereunder or thereunder.
"MATERIALS OF ENVIRONMENTAL CONCERN": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including asbestos, polychlorinated biphenyls
and urea-formaldehyde insulation.
"MORNING PRIDE": as defined in the preamble hereto.
"MORTGAGED PROPERTIES": the real properties listed on Schedule 1.1B,
(i) as to which the Administrative Agent for the benefit of the U.S. Lenders has
been granted a Lien pursuant to the Mortgages and (ii) as to which the Canadian
Lender has been granted a Lien pursuant to the Mortgages.
"MORTGAGES": each of the mortgages and deeds of trust made by any Loan
Party in favor of, or for the benefit of, the Administrative Agent for the
benefit of the U.S. Lenders or in favor of the Canadian Lender, (a) in the case
of properties in the United States, substantially in the form of Exhibit D-1 or
D-2, as the case may be, or (b) in the case of properties located in Canada, in
form and substance reasonably satisfactory to the Canadian Lender (in either
case with such changes thereto as shall be advisable under the law of the
jurisdiction in which such mortgage or deed of trust is to be recorded), as the
same may be amended, supplemented or otherwise modified from time to time.
"MULTIEMPLOYER PLAN": a Plan that is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"NET CASH PROCEEDS": (a) in connection with any Asset Sale or any
Recovery Event, the proceeds thereof in the form of cash and Cash Equivalents
(including any such proceeds received by way of deferred payment of principal
pursuant to a note or installment receivable or purchase price adjustment
receivable or otherwise, but only as and when received) of such Asset Sale or
Recovery Event, net of attorneys' fees, accountants' fees, investment banking
fees, amounts required to be applied to the repayment of Indebtedness secured by
a Lien expressly permitted hereunder on any asset that is the subject of such
Asset Sale or Recovery Event (other than any Lien pursuant to a Security
Document) and other customary fees and expenses actually incurred in connection
therewith and net of taxes paid or reasonably estimated to be payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements) and net of amounts deposited in
escrow in connection therewith or reasonably expected to be paid as a result of
any purchase price adjustment, indemnities or reserves related thereto (provided
that such amounts shall be Net Cash Proceeds
19
to the extent and at the time released or not required to be so used) and (b) in
connection with any issuance or sale of equity securities or debt securities or
instruments or the incurrence of loans, the cash proceeds received from such
issuance or incurrence, net of attorneys' fees, investment banking fees,
accountants' fees, underwriting discounts and commissions and other customary
fees and expenses actually incurred in connection therewith.
"NFI": Norcross Footwear Inc., a Delaware corporation.
"NFI NOTE": the 10.58% Senior Note due 2005 of NSP, issued April 24,
1998 to Norcross Footwear Inc. in the principal amount of $750,000.
"NON-EXCLUDED TAXES": as defined in Section 2.17(a).
"NON-U.S. LENDER": as defined in Section 2.17(d).
"NORTH SAFETY": as defined in the preamble hereto.
"NORTH SAFETY CANADA": as defined in the preamble hereto.
"NOTE AGREEMENT": the Note Agreement, dated as of February 17, 2000,
among NSP, North Safety and Morning Pride and certain purchasers named therein
together with all instruments and other agreements entered into in connection
therewith, as the same may be amended, supplemented or otherwise modified from
time to time in accordance with Section 7.9.
"NOTES": the collective reference to any promissory note evidencing
Loans.
"NSP": as defined in the preamble hereto.
"OBLIGATIONS": the unpaid principal of and interest on (including
interest accruing after the maturity of the Loans and Reimbursement Obligations
and interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
any Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) the Loans and all other obligations and
liabilities of any Borrower to any Agent or to any Lender (or, in the case of
Hedge Agreements, any affiliate of any Lender), whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, this Agreement,
any other Loan Document, the Letters of Credit, any Hedge Agreement entered into
with any Lender or any affiliate of any Lender or any other document made,
delivered or given in connection herewith or therewith, whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including all out of pocket fees, charges and reasonable disbursements
of counsel to the Syndication Agent, the Administrative Agent or to any Lender
that are required to be paid by the Borrowers pursuant hereto) or otherwise.
"ORIGINAL CLOSING DATE": October 2, 1998.
"ORIGINAL
CREDIT AGREEMENT": the original predecessor to this
Agreement, namely the Credit Agreement, dated as of October 2, 1998, which was
amended and restated pursuant to the Existing Credit Agreement.
20
"OTHER TAXES": 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.
"OVERDRAFT AGREEMENT": the Agreement Regarding Overdraft Privileges to
be entered into among the Canadian Lender and the Canadian Borrower in
substantially the form attached hereto as Exhibit L, as amended, supplemented or
otherwise modified from time to time.
"PARTICIPANT": as defined in Section 10.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA (or any successor).
"PERMITTED ACQUISITION": any acquisition made by NSP or any of its
Subsidiaries of all or substantially all of the assets of, or all the Capital
Stock of, or a division or business operated by, another Person engaged in a
business meeting the requirements of Section 7.15, PROVIDED that (a) at the time
of such acquisition and after giving effect thereto no Default or Event of
Default shall have occurred and be continuing, (b) such acquisition shall be
consummated in all material respects in accordance with all applicable laws and
regulations, (c) the applicable Borrower, prior to any such acquisition, shall
have delivered to the Administrative Agent satisfactory evidence that the
Person, business or division to be acquired in such acquisition had positive
EBITDA (calculated in a manner consistent with the calculation of "Consolidated
EBITDA") for the period consisting of four consecutive fiscal quarters most
recently completed, (d) after giving effect to such acquisition on a pro forma
basis (determined without giving effect to any projected cost savings, other
than those approved by the Administrative Agent and the Syndication Agent) the
covenants contained in Section 7.1 shall not have been violated, such covenants
being recomputed as of the last day of the most recently completed fiscal
quarter of NSP for which financial statements shall have been delivered to the
Lenders pursuant to Section 4.1 or 6.1 as if such acquisition (and any related
assumption of Indebtedness) had occurred on the first day of the period of four
consecutive fiscal quarters then ended and (d) NSP shall have delivered to the
Administrative Agent a certificate of a Responsible Officer setting forth
calculations demonstrating compliance with the condition contained in clause (c)
above and attaching all relevant and available financial information regarding
the business or Person which is the subject of such acquisition.
"PERMITTED HOLDERS": collectively, (i) Canadian Imperial Bank of
Commerce, (ii) CIBC Merchant Fund, (iii) Argosy-Safety Products, L.P., (iv)
Co-Investment Merchant Fund, L.L.C., (v) CIBC Wood Gundy Ventures, Inc., (vi)
The ▇▇▇▇ ▇▇▇▇▇▇▇ Mutual Life Insurance Company, (vii) any Affiliate of
(including any equity fund advised by) any of the foregoing (other than any of
their portfolio companies) and (viii) the Individual Investors, each of the
spouses, children (adoptive or biological) or other lineal descendants of the
Individual Investors, the probate estate of any such individual and any trust,
so long as one or more of the foregoing individuals retains substantially all of
the controlling or beneficial interest thereunder.
"PERMITTED LIEN": as defined in Section 7.3.
21
"PERMITTED TAX DISTRIBUTIONS": Tax Distributions as defined in
Section 5.1 of the Holdco L.L.C. Agreement as in effect on the date hereof.
"PERSON": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.
"PLAN": at a particular time, any employee benefit plan that is
covered by ERISA and in respect of which NSP or a Commonly Controlled Entity is
(or, if such plan were terminated at such time, would under Section 4069 of
ERISA be deemed to be) an employer as defined in Section 3(5) of ERISA.
"PRICING GRID": the pricing grid attached hereto as Annex A.
"PRIME RATE": as defined in the definition of ABR.
"PROJECTIONS": as defined in Section 6.2(c).
"RECOVERY EVENT": any settlement of or payment in respect of any
property or casualty insurance claim or any condemnation proceeding relating to
any asset of NSP or any of its Subsidiaries with a value in excess of $500,000.
"REFERENCE LENDER": Canadian Imperial Bank of Commerce or its
successors.
"REFINANCING INDEBTEDNESS": Indebtedness that refunds, refinances or
extends any Indebtedness of NSP or Holdco permitted by clauses (d) through (f)
of Section 7.2 outstanding on the Closing Date or other Indebtedness permitted
to be incurred by NSP or its Subsidiaries pursuant to the terms of this
Agreement but only to the extent that (i) the Refinancing Indebtedness is
subordinated to the Obligations to at least the same extent as the Indebtedness
being refunded, refinanced or extended, if at all, (ii) the Refinancing
Indebtedness is scheduled to mature either (a) no earlier than the Indebtedness
being refunded, refinanced or extended, or (b) after the maturity of the Term
Loans, (iii) the portion, if any, of the Refinancing Indebtedness that is
scheduled to mature on or prior to the maturity date of the Term Loans has a
weighted average life to maturity at the time such Refinancing Indebtedness is
incurred that is equal to or greater than the weighted average life to maturity
of the portion of the Indebtedness being refunded, refinanced or extended that
is scheduled to mature on or prior to the maturity date of the Term Loans, (iv)
such Refinancing Indebtedness is in an aggregate principal amount that is equal
to or less than the sum of (a) the aggregate principal amount then outstanding
under the Indebtedness being refunded, refinanced or extended, (b) the amount of
accrued and unpaid interest, if any, and premiums owed, if any, not in excess of
preexisting payment provisions on such Indebtedness being refunded, refinanced
or extended and (c) the amount of customary fees, expenses and costs related to
the incurrence of such Refinancing Indebtedness and (v) such Refinancing
Indebtedness is incurred by the same Person that initially incurred the
Indebtedness being refunded, refinanced or extended, except that NSP may incur
Refinancing Indebtedness to refund, refinance or extended indebtedness of any
Wholly Owned Subsidiary of NSP.
"REFUNDED U.S. SWINGLINE LOANS": as defined in Section 2.5(d).
22
"REGISTER": as defined in Section 10.6(d).
"REGULATION U": Regulation U of the Board as in effect from time to
time.
"REIMBURSEMENT OBLIGATIONS": the collective reference to the U.S.
Reimbursement Obligations and the Canadian Reimbursement Obligations.
"REINVESTMENT DEFERRED AMOUNT": with respect to any Reinvestment
Event, the aggregate Net Cash Proceeds received by NSP or any of its
Subsidiaries in connection therewith that are not applied to prepay the Term
Loans or reduce the Revolving Commitments pursuant to Section 2.9(b) as a result
of the delivery of a Reinvestment Notice.
"REINVESTMENT EVENT": any Asset Sale or Recovery Event in respect of
which NSP has delivered a Reinvestment Notice.
"REINVESTMENT NOTICE": a written notice executed by a Responsible
Officer stating that no Event of Default has occurred and is continuing and that
NSP (directly or indirectly through a Subsidiary) intends and expects to use all
or a specified portion of the Net Cash Proceeds of an Asset Sale or Recovery
Event to acquire assets useful in NSP's or any of its Subsidiaries' business.
"REINVESTMENT PREPAYMENT AMOUNT": with respect to any Reinvestment
Event, the Reinvestment Deferred Amount relating thereto less any amount
expended prior to the relevant Reinvestment Prepayment Date to acquire assets
(directly or through the purchase of the Capital Stock of a Person) useful in
NSP's or any of its Subsidiaries' business.
"REINVESTMENT PREPAYMENT DATE": with respect to any Reinvestment
Event, the earlier of (a) the date occurring six months after such Reinvestment
Event and (b) the date on which NSP shall have determined not to, or shall have
otherwise ceased to, acquire assets useful in NSP's or any of its Subsidiaries'
business with all or any portion of the relevant Reinvestment Deferred Amount.
"REORGANIZATION": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"REPORTABLE EVENT": any of the events set forth in Section 4043(b) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg.
Section 4043.
"REQUIRED LENDERS": the holders of more than 50% of the sum of (i) the
aggregate unpaid principal amount of the Term Loans, (ii) the U.S. Revolving
Commitments or, if the U.S. Revolving Commitments have been terminated, the U.S.
Revolving Extensions of Credit and (iii) the Dollar Equivalent of the Canadian
Commitment or, if the Canadian Commitment has been terminated, the Dollar
Equivalent of the Canadian Extensions of Credit.
"REQUIREMENT OF LAW": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in
23
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.
"REQUISITE LENDERS": with respect to any Facility, the holders of more
than 50% of the aggregate unpaid principal amount of the Term Loans, the Total
U.S. Revolving Extensions of Credit, or the Dollar Equivalent of the Canadian
Extensions of Credit as the case may be, outstanding under such Facility (or, in
the case of the U.S. Revolving Facility and the Canadian Facility, prior to any
termination of the U.S. Revolving Commitments or the Canadian Commitment, the
holders of more than 50% of the Total U.S. Revolving Commitments or the Dollar
Equivalent of the Canadian Commitment, respectively).
"REQUISITE U.S. REVOLVING FACILITY LENDERS": the Requisite Lenders in
respect of the U.S. Revolving Facility.
"RESPONSIBLE OFFICER": the chief executive officer, president or chief
financial officer of NSP, but in any event, with respect to financial matters,
the chief financial officer of NSP.
"RESTRICTED PAYMENTS": as defined in Section 7.6.
"REVOLVING TERMINATION DATE": March 20, 2008.
"SCHEDULED DEBT": all Indebtedness of Holdco and its Subsidiaries
listed on Schedule 7.2(e).
"SEC": the Securities and Exchange Commission, any successor thereto
and any analogous Governmental Authority.
"SECURITY DOCUMENTS": the collective reference to the Guarantee and
Collateral Agreement, the Mortgages, the Canadian Security Documents and all
other security documents hereafter delivered to and accepted by the
Administrative Agent or the Canadian Lender, as the case may be, granting a Lien
on any property of any Person to secure the obligations and liabilities of any
Loan Party under any Loan Document.
"SENIOR SUBORDINATED NOTES": the 13.0% Senior Subordinated Notes in
the aggregate principal amount of $95,000,000 due August 2005 of NSP, North
Safety and Morning Pride issued pursuant to the Note Agreement, including any
refinancing, refunding or replacement thereof (including pursuant to Section
2.9(c), as amended, supplemented or otherwise modified in accordance with
Section 7.9).
"SINGLE EMPLOYER PLAN": any Plan that is covered by Title IV of ERISA,
but that is not a Multiemployer Plan.
"SOLVENT": when used with respect to any Person, means that, as of any
date of determination, (a) the amount of the present fair saleable value of the
assets of such Person will, as of such date, exceed the amount of all
liabilities of such Person, contingent or otherwise, as of such date, as such
quoted terms are determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors, (b) the present fair
saleable value (as
24
such quoted terms are determined in accordance with applicable federal and state
laws governing determinations of the insolvency of debtors) of the assets of
such Person will, as of such date, be greater than the amount that will be
required to pay the liability of such Person on its debts as such debts become
absolute and matured, (c) such Person will not have, as of such date, an
unreasonably small amount of capital with which to conduct its business, and (d)
such Person will be able to pay its debts as they mature. For purposes of this
definition, (i) debt means liability on a claim, (ii) claim means any (x) right
to payment, whether or not such a right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured or (y) right to an equitable remedy for
breach of performance if such breach gives rise to a right to payment, whether
or not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured or unmatured, disputed, undisputed, secured or unsecured and
(iii) NSP may assume, so long as no Default or Event of Default shall have
occurred and be continuing at the time such assumption is made, that all or a
portion of the then outstanding Term Loans or other Indebtedness of NSP
hereunder will be refinanced at the maturity thereof.
"SPECIFIED CHANGE OF CONTROL": a Change of Control as defined in the
Note Agreement.
"SUBSIDIARY": as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a Subsidiary or to Subsidiaries in this Agreement shall refer to a
Subsidiary or Subsidiaries of NSP.
"SYNDICATION AGENT": as defined in the preamble hereto.
"TERM COMMITMENT": as to any Lender, the obligation of such Lender, if
any, to make a Term Loan to the U.S. Borrowers hereunder on the Closing Date in
a principal amount not to exceed the amount set forth under the heading Term
Commitment opposite such Lender's name on Schedule 1.1A. The original aggregate
amount of the Term Commitments is $130,000,000.
"TERM LENDER": each Lender that is the holder of a Term Loan.
"TERM LOAN": as defined in Section 2.1(a).
"TERM PERCENTAGE": as to any Term Lender at any time, the percentage
which the aggregate principal amount of such Lender's Term Loans then
outstanding constitutes of the aggregate principal amount of the Term Loans then
outstanding provided, that solely for purposes of calculating the amount of each
installment of Term Loans (other than the last installment) payable to a Term
Lender pursuant to Section 2.2, such Term Lender's Term Percentage shall be
calculated without giving effect to any portion of any prior mandatory or
25
optional prepayment attributable to such Term Lender's Term Loans which shall
have been declined by such Term Lender (or, in the case of any Term Lender which
shall have acquired its Term Loans by assignment from another Person, by such
other Person).
"TOTAL U.S. REVOLVING COMMITMENTS": at any time, the aggregate amount
of the U.S. Revolving Commitments then in effect.
"TOTAL U.S. REVOLVING EXTENSIONS OF CREDIT": at any time, the
aggregate amount of the U.S. Revolving Extensions of Credit of the U.S.
Revolving Lenders outstanding at such time.
"TRANSFEREE": any Assignee or Participant.
"TYPE": as to any Loan, its nature as an ABR Loan, a Eurodollar Loan
or a C$ Prime Loan.
"U.S. BORROWERS": as defined in the preamble hereto.
"U.S. COMMITMENT": as to any U.S. Lender, the sum of the Term
Commitment and the U.S. Revolving Commitment of such Lender.
"U.S. ISSUING LENDER": any U.S. Revolving Lender designated as the
U.S. Issuing Lender in a written notice from the Administrative Agent and NSP to
the U.S. Lenders.
"U.S. L/C COMMITMENT": $5,000,000.
"U.S. L/C FEE PAYMENT DATE": the last day of each March, June,
September and December and the last day of the U.S. Revolving Commitment Period.
"U.S. L/C OBLIGATIONS": at any time, an amount equal to the sum of (a)
the aggregate then undrawn and unexpired amount of the then outstanding U.S.
Letters of Credit and (b) the aggregate amount of drawings under U.S. Letters of
Credit that have not then been reimbursed pursuant to Section 3.5.
"U.S. L/C PARTICIPANTS": the collective reference to all the U.S.
Revolving Lenders other than the U.S. Issuing Lender.
"U.S. LENDERS": as defined in the preamble hereto.
"U.S. LETTERS OF CREDIT": as defined in Section 3.1(a).
"U.S. LOANS": the collective reference to the Term Loans, the U.S.
Revolving Loans and the U.S. Swingline Loans.
"U.S. REIMBURSEMENT OBLIGATION": the obligation of the U.S. Borrowers
to reimburse the relevant U.S. Issuing Lender pursuant to Section 3.5 for
amounts drawn under Letters of Credit.
26
"U.S. REQUIRED LENDERS": at any time, the holders of more than 50% of
the sum of (i) the aggregate unpaid principal amount of the Term Loans then
outstanding and (ii) the Total U.S. Revolving Commitments then in effect or, if
the U.S. Revolving Commitments have been terminated, the Total U.S. Revolving
Extensions of Credit then outstanding.
"U.S. REQUIRED PREPAYMENT LENDERS": the Requisite Lenders in respect
of each of the Term Facility and the U.S. Revolving Facility.
"U.S. REVOLVING COMMITMENT": as to any U.S. Lender, the obligation of
such Lender, if any, to make U.S. Revolving Loans and participate in U.S.
Swingline Loans and U.S. Letters of Credit in an aggregate principal and/or face
amount not to exceed the amount set forth under the heading "U.S. Revolving
Commitment" opposite such Lender's name on Schedule 1.1A or in the Assignment
and Acceptance pursuant to which such Lender became a party hereto, as the same
may be changed from time to time pursuant to the terms hereof. The original
amount of the Total U.S. Revolving Commitments is $30,000,000.
"U.S. REVOLVING COMMITMENT PERIOD": the period from and including the
Original Closing Date to the Revolving Termination Date.
"U.S. REVOLVING EXTENSIONS OF CREDIT": as to any U.S. Revolving Lender
at any time, an amount equal to the sum of (a) the aggregate principal amount of
all U.S. Revolving Loans held by such Lender then outstanding, (b) such Lender's
U.S. Revolving Percentage of the U.S. L/C Obligations then outstanding and (c)
such Lender's U.S. Revolving Percentage of the aggregate principal amount of
U.S. Swingline Loans then outstanding.
"U.S. REVOLVING LENDER": at any time, each U.S. Lender that then has a
U.S. Revolving Commitment or that then holds U.S. Revolving Loans.
"U.S. REVOLVING LOANS": as defined in Section 2.3(a).
"U.S. REVOLVING PERCENTAGE": as to any U.S. Revolving Lender at any
time, the percentage which such Lender's U.S. Revolving Commitment then
constitutes of the Total U.S. Revolving Commitments (or, at any time after the
U.S. Revolving Commitments shall have expired or terminated, the percentage
which the aggregate principal amount of such Lender's U.S. Revolving Loans then
outstanding constitutes of the aggregate principal amount of the U.S. Revolving
Loans then outstanding).
"U.S. SUBSIDIARY GUARANTOR": each Subsidiary of NSP other than any
Excluded Foreign Subsidiary.
"U.S. SWINGLINE COMMITMENT": the obligation of the U.S. Swingline
Lender to make U.S. Swingline Loans pursuant to Section 2.5 in an aggregate
principal amount at any one time outstanding not to exceed $5,000,000.
"U.S. SWINGLINE LENDER": Fleet National Bank, in its capacity as the
lender of U.S. Swingline Loans.
"U.S. SWINGLINE LOANS": as defined in Section 2.5(a).
27
"U.S. SWINGLINE PARTICIPATION AMOUNT": as defined in Section 2.5(e).
"U.S. WHOLLY OWNED SUBSIDIARY": as to any Person, any other Person all
of the Capital Stock of which (other than directors' qualifying shares required
by law) is owned by such Person directly and/or through other U.S. Wholly Owned
Subsidiaries.
"U.S. WHOLLY OWNED SUBSIDIARY GUARANTOR": any Subsidiary Guarantor
that is a U.S. Wholly Owned Subsidiary of NSP.
"UNIFORM CUSTOMS": the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No. 500,
as the same may be amended from time to time.
"UNITED STATES": the United States of America.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the other Loan Documents or any certificate or other document made
or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto, (i)
accounting terms relating to NSP and its Subsidiaries not defined in Section 1.1
and accounting terms partly defined in Section 1.1, to the extent not defined,
shall have the respective meanings given to them under GAAP, (ii) the words
"include", "includes" and "including" shall be deemed to be followed by the
phrase "without limitation" and (iii) 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, Capital Stock,
securities, revenues, accounts, leasehold interests and contract rights.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, Schedule and
Exhibit references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 TERM COMMITMENTS; PROCEDURE FOR TERM LOAN BORROWING. (a) Subject
to the terms and conditions hereof, each Term Lender severally agrees to make a
term loan (a "TERM LOAN") to the U.S. Borrowers on the Closing Date in an amount
not to exceed the amount of the Term Commitment of such Term Lender. The Term
Loans may from time to time be Eurodollar Loans or ABR Loans, as determined by
NSP and notified to the Administrative Agent in accordance with Sections 2.1(b)
and 2.10.
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(b) NSP shall give the Administrative Agent irrevocable notice (which
notice must be received by the Administrative Agent prior to 12:00 P.M., New
York City time, one Business Day prior to the anticipated Closing Date)
requesting that the Term Lenders make the Term Loans on the Closing Date and
specifying the amount to be borrowed. The Term Loans made on the Closing Date
shall initially be ABR Loans, and, unless otherwise agreed by the Administrative
Agent in its sole discretion, no Term Loan may be made as, converted into or
continued as a Eurodollar Loan having an Interest Period in excess of one month
prior to the date that is the earlier of (x) 10 days after the Closing Date and
(y) the date the Administrative Agent and the Syndication Agent notify NSP that
the syndication of the Loans has closed, PROVIDED that, during the 10-day period
described in the foregoing clause (x), NSP may (anything in the definition of
the term "Interest Period" to the contrary notwithstanding) select Interest
Periods that end on or before the last day of such 10-day period so long as
Interest Periods of the selected length are available to all Term Lenders. Upon
receipt of such notice the Administrative Agent shall promptly notify each Term
Lender thereof. Not later than 12:00 Noon, New York City time, on the Closing
Date each Term Lender shall make available to the Administrative Agent at the
Funding Office an amount in immediately available funds equal to the Term Loan
or Term Loans to be made by such Lender, PROVIDED, HOWEVER, that, in the case of
any Term Lender which is an Existing Lender, such Term Lender shall only be
required so to make available to the Administrative Agent an amount equal to the
excess, if any, of its Term Commitment over its Term Loan outstanding under the
Existing Credit Agreement and it shall be entitled to credit such existing Term
Loan against its obligation to make its Term Loan under its Term Loan
Commitment. The Administrative Agent shall transfer to the account of the
Borrowers specified by NSP the aggregate of the amounts made available to the
Administrative Agent by the Term Lenders in immediately available funds.
2.2 REPAYMENT OF TERM LOANS. The principal amount of the Term Loan
of each Term Lender shall mature in twenty-four consecutive quarterly
installments, commencing on June 30, 2003, each of which shall be in an amount
equal to such Term Lender's Term Percentage multiplied by the amount set forth
below opposite such installment:
Quarterly Installment Principal Amount
1 - 23 $ 325,000
24 $ 122,525,000
2.3 REVOLVING COMMITMENTS. (a) Subject to the terms and conditions
hereof, each U.S. Revolving Lender severally agrees to make revolving credit
loans ("U.S. REVOLVING LOANS") to NSP from time to time during the U.S.
Revolving Commitment Period in an aggregate principal amount at any one time
outstanding which, when added to such U.S. Lender's U.S. Revolving Percentage of
the sum of (i) the U.S. L/C Obligations then outstanding and (ii) the aggregate
principal amount of the U.S. Swingline Loans then outstanding, does not exceed
the amount of such U.S. Lender's Revolving Commitment. During the U.S. Revolving
Commitment Period the U.S. Borrowers may use the U.S. Revolving Commitments by
borrowing, prepaying the U.S. Revolving Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof. The U.S.
Revolving Loans may from time to
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time be Eurodollar Loans or ABR Loans, as determined by NSP and notified to the
Administrative Agent in accordance with Sections 2.4 and 2.10.
(b) The U.S. Borrowers shall repay all outstanding U.S. Revolving
Loans on the Revolving Termination Date.
(c) Subject to the terms and conditions hereof and in the Canadian
Loan Documents, the Canadian Lender agrees to make revolving credit loans to,
and to accept Drafts from, the Canadian Borrower (such loans and acceptances of
Drafts, the "CANADIAN LOANS") from time to time during the Canadian Commitment
Period in an aggregate principal amount at any one time outstanding which, when
added to the Canadian L/C Obligations then outstanding does not exceed the
Canadian Commitment then in effect.
(d) The Canadian Loans shall be denominated in C$ and may from time to
time be (i) C$Prime Loans, (ii) Bankers' Acceptances or (iii) a combination
thereof, as determined by any one Canadian Borrower and notified to the Canadian
Lender in accordance with the Canadian Loan Documents.
(e) C$ Prime Loans may be borrowed, repaid without premium or penalty
and reborrowed from time to time by the Canadian Borrower during the Canadian
Commitment Period in accordance with the provisions hereof and of the Canadian
Loan Documents.
(f) The Canadian Borrower shall repay all outstanding Canadian Loans
on the Revolving Termination Date.
2.4 PROCEDURE FOR REVOLVING LOAN BORROWING. (a) The U.S. Borrowers
may borrow under the U.S. Revolving Commitments during the U.S. Revolving
Commitment Period on any Business Day, PROVIDED that NSP shall give the
Administrative Agent notice (which notice must be received by the Administrative
Agent prior to 12:00 Noon, New York City time, (a) three Business Days prior to
the requested Borrowing Date, in the case of Eurodollar Loans, or (b) one
Business Day prior to the requested Borrowing Date, in the case of ABR Loans),
specifying (i) the amount and Type of U.S. Revolving Loans to be borrowed, (ii)
the requested Borrowing Date, (iii) the account to which the proceeds of such
Loans should be transferred and (iv) in the case of Eurodollar Loans, the
respective amounts of each such Type of Loan and the respective lengths of the
initial Interest Period therefor. Any U.S. Revolving Loans made on the Closing
Date shall initially be ABR Loans and, unless otherwise agreed by the
Administrative Agent in its sole discretion, no U.S. Revolving Loan may be made
as, converted into or continued as a Eurodollar Loan having an Interest Period
in excess of one month prior to the date that is the earlier of (x) 10 days
after the Closing Date and (y) the date the Administrative Agent and Syndication
Agent notify NSP that the syndication of the Loans has closed, PROVIDED that,
during the 10-day period described in the foregoing clause (x), NSP may
(anything in the definition of the term "Interest Period" to the contrary
notwithstanding) select Interest Periods that end on or before the last day of
such 10-day period so long as Interest Periods of the selected length are
available to all U.S. Revolving Lenders. Each borrowing under the U.S. Revolving
Commitments shall be in an amount equal to (x) in the case of ABR Loans,
$1,000,000 or a whole multiple thereof (or, if the then aggregate Available U.S.
Revolving Commitments are less than $1,000,000, such lesser amount) and (y) in
the case of Eurodollar Loans, $5,000,000 or a
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whole multiple of $1,000,000 in excess thereof; PROVIDED, that the U.S.
Swingline Lender may request, on behalf of NSP, borrowings under the U.S.
Revolving Commitments that are ABR Loans in other amounts pursuant to Section
2.5. Upon receipt of any such notice from NSP, the Administrative Agent shall
promptly notify each U.S. Revolving Lender thereof. Each U.S. Revolving Lender
will make the amount of its pro rata share of each borrowing available to the
Administrative Agent for the account of the Borrowers at the Funding Office
prior to 12:00 Noon, New York City time, on the Borrowing Date requested by NSP
in funds immediately available to the Administrative Agent. Such borrowing will
then be made available to the U.S. Borrowers by the Administrative Agent
transferring to the account of the Borrowers specified by NSP the aggregate of
the amounts made available to the Administrative Agent by the U.S. Revolving
Lenders and in like funds as received by the Administrative Agent.
(b) The Canadian Lender shall open and maintain on its books at its
Montreal main branch, accounts and records evidencing the Canadian Loans made
available to the Canadian Borrower by the Canadian Lender under this Agreement.
The Canadian Lender shall record therein the amount of such Canadian Loans, each
payment of principal and interest made thereon, the Bankers' Acceptances
accepted, paid and cancelled by the Canadian Borrower hereunder, the Canadian
Letters of Credit outstanding, paid or expired and all other amounts becoming
due to the Canadian Lender under this Agreement, including Acceptance Fees,
commitment fees, administration fees and letters of credit fees, and all
payments on account thereof. Such accounts and records maintained by the
Canadian Lender will constitute, in the absence of manifest error, PRIMA FACIE
evidence of the indebtedness of the Canadian Borrower to the Canadian Lender
pursuant to this Agreement, the date the Canadian Lender made each Canadian
Extension of Credit available to the Canadian Borrower or any of them hereunder
and the amounts the Canadian Borrower have paid from time to time on account
thereof.
2.5 U.S. SWINGLINE COMMITMENT; PROCEDURE FOR U.S. SWINGLINE
BORROWING; REFUNDING OF U.S. SWINGLINE LOANS. (a) Subject to the terms and
conditions hereof, the U.S. Swingline Lender agrees to make a portion of the
credit otherwise available to NSP under the U.S. Revolving Commitments from time
to time during the U.S. Revolving Commitment Period by making swing line loans
("U.S. SWINGLINE LOANS") to NSP; provided that (i) the aggregate principal
amount of U.S. Swingline Loans outstanding at any time shall not exceed the U.S.
Swingline Commitment then in effect (notwithstanding that the U.S. Swingline
Loans outstanding at any time, when aggregated with the U.S. Swingline Lender's
outstanding U.S. Revolving Loans, may exceed the U.S. Swingline Commitment then
in effect) and (ii) NSP shall not request, and the U.S. Swingline Lender shall
not make, any U.S. Swingline Loan if, after giving effect to the making of such
U.S. Swingline Loan, the aggregate amount of the Available U.S. Revolving
Commitments would be less than zero. During the U.S. Revolving Commitment
Period, NSP may use the U.S. Swingline Commitment by borrowing, repaying and
reborrowing, all in accordance with the terms and conditions hereof. U.S.
Swingline Loans shall be ABR Loans only.
(b) NSP shall repay to the U.S. Swingline Lender the then unpaid
principal amount of each U.S. Swingline Loan on the earlier of the Revolving
Termination Date and the first date after such U.S. Swingline Loan is made that
is the 15th or last Business Day of a calendar month and is at least two
Business Days after such U.S. Swingline Loan is made;
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PROVIDED that on each date that a U.S. Revolving Loan is borrowed, NSP shall
repay all U.S. Swingline Loans then outstanding.
(c) Whenever NSP desires that the U.S. Swingline Lender make a U.S.
Swingline Loan it shall give the U.S. Swingline Lender irrevocable telephonic
notice confirmed promptly in writing (which telephonic notice must be received
by the U.S. Swingline Lender not later than 1:00 P.M., New York City time, on
the proposed Borrowing Date), specifying (i) the amount to be borrowed and (ii)
the requested Borrowing Date (which shall be a Business Day during the U.S.
Revolving Commitment Period). Each borrowing under the U.S. Swingline Commitment
shall be in an amount equal to $500,000 or a whole multiple of $100,000 in
excess thereof. Not later than 3:00 P.M., New York City time, on the Borrowing
Date specified in a notice in respect of U.S. Swingline Loans, the U.S.
Swingline Lender shall make available to the Administrative Agent at the Funding
Office an amount in immediately available funds equal to the amount of the U.S.
Swingline Loan to be made by the U.S. Swingline Lender. The Administrative Agent
shall make the proceeds of such U.S. Swingline Loan available to NSP on such
Borrowing Date by depositing such proceeds in the account of NSP with the
Administrative Agent on such Borrowing Date in immediately available funds.
(d) The U.S. Swingline Lender, at any time and from time to time in
its sole and absolute discretion may, on behalf of NSP (which hereby irrevocably
directs the U.S. Swingline Lender to act on its behalf), on one Business Day's
notice given by the U.S. Swingline Lender no later than 12:00 Noon, New York
City time, request each U.S. Revolving Lender to make, and each U.S. Revolving
Lender hereby agrees to make, a U.S. Revolving Loan, in an amount equal to such
U.S. Revolving Lender's U.S. Revolving Percentage of the aggregate amount of the
U.S. Swingline Loans (the "REFUNDED U.S. SWINGLINE LOANS") outstanding on the
date of such notice, to repay the U.S. Swingline Lender. Each U.S. Revolving
Lender shall make the amount of such U.S. Revolving Loan available to the
Administrative Agent at the Funding Office in immediately available funds, not
later than 11:00 A.M., New York City time, one Business Day after the date of
such notice. The proceeds of such U.S. Revolving Loans shall be immediately made
available by the Administrative Agent to the U.S. Swingline Lender for
application by the U.S. Swingline Lender to the repayment of the Refunded U.S.
Swingline Loans. NSP irrevocably authorizes the U.S. Swingline Lender to charge
NSP's accounts with the Administrative Agent (up to the amount available in each
such account) to pay immediately the amount of such Refunded U.S. Swingline
Loans to the extent amounts received from the U.S. Revolving Lenders are not
sufficient to repay in full such Refunded U.S. Swingline Loans.
(e) If prior to the time a U.S. Revolving Loan would have otherwise
been made pursuant to Section 2.5(d), one of the events described in Section
8(f) shall have occurred and be continuing with respect to NSP or if for any
other reason, as determined by the U.S. Swingline Lender in its sole discretion,
U.S. Revolving Loans may not be made as contemplated by Section 2.5(d), each
U.S. Revolving Lender shall, on the date such U.S. Revolving Loan was to have
been made pursuant to the notice referred to in Section 2.5(d), purchase for
cash an undivided participating interest in the then outstanding U.S. Swingline
Loans by paying to the U.S. Swingline Lender an amount (the "U.S. SWINGLINE
PARTICIPATION AMOUNT") equal to (i) such U.S. Revolving Lender's U.S. Revolving
Percentage TIMES (ii) the sum of the aggregate principal amount of U.S.
Swingline Loans then outstanding that were to have been repaid with such U.S.
Revolving Loans.
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(f) Whenever, at any time after the U.S. Swingline Lender has received
from any U.S. Revolving Lender such Lender's U.S. Swingline Participation
Amount, the U.S. Swingline Lender receives any payment on account of the U.S.
Swingline Loans, the U.S. Swingline Lender will distribute to such U.S.
Revolving Lender its U.S. Swingline Participation Amount (appropriately
adjusted, in the case of interest payments, to reflect the period of time during
which such U.S. Revolving Lender's participating interest was outstanding and
funded and, in the case of principal and interest payments, to reflect such U.S.
Revolving Lender's PRO RATA portion of such payment if such payment is not
sufficient to pay the principal of and interest on all U.S. Swingline Loans then
due); PROVIDED, HOWEVER, that in the event that such payment received by the
U.S. Swingline Lender is required to be returned, such U.S. Revolving Lender
will return to the U.S. Swingline Lender any portion thereof previously
distributed to it by the U.S. Swingline Lender.
(g) Each U.S. Revolving Lender's obligation to make the U.S. Revolving
Loans referred to in Section 2.5(d) and to purchase participating interests
pursuant to Section 2.5(e) shall be absolute and unconditional and shall not be
affected by any circumstance, including (i) any setoff, counterclaim,
recoupment, defense or other right that such U.S. Revolving Lender or NSP may
have against the U.S. Swingline Lender, NSP or any other Person for any reason
whatsoever, (ii) the occurrence or continuance of a Default or an Event of
Default or the failure to satisfy any of the other conditions specified in
Section 5, (iii) any adverse change in the condition (financial or otherwise) of
NSP, (iv) any breach of this Agreement or any other Loan Document by NSP, any
other Loan Party or any other U.S. Revolving Lender or (v) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing.
2.6 COMMITMENT FEES, ETC. (a) The U.S. Borrowers agree to pay to the
Administrative Agent for the account of each U.S. Revolving Lender a commitment
fee for the period from and including the Original Closing Date to the last day
of the U.S. Revolving Commitment Period, computed at the Commitment Fee Rate on
the average daily amount of the Available U.S. Revolving Commitment of such
Lender during the period for which payment is made, payable quarterly in arrears
on the last day of each March, June, September and December and on the Revolving
Termination Date, commencing on the first of such dates to occur after the date
hereof.
(b) The U.S. Borrowers agree to pay to the Administrative Agent the
fees in the amounts and on the dates previously agreed to in writing by NSP and
the Administrative Agent.
(c) The Canadian Borrower agrees to pay to the Canadian Lender a
commitment fee for the period from and including the Closing Date to the last
day of the Canadian Commitment Period, computed at the Commitment Fee Rate on
the average daily amount of the unused portion of the Canadian Commitment during
the period for which payment is made, payable quarterly in arrears on the last
day of each March, June, September and December and on the Revolving Termination
Date.
2.7 TERMINATION OR REDUCTION OF REVOLVING COMMITMENTS. (a) NSP shall
have the right, upon not less than three Business Days' notice to the
Administrative Agent, to terminate the U.S. Revolving Commitments or, from time
to time, to reduce the amount of the U.S. Revolving Commitments; PROVIDED that
no such termination or reduction of U.S. Revolving
33
Commitments shall be permitted if, after giving effect thereto and to any
prepayments of the U.S. Revolving Loans and U.S. Swingline Loans made on the
effective date thereof, the Total U.S. Revolving Extensions of Credit would
exceed the Total U.S. Revolving Commitments. Any such reduction shall be in an
amount equal to $1,000,000, or a whole multiple thereof, and shall reduce
permanently the U.S. Revolving Commitments then in effect. Upon receipt of any
such notice from NSP, the Administrative Agent shall promptly notify each U.S.
Revolving Lender thereof.
(b) The Canadian Borrower shall have the right, upon not less than
three Business Days' notice to the Canadian Lender, to terminate the Canadian
Commitment or, from time to time, to reduce the amount of the Canadian
Commitment without premium or penalty; PROVIDED that no such termination or
reduction of Canadian Commitment shall be permitted if, after giving effect
thereto and to any prepayments of the Canadian Loans made on the effective date
thereof, the Canadian Extensions of Credit would exceed the Canadian Commitment
at that time. Any such reduction shall be in an amount equal to C$1,000,000, or
a whole multiple thereof (unless the entire balance of the Canadian Commitment
is then terminated), and shall reduce permanently the Canadian Commitment then
in effect.
2.8 OPTIONAL PREPAYMENTS. Each U.S. Borrower may at any time and
from time to time prepay the U.S. Loans made to it, in whole or in part, without
premium or penalty, upon notice substantially in the form of Exhibit G delivered
to the Administrative Agent prior to 12:00 noon, New York City time, at least
three Business Days prior thereto in the case of Eurodollar Loans and at least
one Business Day prior thereto otherwise, which notice shall specify the date
and amount of prepayment and the Type of Loan to be prepaid, and, if a
combination thereof, the amount allocable to each; PROVIDED, that if a
Eurodollar Loan is prepaid on any day other than the last day of the Interest
Period applicable thereto, the U.S. Borrowers shall also pay any amounts owing
pursuant to Section 2.18. Upon receipt of any such notice, the Administrative
Agent shall promptly notify each relevant U.S. Lender thereof. If any such
notice is given, the amount specified in such notice shall be due and payable on
the date specified therein, together with (except in the case of U.S. Revolving
Loans that are ABR Loans and U.S. Swingline Loans) accrued interest to such date
on the amount prepaid. Partial prepayments of Term Loans and U.S. Revolving
Loans shall be in an aggregate principal amount of $1,000,000 or a whole
multiple thereof. Partial prepayments of U.S. Swingline Loans shall be in an
aggregate principal amount of $100,000 or a whole multiple thereof.
2.9 MANDATORY PREPAYMENTS AND COMMITMENT REDUCTIONS. (a) Unless,
with respect to the Term Loans or the U.S. Revolving Credit Facility, the U.S.
Required Prepayment Lenders or, with respect to the Canadian Facility, the
Canadian Lender shall otherwise agree, if any Capital Stock or Indebtedness
shall be issued or incurred by NSP or any of its Subsidiaries (excluding (x) any
Capital Stock issued pursuant to the exercise of stock options held by an
employee of Holdco or any of its Subsidiaries or any Indebtedness incurred in
accordance with Section 7.2 as in effect on the date of this Agreement and (y)
any Capital Stock issued by NSP the Net Cash Proceeds of which are used promptly
after the receipt thereof to pay all or a portion of the purchase price of a
Permitted Acquisition), an amount equal to (i) in the case of issuance of any
Capital Stock, 50% of the Net Cash Proceeds thereof and (ii) in the case of
incurrence of any Indebtedness, 100% of the Net Cash Proceeds thereof shall be
applied on the date of such issuance or incurrence toward the prepayment of the
Term Loans, the reduction of the U.S.
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Revolving Commitments and the reduction of the Canadian Commitment as set forth
in Section 2.9(d).
(b) Unless, with respect to the Term Loans or the U.S. Revolving
Credit Facility, the U.S. Required Prepayment Lenders or, with respect to the
Canadian Facility, the Canadian Lender, shall otherwise agree, if on any date
NSP or any of its Subsidiaries shall receive Net Cash Proceeds from any Asset
Sale or Recovery Event then, unless a Reinvestment Notice shall be delivered in
respect thereof, such Net Cash Proceeds shall be applied on such date toward the
prepayment of the Term Loans, the reduction of the U.S. Revolving Commitments
and the reduction of the Canadian Commitment as set forth in Section 2.9(d);
provided, that, notwithstanding the foregoing, (i) the aggregate Net Cash
Proceeds of Recovery Events that may be excluded from the foregoing requirement
pursuant to a Reinvestment Notice shall not exceed $5,000,000 in any fiscal year
of NSP and (ii) on each Reinvestment Prepayment Date, an amount equal to the
Reinvestment Prepayment Amount with respect to the relevant Reinvestment Event
shall be applied toward the prepayment of the Term Loans, the reduction of the
U.S. Revolving Commitments and the Canadian Commitment as set forth in Section
2.9(d).
(c) Unless, with respect to the Term Loans or the U.S. Revolving
Credit Facility, the U.S. Required Prepayment Lenders or, with respect to the
Canadian Facility, the Canadian Lender, shall otherwise agree, if for any fiscal
year of NSP, commencing with the fiscal year ending December 31, 2003, there
shall be Excess Cash Flow, the Borrowers shall, on the relevant Excess Cash Flow
Application Date (as defined below), apply the ECF Percentage of such Excess
Cash Flow toward the prepayment of the Term Loans, the reduction of the U.S.
Revolving Commitments and the reduction of the Canadian Commitments as set forth
in Section 2.9(d). Each such prepayment and commitment reduction shall be made
on a date (an "EXCESS CASH FLOW APPLICATION DATE") no later than five days after
the earlier of (i) the date on which the financial statements of NSP referred to
in Section 6.1(a), for the fiscal year with respect to which such prepayment is
made, are required to be delivered to the Lenders and (ii) the date such
financial statements are actually delivered.
(d) Unless otherwise agreed by the U.S. Required Prepayment Lenders or
the Canadian Lender, as the case may be, amounts to be applied in connection
with prepayments and Commitment reductions made pursuant to Section 2.9(a) or
2.9(c) shall be applied, first, to the prepayment of the Term Loans and, second,
to reduce permanently on a pro rata basis, the U.S. Revolving Commitments and
the Canadian Commitment. Unless otherwise agreed by the U.S. Required Prepayment
Lenders or the Canadian Lender, as the case may be, amounts to be applied in
connection with prepayments and Commitment reductions made pursuant to Section
2.9(b) shall be applied (i) if related to any Asset Sale or Recovery Event by
NSP or any of its Subsidiaries (other than the Canadian Borrower or any of its
Subsidiaries), first, to the prepayment of the Term Loans, second, to reduce
permanently the U.S. Revolving Commitments and, third, to reduce permanently the
Canadian Commitment and (ii) if related to any Asset Sale or Recovery Event by
the Canadian Borrower or any of its Subsidiaries, to reduce permanently the
Canadian Commitment. Any such reduction of the U.S. Revolving Commitments or the
Canadian Commitment shall be accompanied by prepayment of the U.S. Revolving
Loans and/or U.S. Swingline Loans or the Canadian Loans, as the case may be, to
the extent, if any, that the Total U.S. Revolving Extensions of Credit exceed
the amount of the Total U.S. Revolving Commitments as so reduced or to the
extent, if any, that the Canadian Extensions of Credit
35
exceed the amount of the Canadian Commitment, as the case may be, PROVIDED that
if the aggregate principal amount of U.S. Revolving Loans and U.S. Swingline
Loans then outstanding is less than the amount of such excess (because U.S. L/C
Obligations constitute a portion thereof), the U.S. Borrowers shall, to the
extent of the balance of such excess, replace outstanding U.S. Letters of Credit
and/or deposit an amount in cash in a cash collateral account established with
the Administrative Agent for the benefit of the U.S. Lenders on terms and
conditions satisfactory to the Administrative Agent and PROVIDED FURTHER that if
the aggregate principal amount of Canadian Loans (other than Bankers'
Acceptances) then outstanding is less than the amount of such excess (because
Canadian L/C Obligations and/or Bankers' Acceptances constitute a portion
thereof), the Canadian Borrower shall, to the extent of the balance of such
excess, replace outstanding Canadian Letters of Credit and/or deposit an amount
in cash in a cash collateral account established with the Canadian Lender on
terms and conditions satisfactory to the Canadian Lender. The application of any
prepayment pursuant to Section 2.9 shall be made, FIRST, to ABR Loans and,
SECOND, to Eurodollar Loans in such manner as to minimize break funding costs
set forth in Section 2.18. Each prepayment of the Loans under Section 2.9
(except in the case of U.S. Revolving Loans that are ABR Loans, U.S. Swingline
Loans or Canadian Loans that are C$ Prime Loans) shall be accompanied by accrued
interest to the date of such prepayment on the amount prepaid.
(e) Unless on or before February 1, 2005 the Senior Subordinated Notes
shall have been refinanced, or the maturity thereof extended, on terms and
conditions approved in writing by the Syndication Agent and the Administrative
Agent, including by extending the maturity thereof so that no part of the
principal thereof shall be scheduled to mature on or before September 30, 2009,
on February 1, 2005, the U.S. Revolving Commitments and the Canadian Revolving
Commitments shall automatically terminate and all U.S. Loans (with accrued
interest thereon) and all other amounts owing under this Agreement and the other
Loan Documents (including all amounts of L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented the
documents required thereunder to the Borrowers, and the face amount of all
Bankers' Acceptances accepted by the Canadian Lender) shall be due and payable
forthwith. Furthermore, the provisions of the last two paragraphs of Section 8
shall be applicable to all then outstanding Letters of Credit and Bankers'
Acceptances as fully as if an acceleration had occurred on such date pursuant to
said Section.
2.10 CONVERSION AND CONTINUATION OPTIONS. (a) NSP may elect from time
to time to convert Eurodollar Loans to ABR Loans by giving the Administrative
Agent at least three Business Days' prior notice of such election, PROVIDED that
any such conversion of Eurodollar Loans may only be made on the last day of an
Interest Period with respect thereto. NSP may elect from time to time to convert
ABR Loans to Eurodollar Loans by giving the Administrative Agent at least three
Business Days' prior irrevocable notice of such election (which notice shall
specify the length of the initial Interest Period therefor), PROVIDED that no
ABR Loan under a particular Facility may be converted into a Eurodollar Loan
when any Event of Default has occurred and is continuing and the Administrative
Agent has or the Requisite Lenders in respect of such Facility have determined
in its or their sole discretion not to permit such conversions. Upon receipt of
any such notice the Administrative Agent shall promptly notify each relevant
Lender thereof.
36
(b) Any Eurodollar Loan may be continued as such upon the expiration
of the then current Interest Period with respect thereto by NSP giving notice to
the Administrative Agent, in accordance with the applicable provisions of the
term "Interest Period" set forth in Section 1.1, of the length of the next
Interest Period to be applicable to such Loans, PROVIDED that no Eurodollar Loan
under a particular Facility may be continued as such when any Event of Default
has occurred and is continuing and the Administrative Agent has or the Requisite
Lenders in respect of such Facility have determined in its or their sole
discretion not to permit such continuations, and PROVIDED, FURTHER, that if NSP
shall fail to give any required notice as described above in this paragraph or
if such continuation is not permitted pursuant to the preceding proviso such
Loans shall be automatically converted to ABR Loans on the last day of such then
expiring Interest Period. Upon receipt of any such notice the Administrative
Agent shall promptly notify each relevant Lender thereof.
2.11 LIMITATIONS ON EURODOLLAR TRANCHES. Notwithstanding anything to
the contrary in this Agreement, all borrowings, conversions and continuations of
Eurodollar Loans hereunder and all selections of Interest Periods hereunder
shall be in such amounts and be made pursuant to such elections so that, (a)
after giving effect thereto, the aggregate principal amount of the Eurodollar
Loans comprising each Eurodollar Tranche shall be equal to $5,000,000 or a whole
multiple of $1,000,000 in excess thereof and (b) no more than ten Eurodollar
Tranches shall be outstanding at any one time.
2.12 INTEREST RATES AND PAYMENT DATES. (a) Each Eurodollar Loan
shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
PLUS the Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum equal to the
ABR PLUS the Applicable Margin.
(c) Each C$ Prime Loan shall bear interest at a rate per annum equal
to the C$ Prime Rate, with interest on any overdue amount of interest accruing
daily at the same rate until fully paid.
(d) (i) If all or a portion of the principal amount of any Loan or
Reimbursement Obligation shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), all outstanding U.S. Loans and U.S.
Reimbursement Obligations (whether or not overdue) shall bear interest at a rate
per annum equal to (x) in the case of the U.S. Loans, the rate that would
otherwise be applicable thereto pursuant to the foregoing provisions of this
Section PLUS 2% or (y) in the case of U.S. Reimbursement Obligations, the rate
applicable to ABR Loans under the U.S. Revolving Facility PLUS 2%, and (ii) if
all or a portion of any interest payable on any U.S. Loan or U.S. Reimbursement
Obligation or any commitment fee or other amount payable hereunder to the U.S.
Lenders shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum equal to the rate then applicable to ABR Loans PLUS 2% (or, in the
case of any such other amounts that do not relate to a particular Facility, the
rate then applicable to ABR Loans under the U.S. Revolving Facility PLUS 2%), in
each case, with respect to clauses (i) and (ii) above, from the date of such
non-payment until such amount is paid in full (as well after as before
judgment).
37
(e) Interest shall be payable in arrears on each Interest Payment
Date, PROVIDED that interest accruing pursuant to paragraph (d) of this Section
shall be payable from time to time on demand. Interest in respect of U.S. Loans
and U.S. Reimbursement Obligations (and all other amounts denominated in $)
shall be payable in $, and interest in respect of Canadian Loans or Canadian
Reimbursement Obligations (and all other amounts denominated in C$) shall be
payable in C$.
2.13 COMPUTATION OF INTEREST AND FEES. (a) Interest and fees payable
pursuant hereto shall be calculated on the basis of a 360-day year for the
actual days elapsed, except that, with respect to ABR Loans the rate of interest
on which is calculated on the basis of the Prime Rate and C$ Prime Loans, the
interest thereon shall be calculated on the basis of a 365- (or 366-, as the
case may be) day year for the actual days elapsed. Acceptance Fees and
commitment fees and interest calculated on the basis of the CDOR Rate shall be
calculated on the basis of a 365- day year for the actual days elapsed. The
Administrative Agent shall as soon as practicable notify NSP and the relevant
U.S. Lenders of each determination of a Eurodollar Rate. Any change in the
interest rate on a Loan resulting from a change in the ABR, the C$ Prime Rate or
the Eurocurrency Reserve Requirements shall become effective as of the opening
of business on the day on which such change becomes effective (it being agreed
that the effective date of any change in the ABR or the C$ Prime Rate shall be
the date of announcement of such change). The Administrative Agent or the
Canadian Lender shall as soon as practicable notify NSP and the relevant U.S.
Lenders or the relevant Canadian Borrower, as the case may be, of the effective
date and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the Administrative Agent
or the Canadian Lender pursuant to any provision of this Agreement shall be
conclusive and binding on the relevant Borrowers and the relevant Lenders in the
absence of manifest error. The Administrative Agent shall, at the request of
NSP, deliver to NSP a statement showing the quotations used by the
Administrative Agent in determining any interest rate pursuant to Section
2.12(a).
(c) For the purposes of the Interest Act (Canada), in any case in
which an interest rate is stated in this Agreement to be calculated on the basis
of a year of 365 days, as the case may be, the yearly rate of interest to which
such interest rate is equivalent is equal to such interest rate multiplied by
the number of days in the year in which the relevant interest payment accrues
and divided by 365.
2.14 INABILITY TO DETERMINE INTEREST RATE. If prior to the first day
of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the U.S. Borrowers)
that, by reason of circumstances affecting the relevant market, adequate
and reasonable means do not exist for ascertaining the Eurodollar Rate in
accordance with the terms hereof for such Interest Period, or
(b) the Administrative Agent shall have received notice from the
Requisite Lenders in respect of the relevant Facility that the Eurodollar
Rate determined or to be
38
determined for such Interest Period will not adequately and fairly reflect
the cost to such U.S. Lenders (as conclusively certified by such Lenders)
of making or maintaining their affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to NSP
and the relevant Lenders as soon as practicable thereafter. If such notice is
given (x) any Eurodollar Loans under the relevant Facility requested to be made
on the first day of such Interest Period shall be made as ABR Loans, (y) any
Loans under the relevant Facility that were to have been converted on the first
day of such Interest Period to Eurodollar Loans shall be continued as ABR Loans
and (z) any outstanding Eurodollar Loans under the relevant Facility shall be
converted, on the first day of the next succeeding Interest Period, to ABR
Loans. Until such notice has been withdrawn by the Administrative Agent (which
the Administrative Agent shall be obligated to do when the circumstances giving
rise to such notice no longer exist), no further Eurodollar Loans under the
relevant Facility shall be made or continued as such, nor shall NSP have the
right to convert Loans under the relevant Facility to Eurodollar Loans.
2.15 PRO RATA TREATMENT AND PAYMENTS. (a) Each borrowing by the U.S.
Borrowers from the U.S. Lenders hereunder, each payment by the U.S. Borrowers on
account of any commitment fee and any reduction of the Commitments of the U.S.
Lenders shall be made pro rata according to the respective Term Percentages or
U.S. Revolving Percentages, as the case may be, of the relevant Lenders.
(b) Each payment (including each prepayment) by the U.S. Borrowers on
account of principal of and interest on the Term Loans shall be made pro rata
according to the respective outstanding principal amounts of the Term Loans then
held by the Term Lenders (except as otherwise provided in Section 2.9(e)). The
amount of each principal prepayment of the Term Loans shall be applied to reduce
the then remaining installments of the Term Loans pro rata based upon the then
remaining principal amount thereof. Amounts prepaid on account of the Term Loans
may not be reborrowed.
(c) Each payment (including each prepayment) by the U.S. Borrowers on
account of principal of and interest on the U.S. Revolving Loans shall be made
pro rata according to the respective outstanding principal amounts of the U.S.
Revolving Loans then held by the U.S. Revolving Lenders.
(d) All payments (including prepayments) to be made by the Borrowers
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 12:00 Noon,
New York City time (in the case of U.S. Loans or obligations) or Montreal time
(in the case of Canadian Loans or obligations), on the due date thereof to the
Administrative Agent, for the account of the U.S. Lenders, or, as the case may
be, the Canadian Lender at the applicable Funding Office, in Dollars or Canadian
Dollars, as the case may be, and in immediately available funds. The
Administrative Agent shall distribute such payments received by it to the U.S.
Lenders promptly upon receipt in like funds as received. If any payment
hereunder (other than payments on the Eurodollar Loans) becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day. If any payment on a Eurodollar Loan becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding
39
Business Day unless the result of such extension would be to extend such payment
into another calendar month, in which event such payment shall be made on the
immediately preceding Business Day. In the case of any extension of any payment
of principal pursuant to the preceding two sentences, interest thereon shall be
payable at the then applicable rate during such extension.
(e) Unless the Administrative Agent shall have been notified in
writing by any U.S. Lender prior to a borrowing that such Lender will not make
the amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to NSP a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative Agent, on demand, such amount with interest thereon at a
rate equal to the daily average Federal Funds Effective Rate for the period
until such Lender makes such amount immediately available to the Administrative
Agent. A certificate of the Administrative Agent submitted to any U.S. Lender
with respect to any amounts owing under this paragraph shall be conclusive in
the absence of manifest error. If and to the extent that such Lender's share of
such borrowing is not made available to the Administrative Agent by such Lender
within three Business Days of such Borrowing Date, the Administrative Agent
shall also be entitled to recover such amount with interest thereon (and no
other interest) at the rate per annum applicable to ABR Loans under the relevant
Facility, on demand, from the U.S. Borrowers.
(f) Unless the Administrative Agent shall have been notified in
writing by NSP prior to the date of any payment being made hereunder that the
U.S. Borrowers will not make such payment to the Administrative Agent, the
Administrative Agent may assume that the U.S. Borrowers are making such payment,
and the Administrative Agent may, but shall not be required to, in reliance upon
such assumption, make available to the U. S. Lenders their respective pro rata
shares of a corresponding amount. If such payment is not made to the
Administrative Agent by the U.S. Borrowers within three Business Days of such
required date, the Administrative Agent shall be entitled to recover, on demand,
from each U.S. Lender to which any amount which was made available pursuant to
the preceding sentence, such amount with interest thereon (net of any interest
or other reimbursement received from such Lender) at the rate per annum equal to
the daily average Federal Funds Effective Rate. Nothing herein shall be deemed
to limit the rights of the Administrative Agent or any U.S. Lender against the
U.S. Borrowers.
2.16 REQUIREMENTS OF LAW. (a) If the adoption of or any change in
any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Letter of Credit, any Application or
any Eurodollar Loan made by it or any Bankers' Acceptance purchased or
accepted by it, or change the basis of taxation of payments to such Lender
in respect thereof (except for Non-Excluded Taxes covered
40
by Section 2.17 and changes in the rate of tax on the overall net income or
capital of such Lender);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender that is not otherwise included in the determination
of the Eurodollar Rate hereunder or the Applicable BA Discount Rate
hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount that such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit or purchasing or accepting Bankers' Acceptances, or to reduce
any amount receivable hereunder in respect thereof, then, in any such case, the
U.S. Borrowers or the Canadian Borrower, as the case may be, shall promptly pay
such Lender, upon its demand, any additional amounts necessary to compensate
such Lender for such increased cost or reduced amount receivable. If any Lender
becomes entitled to claim any additional amounts pursuant to this paragraph, it
shall promptly notify NSP (with a copy to the Administrative Agent) of the event
by reason of which it has become so entitled; PROVIDED that the Borrowers shall
not be required to compensate a Lender pursuant to this paragraph for any
amounts incurred more than six months prior to the date that such Lender
notifies NSP of such Lender's intention to claim compensation therefor and
PROVIDED, FURTHER, that if the circumstances giving rise to such claim have a
retroactive effect, then such six-month period shall be extended to include the
period of such retroactive effect.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under or in respect of any Letter of
Credit or Bankers' Acceptance to a level below that which such Lender or such
corporation could have achieved but for such adoption, change or compliance
(taking into consideration such Lender's or such corporation's policies with
respect to capital adequacy) by an amount deemed by such Lender to be material,
then from time to time, after submission by such Lender to NSP (with a copy to
the Administrative Agent) of a written request therefor, the relevant Borrowers
shall pay to such Lender such additional amount or amounts as will compensate
such Lender for such reduction; PROVIDED that such Borrowers shall not be
required to compensate a Lender pursuant to this paragraph for any amounts
incurred more than six months prior to the date that such Lender notifies NSP of
such Lender's intention to claim compensation therefor and PROVIDED, FURTHER,
that if the circumstances giving rise to such claim have a retroactive effect,
then such six-month period shall be extended to include the period of such
retroactive effect.
41
(c) A certificate as to any additional amounts payable pursuant to
this Section submitted by any Lender to NSP (with a copy to the Administrative
Agent) shall be presumptively correct. The obligations of any of the Borrowers
pursuant to this Section shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.
2.17 TAXES. (a) All payments made by the Borrowers under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding net income taxes and franchise taxes (imposed in lieu of
net income taxes) imposed on the Administrative Agent or any Lender as a result
of a present or former connection between the Administrative Agent or such
Lender and the jurisdiction of the Governmental Authority imposing such tax or
any political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the Administrative Agent or such Lender
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or any other Loan Document). If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("NON-EXCLUDED TAXES") or Other Taxes are required to be withheld
from any amounts payable to the Administrative Agent or any Lender hereunder,
the amounts so payable to the Administrative Agent or such Lender shall be
increased to the extent necessary to yield to the Administrative Agent or such
Lender (after payment of all Non-Excluded Taxes and Other Taxes) interest or any
such other amounts payable hereunder at the rates or in the amounts specified in
this Agreement, PROVIDED, however, that the Borrowers shall not be required to
increase any such amounts payable to any Lender with respect to any Non-Excluded
Taxes (i) that are attributable to such Lender's failure to comply with the
requirements of paragraph (d) or (e) of this Section, (ii) that are United
States withholding taxes imposed on amounts payable to such Lender at the time
the Lender becomes a party to this Agreement, except to the extent that such
Lender's assignor (if any) was entitled, at the time of assignment, to receive
additional amounts from the U.S. Borrowers with respect to such Non-Excluded
Taxes pursuant to this paragraph, (iii) that are Canadian withholding taxes
imposed on amounts payable to such Lender at the time such Lender becomes a
party to this Agreement, except to the extent that such Lender's assignor (if
any) was entitled, at the time of assignment, to receive additional amounts from
the Canadian Borrower with respect to such Non-Excluded Taxes pursuant to this
paragraph or (iv) if such additional amount arises because the Canadian Lender
is a Person which is a non-resident of Canada for the purpose of Section 212 of
the Income Tax Act (Canada).
(b) In addition, the Borrowers shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the
Borrowers, as promptly as possible thereafter NSP shall send to the
Administrative Agent for its own account or for the account of the relevant
Lender, as the case may be, a certified copy of an original official receipt
received by NSP showing payment thereof. If the Borrowers fail to pay any
Non-Excluded Taxes or Other Taxes when due to the appropriate taxing authority
or fails to remit to the Administrative Agent the required receipts or other
required documentary evidence, the Borrowers shall indemnify the Administrative
Agent and the Lenders for any incremental
42
taxes, interest or penalties that may become payable by the Administrative Agent
or any Lender as a result of any such failure.
(d) Each U.S. Lender (or Transferee) that is not a citizen or resident
of the United States, a corporation, partnership or other entity created or
organized in or under the laws of the United States (or any jurisdiction
thereof), or any estate or trust that is subject to federal income taxation
regardless of the source of its income (a "NON-U.S. LENDER") shall deliver to
NSP and the Administrative Agent (or, in the case of a Participant, to the
Lender from which the related participation shall have been purchased) two
copies of either U.S. Internal Revenue Service Form 1001 or Form 4224, or, in
the case of a Non-U.S. Lender claiming exemption from U.S. federal withholding
tax under Section 871(h) or 881(c) of the Code with respect to payments of
"portfolio interest", a statement substantially in the form of Exhibit H and a
Form W-8, or any subsequent versions thereof or successors thereto, properly
completed and duly executed by such Non-U.S. Lender claiming complete exemption
from, or a reduced rate of, U.S. federal withholding tax on all payments by the
Borrowers under this Agreement and the other Loan Documents. Such forms shall be
delivered by each Non-U.S. Lender on or before the date it becomes a party to
this Agreement (or, in the case of any Participant, on or before the date such
Participant purchases the related participation). In addition, each Non-U.S.
Lender shall deliver such forms promptly upon the obsolescence or invalidity of
any form previously delivered by such Non-U.S. Lender. Each Non-U.S. Lender
shall promptly notify NSP at any time it determines that it is no longer in a
position to provide any previously delivered certificate to NSP (or any other
form of certification adopted by the U.S. taxing authorities for such purpose).
Notwithstanding any other provision of this paragraph, a Non-U.S. Lender shall
not be required to deliver any form pursuant to this paragraph that such
Non-U.S. Lender is not legally able to deliver.
(e) A Lender that is entitled to an exemption from or reduction of
non-U.S. withholding tax under the law of the jurisdiction in which the U.S.
Borrowers are located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to NSP (with a copy to
the Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by NSP, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without
withholding or at a reduced rate, PROVIDED that such Lender is legally entitled
to complete, execute and deliver such documentation and in such Lender's
judgment such completion, execution or submission would not materially prejudice
the legal position of such Lender.
(f) If the Administrative Agent or any Lender receives a refund or
otherwise would have received a refund but for the offset of the amount of such
refund against the Lender's Non-Excluded Taxes ("TAX REFUND"), which in the good
faith judgment of such Lender is allocable to Non-Excluded Taxes paid by NSP, it
shall promptly pay such Tax Refund to NSP, net of all out-of-pocket expenses of
such Lender incurred in obtaining such Tax Refund, PROVIDED, however, that NSP
agrees to promptly return such Tax Refund to the Administrative Agent or the
applicable Lender, as the case may be, if it receives notice from the
Administrative Agent or applicable Lender that such Administrative Agent or
Lender is required to repay such Tax Refund but only if such repayment is
required because the initial Tax Refund was permitted in error.
43
(g) The agreements in this Section shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.
2.18 INDEMNITY. The U.S. Borrowers agree to indemnify each U.S.
Lender and to hold each U.S. Lender harmless from any loss or expense (other
than any loss of Applicable Margin) that such Lender may sustain or incur as a
consequence of (a) the failure by the Borrowers in making a borrowing of,
conversion into or continuation of Eurodollar Loans after NSP has given a notice
requesting the same in accordance with the provisions of this Agreement, (b) the
failure by the Borrowers in making any prepayment of or conversion from
Eurodollar Loans after NSP has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making of a prepayment of Eurodollar
Loans on a day that is not the last day of an Interest Period with respect
thereto. Such indemnification may include an amount equal to the excess, if any,
of (i) the amount of interest that would have accrued on the amount so prepaid,
or not so borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Loans provided
for herein (excluding, however, the Applicable Margin included therein, if any)
over (ii) the amount of interest (as reasonably determined by such Lender) that
would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the London interbank
eurodollar market. A certificate as to any amounts payable pursuant to this
Section submitted to NSP by any U.S. Lender shall be conclusive in the absence
of manifest error. This covenant shall survive the termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder.
2.19 CHANGE OF LENDING OFFICE. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 2.16 or 2.17(a)
with respect to such Lender, it will, if requested by NSP, use reasonable
efforts (subject to overall policy considerations of such Lender) to designate
another lending office for any Loans affected by such event with the object of
avoiding the consequences of such event; PROVIDED, that such designation is made
on terms that, in the sole judgment of such Lender, cause such Lender and its
lending office(s) to suffer no economic, legal or regulatory disadvantage, and
PROVIDED, FURTHER, that nothing in this Section shall affect or postpone any of
the obligations of any Borrower or the rights of any Lender pursuant to Section
2.16 or 2.17(a).
2.20 REPLACEMENT OF LENDERS UNDER CERTAIN CIRCUMSTANCES. NSP shall
be permitted to (a) replace any U.S. Lender which (i) defaults in its obligation
to make Loans hereunder or (ii) in connection with any proposed amendment,
modification, supplement or waiver with respect to any of the provisions of the
Loan Documents as contemplated in Section 10.1 where such amendment,
modification, supplement or waiver has been approved by the U.S. Required
Lenders (and, if applicable, the U.S. Required Prepayment Lenders and/or the
Requisite Lenders) in accordance with such Section, fails to consent to any such
proposed amendment, modification, supplement or waiver and (b) replace or remove
any Lender which requests reimbursement for amounts owing pursuant to Section
2.16 or 2.17 and, if NSP elects to remove such Lender, terminate such Lender's
U.S. Revolving Commitment hereunder; PROVIDED that (A)(i) such replacement or
removal, as the case may be, does not conflict with any Requirement of Law, (ii)
no Event of Default shall have occurred and be continuing at the time
44
of such replacement or removal, as the case may be, (iii) prior to any such
replacement or removal, as the case may be, pursuant to clause (b) above such
U.S. Lender shall have taken no action under Section 2.19 so as to eliminate the
continued need for payment of amounts owing pursuant to Section 2.16 or 2.17,
(iv) NSP shall be liable to such replaced or removed U.S. Lender under Section
2.18 if any Eurodollar Loan owing to such replaced or removed Lender shall be
purchased other than on the last day of the Interest Period relating thereto and
(v) any such replacement or removal, as the case may be, shall not be deemed a
waiver of any rights which NSP, the Administrative Agent or any other U.S.
Lender shall have against the replaced or removed Lender, (B) in the case of
replacement of a U.S. Lender under this Section 2.20, (i) the replacement
financial institution shall purchase, at par, all Loans including all accrued,
but unpaid interest and fees and other amounts owing to such replaced Lender on
or prior to the date of replacement, (ii) the replacement financial institution,
if not already a U.S. Lender, shall be reasonably satisfactory to the
Administrative Agent and the Issuing Lender, (iii) the replaced Lender shall be
obligated to make such replacement in accordance with the provisions of Section
10.6 and (iv) until such time as such replacement shall be consummated, NSP
shall pay all additional amounts (if any) required pursuant to Section 2.16 or
2.17; (C) if NSP elects to remove a U.S. Lender under clause (b) of this Section
2.20 and if such Lender has any Loans outstanding at such time, the consent of
the Administrative Agent and the U.S. Required Lenders shall be required to
terminate such Lender's Revolving Credit Commitment and (D) in the case of
replacement of a non-consenting Lender under clause (a)(ii) of this Section
2.20, NSP shall replace such Lender within 60 days of such Lender's failure to
consent to the proposed action.
2.21 BANKERS' ACCEPTANCES UNDER THE CANADIAN FACILITY. The Canadian
Borrower may issue Drafts denominated in C$ for acceptance by the Canadian
Lender subject to the following provisions:
(a) Bankers' Acceptances shall be denominated in C$, for acceptance and,
at the Canadian Borrower's option, purchased by the Canadian Lender at
the Applicable BA Discount Rate;
(b) each utilization by way of Bankers' Acceptances is for a minimum
aggregate face amount of C$1,000,000 or any greater amount which is a
whole multiple of C$100,000;
(c) each Bankers' Acceptance has a term of not less than one (1) month and
not more than six (6) months;
(d) each Bankers' Acceptance will mature on a Business Day on or before
the Revolving Termination Date;
(e) the Canadian Lender has been notified verbally by 11:00 A.M. (Montreal
time) two (2) Business Days prior to the date of issuance, of the
Canadian Borrower's intention to issue Bankers' Acceptances, such
verbal notice to be followed by written confirmation in the form and
substance provided in Exhibit I not later than 3:00 P.M. (Montreal
time) on the same day;
45
(f) an Acceptance Fee shall be payable by the Canadian Borrower to the
Canadian Lender in advance upon the issuance of a Bankers' Acceptance
to be accepted by the Canadian Lender calculated at the rate per annum
(based on a 365-day year) equal to the Applicable Margin for Bankers'
Acceptances, such Acceptance Fee to be calculated on the face amount
of such Bankers' Acceptance and to be computed on the basis of the
number of days in the term of such Bankers' Acceptance;
(g) the face amount of Bankers' Acceptances shall be used when
calculations are made to determine the amount of the Canadian Loans;
and
(h) Bankers' Acceptances issued by the Canadian Borrower hereunder and
outstanding at any particular time may not be repaid or prepaid prior
to the respective scheduled maturity thereof except with the prior
consent of the Canadian Lender, which consent shall only be granted
upon such terms and conditions with respect to timing, breakage costs
or otherwise as the Canadian Lender shall alone determine in its
reasonable discretion.
2.22 REPAYMENT AND RENEWAL OF BANKERS' ACCEPTANCES. With respect to
each Canadian Loan which is outstanding as a Bankers' Acceptance, at or before
11:00 A.M. (Montreal time) two (2) Business Day prior to the maturity date of
such Banker's Acceptance, the applicable Canadian Borrower shall notify the
Canadian Lender verbally of its intention to reissue Bankers' Acceptances on
such maturity date to provide for the payment of such maturing Bankers'
Acceptance, such verbal notice to be followed by written confirmation in form
and substance as provided in Exhibit I not later than 3:00 P.M. (Montreal time)
on the same day. The provisions of Section 2.21 shall apply MUTATIS MUTANDIS to
each such renewal of Bankers' Acceptances. If the applicable Canadian Borrower
fails to give such notices, such Bankers' Acceptance so maturing shall be
automatically converted on its maturity date into a C$ Prime Loan.
2.23 POWER OF ATTORNEY FOR THE EXECUTION OF BANKERS' ACCEPTANCES. To
facilitate availment of the Canadian Loans by way of Bankers' Acceptances, the
Canadian Borrower hereby appoints the Canadian Lender as its agent to sign and
endorse on its behalf, in handwriting or by facsimile or mechanical signature as
and when deemed necessary by the Canadian Lender, blank forms of Bankers'
Acceptances in order to allow the Canadian Lender to complete and accept from
time to time such instruments in the aggregate and face amounts and for the
maturities chosen by the Canadian Borrower (subject to the provisions of
Sections 2.21 and 2.22 hereof). The Canadian Borrower recognizes and agrees that
all Banker's Acceptances signed and/or endorsed on its behalf by the Canadian
Lender shall bind the Canadian Borrower as fully and effectually as if signed in
the handwriting of and duly issued by the proper signing officers of the
Canadian Borrower. In this connection, the parties also agree as follows:
(a) the Canadian Lender shall deal prudently in accordance with Canadian
Banking Standards with any Bankers' Acceptance forms purported to have
been pre-signed and/or pre-endorsed by the Canadian Borrower and shall
use them only in accordance with the instructions of the Canadian
Borrower given to the Canadian Lender in conformity with this
Agreement. The Canadian Lender shall be
46
presumed to have acted prudently when following such instructions in
the absence of gross negligence, bad faith or willful misconduct;
(b) on request of the Canadian Borrower, the Canadian Lender shall cancel
all forms of Bankers' Acceptance which have been pre-signed or
pre-endorsed by or on behalf of the Canadian Borrower and which are
held by the Canadian Lender and have not yet been issued in accordance
with the Canadian Borrower's instructions hereunder; and
(c) the Canadian Lender shall maintain a record with respect to Bankers'
Acceptances (i) completed by it in blank hereunder, (ii) voided by it
for any reason, (iii) accepted by it hereunder and (iv) cancelled at
their respective maturities. The Canadian Lender agrees to provide
such records to the Canadian Borrower promptly upon request.
2.24 CIRCUMSTANCES MAKING BANKERS' ACCEPTANCES UNAVAILABLE. (a) If
the Canadian Lender determines in good faith, which determination shall be
final, conclusive and binding upon the Canadian Borrower, and notifies the
Canadian Borrower that, by reason of circumstances affecting the money market,
there is no market for Bankers' Acceptances, then:
(i) the right of the Canadian Borrower to request a borrowing by
way of Bankers' Acceptance shall be suspended until the
Canadian Lender determines that the circumstances causing such
suspension no longer exist and the Canadian Lender so notifies
the Canadian Borrower; and
(ii) any notice relating to a borrowing by way of Bankers'
Acceptance which is outstanding at such time shall be deemed
to be a notice requesting a borrowing by way of C$ Prime
Loans.
(b) The Canadian Lender shall promptly notify the Canadian Borrower of
the suspension of the Canadian Borrower's right to request a borrowing by way of
Bankers' Acceptance and of the termination of such suspension.
2.25 INCREASES OF THE FACILITIES. (a) At the mutual discretion of
the Borrowers and the Administrative Agent, the Borrowers may request in writing
at any time during the period from the Closing Date to and including the second
anniversary of the Closing Date that (x) the then effective aggregate principal
amount of any Type or Types of Term Loans be increased, and/or (y) the then
effective aggregate amounts of U.S. Revolving Credit Commitments and/or the
Canadian Commitments be increased; PROVIDED that (1) the aggregate principal
amount of the increases in the Facilities pursuant to this Section 2.25 shall
not exceed $25,000,000, (2) the Borrowers may not make more than two requests
for such increases in the Facilities, (3) no Event of Default shall have
occurred and be continuing or occurs as a result of such increases in the
Facilities, and (4) the Borrowers shall, and shall cause their Subsidiaries to,
execute and deliver projections evidencing Borrowers' compliance, on a pro forma
basis, with Section 7.1 of this Agreement for the next succeeding twelve month
period and such other documents and instruments and take such other actions as
may be reasonably requested by Administrative Agent in connection with such
increases. Any request under this Section 2.25
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shall be submitted by the Borrowers to the Administrative Agent (which shall
promptly forward copies to the Lenders), specify the proposed effective date and
amount of such increase and be accompanied by an officer's certificate stating
on behalf of the Borrowers that no Event of Default exists or will occur as a
result of such increase.
(b) No Lender shall have any obligation, express or implied, to offer
to increase the aggregate principal amount of its applicable Term Loans, U.S.
Revolving Credit Commitment or Canadian Commitment, as the case may be. Only the
consent of each Lender (an "INCREASING LENDER") which agrees to increase the
principal amount of its applicable Term Loans, U.S. Revolving Credit Commitments
or Canadian Commitment, as the case may be, shall be required for an increase in
the aggregate principal amount of the applicable Term Loans, U.S. Revolving
Credit Commitment or Canadian Commitment, as the case may be, pursuant to this
Section 2.25. No Lender which elects not to increase the principal amount of its
Term Loans, U.S. Revolving Credit Commitment or Canadian Commitment, as the case
may be, may be replaced in respect of its existing applicable Term Loans, U.S.
Revolving Credit Commitment or Canadian Commitment, as the case may be, as a
result thereof without such Lender's consent. Each Increasing Lender shall as
soon as practicable specify the amount of the proposed increase which it is
willing to assume. The Borrowers may accept some or all of the offered amounts
or designate new lenders which, if they satisfy the requirements of Section
10.6(c) as if they were Assignees seeking to become Lenders, shall qualify as
additional Lenders hereunder in accordance with this Section 2.25 (each such new
lender being a "NEW LENDER"), which New Lenders may assume all or a portion of
the increase in the aggregate principal amount of the applicable Term Loans,
U.S. Revolving Credit Commitments or Canadian Commitment, as the case may be.
The Borrowers and the Administrative Agent shall have discretion jointly to
adjust the allocation of the increased aggregate principal amount of the
applicable Term Loans, U.S. Revolving Credit Commitments or Canadian Commitment,
as the case may be, among Increasing Lenders and New Lenders.
(c) Each New Lender designated by the Borrowers shall become an
additional party hereto as a Lender concurrently with the effectiveness of the
proposed increase in the aggregate principal amount of the applicable Term
Loans, U.S. Revolving Credit Commitments or Canadian Commitment, as the case may
be, upon its execution of an instrument of joinder, in each case in form and
substance satisfactory to the Administrative Agent. Subject to the foregoing,
any increase requested by the Borrowers shall be effective as of the date
proposed by the Borrowers and shall be in the principal amount equal to (i) the
principal amount which Increasing Lenders are willing to assume as increases to
the principal amount of their applicable Term Loans, U.S. Revolving Credit
Commitments or Canadian Commitment, as the case may be, plus (ii) the principal
amount offered by New Lenders with respect to the applicable Term Loans, U.S.
Revolving Credit Commitments or Canadian Commitment, as the case may be, in
either case as adjusted by the Borrowers and the Administrative Agent pursuant
to this Section 2.25.
(d) All new Term Loans to be made under this Section 2.25 shall be
made to the U.S. Borrowers on the same day as such increase in the applicable
Term Loans under this Section 2.25 becomes effective. The initial Interest
Periods applicable to such new and/or increased Term Loans shall end on dates
which correspond to the respective next succeeding Interest-Period-end dates
applicable to the Term Loans on the date such new and increased Term
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Loans are made. Any Term Loan made pursuant to this Section 2.25 shall mature in
that number of consecutive quarterly installments as is equal to the number of
then remaining installments payable in respect of the Term Loans made on the
Closing Date, all but the last of which shall be in an amount equal to 1/4 of 1%
of the original principal amount of such Term Loan and the last of which shall
be in an amount equal to the remaining amount thereof. Upon effectiveness of any
such increase, the Term Loan Percentage and/or U.S. Revolving Percentage of each
U.S. Lender will be adjusted to give effect to the increase in the applicable
Term Loans or U.S. Revolving Credit Commitments, as the case may be, and the
Administrative Agent shall distribute to the Lenders a revised Schedule 1.1A
reflecting the applicable Term Loans, U.S. Revolving Credit Commitment or
Canadian Commitment of each Lender after giving effect to such increase. On the
effective date of any increase in the U.S. Revolving Commitments or the Canadian
Commitment pursuant to this Section 2.25 all U.S. Revolving Loans or Canadian
Loans, as the case may be, outstanding on such date shall be prepaid (and any
amounts due as a result thereof pursuant to Section 2.18 shall be paid) and, to
the extent desired by the applicable Borrowers or Borrower, as the case may be,
reborrowed. Any increase in the Canadian Commitment shall be effective only if
it shall have received the prior written consent of the Canadian Lender and, if
applicable, this Agreement and the Canadian Loan Documents shall have been
appropriately modified to reflect the addition of one or more new Canadian
Lenders.
(e) To the extent that the Applicable Margins on any Term Loan, U.S.
Revolving Loan or Canadian Loan made or committed to be made pursuant to this
Section are greater than those applicable to the then existing Term Loans, U.S.
Revolving Loans or Canadian Loans, as the case may be, the Applicable Margins on
all the then existing Term Loans, U.S. Revolving Loans and/or Canadian Loans, as
the case may be, shall be increased upon the effectiveness of the applicable
increase effected pursuant to this Section. In the event that the upfront fee
payable on any Term Loan, U.S. Revolving Commitment or Canadian Commitment
increased pursuant to this Section exceeds the upfront fee payable on the
original extension of Term Loans, U.S. Revolving Commitments or Canadian
Commitments, as the case may be (in the case of first increase under this
Section), or the upfront fee payable on the immediately preceding increase of
Term Loans, U.S. Revolving Commitments or Canadian Commitments, as the case may
be (in the case of any subsequent increase under this Section), the Borrowers
shall pay to each Lender an amount, calculated on the Term Loan, U.S. Revolving
Commitment and/or Canadian Commitment, as the case may be, (including any prior
increased Term Loan, U.S. Revolving Commitment or Canadian Commitment, as the
case may be) of such Lender, equal to the number of basis points by which the
fee payable on such Term Loan, U.S. Revolving Commitment or Canadian Commitment,
as the case may be, increased pursuant to this Section exceeded the upfront fee
payable on such original or immediately preceding, as the case may be, increase
of Term Loan, U.S. Revolving Commitment or Canadian Commitment. If any Term
Loans, U.S. Revolving Commitments or Canadian Commitments made or committed to
pursuant to this Section are issued at a discount, such discount shall be
treated as an upfront fee.
(f) Without the prior written consent of each holder of the then
outstanding Term Loans, no Term Loan shall be made pursuant to this Section 2.25
the proceeds to the U.S. Borrower of which (after deducting any fees payable in
connection therewith and taking into account any applicable original issue
discount) are less than the price the applicable Lender would have then been
required to pay in the market for a Term Loan in an amount equal to such Term
Loan.
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SECTION 3. LETTERS OF CREDIT
3.1 U.S. L/C COMMITMENT. (a) Subject to the terms and conditions
hereof, the Issuing Lender, in reliance on the agreements of the other U.S.
Revolving Lenders set forth in Section 3.4(a), agrees to issue letters of credit
("U.S. LETTERS OF CREDIT") for the account of the U.S. Borrowers on any Business
Day during the Revolving Commitment Period in such form as may be approved from
time to time by the U.S. Issuing Lender; PROVIDED that the U.S. Issuing Lender
shall have no obligation to issue any U.S. Letter of Credit if, after giving
effect to such issuance, (i) the U.S. L/C Obligations would exceed the U.S. L/C
Commitment or (ii) the aggregate amount of the Available U.S. Revolving
Commitments would be less than zero. Each U.S. Letter of Credit shall (i) be
denominated in Dollars and (ii) expire no later than the earlier of (x) the
first anniversary of its date of issuance and (y) the date that is five Business
Days prior to the U.S. Revolving Termination Date, PROVIDED that any U.S. Letter
of Credit with a one-year term may provide for the renewal thereof, unless
notice of termination thereof is given by the U.S. Issuing Lender prior to the
expiry date thereof, for additional one-year periods (which shall in no event
extend beyond the date referred to in clause (y) above).
(b) Each U.S. Letter of Credit shall be subject to the Uniform Customs
and, to the extent not inconsistent therewith, the laws of the State of New
York.
(c) The U.S. Issuing Lender shall not at any time be obligated to
issue any U.S. Letter of Credit hereunder if such issuance would conflict with,
or cause the U.S. Issuing Lender or any U.S. L/C Participant to exceed any
limits imposed by, any applicable Requirement of Law.
3.2 PROCEDURE FOR ISSUANCE OF U.S. LETTER OF CREDIT. NSP may from
time to time request that the U.S. Issuing Lender issue a U.S. Letter of Credit
by delivering to the U.S. Issuing Lender at its address for notices specified
herein an Application therefor, completed to the satisfaction of the U.S.
Issuing Lender, and such other certificates, documents and other papers and
information as the U.S. Issuing Lender may request. Upon receipt of any
Application, the U.S. Issuing Lender will process such Application and the
certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall
promptly issue the U.S. Letter of Credit requested thereby (but in no event
shall the U.S. Issuing Lender be required to issue any U.S. Letter of Credit
earlier than three Business Days after its receipt of the Application therefor
and all such other certificates, documents and other papers and information
relating thereto) by issuing the original of such U.S. Letter of Credit to the
beneficiary thereof or as otherwise may be agreed to by the U.S. Issuing Lender
and NSP. The U.S. Issuing Lender shall furnish a copy of such U.S. Letter of
Credit to NSP promptly following the issuance thereof. The U.S. Issuing Lender
shall promptly furnish to the Administrative Agent, which shall in turn promptly
furnish to the Lenders, notice of the issuance of each U.S. Letter of Credit
(including the amount thereof).
3.3 FEES AND OTHER CHARGES. (a) The Borrowers will pay a fee on the
undrawn face amount of all outstanding U.S. Letters of Credit at a per annum
rate equal to the Applicable Margin then in effect with respect to Eurodollar
Loans under the U.S. Revolving Facility, shared ratably among the U.S. Revolving
Lenders and payable quarterly in arrears on each U.S. L/C Fee
50
Payment Date after the issuance date. In addition, the U.S. Borrowers shall pay
to the U.S. Issuing Lender for its own account a fronting fee of 1/4 of 1% per
annum or such other rate as shall be agreed upon between the U.S. Issuing Lender
and the U.S. Borrowers on the undrawn and unexpired amount of each U.S. Letter
of Credit, payable quarterly in arrears on each L/C Fee Payment Date after the
issuance date.
(b) In addition to the foregoing fees, the U.S. Borrowers shall pay or
reimburse the U.S. Issuing Lender for such normal and customary costs and
expenses as are incurred or charged by the U.S. Issuing Lender in issuing,
negotiating, effecting payment under, amending or otherwise administering any
U.S. Letter of Credit issued by it.
3.4 U.S. L/C PARTICIPATIONS. (a) The U.S. Issuing Lender irrevocably
agrees to grant and hereby grants to each U.S. L/C Participant, and, to induce
the U.S. Issuing Lender to issue U.S. Letters of Credit hereunder, each U.S. L/C
Participant irrevocably agrees to accept and purchase and hereby accepts and
purchases from the U.S. Issuing Lender, on the terms and conditions hereinafter
stated, for such U.S. L/C Participant's own account and risk an undivided
interest equal to such U.S. L/C Participant's U.S. Revolving Percentage in the
U.S. Issuing Lender's obligations and rights under each U.S. Letter of Credit
issued hereunder and the amount of each draft paid by the U.S. Issuing Lender
thereunder. Each U.S. L/C Participant unconditionally and irrevocably agrees
with the U.S. Issuing Lender that, if a draft is paid under any U.S. Letter of
Credit for which the U.S. Issuing Lender is not reimbursed in full by NSP in
accordance with the terms of this Agreement, such U.S. L/C Participant shall pay
to the U.S. Issuing Lender upon demand at the U.S. Issuing Lender's address for
notices specified herein an amount equal to such U.S. L/C Participant's U.S.
Revolving Percentage of the amount of such draft, or any part thereof, that is
not so reimbursed.
(b) If any amount required to be paid by any U.S. L/C Participant to
the U.S. Issuing Lender pursuant to Section 3.4(a) in respect of any
unreimbursed portion of any payment made by the U.S. Issuing Lender under any
U.S. Letter of Credit is paid to the U.S. Issuing Lender within three Business
Days after the date such payment is due, such U.S. L/C Participant shall pay to
the U.S. Issuing Lender on demand an amount equal to the product of (i) the
amount, times (ii) the daily average Federal Funds Effective Rate during the
period from and including the date such payment is required to the date on which
such payment is immediately available to the U.S. Issuing Lender, times (iii) a
fraction the numerator of which is the number of days that elapse during such
period and the denominator of which is 360. If any such amount required to be
paid by any U.S. L/C Participant pursuant to Section 3.4(a) is not made
available to the U.S. Issuing Lender by such U.S. L/C Participant within three
Business Days after the date such payment is due, the U.S. Issuing Lender shall
be entitled to recover from such U.S. L/C Participant, on demand, such amount
with interest thereon calculated from such due date at the rate per annum
applicable to ABR Loans under the Revolving Facility. A certificate of the U.S.
Issuing Lender submitted to any U.S. L/C Participant with respect to any amounts
owing under this Section shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after the U.S. Issuing Lender has made
payment under any U.S. Letter of Credit and has received from any U.S. L/C
Participant its pro rata share of such payment in accordance with Section
3.4(a), the U.S. Issuing Lender receives any payment related to such U.S. Letter
of Credit (whether directly from NSP or otherwise, including
51
proceeds of collateral applied thereto by the U.S. Issuing Lender), or any
payment of interest on account thereof, the U.S. Issuing Lender will distribute
to such U.S. L/C Participant its pro rata share thereof; PROVIDED, however, that
in the event that any such payment received by the U.S. Issuing Lender shall be
required to be returned by the U.S. Issuing Lender, such U.S. L/C Participant
shall return to the U.S. Issuing Lender the portion thereof previously
distributed by the U.S. Issuing Lender to it.
3.5 REIMBURSEMENT OBLIGATIONS OF U.S. BORROWERS. The U.S. Borrowers,
jointly and severally, agree in accordance with the terms and provisions of this
Section to reimburse the U.S. Issuing Lender on each date on which the U.S.
Issuing Lender notifies NSP of the date and amount of a draft presented under
any U.S. Letter of Credit and paid by the U.S. Issuing Lender for the amount of
(a) such draft so paid and (b) any taxes, fees, charges or other costs or
expenses incurred by the U.S. Issuing Lender in connection with such payment.
Each such payment shall be made to the U.S. Issuing Lender at its address for
notices specified herein in lawful money of the United States and in immediately
available funds. Interest shall be payable on any and all amounts remaining
unpaid by the Borrowers under this Section from the date such amounts become
payable (whether at stated maturity, by acceleration or otherwise) until payment
in full at the rate set forth in (i) until the second Business Day following the
date of the applicable drawing, Section 2.12(b) and (ii) thereafter, Section
2.12(d).
3.6 OBLIGATIONS ABSOLUTE. The Borrowers' obligations under this
Section 3 shall be absolute and unconditional under any and all circumstances
and irrespective of any setoff, counterclaim or defense to payment that the
Borrowers may have or have had against the U.S. Issuing Lender, any beneficiary
of a U.S. Letter of Credit or any other Person. The Borrowers also agree with
the U.S. Issuing Lender that the U.S. Issuing Lender shall not be responsible
for, and the Borrowers' Reimbursement Obligations under Section 3.5 shall not be
affected by, among other things, the validity or genuineness of documents or of
any endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or any dispute between or among any Borrower and
any beneficiary of any U.S. Letter of Credit or any other party to which such
U.S. Letter of Credit may be transferred or any claims whatsoever of any
Borrower against any beneficiary of such U.S. Letter of Credit or any such
transferee. The U.S. Issuing Lender shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any U.S. Letter of Credit,
except for errors or omissions found by a final and nonappealable decision of a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of the U.S. Issuing Lender. The Borrowers agree that any
action taken or omitted by the U.S. Issuing Lender under or in connection with
any U.S. Letter of Credit or the related drafts or documents, if done in the
absence of gross negligence or willful misconduct and in accordance with the
standards of care specified in the Uniform Commercial Code of the State of New
York, shall be binding on the Borrowers and shall not result in any liability of
the U.S. Issuing Lender to the Borrowers.
3.7 U.S. LETTER OF CREDIT PAYMENTS. If any draft shall be presented
for payment under any U.S. Letter of Credit, the U.S. Issuing Lender shall
promptly notify NSP of the date and amount thereof. The responsibility of the
U.S. Issuing Lender to the Borrowers in connection with any draft presented for
payment under any U.S. Letter of Credit shall, in addition to any payment
obligation expressly provided for in such U.S. Letter of Credit, be
52
limited to determining that the documents (including each draft) delivered under
such U.S. Letter of Credit in connection with such presentment are substantially
in conformity with such U.S. Letter of Credit.
3.8 APPLICATIONS. To the extent that any provision of any
Application related to any U.S. Letter of Credit is inconsistent with the
provisions of this Section 3, the provisions of this Section 3 shall apply.
3.9 CANADIAN L/C COMMITMENT. No Canadian Letter of Credit shall be
issued hereunder if, after giving effect thereto, (a) the aggregate face amount
of the Canadian Letters of Credit then outstanding plus the aggregate
unreimbursed amount of drawings under Canadian Letters of Credit would exceed
the Canadian L/C Commitment or (b) the aggregate Canadian Extensions of Credit
would exceed the Canadian Commitment at that time. All other terms and
conditions of the Canadian L/C Commitment and all Canadian Letters of Credit
issued from time to time by the Canadian Lender shall, to the extent not covered
by this Agreement, be governed by the relevant Canadian L/C Agreements. The
Canadian Borrower agrees to pay fees in accordance with the schedule previously
agreed to.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Syndication Agent, the Administrative Agent and the
relevant Lenders to enter into this Agreement and to make the Loans and issue or
participate in the Letters of Credit, the Borrowers hereby jointly and severally
represent and warrant to the Syndication Agent, the Administrative Agent and
each Lender that:
4.1 FINANCIAL CONDITION. The audited consolidated balance sheets of
NSP as at December 31, 2000 and December 31, 2001 and the related consolidated
statements of income and of cash flows for the fiscal years ended on such dates,
reported on by and accompanied by an unqualified report from Ernst & Young, LLP
present fairly in all material respects the consolidated financial condition of
NSP as at such dates, and the consolidated results of its operations and its
consolidated cash flows for the respective fiscal years then ended. The
unaudited consolidated balance sheet of NSP as at December 31, 2002, and the
related unaudited consolidated statements of income and cash flows for the
12-month period ended on such date, present fairly in all material respects the
consolidated financial condition of NSP as at such date, and the consolidated
results of its operations and its consolidated cash flows for the 12-month
period then ended (subject to normal year-end audit adjustments). All such
financial statements, including the related schedules and notes thereto, have
been prepared in accordance with GAAP applied consistently throughout the
periods involved (except as approved by the aforementioned firm of accountants
and disclosed therein and for the absence of certain notes thereto). NSP and its
Subsidiaries do not have any material Guarantee Obligations, contingent
liabilities and liabilities for taxes, or any long-term leases or unusual
forward or long-term commitments, including any interest rate or foreign
currency swap or exchange transaction or other obligation in respect of
derivatives, that are not reflected in the most recent financial statements
referred to in this paragraph but which would in accordance with GAAP be so
reflected in a consolidated balance sheet of NSP and its Subsidiaries as of the
Closing Date. During the period from December 31, 2002 to and including the date
hereof there has been no Disposition by NSP of any material part of its business
or property.
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4.2 NO CHANGE. Since December 31, 2002 there has been no development
or event that has had or could reasonably be expected to have a Material Adverse
Effect.
4.3 EXISTENCE; COMPLIANCE WITH LAW. Each of NSP and its Subsidiaries
(a) is duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization, (b) has the corporate (or other
equivalent) power and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation (or equivalent thereof) and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property or the conduct
of its business requires such qualification except to the extent the failure to
be so qualified and/or in good standing could not reasonably be expected to have
a Material Adverse Effect and (d) is in compliance with all Requirements of Law
except to the extent that the failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
4.4 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Each Loan Party
has the corporate (or, in the case of any Loan Party which is not a corporation,
such equivalent) power and authority, and the legal right, to make, deliver and
perform the Loan Documents to which it is a party and, in the case of the
Borrowers, to borrow hereunder. Each Loan Party has taken all necessary
corporate (or, in the case of any Loan Party which is not a corporation, such
equivalent) action to authorize the execution, delivery and performance of the
Loan Documents to which it is a party and, in the case of the Borrowers, to
authorize the borrowings on the terms and conditions of this Agreement. No
consent or authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person is required in
connection with the borrowings hereunder or with the execution, delivery,
performance, validity or enforceability of this Agreement or any of the Loan
Documents, except (i) consents, authorizations, filings and notices described in
Schedule 4.4, which consents, authorizations, filings and notices have been
obtained or made and are in full force and effect (other than such consents,
authorizations, filings and notices the failure to obtain or make which could
not reasonably be expected to have a Material Adverse Effect) and (ii) the
filings referred to in Section 4.19. Each Loan Document has been duly executed
and delivered on behalf of each Loan Party party thereto. This Agreement
constitutes, and each other Loan Document upon execution will constitute, a
legal, valid and binding obligation of each Loan Party party thereto,
enforceable against each such Loan Party in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
4.5 NO LEGAL BAR. The execution, delivery and performance of this
Agreement and the other Loan Documents, the issuance of Letters of Credit, the
borrowings hereunder and the use of the proceeds thereof will not violate any
Requirement of Law or any Contractual Obligation of NSP or any of its
Subsidiaries and will not result in, or require, the creation or imposition of
any Lien on any of their respective properties or revenues pursuant to any
Requirement of Law or any such Contractual Obligation (other than the Liens
created by the Security Documents). No Requirement of Law or Contractual
Obligation applicable to NSP or any of its Subsidiaries could reasonably be
expected to have a Material Adverse Effect.
54
4.6 NO MATERIAL LITIGATION. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of NSP, threatened by or against NSP or any of its Subsidiaries
or against any of their respective properties or revenues (a) with respect to
any of the Loan Documents or any of the transactions contemplated hereby or
thereby, or (b) that could reasonably be expected to have a Material Adverse
Effect.
4.7 NO DEFAULT. Neither NSP nor any of its Subsidiaries is in
default under or with respect to any of its Contractual Obligations in any
respect that could reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
4.8 OWNERSHIP OF PROPERTY; LIENS. Each of NSP and its Subsidiaries
has title in fee simple to, or a valid leasehold interest in, all its real
property material to the conduct of its business, and good title to, or a valid
leasehold interest in, all its other property material to the conduct of its
business, and none of such property is subject to any Lien except as permitted
by Section 7.3.
4.9 INTELLECTUAL PROPERTY. NSP and each of its Subsidiaries owns, or
is licensed to use, all Intellectual Property necessary for the conduct of its
business as currently conducted, except for any failure to so own or license
Intellectual Property which individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect. No claim has been
asserted and is pending by any Person challenging or questioning the use of any
Intellectual Property or the validity or effectiveness of any Intellectual
Property, nor does NSP know of any valid basis for any such claim except for any
claims which individually or in the aggregate could not reasonably be expected
to have a Material Adverse Effect. The use of Intellectual Property by NSP and
its Subsidiaries does not infringe on the rights of any Person in any respect,
except for any failure to so use Intellectual Property which individually or in
the aggregate could not reasonably be expected to have a Material Adverse
Effect.
4.10 TAXES. NSP and each of its Subsidiaries has filed or caused to
be filed all Federal, state and other material tax returns that are required to
be filed and has paid all taxes shown to be due and payable on said returns or
on any assessments made against it or any of its property and all other taxes,
fees or other charges imposed on it or any of its property by any Governmental
Authority (other than any the amount or validity of that are currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided on the books of NSP or its
Subsidiaries, as the case may be); no tax Lien has been filed, and, to the
knowledge of NSP, no material claim is being asserted, with respect to any such
tax, fee or other charge.
4.11 FEDERAL REGULATIONS. No part of the proceeds of any Loans will
be used for "buying" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U as now and from time to
time hereafter in effect or for any purpose that violates the provisions of the
Regulations of the Board. If requested by any Lender or the Administrative
Agent, NSP will furnish to the Administrative Agent and each Lender a statement
to the foregoing effect in conformity with the requirements of FR Form G-3 or FR
Form U-1, as applicable, referred to in Regulation U.
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4.12 LABOR MATTERS. Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect: (a) there are no
strikes or other labor disputes against NSP or any of its Subsidiaries pending
or, to the knowledge of NSP, threatened; (b) hours worked by and payment made to
employees of NSP and its Subsidiaries have not been in violation of the Fair
Labor Standards Act or any other applicable Requirement of Law dealing with such
matters; and (c) all payments due from NSP or any of its Subsidiaries on account
of employee health and welfare insurance have been paid or accrued as a
liability on the books of NSP or the relevant Subsidiary.
4.13 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan which could
reasonably be expected to have a Material Adverse Effect and each Plan has
complied in all material respects with the applicable provisions of ERISA and
the Code. No termination of a Single Employer Plan has occurred which could
reasonably be expected to result in a material liability, and no Lien in favor
of the PBGC or a Plan has arisen, during such five-year period. The present
value of all accrued benefits under each Single Employer Plan (based on those
assumptions used to fund such Plans) did not, as of the last annual valuation
date prior to the date on which this representation is made or deemed made,
exceed the value of the assets of such Plan allocable to such accrued benefits
by a material amount. Neither NSP nor any Commonly Controlled Entity has had a
complete or partial withdrawal from any Multiemployer Plan that has resulted or
could reasonably be expected to result in a material liability under ERISA, and
neither NSP nor any Commonly Controlled Entity would become subject to any
material liability under ERISA if NSP or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made. To the knowledge of NSP or any Commonly Controlled Entity, no such
Multiemployer Plan is in Reorganization or Insolvent.
4.14 INVESTMENT COMPANY ACT; OTHER REGULATIONS. No Loan Party is an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. No Loan
Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) that limits its ability to incur Indebtedness.
4.15 SUBSIDIARIES. Except as disclosed to the Administrative Agent
by NSP in writing from time to time after the Closing Date, (a) Schedule 4.15
sets forth the name and jurisdiction of organization of each Subsidiary and, as
to each such Subsidiary, the percentage of each class of Capital Stock owned by
any Loan Party and (b) there are no outstanding subscriptions, options,
warrants, calls, rights or other agreements or commitments (other than stock
options granted to employees or directors and directors' qualifying shares) of
any nature relating to any Capital Stock of NSP or any Subsidiary, except as
created by the Loan Documents or as listed on Schedule 4.15.
4.16 USE OF PROCEEDS. The proceeds of the Term Loans and, the U.S.
Revolving Loans and the Canadian Loans made on the Closing Date will be used to
pay the principal of the loans outstanding under the Existing Credit Agreement
on such Date and to pay related fees and
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expenses. The remaining proceeds of the U.S. Revolving Loans and the U.S.
Swingline Loans, and the U.S. Letters of Credit, shall be used for general
corporate purposes. The proceeds of the Canadian Loans shall be used to finance
the working capital needs of the Canadian Borrower.
4.17 ENVIRONMENTAL MATTERS. Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect:
(a) the facilities and properties owned, leased or operated by NSP or
any of its Subsidiaries (the "GROUP PROPERTIES") do not contain, any
Materials of Environmental Concern in amounts or concentrations or under
circumstances that constitute or constituted a violation of, or could give
rise to liability under, any Environmental Law;
(b) neither NSP nor any of its Subsidiaries has received or has
knowledge of any notice of violation, alleged violation, non-compliance,
liability or potential liability regarding environmental matters or
compliance with Environmental Laws with regard to any of the Group
Properties or the business operated by NSP or any of its Subsidiaries (the
"BUSINESS"), nor does NSP have knowledge or reason to believe that any such
notice will be received or is being threatened;
(c) Materials of Environmental Concern have not been transported or
disposed of from the Group Properties in violation of, or in a manner or to
a location that could reasonably be expected to give rise to liability
under, any Environmental Law, nor have any Materials of Environmental
Concern been generated, treated, stored or disposed of at, on or under any
of the Group Properties in violation of, or in a manner that could
reasonably be expected to give rise to liability under, any applicable
Environmental Law;
(d) no judicial proceeding or governmental or administrative action is
pending or, to the knowledge of NSP, threatened, under any Environmental
Law to which NSP or any Subsidiary is or will be named as a party with
respect to the Group Properties or the Business, nor are there any consent
decrees or other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements outstanding under
any Environmental Law with respect to the Group Properties or the Business;
(e) there has been no release or threat of release of Materials of
Environmental Concern at or from the Group Properties, or arising from or
related to the operations of NSP or any Subsidiary in connection with the
Group Properties or otherwise in connection with the Business, in violation
of or in amounts or in a manner that could reasonably be expected to give
rise to liability under Environmental Laws;
(f) the Group Properties and all operations at the Group Properties
are in compliance, and have in the last five years been in compliance, with
all applicable Environmental Laws, and there is no contamination at, under
or about the Group Properties or violation of any Environmental Law with
respect to the Group Properties or the Business; and
(g) neither NSP nor any of its Subsidiaries has assumed any liability
of any other Person under Environmental Laws.
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4.18 ACCURACY OF INFORMATION, ETC. Subject to the next succeeding
sentence and to the qualifications provided therein, no statement or information
contained in this Agreement, any other Loan Document, or to the best of NSP's
knowledge, any other document or written certificate or statement furnished by
or on behalf of any Loan Party to the Syndication Agent, the Administrative
Agent or the Lenders, or any of them, pursuant to the Existing Credit Agreement
or the Loan Documents or at the request of Fleet Securities, Inc. and/or CIBC
World Markets Corp., as Co-Lead Arrangers and Joint Bookrunners, for use in
connection with the transactions contemplated by this Agreement or the other
Loan Documents, taken as a whole, contained as of the date this Agreement or
such other Loan Document was delivered or such statement, document or
certificate was so furnished, any untrue statement of a material fact or omitted
to state a material fact necessary to make the statements contained herein or
therein, taken as a whole, not misleading in any material respect. The
projections and pro forma financial information contained in the materials
referenced above are based upon good faith estimates and assumptions believed by
management of NSP to be reasonable at the time made, it being recognized by the
Lenders that such financial information as it relates to future events is not to
be viewed as fact and that actual results during the period or periods covered
by such financial information may differ from the projected results set forth
therein by a material amount. There is no fact known to any Loan Party that
could reasonably be expected to have a Material Adverse Effect that has not been
expressly disclosed herein, in the other Loan Documents or in any other
documents, certificates and statements furnished to the Syndication Agent, the
Administrative Agent and the Lenders for use in connection with the transactions
contemplated hereby and by the other Loan Documents.
4.19 SECURITY DOCUMENTS. (a) The Guarantee and Collateral Agreement
is effective to create in favor of the Administrative Agent, for the benefit of
the Lenders, a legal, valid and enforceable security interest in the Collateral
described therein (other than Collateral described as "all other property not
otherwise described above" and the proceeds thereof) and the proceeds thereof.
In the case of the Pledged Stock described in the Guarantee and Collateral
Agreement, stock certificates representing such Pledged Stock having been
delivered to the Administrative Agent and, in the case of the other Collateral
described in the Guarantee and Collateral Agreement, financing statements and
other filings specified on Schedule 4.19(a) in appropriate form having been
filed in the offices specified on Schedule 4.19(a), the Guarantee and Collateral
Agreement constitutes a fully perfected Lien on, and security interest in, all
right, title and interest of the Loan Parties in such Collateral (other than
Collateral described as "all other property not otherwise described above" and
the proceeds thereof) and the proceeds thereof, as security for the Borrower
Obligations (as defined in the Guarantee and Collateral Agreement), in each case
prior and superior in right to any other Person (except, in the case of
Collateral other than Pledged Stock, Liens permitted by Section 7.3 that have
priority by operation of law).
(b) Each of the Mortgages is effective to create in favor of the
Administrative Agent, for the benefit of the Lenders, or the Canadian Lender, as
applicable, a legal, valid and enforceable Lien on the Mortgaged Properties
described therein and proceeds thereof, and the Mortgages having been filed in
the offices specified on Schedule 4.19(b), each such Mortgage constitutes a
fully perfected Lien on, and security interest in, all right, title and interest
of the Loan Parties in the Mortgaged Properties and the proceeds thereof, as
security for the
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Obligations (as defined in the relevant Mortgage), in each case prior and
superior in right to any other Person other than Liens permitted by Section 7.3
that have priority by operation of law.
(c) The Hypothec on Movables is effective to create in favor of the
Canadian Lender a legal, valid and enforceable security interest in the
Collateral described therein and proceeds thereof. In the case of certified
Pledged Stock (as defined in the Canadian Security Documents), certificates
representing such Pledged Stock having been delivered to the Canadian Lender,
and in the case of the other Collateral described in the Canadian Security
Documents, financing statements in appropriate form having been filed in the
offices specified on Schedule 4.19(c), the Canadian Security Documents
constitute fully perfected Liens on, and security interests in, all right, title
and interest of the Loan Parties in such Collateral and the proceeds thereof, as
security for the obligations described therein as being secured thereby, in each
case prior and superior in right to any other person except for Liens permitted
under Section 7.3 to the extent such Liens have priority under applicable law.
4.20 SOLVENCY. Each Loan Party is, and after giving effect to the
incurrence of all Indebtedness and obligations being incurred in connection
herewith and therewith will be and will continue to be, Solvent.
4.21 SENIOR INDEBTEDNESS. The Obligations constitute "Senior
Indebtedness" of the U.S. Borrowers under and as defined in the Note Agreement.
The obligations of each U.S. Subsidiary Guarantor under the Guarantee and
Collateral Agreement constitute "Guarantor Senior Indebtedness" of such U.S.
Subsidiary Guarantor under and as defined in the Note Agreement.
4.22 REGULATION H. No Mortgage encumbers improved real property that
is located in an area that has been identified by the Secretary of Housing and
Urban Development as an area having special flood hazards and in which flood
insurance has been made available under the National Flood Insurance Act of
1968.
4.23 CERTAIN DOCUMENTS. NSP has delivered to the Administrative
Agent and Syndication Agent a complete and correct copy of each document or
instrument pursuant to which the Scheduled Debt has been created or is
evidenced, the Holdco L.L.C. Agreement and the L.L.C. Agreement, including any
amendments, supplements or other modifications with respect to any of the
foregoing.
4.24 CAPITAL STRUCTURE. (a) All of the issued and outstanding shares
of the Capital Stock of NSP are owned by Holdco.
(b) Set forth on Schedule 4.24 is a complete and correct list of all
Subsidiaries of NSP on the date hereof, including the number of issued and
outstanding shares of the Capital Stock thereof and the ownership of such
shares.
4.25 MORTGAGED PROPERTIES. Schedule 1.1B includes a complete and
correct list of all fee interests in real property owned on the date hereof by
NSP and/or any of its Subsidiaries having a value (together with improvements
thereon) of at least $1,000,000.
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SECTION 5. CONDITIONS PRECEDENT
5.1 CONDITIONS TO INITIAL EXTENSION OF CREDIT. The agreement of each
Lender to make the initial extension of credit requested to be made by it is
subject to the satisfaction, prior to or concurrently with the making of such
extension of credit on the Closing Date (but in any event no later than March
31, 2003), of the following conditions precedent:
(a) LOAN DOCUMENTS. The Administrative Agent and the Canadian Lender
shall have received (i) this Agreement, executed and delivered by the
Syndication Agent, the Administrative Agent, the Borrowers and the Lenders,
(ii) the Guarantee and Collateral Agreement, executed and delivered by
Holdco, the U.S. Borrowers and each U.S. Subsidiary Guarantor, (iii) an
Acknowledgment and Consent in the form attached to the Guarantee and
Collateral Agreement, executed and delivered by each Issuer (as defined
therein), if any, that is not a Loan Party and (iv) the Canadian Loan
Documents, executed and delivered by the Canadian Lender and the Canadian
Borrower.
(b) EXISTING CREDIT AGREEMENT. All principal and all accrued unpaid
interest, fees, commissions and other amounts owing under the Existing
Credit Agreement shall have been paid in full (whether, in the case of
principal, through the use of the proceeds of Loans hereunder or
otherwise).
(c) FEES. The Lenders, the Syndication Agent and the Administrative
Agent each shall have received all fees required to be paid, and all
expenses for which invoices have been presented (including the reasonable
fees and expenses of legal counsel), on or before the Closing Date,
PROVIDED that the Administrative Agent's fee payable on the Closing Date
shall be reduced by an amount equal to the product of (i) the amount of the
Administrative Agent's fee paid to the Administrative Agent on October 1,
2002 and (ii) a fraction the denominator of which is 365 and the numerator
of which is the number of days in the period from the Closing Date to and
including September 30, 2003.
(d) CLOSING CERTIFICATE. The Administrative Agent and the Canadian
Lender shall have received, with a counterpart for each Lender, a
certificate of each Loan Party, dated the Closing Date, substantially in
the form of Exhibit C, with appropriate insertions and attachments.
(e) LEGAL OPINIONS. The Administrative Agent shall have received the
executed legal opinions of (i) ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, counsel to NSP and its
Subsidiaries, substantially in the form of Exhibit F-1 and (ii) ▇▇▇▇▇▇▇▇▇
Katznelson Montiguy, S.E.N.C., counsel to the Canadian Borrower and its
Subsidiaries, substantially in the form of Exhibit F-2. Such legal opinions
shall cover such other matters incident to the transactions contemplated by
this Agreement as the Administrative Agent and Syndication Agent may
reasonably require.
(f) PLEDGED STOCK; STOCK POWERS; PLEDGED NOTES. The Administrative
Agent shall have received (i) the certificates representing the shares of
Capital Stock pledged pursuant to the Guarantee and Collateral Agreement
that are represented by certificates, (other than those certificates
representing the shares of Capital Stock to be furnished to
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the Administrative Agent pursuant to Section 6.12(b)) together with an
undated stock power for each such certificate executed in blank by a duly
authorized officer of the pledgor thereof and (ii) each promissory note (if
any) pledged to the Administrative Agent pursuant to the Guarantee and
Collateral Agreement endorsed (without recourse) in blank (or accompanied
by an executed transfer form in blank) by the pledgor thereof. The Canadian
Lender shall have received (i) the certificates representing the shares of
Capital Stock pledged pursuant to the Canadian Security Documents that are
represented by certificates, together with an undated stock power for each
such certificate executed in blank by a duly authorized officer of the
pledgor thereof and (ii) each promissory note, if any, pledged to the
Canadian Lender pursuant to the Canadian Security Documents endorsed
(without recourse) in blank (or accompanied by an executed transfer form in
blank satisfactory to the Canadian Lender) by the pledgor thereof.
(g) FILINGS, REGISTRATIONS AND RECORDINGS. Each document (including
any Uniform Commercial Code or other financing statement) required by the
Security Documents or under law or reasonably requested by the
Administrative Agent or the Canadian Lender to be filed, registered or
recorded in order to create in favor of the Administrative Agent for the
benefit of the U.S. Lenders or in favor of the Canadian Lender, as
applicable, a perfected Lien on the Collateral described therein, prior and
superior in right to any other Person (other than with respect to Liens
expressly permitted by Section 7.3), shall be in proper form for filing,
registration or recordation and shall have been delivered to the
Administrative Agent and the Syndication Agent, or the Canadian Lender, as
applicable.
(h) MORTGAGES, ETC. There shall have been executed and delivered to
the Administrative Agent, in proper form for filing in each applicable
recording office, an amendment to each Mortgage in existence on the Closing
Date reflecting the terms and conditions of this Agreement and in form and
substance satisfactory to the Administrative Agent, together with datedown
endorsements to the title insurance policies previously delivered in
connection with such Mortgages.
(i) INSURANCE. The Administrative Agent shall have received insurance
certificates satisfying the requirements of the Security Documents.
(j) LEVERAGE RATIOS. The Administrative Agent shall have received
evidence, in form and substance satisfactory to it, that as of the Closing
Date and calculated as described below, the Consolidated Senior Leverage
Ratio is not greater than 2.5 to 1.0 and the Consolidated Total Leverage
Ratio is not greater than 4.5 to 1.0. For the purposes of the computation
of the Ratios described in the preceding sentence, Consolidated Senior Debt
and Consolidated Total Debt shall be calculated as of the Closing Date,
giving effect to any borrowings and prepayments to occur hereunder on such
Date, and Consolidated EBITDA shall be calculated for the period of four
consecutive fiscal quarters ending December 31, 2002.
(k) AMENDMENT TO SENIOR SUBORDINATED NOTES. The Administrative Agent
shall have received evidence that the Note Agreement shall have been
amended in a manner reasonably satisfactory to the Administrative Agent and
the Syndication Agent, including
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to relax the financial covenants set forth therein and to modify the
covenant limiting Indebtedness included therein to permit the Loans and
other extensions of credit to be made under this Agreement in an aggregate
amount not to exceed $175,000,000 at any one time outstanding.
5.2 CONDITIONS TO EACH EXTENSION OF CREDIT. The agreement of each
Lender to make any extension of credit requested to be made by it on any date
(including its initial extension of credit) is subject to the satisfaction of
the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties made by any Loan Party in or pursuant to the Loan Documents
shall be true and correct in all material respects on and as of such date
as if made on and as of such date except for such representations and
warranties expressly stated to be made as of a specific earlier date, in
which case such representations and warranties shall be true and correct in
all material respects as of such earlier date.
(b) NO DEFAULT. No Default or Event of Default shall have occurred and
be continuing on such date or after giving effect to the extensions of
credit requested to be made on such date.
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrowers
hereunder shall constitute a representation and warranty by the Borrowers as of
the date of such extension of credit that the conditions contained in this
Section 5.2 have been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
NSP hereby agrees that, so long as the Commitments remain in effect,
any Letter of Credit remains outstanding or any Loan or other amount is owing to
any Lender, the Syndication Agent or the Administrative Agent hereunder (other
than contingent and indemnification obligations), NSP shall and shall cause each
of its Subsidiaries to:
6.1 FINANCIAL STATEMENTS. (a) Furnish to the Administrative Agent
and each Lender:
(i) as soon as available, but in any event within 90 days after
the end of each fiscal year of NSP, a copy of the audited consolidated
balance sheet of NSP and its consolidated Subsidiaries as at the end of
such year and the related audited consolidated statements of income and of
cash flows for such year, setting forth in each case in comparative form
the figures for the previous year, reported on without a "going concern" or
like qualification or exception, or qualification arising out of the scope
of the audit, by Ernst & Young LLP or other independent certified public
accountants of nationally recognized standing;
(ii) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of NSP, the unaudited consolidated balance sheet of NSP and its
consolidated Subsidiaries as at the end of such quarter and the related
unaudited consolidated statements of income and of cash flows for such
quarter and the portion of the fiscal year through the end of such quarter,
setting
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forth in each case in comparative form the figures for the previous year,
certified by a Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments and the absence of
certain footnotes);
(iii) as soon as available, but in any event not later than 30 days
after the end of each month or 45 days in the case of the end of the third,
sixth, ninth and twelfth months occurring during each fiscal year of NSP,
the unaudited consolidated balance sheets of NSP and its Subsidiaries as at
the end of such month and the related unaudited consolidated statements of
income and of cash flows for such month and the portion of the fiscal year
through the end of such month, setting forth in each case in comparative
form the figures for the previous year, certified by a Responsible Officer
as being fairly stated in all material respects (subject to normal year-end
audit adjustments and the absence of certain footnotes); and
(iv) as soon as available, but in any event within 90 days after
the end of each fiscal year of Holdco, a copy of the audited consolidated
balance sheet of Holdco and its consolidated Subsidiaries as at the end of
such year and the related audited consolidated statements of income and of
cash flows for such year, setting forth in each case in comparative form
the figures for the previous year, reported on without a "going concern" or
like qualification or exception, or qualification arising out of the scope
of the audit, by Ernst & Young LLP or other independent certified public
accountants of nationally recognized standing.
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
(b) Cause the Canadian Borrower to deliver to the Administrative Agent
and each Lender:
(i) within 90 days after the end of each fiscal year of North Safety
Canada, a copy of the unaudited balance sheet of North Safety Canada as at
the end of such year and the related unaudited statements of income and of
cash flows for such year, setting forth in each case in comparative form
the figures for the previous year, prepared in accordance with GAAP; and
(ii) as soon as available, but in any event not later than 30 days
after the end of each month or 45 days in the case of the third, sixth,
ninth and twelfth months occurring during each fiscal year of North Safety
Canada, the unaudited balance sheet of North Safety Canada as at the end of
such month and the related unaudited statements of income and of cash flows
for such month and the portion of the fiscal year through the end of such
month, setting forth in each case in comparative form the figures for the
previous year, certified by a Responsible Officer as being fairly stated in
all material respects (subject to normal year-end adjustments and the
absence of certain footnotes).
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6.2 CERTIFICATES; OTHER INFORMATION. Furnish to the Administrative
Agent and each Lender (or, in the case of clause (g), to the relevant Lender):
(a) concurrently with the delivery of the financial statements
referred to in Section 6.1(a)(i) and (iv), (i) a certificate of the
independent certified public accountants reporting on such financial
statements stating that in making the examination necessary therefor no
knowledge was obtained of any Default or Event of Default, except as
specified in such certificate and (ii) all "management letters", if any,
delivered by such accountants in connection therewith.
(b) concurrently with the delivery of any financial statements
pursuant to Section 6.1(a), (i) a certificate of a Responsible Officer
stating that such Responsible Officer has obtained no knowledge of any
Default or Event of Default except as specified in such certificate and
(ii) in the case of quarterly or annual financial statements, (x) a
Compliance Certificate containing all information and calculations
necessary for determining compliance by NSP and its Subsidiaries with the
provisions of this Agreement referred to therein as of the last day of the
fiscal quarter or fiscal year of NSP, as the case may be, and (y) to the
extent not previously disclosed to the Administrative Agent, a listing of
any Intellectual Property acquired by any Loan Party since the date of the
most recent list delivered pursuant to this clause (y) (or, in the case of
the first such list so delivered, since the Closing Date);
(c) as soon as available, and in any event no later than 60 days after
the end of each fiscal year of NSP, a detailed consolidated budget for the
following fiscal year (including a projected consolidated balance sheet of
NSP and its Subsidiaries as of the end of the following fiscal year, the
related consolidated statements of projected cash flow, projected changes
in financial position and projected income and a description of the
underlying assumptions applicable thereto), and, as soon as available,
significant revisions, if any, of such budget and projections with respect
to such fiscal year which are delivered to the Board of Managers of Holdco
for its review (collectively, the "PROJECTIONS"), which Projections shall
in each case be accompanied by a certificate of a Responsible Officer
stating that such Projections are based on reasonable estimates,
information and assumptions at the time made in light of the circumstances
then existing and that such Responsible Officer has no reason to believe
that such Projections are incorrect or misleading in any material respect;
(d) concurrently with the delivery of any financial statements
pursuant to Section 6.1(a)(ii), a narrative discussion and analysis of the
financial condition and results of operations of NSP and its Subsidiaries
for such fiscal quarter and for the period from the beginning of the then
current fiscal year to the end of such fiscal quarter, as compared to the
portion of the Projections covering such periods and to the comparable
periods of the previous year;
(e) no later than 10 Business Days prior to the effectiveness thereof,
copies of substantially final drafts of any proposed amendment, supplement,
waiver or other modification with respect to any Scheduled Debt;
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(f) within five days after the same are sent, copies of all financial
statements and reports that NSP sends to the holders of any class of its
debt securities or public equity securities and, within five days after the
same are filed, copies of all financial statements and reports that NSP may
make to, or file with, the SEC; and
(g) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
6.3 PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature, except where (a) the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of NSP or its Subsidiaries, as the case may be or (b) the failure to
so pay, discharge or otherwise satisfy any such obligations could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
6.4 MAINTENANCE OF EXISTENCE; COMPLIANCE. (a) (i) preserve, renew
and keep in full force and effect its legal existence and (ii) take all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business, except, in each case, as
otherwise permitted by Section 7.4 and except, in the case of clause (ii) above,
to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect; and (b) comply with all Contractual Obligations and
Requirements of Law except to the extent that failure to comply therewith could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect.
6.5 MAINTENANCE OF PROPERTY; INSURANCE. (a) Keep all material
tangible property useful and necessary in its business in good working order and
condition, ordinary wear and tear and damage occurring as a result of a casualty
event excepted and (b) maintain with financially sound and reputable insurance
companies insurance on all its property in at least such amounts and against at
least such risks (but including in any event public liability, product liability
and business interruption) as are usually insured against in the same general
area by companies engaged in the same or a similar business.
6.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. (a) Keep
books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities and (b) permit
representatives of any Lender, at its own expense, to visit and inspect any of
its properties and examine and make abstracts from any of its books and records
at any reasonable time and as often as may reasonably be desired and to discuss
the business, operations, properties and financial and other condition of NSP
and its Subsidiaries with officers and employees of NSP and its Subsidiaries and
with its independent certified public accountants (such visits and inspections
shall be coordinated by the Lenders to the extent reasonably practicable).
6.7 NOTICES. Promptly give notice to the Administrative Agent and
each Lender of:
65
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of NSP or any of its Subsidiaries or (ii) litigation,
investigation or proceeding that may exist at any time between NSP or any
of its Subsidiaries and any Governmental Authority, that in either case, if
not cured or if adversely determined, as the case may be, could reasonably
be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting NSP or any of its
Subsidiaries in which the amount involved is $1,000,000 or more and not
covered by insurance or in which injunctive or similar relief is sought;
(d) any of the following events which could reasonably be expected to
result in a liability in excess of $1,000,000, as soon as possible and in
any event within 30 days after NSP knows or has reason to know thereof: (i)
the occurrence of any Reportable Event with respect to any Plan, a failure
to make any required contribution to a Plan, the creation of any Lien in
favor of the PBGC or a Plan or any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan or (ii) the
institution of proceedings or the taking of any other action by the PBGC or
NSP or any Commonly Controlled Entity or any Multiemployer Plan with
respect to the withdrawal from, or the termination, Reorganization or
Insolvency of, any Plan; and
(e) any development or event that has had or could reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this Section 6.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action NSP or the relevant Subsidiary proposes to take
with respect thereto.
6.8 ENVIRONMENTAL LAWS. (a) Comply in all material respects with,
and ensure compliance in all material respects by all tenants and subtenants, if
any, with, all applicable Environmental Laws, and obtain and comply in all
material respects with and maintain, and ensure that all tenants and subtenants
obtain and comply in all material respects with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws. For the purposes of this subsection 6.8(a)
noncompliance by NSP shall be deemed not to constitute a breach of this covenant
PROVIDED that, upon learning of any actual or suspected noncompliance, NSP shall
in a timely fashion undertake reasonable efforts to achieve compliance and
PROVIDED, FURTHER, that, in any case, such noncompliance, and any other
noncompliance with any Environmental Law, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws. For the purposes of this subsection 6.8(b) noncompliance by NSP shall be
deemed not to constitute a breach of this covenant PROVIDED that, upon learning
of any actual or suspected noncompliance, NSP shall in a timely fashion
undertake reasonable
66
efforts to achieve compliance and PROVIDED, FURTHER that, in any case, such
noncompliance, and any other noncompliance with any Environmental Law,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
(c) Use commercially reasonable efforts to deliver to the
Administrative Agent not later than 60 days following the Closing Date an
environmental report prepared by an independent environmental consultant
satisfactory to the Administrative Agent covering NSP's Nashua, New Hampshire
manufacturing facility that is satisfactory in scope to the Administrative
Agent.
(d) At all times have appointed an employee of NSP or one of its
Subsidiaries to have responsibility for the management of all environmental
matters and issues applicable to NSP and its Subsidiaries and for implementing
programs and procedures to assure compliance with all Environmental Laws.
6.9 ADDITIONAL COLLATERAL, ETC. (a) With respect to any property
acquired after the Original Closing Date by NSP or any of its Subsidiaries
(other than (x) any property described in paragraph (b), (c) or (d) below, (y)
any property subject to a Lien expressly permitted by Section 7.3(g) and (z)
property acquired by an Excluded Foreign Subsidiary) as to which the
Administrative Agent, for the benefit of the Lenders, does not have a perfected
Lien, promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement or such other documents as
the Administrative Agent deems necessary or advisable to grant to the
Administrative Agent, for the benefit of the U.S. Lenders, a security interest
in such property, (ii) in the case of property acquired by the Canadian Borrower
or any Canadian Subsidiary Guarantor, execute and deliver to the Canadian Lender
such amendments to the Canadian Security Documents or such other documents as
the Canadian Lender deems necessary or advisable to grant to the Canadian Lender
a security interest in such property and (iii) take all actions necessary or
advisable to grant to the Administrative Agent, for the benefit of the U.S.
Lenders, or to the Canadian Lender, as the case may be, a perfected first
priority security interest in such property, including the filing of Uniform
Commercial Code or other financing statements in such jurisdictions as may be
required by the Guarantee and Collateral Agreement, the Canadian Security
Documents or by law or as may be reasonably requested by the Administrative
Agent or the Canadian Lender, as the case may be.
(b) With respect to any fee interest in any real property having a
value (together with improvements thereof) of at least $1,000,000 acquired after
the Original Closing Date by NSP or any of its Subsidiaries (other than (x) any
such real property subject to a Lien expressly permitted by Section 7.3(g) and
(y) real property acquired by any Excluded Foreign Subsidiary), promptly (i)
execute and deliver a first priority Mortgage, in favor of the Administrative
Agent, for the benefit of the U.S. Lenders or the Canadian Lender, as the case
may be, covering such real property, (ii) if requested by the Administrative
Agent or the Canadian Lender, as the case may be, provide the U.S. Lenders or
the Canadian Lender, as the case may be, with (x) title and extended coverage
insurance covering such real property in an amount at least equal to the
purchase price of such real property (or such other amount as shall be
reasonably specified by the Administrative Agent or the Canadian Lender, as the
case may be) as well as a current ALTA survey thereof, together with a
surveyor's certificate and (y) any consents or estoppels reasonably deemed
necessary or advisable by the Administrative Agent or the Canadian Lender,
67
as the case may be, in connection with such mortgage or deed of trust, each of
the foregoing in form and substance reasonably satisfactory to the
Administrative Agent or the Canadian Lender, as the case may be, and (iii) if
requested by the Administrative Agent or the Canadian Lender, as the case may
be, deliver to the Administrative Agent or the Canadian Lender, as the case may
be, legal opinions relating to the matters described above, which opinions shall
be in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent or the Canadian Lender, as the case may be.
(c) With respect to any new Subsidiary (other than an Excluded Foreign
Subsidiary) created or acquired after the Closing Date by NSP or any of its
Subsidiaries (which, for the purposes of this paragraph (c), shall include any
existing Subsidiary that ceases to be an Excluded Foreign Subsidiary) and with
respect to any Subsidiary in existence on the date hereof which is not a party
to the Guarantee and Collateral Agreement on the Closing Date as to which the
Administrative Agent reasonably requests, promptly (i) execute and deliver to
the Administrative Agent such amendments to the Guarantee and Collateral
Agreement as the Administrative Agent deems necessary or advisable to grant to
the Administrative Agent, for the benefit of the Lenders, a perfected first
priority security interest in the Capital Stock of such new or existing
Subsidiary, as the case may be, that is owned by NSP or any of its Subsidiaries,
(ii) deliver to the Administrative Agent the certificates representing such
Capital Stock, together with undated stock powers, in blank, executed and
delivered by a duly authorized officer of NSP or such Subsidiary, as the case
may be, (iii) cause such new or existing Subsidiary, as the case may be, (A) to
become a party to the Guarantee and Collateral Agreement, (B) to take such
actions necessary or advisable to grant to the Administrative Agent for the
benefit of the Lenders a perfected first priority security interest in the
Collateral described in the Guarantee and Collateral Agreement with respect to
such new or existing Subsidiary, as the case may be, including the filing of
Uniform Commercial Code financing statements in such jurisdictions as may be
required by the Guarantee and Collateral Agreement or by law or as may be
requested by the Administrative Agent and (C) to deliver to the Administrative
Agent a certificate of such Subsidiary, substantially in the form of Exhibit C,
with appropriate insertions and attachments, and (iv) if requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
(d) With respect to any new Excluded Foreign Subsidiary created or
acquired after the Original Closing Date by NSP or any of its Subsidiaries
(other than the Canadian Borrower or any Subsidiaries thereof), promptly (i)
execute and deliver to the Administrative Agent such amendments to the Guarantee
and Collateral Agreement as the Administrative Agent deems necessary or
advisable to grant to the Administrative Agent, for the benefit of the U.S.
Lenders, a perfected first priority security interest in the Capital Stock of
such new Subsidiary, as the case may be, that is owned by NSP or any of its
Subsidiaries (provided that in no event shall more than 65% of the total
outstanding Capital Stock of any such new Subsidiary, as the case may be, be
required to be so pledged), (ii) deliver to the Administrative Agent the
certificates representing such Capital Stock, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of NSP or
such Subsidiary, as the case may be, and take such other action as may be
necessary or, in the opinion of the Administrative Agent, desirable to perfect
the Administrative Agent's security interest therein, and (iii) legal opinions
relating to the
68
matters described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Administrative Agent.
(e) with respect to any new Canadian Wholly Owned Subsidiary created
or acquired after the Original Closing Date by the Canadian Borrower or any of
its Subsidiaries, promptly (i) execute and deliver to the Canadian Lender such
amendments to the Canadian Security Documents as the Canadian Lender deems
necessary or advisable to grant to the Canadian Lender a perfected first
priority security interest in the Capital Stock of such new Subsidiary, that is
owned by the Canadian Borrower or any of its Subsidiaries, (ii) deliver to the
Canadian Lender the certificates representing such Capital Stock, together with
undated stock powers, in blank, executed and delivered by a duly authorized
officer of the Canadian Borrower or such Subsidiary, as the case may be, and
take such other action as may be necessary or, in the opinion of the Canadian
Lender, desirable to perfect the Canadian Lender's security interest therein,
and (iii) cause such new Subsidiary (A) to become a party to the applicable
Canadian Security Documents and (B) to take such actions necessary or advisable
to grant to the Canadian Lender a perfected first priority security interest or
first-ranking hypothec, as the case may be, in the Collateral or in Collateral
similar to the one described in the Canadian Security Documents with respect to
such new Subsidiary (except to the extent of Liens on such Collateral permitted
by Section 7.3 which have priority in accordance with applicable law),
including, without limitation, the filing of appropriate financing statements in
such jurisdictions as may be required by the applicable Canadian law or as may
be requested by the Canadian Lender, and (iv) if requested by the Canadian
Lender, deliver to the Canadian Lender legal opinions relating to the matters
described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Canadian Lender.
6.10 REAL ESTATE DOCUMENTATION. Furnish to the Canadian Lender all
real estate documentation reasonably required by the Canadian Lender with
respect to the Mortgaged Property of the Canadian Borrower and each of its
Subsidiaries.
6.11 MAINTENANCE OF RATINGS. Use commercially reasonable efforts to
maintain at all times ratings for the Facilities by both Standard & Poor's and
▇▇▇▇▇'▇.
6.12 POST-CLOSING MATTERS. (a)(i) Cause Durabilt Industries Limited
to file, within forty-five (45) days following the Closing Date, the application
for its dissolution with the Ontario Ministry of Consumer and Commercial
Relations or any other competent authority and to obtain Articles of dissolution
of Durabilt Industries Limited and (ii) obtain the registration, within ninety
(90) days following the execution of this Agreement, of the cancellation of the
legal hypothec registered on March 13, 2001 at the
Quebec Land Registry,
Registration Division of Montcalm under number 322471 and affecting the property
bearing civic numbers 3719 and 3707, des Commissaires Street, Rawdon, province
▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇, ▇▇▇▇▇▇.
(b) Furnish to the Administrative Agent, within forty-five (45) days
following the Closing Date, originals, replacements, affidavits, or the
equivalent of the foregoing, as the case may be, to those certificates
representing the pledges of shares of Capital Stock listed on Schedule 4.24(b)
and not in the possession of the Administrative Agent as of the Closing Date.
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SECTION 7. NEGATIVE COVENANTS
NSP hereby agrees that, so long as the Commitments remain in effect,
any Letter of Credit remains outstanding or any Loan or other amount is owing to
any Lender or the Administrative Agent hereunder (other than contingent or
indemnification obligations), NSP shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly:
7.1 FINANCIAL CONDITION COVENANTS. CONSOLIDATED TOTAL LEVERAGE
RATIO. (a) Permit the Consolidated Total Leverage Ratio as at the last day of
any period of four consecutive fiscal quarters of NSP ending with any fiscal
quarter ending during any period set forth below to exceed the ratio set forth
below opposite such period:
Consolidated Total
Period Leverage Ratio
03/31/03 through 09/30/04 4.90x
12/31/04 through 09/30/05 4.75x
12/31/05 through 09/30/06 4.35x
12/31/06 through 09/30/07 4.00x
12/31/07 through 09/30/08 3.75x
12/31/08 through 03/31/09 3.50x
(b) CONSOLIDATED INTEREST COVERAGE RATIO. Permit the Consolidated
Interest Coverage Ratio for any period of four consecutive fiscal quarters of
NSP ending with any fiscal quarter ending during any period set forth below to
be less than the ratio set forth below opposite such period:
Consolidated Interest
Period Coverage Ratio
03/31/03 through 09/30/05 1.90x
12/31/05 through 09/30/06 2.00x
12/31/06 through 03/31/09 2.25x
(c) CONSOLIDATED FIXED CHARGE COVERAGE RATIO. Permit the Consolidated
Fixed Charge Coverage Ratio for any period of four consecutive fiscal quarters
of NSP ending with any fiscal quarter ending during any period set forth below
to be less than the ratio set forth below opposite such period:
Consolidated Fixed Charge
Period Coverage Ratio
03/31/03 through 09/30/05 1.10x
12/31/05 through 09/30/06 1.15x
12/31/06 through 03/31/09 1.25x
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(d) CONSOLIDATED SENIOR LEVERAGE RATIO. Permit the Consolidated Senior
Leverage Ratio as at the last day of any period of four consecutive fiscal
quarters of NSP ending with any fiscal quarter ending during any period set
forth below to exceed the ratio set forth below opposite such period:
Consolidated Senior
Period Leverage Ratio
03/31/03 through 09/30/04 2.75x
12/31/04 through 09/30/05 2.50x
12/31/05 through 09/30/06 2.25x
12/31/06 through 09/30/07 2.00x
12/31/07 through 03/31/09 1.75x
7.2 INDEBTEDNESS. Create, issue, incur, assume, become liable in
respect of or suffer to exist any Indebtedness, or permit Holdco to create,
issue, incur, assume, become liable in respect of or suffer to exist any
Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan Document;
(b) Indebtedness of NSP to any Subsidiary and of any U.S. Subsidiary
Guarantor to NSP or any other Subsidiary;
(c) Indebtedness of the Canadian Borrower to any Canadian Subsidiary
Guarantor and of any Canadian Subsidiary Guarantor to the Canadian Borrower or
any other Canadian Subsidiary Guarantor;
(d) Guarantee Obligations incurred in the ordinary course of business
by NSP or any of its Subsidiaries of obligations of any U.S. Subsidiary
Guarantor, the Canadian Borrower or any Canadian Subsidiary Guarantor,
respectively;
(e) Indebtedness outstanding on the date hereof and listed on Schedule
7.2(e);
(f) additional Indebtedness of NSP or any of its Subsidiaries in an
aggregate principal amount at any time outstanding not to exceed $8,000,000;
(g) Refinancing Indebtedness in respect of clauses (d) through (f)
above;
(h) Indebtedness of any Foreign Subsidiary (other than the Canadian
Borrower or any Subsidiary thereof incorporated or organized in Canada) not to
exceed $5,500,000 in the aggregate of principal amount at any one time
outstanding;
(i) Indebtedness of Foreign Subsidiaries to NSP, any U.S. Subsidiary
Guarantor, the Canadian Borrower or any Canadian Subsidiary Guarantor not to
exceed $38,000,000 in the aggregate of principal amount at any one time
outstanding for all such Foreign Subsidiaries (provided that no more than
$10,000,000 of such Indebtedness at any one time outstanding shall constitute
Indebtedness for Borrowed Money); PROVIDED that the aggregate amount of
Indebtedness owing by the Canadian Borrower and its Subsidiaries to NSP, the
other U.S.
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Borrowers and the U.S. Subsidiary Guarantors shall not exceed $8,000,000 at any
one time outstanding;
(j) Indebtedness of any Foreign Subsidiary to any other Foreign
Subsidiary (other than the Canadian Borrower or any Subsidiary thereof which is
a Guarantor); and
(k) Indebtedness in an aggregate principal amount not to exceed
$32,000,000 of the Canadian Borrower to North Safety.
7.3 LIENS. Create, incur, assume or suffer to exist any Lien upon
any of its property, whether now owned or hereafter acquired, except for the
following Liens (each a "PERMITTED LIEN"):
(a) Liens for taxes, assessments or governmental charges or levies
not yet delinquent or that are being contested in good faith by appropriate
proceedings, PROVIDED that adequate reserves with respect thereto are
maintained on the books of NSP or its Subsidiaries, as the case may be, in
conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business
imposed by law in each case that are not overdue for a period of more than
30 days or that are being contested in good faith by appropriate
proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, tenders, trade
contracts (other than for borrowed money), leases, statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business;
(e) easements, rights-of-way, restrictions, minor defects or
irregularities of title and other similar encumbrances incurred in the
ordinary course of business that, in the aggregate, are not substantial in
amount and that do not in any case materially detract from the value of the
property subject thereto or materially interfere with the ordinary conduct
of the business of NSP or any of its Subsidiaries;
(f) Liens in existence on the date hereof listed on Schedule
7.3(f), including Liens securing Indebtedness permitted by Sections 7.2(e)
and 7.2(g), PROVIDED that no such Lien is spread to cover any additional
property after the Closing Date and that the amount of Indebtedness secured
thereby is not increased;
(g) Liens securing Indebtedness of NSP or any other Subsidiary
incurred pursuant to Section 7.2(f) to finance the acquisition of fixed or
capital assets, PROVIDED that (i) such Liens and the Indebtedness secured
thereby are incurred within ninety (90) days of the acquisition of such
fixed or capital assets, (ii) such Liens do not at any time encumber any
property other than the property financed by such Indebtedness and (iii)
the amount of Indebtedness secured thereby is not increased;
72
(h) Liens created pursuant to this Agreement and the Security
Documents, or which are specifically permitted by the terms of any Security
Document;
(i) any interest or title of a lessor under any lease entered into
by NSP or any other Subsidiary in the ordinary course of its business and
covering only the assets so leased;
(j) all building codes and zoning ordinances and other laws,
ordinances, regulations, rules, orders or determinations of any federal,
state, county, municipal and other governmental authority now or hereafter
enacted;
(k) Liens securing reimbursement of obligations in respect of (i)
documentary letters of credit, PROVIDED that such Liens cover only the
documents, the goods covered thereby and the proceeds thereof and (ii)
bankers' acceptances created in respect of drawings under such letters of
credit, PROVIDED that such Liens cover only the specific goods covered by
such letter of credit and the proceeds thereof;
(l) Liens consisting of rights of set-off of a customary nature or
bankers' liens on amounts on deposit, whether arising by contract or
operation of law, in each case incurred in the ordinary course of business;
(m) Liens encumbering customary initial deposits in respect of
commodity trading accounts or other brokerage accounts incurred in the
ordinary course of business;
(n) Liens not otherwise permitted by this Section 7.3 on assets of
Foreign Subsidiaries (other than the Canadian Borrower or any Subsidiary
thereof) so long as neither (i) the aggregate outstanding principal amount
of the obligations secured thereby nor (ii) the aggregate fair market value
(determined, in the case of each such Lien, as of the date such Lien is
incurred) of the assets subject thereto exceeds (as to all Foreign
Subsidiaries) $1,000,000 at any one time;
(o) Liens on goods in favor of customs and revenue authorities
which secure payment of customs duties in connection with the importation
of such goods;
(p) Liens securing obligations (other than Indebtedness) under
operating, reciprocal easements or similar agreements entered into in the
ordinary course of business by NSP and its Subsidiaries which do not
materially interfere with the ordinary conduct of the business of NSP and
its Subsidiaries;
(q) Liens on property or assets of, or any shares of stock of or
secured debt of, any corporation existing at the time of the acquisition
thereof pursuant to a Permitted Acquisition; PROVIDED that such Liens are
not incurred in connection with, or in contemplation of, such Permitted
Acquisition;
(r) Liens arising from the filing, for notice purposes only, of
financing statements in respect of operating leases;
73
(s) Liens securing Indebtedness of any Foreign Subsidiary incurred
pursuant to Section 7.2(h);
(t) Liens on any assets that are the subject of an agreement for a
Disposition thereof permitted hereunder that arise pursuant to such
agreement, so long as such assets are disposed within six (6) months of the
date such agreement shall have been entered into;
(u) Liens consisting of restrictions on the transfer of securities
pursuant to applicable federal and state securities laws;
(v) any attachment or judgment lien not constituting an Event of
Default; and
(w) Liens not otherwise permitted by this Section 7.3 on assets
not constituting Collateral securing Indebtedness and other obligations and
liabilities in an aggregate amount not to exceed $1,000,000 at any one time
outstanding.
7.4 FUNDAMENTAL CHANGES. Enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or Dispose of, all or substantially all of its
property or business, except that:
(a) any Subsidiary of NSP may be merged or consolidated with or into
NSP (PROVIDED that NSP shall be the continuing or surviving corporation) or
with or into any U.S. Wholly Owned Subsidiary Guarantor (PROVIDED that a
U.S. Wholly Owned Subsidiary Guarantor shall be the continuing or surviving
corporation);
(b) any Subsidiary of NSP may Dispose of any or all of its assets
(upon voluntary liquidation or otherwise) to NSP or any U.S. Wholly Owned
Subsidiary Guarantor;
(c) Dispositions permitted under Section 7.5;
(d) any Canadian Subsidiary Guarantor may be merged or consolidated
with or into any Canadian Borrower (PROVIDED that a Canadian Borrower shall
be the continuing or surviving corporation) or with or into any Canadian
Wholly Owned Subsidiary Guarantor (PROVIDED that a Canadian Wholly Owned
Subsidiary Guarantor shall be the continuing or surviving corporation);
(e) any Canadian Subsidiary Guarantor may Dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to the Canadian Borrower
or any other Canadian Subsidiary Guarantor;
(f) Arbin Personal Protection B.V. may be merged or consolidated with
or into North Safety Products (Europe) B.V. (PROVIDED that North Safety
Products (Europe) B.V. shall be the continuing or surviving corporation);
and
(g) any Subsidiary of NSP (other than the Canadian Borrower or any
Guarantor) may be merged into or consolidated with any other Subsidiary of
NSP (other than the Canadian Borrower or any Guarantor).
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7.5 DISPOSITION OF PROPERTY. Dispose of any of its 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, except:
(a) the Disposition of obsolete, worn out or surplus property in the
ordinary course of business; PROVIDED that the aggregate consideration
received for all such property is at least equal to the aggregate fair
market value thereof;
(b) the sale of inventory or sale or lease of equipment in the
ordinary course of business;
(c) Dispositions permitted by Section 7.4 (a), (b), (d), (e), (f) or
(g);
(d) the sale or issuance of any Subsidiary's Capital Stock to NSP or
any U.S. Wholly Owned Subsidiary Guarantor or the sale or issuance of NSP's
Capital Stock to Holdco;
(e) the sale of North Safety Products (Africa) (Pty) Ltd. and its
subsidiaries;
(f) Restricted Payments permitted under Section 7.6;
(g) Dispositions of Cash Equivalents; PROVIDED that the aggregate
consideration received for all such Cash Equivalents is at least equal to
the aggregate fair market value thereof; and
(h) Disposition of real estate owned in fee simple in Chicago,
Illinois and in Tallmadge, Ohio.
(i) the Disposition of other property having a fair market value not
to exceed $5,000,000 in the aggregate for any fiscal year of NSP; PROVIDED
that the aggregate consideration received for all such property is at least
equal to the aggregate fair market value thereof.
7.6 RESTRICTED PAYMENTS. Declare or pay any dividend (other than
dividends payable solely in common stock of the Person making such dividend) on,
or make any payment on account of, or set apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of, any Capital Stock of NSP or any Subsidiary, whether now or
hereafter outstanding, or make any other distribution in respect thereof, either
directly or indirectly, whether in cash or property or in obligations of NSP or
any Subsidiary (collectively, "RESTRICTED PAYMENTS"), except:
(a) any Subsidiary may make Restricted Payments to NSP or any U.S.
Wholly Owned Subsidiary Guarantor, and any Subsidiary of the Canadian
Borrower may make Restricted Payments to the Canadian Borrower or to any
Canadian Subsidiary Guarantor;
(b) distributions by NSP to Holdco the proceeds of which are used
by Holdco to make Permitted Tax Distributions;
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(c) payments made to Holdco for corporate overhead expenses
reasonably incurred by Holdco for management services, including without
limitation, the (i) insurance premiums, (ii) legal, accounting, audit and
tax fees, (iii) reimbursement payments to investors for their ordinary
course out-of-pocket expenses and (iv) fees and expenses of board meetings;
PROVIDED that the payments permitted under this clause (c) shall not exceed
$600,000 in the aggregate for any fiscal year of NSP;
(d) so long as no Default or Event of Default shall have occurred
and be continuing, NSP may pay dividends to Holdco to permit Holdco to
purchase Holdco's common stock or common stock options from present or
former officers or employees of Holdco, NSP or any Subsidiary upon the
death, disability or termination of employment of such officer or employee,
PROVIDED, that the aggregate amount of payments under this clause (d) after
the date hereof (net of any proceeds received by Holdco and contributed to
NSP after the date hereof in connection with resales of any common stock or
common stock options so purchased) shall not exceed $1,500,000 in any
fiscal year or $7,500,000 in the aggregate from and after the Closing Date;
(e) ▇▇▇▇▇ ▇▇▇▇▇ Zimbabwe Pbt Ltd ("▇▇▇▇▇") may make Restricted
Payments (i) to North Safety Products (Africa) (Pty) Ltd., the Subsidiary
which is the indirect parent of ▇▇▇▇▇ ("NSPA") and (ii) to Anglo American
Corporation Zimbabwe Pension Fund and to Anglo American Associated
Companies Pension Fund, in an aggregate amount which bears the same ratio
to the Restricted Payments made by ▇▇▇▇▇ to NSPA pursuant to clause (i) as
the number of shares of the common stock of ▇▇▇▇▇ owned by the entities
described in this clause (ii) bears to the aggregate number of shares of
the common stock of ▇▇▇▇▇ owned by NSPA;
(f) so long as no Default or Event of Default shall have occurred
and be continuing or would result therefrom, (i) NSP may pay dividends to
Holdco in amounts sufficient to pay the principal and interest on the Arkon
Note (as in effect on the date of issuance thereof without giving effect to
any amendments or other modifications thereto) when and as (and only when
and as) the same becomes due and payable and (ii) Holdco may exercise any
setoff rights it has under the Arkon Note; and
(g) NSP may pay dividends to Holdco in an aggregate amount not to
exceed $400,000 in the 2003 fiscal year of NSP, PROVIDED that (i) the
proceeds thereof are used to make contractually required employee
compensation payments to certain officers of NSP, (ii) each such officer
shall, immediately following his receipt thereof, utilize the portion of
such payment remaining after deducting therefrom the maximum amount of
Federal, state and local income taxes that he would be required to pay with
respect to such payment to repay to Holdco the principal amount of the
Management Notes and (iii) Holdco shall, immediately following its receipt
of the payments referred to in clause (ii) above, contribute the entire
amount thereof to the capital of NSP.
7.7 CAPITAL EXPENDITURES. Make or commit to make any Capital
Expenditure, except:
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(a) Capital Expenditures of NSP and its Subsidiaries in the
ordinary course of business not exceeding $12,000,000 during any fiscal
year of NSP; PROVIDED, that (A) up to $6,000,000 of any amount referred to
above, if not so expended in the fiscal year for which it is permitted, may
be carried over for expenditure in the next succeeding fiscal year and (B)
Capital Expenditures made pursuant to this paragraph (a) during any fiscal
year shall be deemed made, first, in respect of amounts permitted for such
fiscal year as provided above and, second, in respect of amounts carried
over from the prior fiscal year pursuant to subclause (A) above; and
(b) Capital Expenditures made with the proceeds of any
Reinvestment Deferred Amount.
7.8 INVESTMENTS. Make any advance, loan, extension of credit (by way
of guaranty or otherwise) or capital contribution to, or purchase any Capital
Stock, bonds, notes, debentures or other debt securities of, or any assets
constituting a business unit of, or make any other investment in, any Person
(all of the foregoing, "INVESTMENTS"), except:
(a) extensions of trade credit in the ordinary course of business;
(b) investments in cash and Cash Equivalents;
(c) Guarantee Obligations permitted by Section 7.2;
(d) loans and advances to employees of NSP or any Subsidiary of NSP in
the ordinary course of business (including for travel, entertainment and
relocation expenses) in an aggregate amount for NSP or any Subsidiary of
NSP not to exceed at any one time outstanding $250,000;
(e) Investments in assets useful in the business of NSP and its
Subsidiaries made by NSP or any of its Subsidiaries with the proceeds of
any Reinvestment Deferred Amount;
(f) (i) Investments by NSP or any of its Subsidiaries in NSP or any
Person that, prior to such Investment, is a U.S. Borrower or a U.S. Wholly
Owned Subsidiary Guarantor and (ii) Investments by any U.S. Borrower or any
U.S. Subsidiary Guarantor in any newly-formed Wholly Owned Subsidiary of a
U.S. Borrower or a U.S. Subsidiary Guarantor that has no material assets or
liabilities prior to such Investment and with respect to which all the
requirements of Section 6.9 shall be satisfied;
(g) loans to officers and employees of the Borrowers for the sole
purpose of purchasing equity of Holdco, secured with the equity purchased
therewith and not exceeding $3,500,000 at any one time outstanding;
(h) Investments in joint ventures useful in the business of NSP and
its Subsidiaries in amounts not to exceed $500,000 individually and
$4,000,000 in the aggregate at any one time outstanding;
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(i) Investments in the Management Notes originally issued to NSP which
such Notes are payable to Holdco following their assignment by NSP to
Holdco;
(j) in addition to Investments otherwise expressly permitted by this
Section, Permitted Acquisitions completed subsequent to the Closing Date
for an aggregate purchase price (including cash, Capital Stock and
promissory notes given as consideration therefor and Indebtedness assumed
in connection therewith, but excluding investment banking, brokerage,
legal, accounting and other similar fees paid in connection therewith and
fees paid in connection with the financing thereof) not to exceed
$20,000,000 for any such Permitted Acquisition or $50,000,000 for all such
Permitted Acquisitions;
(k) Investments in a joint venture in China in an amount not to exceed
$5,000,000 in aggregate;
(l) loans permitted by Sections 7.2(i), 7.2(k) and any Scheduled Debt
owing by a Subsidiary to another Subsidiary;
(m) (i) Investments by the Canadian Borrower or any Canadian
Subsidiary Guarantor in the Canadian Borrower or any Person that, prior to
such Investment, is a Canadian Subsidiary Guarantor and (ii) Investments by
the Canadian Borrower or any Canadian Subsidiary Guarantor in any
newly-formed Wholly Owned Subsidiary of the Canadian Borrower that has no
material assets or liabilities prior to such Investment and with respect to
which all the requirements of Section 6.9 shall be satisfied;
(n) Investments by any Foreign Subsidiary that is not a Guarantor in
any other Foreign Subsidiary, any Borrower or any Guarantor;
(o) Investments not otherwise permitted by this Section in an
aggregate amount not to exceed $2,000,000 subsequent to the Closing Date;
and
(p) Investments set forth on Schedule 7.8(p).
7.9 OPTIONAL PAYMENTS AND MODIFICATIONS OF CERTAIN DEBT INSTRUMENTS.
(a) Make or offer to make, or permit Holdco to make or offer to make any
optional or voluntary payment, prepayment, repurchase or redemption of, or
otherwise optionally or voluntarily defease or segregate funds with respect to,
or permit Holdco to defease or segregate funds with respect to, any Indebtedness
(other than the NFI Note and any other Scheduled Debt that is not subordinated
in right of payment to the Obligations), other than with the proceeds of
Refinancing Indebtedness or (b) amend, modify, waive or otherwise change, or
consent or agree to any amendment, modification, waiver or other change to, any
of the terms of any subordinated Indebtedness included in the Scheduled Debt
(including the Senior Subordinated Notes), other than any such amendment,
modification, waiver or other change that (i) (A) would extend the maturity or
reduce the amount of any payment of principal thereof or reduce the rate or
extend any date for payment of interest thereon or (B) is not adverse in any
respect to the interests of the Borrowers or Lenders in the reasonable opinion
of the U.S. Required Lenders and (ii) does not involve the payment of a consent
fee or (c) designate any Indebtedness (other than obligations of
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the Loan Parties pursuant to the Loan Documents) as "Designated Senior
Indebtedness" for the purposes of the Senior Subordinated Notes and the Note
Agreement.
7.10 TRANSACTIONS WITH AFFILIATES. Enter into any transaction,
including any purchase, sale, lease or exchange of property, the rendering of
any service or the payment of any management, advisory or similar fees, with any
Affiliate (other than between or among (x) NSP or any U.S. Wholly Owned
Subsidiary Guarantor, (y) the Canadian Borrower and/or any Canadian Subsidiary
Guarantor(s) and (z) any Foreign Subsidiary (other than the Canadian Borrower or
any Canadian Subsidiary Guarantor) and any other such Foreign Subsidiary) unless
such transaction is (a) otherwise permitted under this Agreement, (b) in the
ordinary course of business of NSP or such Subsidiary, as the case may be, and
(c) upon fair and reasonable terms (i) no less favorable to NSP or such
Subsidiary, as the case may be, than it would obtain in a comparable arm's
length transaction with a Person that is not an Affiliate or (ii) in the case of
a transaction between NSP and such Subsidiary, more favorable to NSP than it
would obtain in a comparable arm's length transaction with a Person that is not
an Affiliate.
7.11 SALES AND LEASEBACKS. Enter into any arrangement with any
Person providing for the leasing by NSP or any Subsidiary of real or personal
property that has been or is to be sold or transferred by NSP or such Subsidiary
to such Person or to any other Person to whom funds have been or are to be
advanced by such Person on the security of such property or rental obligations
of NSP or such Subsidiary unless such arrangement is entered into in connection
with the financing of the acquisition of such property through the proceeds of a
Capital Lease Obligation permitted by Section 7.3(g) and the sale or transfer of
such property occurs within ninety days following the acquisition thereof by NSP
or any of its Subsidiaries.
7.12 CHANGES IN FISCAL PERIODS. Permit the fiscal year of NSP to
end on a day other than December 31 or change NSP's method of determining fiscal
quarters.
7.13 NEGATIVE PLEDGE CLAUSES. Enter into or suffer to exist or
become effective any agreement that prohibits or limits the ability of NSP or
any of its Subsidiaries to create, incur, assume or suffer to exist any Lien
upon any of its property or revenues, whether now owned or hereafter acquired,
to secure its obligations under the Loan Documents to which it is a party, other
than (a) this Agreement and the other Loan Documents and (b) any agreements
governing any purchase money Liens or Capital Lease Obligations otherwise
permitted hereby (in which case, any prohibition or limitation shall only be
effective against the assets financed thereby).
7.14 CLAUSES RESTRICTING SUBSIDIARY DISTRIBUTIONS. Enter into or
suffer to exist or become effective any consensual encumbrance or restriction on
the ability of any Subsidiary of NSP to (a) make Restricted Payments in respect
of any Capital Stock of such Subsidiary held by, or pay any Indebtedness owed
to, NSP or any other Subsidiary of NSP, (b) make loans or advances to, or other
Investments in, NSP or any other Subsidiary of NSP or (c) transfer any of its
assets to NSP or any other Subsidiary of NSP, except for such encumbrances or
restrictions existing under or by reason of (i) any restrictions existing under
the Loan Documents, (ii) any restrictions with respect to a Subsidiary imposed
pursuant to an agreement that has been entered into in connection with the
Disposition of all or substantially all of the Capital Stock or assets of such
Subsidiary, and (iii) any restrictions on the ability of any Subsidiary to
transfer any such
79
asset imposed by the provisions of the documentation pursuant to which there
shall have been created a Lien permitted by Section 7.3.
7.15 LINES OF BUSINESS. Enter into any business, either directly or
through any Subsidiary, except for the manufacture, distribution and sale of
personal protection and safety equipment products intended for use in the
workplace.
7.16 LIMITATION ON LEASE EXPENSE. Permit Lease Expense to exceed
$9,000,000 for any fiscal year of NSP.
7.17 CHANGE OF NAME. Permit the Canadian Borrower or any Canadian
Subsidiary Guarantor to change its name, unless a 30-day prior written notice
has been given to the Canadian Lender.
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) the Borrowers shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms hereof; or
the Borrowers shall fail to pay any interest on any Loan or Reimbursement
Obligation, or any other amount payable hereunder or under any other Loan
Document, within five days after any such interest or other amount becomes
due in accordance with the terms hereof; or
(b) any representation or warranty made or deemed made by any Loan
Party herein or in any other Loan Document or that is contained in any
certificate, document or financial or other statement furnished by it at
any time under or in connection with this Agreement or any such other Loan
Document shall prove to have been inaccurate in any material respect on or
as of the date made or deemed made; or
(c) (i) any Loan Party shall default in the observance or performance
of any agreement contained in Section 2.9(e), clause (i) or (ii) of Section
6.4(a) (with respect to NSP only), Section 6.7(a) or Section 7 of this
Agreement or Sections 5.5 and 5.7(b) of the Guarantee and Collateral
Agreement or (ii) an "Event of Default" under and as defined in any
Mortgage or in any of the Canadian Loan Documents shall have occurred and
be continuing; or
(d) any Loan Party shall default in the observance or performance of
any other agreement contained in this Agreement or any other Loan Document
(other than as provided in paragraphs (a) through (c) of this Section), and
such default shall continue unremedied for a period of 30 days after notice
to NSP from the Administrative Agent or any Lender; or
(e) NSP or any of its Subsidiaries shall (i) default in making any
payment of any principal of any Indebtedness (including any Guarantee
Obligation, but excluding the Loans) on the scheduled or original due date
with respect thereto; or (ii) default in making any payment of any interest
on any such Indebtedness beyond the period of grace, if any, PROVIDED in
the instrument or agreement under which such Indebtedness
80
was created; or (iii) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness or contained in
any instrument or agreement evidencing, securing or relating thereto, or
any other event shall occur or condition exist, the effect of which default
or other event or condition is to cause, or to permit the holder or
beneficiary of such Indebtedness (or a trustee or agent on behalf of such
holder or beneficiary) to cause, with the giving of notice if required,
such Indebtedness to become due prior to its stated maturity or (in the
case of any such Indebtedness constituting a Guarantee Obligation) to
become payable; PROVIDED, that a default, event or condition described in
clause (i), (ii) or (iii) of this paragraph (e) shall not at any time
constitute an Event of Default unless, at such time, one or more defaults,
events or conditions of the type described in clauses (i), (ii) and (iii)
of this paragraph (e) shall have occurred and be continuing with respect to
Indebtedness the outstanding principal amount of which exceeds in the
aggregate $1,000,000 (or the C$ Equivalent thereof); or
(f) (i) NSP or any of its Subsidiaries shall commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or
its debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any substantial
part of its assets, or NSP or any of its Subsidiaries shall make a general
assignment for the benefit of its creditors; or (ii) there shall be
commenced against NSP or any of its Subsidiaries any case, proceeding or
other action of a nature referred to in clause (i) above that (A) results
in the entry of an order for relief or any such adjudication or appointment
or (B) remains undismissed, undischarged or unbonded for a period of 60
days; or (iii) there shall be commenced against NSP or any of its
Subsidiaries any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against all
or any substantial part of its assets that results in the entry of an order
for any such relief that shall not have been vacated, discharged, or stayed
or bonded pending appeal within 60 days from the entry thereof; or (iv) NSP
or any of its Subsidiaries shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts
set forth in clause (i), (ii), or (iii) above; or (v) NSP or any of its
Subsidiaries shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due; or
(g) (i) any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of NSP or
any Commonly Controlled Entity, (iii) a Reportable Event shall occur with
respect to, or proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed, to administer or to terminate, any Single
Employer Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the U.S. Required
Lenders, likely to result in the termination of such Plan for purposes of
Title IV of ERISA, (iv) any
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Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v)
NSP or any Commonly Controlled Entity shall, or in the reasonable opinion
of the U.S. Required Lenders is likely to, incur any liability in
connection with a withdrawal from, or the Insolvency or Reorganization of,
a Multiemployer Plan or (vi) any other event or condition shall occur or
exist with respect to a Plan; and in each case in clauses (i) through (vi)
above, such event or condition, together with all other such events or
conditions, if any, could, in the opinion of the U.S. Required Lenders,
reasonably be expected to have a Material Adverse Effect; or
(h) one or more judgments or decrees shall be entered against NSP or
any of its Subsidiaries involving in the aggregate a liability (not paid or
fully covered by insurance or Invensys as to which the relevant insurance
company or Invensys, as the case may be, has acknowledged coverage) of
$1,000,000 (or the C$ Equivalent thereof) or more, and all such judgments
or decrees shall not have been vacated, discharged, stayed or bonded
pending appeal within 30 days from the entry thereof; or
(i) any of the Security Documents shall cease, for any reason, to be
in full force and effect in all material respects, or any Loan Party or any
Affiliate of any Loan Party shall so assert, or any Lien created by any of
the Security Documents shall cease to be enforceable and of the same effect
and priority purported to be created thereby other than as to Collateral
having an aggregate value less than $1,000,000 or as a result of the
Administrative Agent's failure to take any necessary action with respect to
the Collateral or the Security Documents; or
(j) any guarantee contained in Section 2 of the Guarantee and
Collateral Agreement or in any Canadian Security Document shall cease, for
any reason, to be in full force and effect or any Loan Party or any
Affiliate of any Loan Party shall so assert; or
(k) (i) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT")) other than the Permitted Holders shall become, or obtain
rights (whether by means or warrants, options or otherwise) to become, the
"beneficial owner" (as defined in Rules 13(d)-3 and 13(d)-5 under the
Exchange Act), directly or indirectly, of more than 33-1/3% of the
outstanding common stock of NSP; (ii) Holdco shall cease to be the sole
manager of NSP or a majority of the managers of Holdco shall not have been
elected by the Argosy Group and the ▇▇▇▇▇▇▇ Group (each as defined in the
Holdco L.L.C. Agreement as in effect on the Original Closing Date) or (iii)
a Specified Change of Control shall occur; or
(l) the Senior Subordinated Notes or the guarantees of the Senior
Subordinated Notes shall cease, for any reason, to be validly subordinated
to the Obligations or the obligations of the U.S. Subsidiary Guarantors
under the Guarantee and Collateral Agreement, as the case may be, as
provided in the Note Agreement, or any Loan Party, any Affiliate of any
Loan Party, or the holders of at least 25% in aggregate principal amount of
the Senior Subordinated Notes shall so assert;
82
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to any Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (including the face amount of all Bankers' Acceptances accepted by the
Canadian Lender), with accrued interest thereon and all other amounts owing
under this Agreement and the other Loan Documents (including all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) shall immediately
become due and payable, and (B) if such event is any other Event of Default, any
or all of the following actions may be taken: (i) with the consent of the
Requisite U.S. Revolving Facility Lenders, the Administrative Agent may, or upon
the request of the Requisite U.S. Revolving Facility Lenders, the Administrative
Agent shall, by notice to NSP declare the U.S. Revolving Commitments to be
terminated forthwith, whereupon the U.S. Revolving Commitments shall immediately
terminate; (ii) the Canadian Lender may, by notice to the Canadian Borrower,
declare the Canadian Commitment to be terminated forthwith, whereupon the
Canadian Commitments shall immediately terminate; (iii) with the consent of the
U.S. Required Lenders, the Administrative Agent may, or upon the request of the
U.S. Required Lenders, the Administrative Agent shall, by notice to NSP, declare
the U.S. Loans hereunder (with accrued interest thereon) and all other amounts
owing under this Agreement and the other Loan Documents (including all amounts
of L/C Obligations, whether or not the beneficiaries of the then outstanding
Letters of Credit shall have presented the documents required thereunder to the
U.S. Borrowers) to be due and payable forthwith, whereupon the same shall
immediately become due and payable; and (iv) the Canadian Lender may, by notice
to the Canadian Borrower, declare the Canadian Loans hereunder (including the
face amount of all Bankers' Acceptances accepted by the Canadian Lender), with
accrued interest thereon, and all other amounts owing under this Agreement and
the other Loan Documents to be due and payable forthwith, whereupon the same
shall immediately become due and payable.
With respect to all U.S. Letters of Credit and Canadian Letters of
Credit with respect to which presentment for honor shall not have occurred at
the time of an acceleration pursuant to this paragraph, the U.S. Borrowers and
the Canadian Borrower, as the case may be, shall at such time deposit in a cash
collateral account opened by the Administrative Agent or the Canadian Lender, as
the case may be, an amount equal to the aggregate then undrawn and unexpired
amount of such U.S. Letters of Credit or Canadian Letters of Credit, as the case
may be. Amounts held in such cash collateral account shall be applied by the
Administrative Agent or the Canadian Lender, as the case may be, to the payment
of drafts drawn under such U.S. Letters of Credit or Canadian Letters of Credit,
as the case may be, and the unused portion thereof after all such U.S. Letters
of Credit or Canadian Letters of Credit, as the case may be, shall have expired
or been fully drawn upon, if any, shall be applied to repay other obligations of
the U.S. Borrowers and the Canadian Borrower, as the case may be, hereunder and
under the other Loan Documents. After all such U.S. Letters of Credit or
Canadian Letters of Credit, as the case may be, shall have expired or been fully
drawn upon, all Reimbursement Obligations shall have been satisfied and all
other obligations of NSP and the Canadian Borrower, as the case may be,
hereunder and under the other Loan Documents shall have been paid in full, the
balance, if any, in such cash collateral account shall be returned to the
relevant Borrowers (or such other Person as may be lawfully entitled thereto).
Except as expressly provided above in this Section, presentment, demand, protest
and all other notices of any kind are hereby expressly waived by NSP and the
Canadian Borrower.
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With respect to all Bankers' Acceptances which are outstanding at the
time the Canadian Lender takes any action pursuant to clause (iv) of the second
preceding paragraph, the Canadian Borrower shall at such time deposit in a cash
collateral account opened by the Canadian Lender an amount of cash equal to the
aggregate undiscounted face amount of all unmatured Bankers' Acceptances.
Amounts held in such account shall be applied to pay maturing Bankers'
Acceptances, and the unused portion thereof after all such Bankers' Acceptances
shall have matured, if any, shall be applied to repay other obligations of the
Canadian Borrower hereunder. After all Bankers' Acceptances shall have been
satisfied and all other obligations of the Canadian Borrower hereunder shall
have been paid in full, the balance, if any, in such cash collateral account
shall be returned to the Canadian Borrower.
SECTION 9. THE AGENTS
9.1 APPOINTMENT. Each U.S. Lender hereby irrevocably designates and
appoints the Administrative Agent and the Syndication Agent as the agents of
such Lender under this Agreement and the other Loan Documents, and each such
Lender irrevocably authorizes the Administrative Agent and the Syndication
Agent, in such capacities, to take such action on its behalf under the
provisions of this Agreement and the other Loan Documents and to exercise such
powers and perform such duties as are expressly delegated to the Administrative
Agent or the Syndication Agent, as the case may be, by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, neither the Administrative Agent nor the
Syndication Agent shall have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any U.S. Lender,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent or the Syndication Agent.
9.2 DELEGATION OF DUTIES. The Administrative Agent and the
Syndication Agent may execute any of their respective duties under this
Agreement and the other Loan Documents by or through agents or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters pertaining to
such duties. Neither the Administrative Agent nor the Syndication Agent shall be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
9.3 EXCULPATORY PROVISIONS. Neither any Agent nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from its or such Person's own gross negligence or willful misconduct)
or (ii) responsible in any manner to any of the U.S. Lenders for any recitals,
statements, representations or warranties made by any Loan Party or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agents under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of any Loan Party a party thereto
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to perform its obligations hereunder or thereunder. The Agents shall not be
under any obligation to any U.S. Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of any Loan Party.
9.4 RELIANCE BY ADMINISTRATIVE AGENT AND SYNDICATION AGENT. The
Administrative Agent and the Syndication Agent shall be entitled to rely, and
shall be fully protected in relying, upon any instrument, writing, resolution,
notice, consent, certificate, affidavit, letter, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including counsel to
NSP), independent accountants and other experts selected by the Administrative
Agent or the Syndication Agent, as the case may be. The Administrative Agent or
the Syndication Agent, as the case may be, may deem and treat the payee of any
Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent or the Syndication Agent, as the case may be. The
Administrative Agent and the Syndication Agent shall each be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the U.S.
Required Lenders (or, if so specified by this Agreement, all U.S. Lenders) as it
deems appropriate or it shall first be indemnified to its satisfaction by the
U.S. Lenders against any and all liability and expense that may be incurred by
it by reason of taking or continuing to take any such action. The Administrative
Agent and the Syndication Agent shall each in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and the other Loan
Documents in accordance with a request of the U.S. Required Lenders (or, if so
specified by this Agreement, all U.S. Lenders), and such request and any action
taken or failure to act pursuant thereto shall be binding upon all the U.S.
Lenders and all future holders of the Loans.
9.5 NOTICE OF DEFAULT. Neither the Administrative Agent nor the
Syndication Agent shall be deemed to have knowledge or notice of the occurrence
of any Default or Event of Default hereunder unless the Administrative Agent or
the Syndication Agent, as the case may be, has received notice from a Lender or
NSP referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall give
notice thereof to the Lenders. The Administrative Agent shall take such action
with respect to such Default or Event of Default as shall be reasonably directed
by the Required Lenders (or, if so specified by this Agreement, all Lenders);
PROVIDED that unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the
Lenders; PROVIDED, FURTHER that with respect to the termination of the U.S.
Revolving Commitments and/or the acceleration of the U.S. Loans, the
Administrative Agent shall take such action with respect to such termination
and/or acceleration as shall be reasonably directed by the U.S. Revolving
Facility Lenders and/or the U.S. Required Lenders, respectively.
9.6 NON-RELIANCE ON AGENTS AND OTHER U.S. LENDERS. Each U.S. Lender
expressly acknowledges that neither the Agents nor any of their respective
officers, directors,
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employees, agents, attorneys-in-fact or affiliates have made any representations
or warranties to it and that no act by any Agent hereinafter taken, including
any review of the affairs of a Loan Party or any affiliate of a Loan Party,
shall be deemed to constitute any representation or warranty by any Agent to any
U.S. Lender. Each U.S. Lender represents to the Agents that it has,
independently and without reliance upon any Agent or any other U.S. Lender, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their
affiliates and made its own decision to make its Loans hereunder and enter into
this Agreement. Each U.S. Lender also represents that it will, independently and
without reliance upon any Agent or any other U.S. Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates. Except for notices, reports and other
documents expressly required to be furnished to the U.S. Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any U.S. Lender with any credit or other
information concerning the business, operations, property, condition (financial
or otherwise), prospects or creditworthiness of any Loan Party or any affiliate
of a Loan Party that may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
9.7 INDEMNIFICATION. The U.S. Lenders agree to indemnify each Agent
in its capacity as such (to the extent not reimbursed by the Borrowers and
without limiting the obligation of the Borrowers to do so), ratably according to
their respective Aggregate Exposure Percentages in effect on the date on which
indemnification is sought under this Section (or, if indemnification is sought
after the date upon which the Commitments shall have terminated and the Loans
shall have been paid in full, ratably in accordance with such Aggregate Exposure
Percentages immediately prior to such date), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever that may at any time
(whether before or after the payment of the Loans) be imposed on, incurred by or
asserted against such Agent in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by such Agent
under or in connection with any of the foregoing; PROVIDED that no U.S. Lender
shall be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements that are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from such Agent's gross negligence or
willful misconduct. The agreements in this Section shall survive the payment of
the Loans and all other amounts payable hereunder.
9.8 AGENT IN ITS INDIVIDUAL CAPACITY. Each Agent and its affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with any Loan Party as though such Agent was not an Agent. With respect
to its Loans made or renewed by it and with respect to any Letter of Credit
issued or participated in by it, each Agent shall have the same rights and
powers under this Agreement and the other Loan Documents as any U.S. Lender
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and may exercise the same as though it were not an Agent, and the terms "U.S.
Lender" and "U.S. Lenders" shall include each Agent in its individual capacity.
9.9 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign as Administrative Agent upon 10 days' notice to the U.S. Lenders and NSP.
If the Administrative Agent shall resign as Administrative Agent under this
Agreement and the other Loan Documents, then the U.S. Required Lenders shall
appoint from among the U.S. Lenders a successor agent for the U.S. Lenders,
which successor agent shall (unless an Event of Default under Section 8(a) or
Section 8(f) with respect to any Borrower shall have occurred and be continuing)
be subject to approval by NSP (which approval shall not be unreasonably withheld
or delayed), whereupon such successor agent shall succeed to the rights, powers
and duties of the Administrative Agent, and the term "Administrative Agent"
shall mean such successor agent effective upon such appointment and approval,
and the former Administrative Agent's rights, powers and duties as
Administrative Agent shall be terminated, without any other or further act or
deed on the part of such former Administrative Agent or any of the parties to
this Agreement or any holders of the Loans. If no successor agent has accepted
appointment as Administrative Agent by the date that is 10 days following a
retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become effective
and the U.S. Lenders shall assume and perform all of the duties of the
Administrative Agent hereunder until such time, if any, as the U.S. Required
Lenders appoint a successor agent as provided for above. After any retiring
Administrative Agent's resignation as Administrative Agent, the provisions of
this Section 9 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Administrative Agent under this Agreement and the
other Loan Documents.
9.10 AUTHORIZATION TO RELEASE GUARANTEES AND LIENS. Notwithstanding
anything to the contrary contained herein or in any other Loan Document, the
Administrative Agent is hereby irrevocably authorized by each of the U.S.
Lenders (without requirement of notice to or consent of any U.S. Lender except
as expressly required by Section 10.1) to take any action requested by NSP
having the effect of releasing any Collateral or guarantee obligations to the
extent necessary to permit consummation of any transaction not prohibited by any
Loan Document or that has been consented to in accordance with Section 10.1.
9.11 DOCUMENTATION AGENT. The Documentation Agent shall not have any
duties or responsibilities hereunder in its capacity as such.
SECTION 10. MISCELLANEOUS
10.1 AMENDMENTS AND WAIVERS. Except as provided in Section 2.25,
neither this Agreement, any other Loan Document, nor any terms hereof or thereof
may be amended, supplemented or modified except in accordance with the
provisions of this Section 10.1. The Required Lenders and each Loan Party party
to the relevant Loan Document may, or, with the written consent of the Required
Lenders, the Administrative Agent and each Loan Party party to the relevant Loan
Document may, from time to time, (a) enter into written amendments, supplements
or modifications hereto and to the other Loan Documents for the purpose of
adding any provisions to this Agreement or the other Loan Documents or changing
in any manner the rights of the Lenders or of the Loan Parties hereunder or
thereunder or (b) waive, on such terms
87
and conditions as the Required Lenders or the Administrative Agent, as the case
may be, may specify in such instrument, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and its
consequences; PROVIDED, however, that no such waiver and no such amendment,
supplement or modification shall (i) forgive the principal amount or extend the
final scheduled date of maturity of any Loan, extend the scheduled date of any
amortization payment in respect of any Term Loan, reduce the stated rate of any
interest or fee payable hereunder or extend the scheduled date of any payment
thereof, or increase the amount or extend the expiration date of any Lender's
Revolving Commitment, in each case without the consent of each Lender directly
affected thereby; (ii) reduce any percentage specified in the definition of
Required Lenders or U.S. Required Prepayment Lenders, consent to the assignment
or transfer by NSP of any of its rights and obligations under this Agreement and
the other Loan Documents, release all or substantially all of the Collateral or
release any material Guarantor from its obligations under the Guarantee and
Collateral Agreement, in each case without the written consent of all U.S.
Lenders; (iii) eliminate or reduce the voting rights of any Lender under this
Section 10.1 without the written consent of such Lender; (iv) amend, modify or
waive any condition precedent to any extension of credit under the U.S.
Revolving Facility set forth in Section 5.2 (including in connection with any
waiver of an existing Default or Event of Default) without the written consent
of the Requisite U.S. Revolving Facility Lenders; (v) amend, modify or waive any
provision of Section 2.17 without the consent of the Requisite Lenders in
respect of each Facility adversely affected thereby; (vi) reduce the percentage
specified in the definition of Requisite Lenders with respect to any Facility
without the written consent of all Lenders under such Facility; (vii) amend,
modify or waive any provision of Section 9 without the written consent of the
Administrative Agent; (ix) amend, modify or waive any provision of Section 2.5
without the written consent of the Swingline Lender; or (x) amend, modify or
waive any provision of Section 3 without the written consent of the U.S. Issuing
Lender. Any such waiver and any such amendment, supplement or modification shall
apply equally to each of the Lenders and shall be binding upon the Loan Parties,
the Lenders, the Administrative Agent and all future holders of the Loans. In
the case of any waiver, the Loan Parties, the Lenders and the Administrative
Agent shall be restored to their former position and rights hereunder and under
the other Loan Documents, and any Default or Event of Default waived shall be
deemed to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Default or Event of Default, or impair any right consequent
thereon.
10.2 NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of NSP, the Administrative Agent and
the Canadian Lender, and as set forth in an administrative questionnaire
delivered to the Administrative Agent in the case of the U.S. Lenders, or to
such other address as may be hereafter notified by the respective parties
hereto:
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NSP: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
Aon Center
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇▇▇▇ Katznelson ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: Me ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative Agent: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
MADE 10011A
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
The Canadian Lender: Canadian Imperial Bank of Commerce
Commercial Banking Center
▇▇▇▇ ▇▇▇▇-▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: The Manager
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
PROVIDED that any notice, request or demand to or upon the Administrative Agent,
the Canadian Lender or the U.S. Lenders shall not be effective until received.
10.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude
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any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges herein
provided are cumulative and not exclusive of any rights, remedies, powers and
privileges provided by law.
10.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans and other extensions of credit hereunder.
10.5 PAYMENT OF EXPENSES AND TAXES. The Borrowers agree (a) to pay
or reimburse the Administrative Agent, the Syndication Agent and the Canadian
Lender for all their reasonable out-of-pocket costs and expenses incurred in
connection with the development, preparation and execution of, and any
amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including the reasonable fees and disbursements of counsel to the
Administrative Agent, the Syndication Agent and the Canadian Lender and filing
and recording fees and expenses, with statements with respect to the foregoing
to be submitted to NSP prior to the Closing Date (in the case of amounts to be
paid on the Closing Date) and from time to time thereafter on a quarterly basis
or such other periodic basis as the Administrative Agent shall deem appropriate,
(b) to pay or reimburse each Lender and the Administrative Agent for all its
costs and expenses incurred in connection with the enforcement or preservation
of any rights under or workout or restructuring of this Agreement, the other
Loan Documents and any such other documents, including the fees and
disbursements of counsel (including the allocated fees and expenses of in-house
counsel) to each Lender and of counsel to the Administrative Agent, (c) to pay,
indemnify, and hold each Lender, the Arranger and the Administrative Agent
harmless from, any and all recording and filing fees and any and all liabilities
with respect to, or resulting from any delay in paying, stamp, excise and other
taxes, if any, that may be payable or determined to be payable in connection
with the execution and delivery of, or consummation or administration of any of
the transactions contemplated by, or any amendment, supplement or modification
of, or any waiver or consent under or in respect of, this Agreement, the other
Loan Documents and any such other documents, and (d) to pay, indemnify, and hold
each Lender, the Arranger and the Administrative Agent and their respective
officers, directors, employees, affiliates, agents and controlling persons
(each, an "INDEMNITEE") harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement, the other Loan Documents and any such other documents, including any
of the foregoing relating to the use of proceeds of the Loans or the violation
of, noncompliance with or liability under, any Environmental Law applicable to
the operations of any Borrower, any of their Subsidiaries or any of the Group
Properties and the reasonable fees and expenses of legal counsel in connection
with claims, actions or proceedings by any Indemnitee against any Loan Party
under any Loan Document (all the foregoing in this clause (d), collectively, the
"Indemnified Liabilities"), PROVIDED, that the Borrowers shall have no
obligation hereunder to any Indemnitee with respect to Indemnified Liabilities
to the extent such Indemnified Liabilities (i) are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of such Indemnitee or (ii) arise
from disputes among the
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Agents or among the Lenders. All amounts due under this Section 10.5 shall be
payable promptly after written demand therefor. Statements payable by the
Borrowers pursuant to this Section 10.5 shall be submitted to ▇▇▇▇▇ ▇▇▇▇▇
(Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇) (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇), at the address of
NSP set forth in Section 10.2, or to such other Person or address as may be
hereafter designated by NSP in a written notice to the Administrative Agent. The
agreements in this Section 10.5 shall survive repayment of the Loans and all
other amounts payable hereunder.
10.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS. (a)
This Agreement shall be binding upon and inure to the benefit of the Borrowers,
the Lenders, the Administrative Agent, all future holders of the Loans and their
respective successors and assigns, except that no Borrower may assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of each Lender.
(b) Any Lender may, without the consent of any Borrower, in accordance
with applicable law, at any time sell to one or more banks, financial
institutions or other entities (each, a "PARTICIPANT") participating interests
in any Loan owing to such Lender, any Commitment of such Lender or any other
interest of such Lender hereunder and under the other Loan Documents. In the
event of any such sale by a Lender of a participating interest to a Participant,
such Lender's obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, such Lender shall remain the holder of any such
Loan for all purposes under this Agreement and the other Loan Documents, and NSP
and the Administrative Agent shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Agreement and the other Loan Documents. In no event shall any Participant under
any such participation have any right to approve any amendment or waiver of any
provision of any Loan Document, or any consent to any departure by any Loan
Party therefrom, except to the extent that such amendment, waiver or consent
would reduce the principal of, or interest on, the Loans or any fees payable
hereunder, or postpone the date of the final maturity of the Loans, in each case
to the extent subject to such participation. The Borrowers agree that if amounts
outstanding under this Agreement and the Loans are due or unpaid, or shall have
been declared or shall have become due and payable upon the occurrence of an
Event of Default, each Participant shall, to the maximum extent permitted by
applicable law, be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement, PROVIDED that, in purchasing such participating
interest, such Participant shall be deemed to have agreed to share with the
Lenders the proceeds thereof as provided in Section 10.7(a) as fully as if it
were a Lender hereunder. The Borrowers also agree that each Participant shall be
entitled to the benefits of Sections 2.16, 2.17 and 2.18 with respect to its
participation in the Commitments and the Loans outstanding from time to time as
if it was a Lender; PROVIDED that, in the case of Section 2.17, such Participant
shall have complied with the requirements of said Section and PROVIDED, FURTHER,
that no Participant shall be entitled to receive any greater amount pursuant to
any such Section than the transferor Lender would have been entitled to receive
in respect of the amount of the participation transferred by such transferor
Lender to such Participant had no such transfer occurred.
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(c) Any Lender (an "ASSIGNOR") may, in accordance with applicable law,
at any time and from time to time assign to any Lender or any affiliate thereof
or, with the consent of NSP and the Administrative Agent (which, in each case,
shall not be unreasonably withheld or delayed), to an additional bank, financial
institution or other entity (an "ASSIGNEE") all or any part of its rights and
obligations under this Agreement pursuant to an Assignment and Acceptance,
executed by such Assignee, such Assignor and any other Person whose consent is
required pursuant to this paragraph, and delivered to the Administrative Agent
for its acceptance and recording in the Register; PROVIDED that no such
assignment to an Assignee (other than any Lender or any affiliate thereof)
shall, unless otherwise agreed by NSP and the Administrative Agent, be in an
aggregate principal amount (treating multiple, simultaneous assignments to two
or more Approved Funds managed by the same investment advisor as a single
assignment) of less than (i) $1,000,000, in the case of the Term Loans, (ii)
$2,500,000, in the case of the U.S. Revolving Loans, or (iii) C$2,500,000, in
the case of the Canadian Loans, unless the entire Commitments and Loans and
other interests of the assigning Lender (and of all Lenders which are Approved
Funds managed by the same investment advisor as the assigning Lender) are so
assigned; and PROVIDED FURTHER that no such assignment of all or any part of the
Canadian Commitment or the Canadian Extensions of Credit shall be made in favor
of any Person which is a non-resident of Canada for the purpose of Section 212
of the Income Tax Act (Canada). Any such assignment need not be ratable as among
the Facilities. Upon such execution, delivery, acceptance and recording, from
and after the effective date determined pursuant to such Assignment and
Acceptance, (x) the Assignee thereunder shall be a party hereto and, to the
extent provided in such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder with a Commitment and/or Loans as set forth
therein, and (y) the Assignor thereunder shall, to the extent provided in such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of an Assignor's
rights and obligations under this Agreement, such Assignor shall cease to be a
party hereto). Notwithstanding any provision of this Section 10.6, the consent
of NSP shall not be required for any assignment that occurs when an Event of
Default shall have occurred and be continuing.
(d) The Administrative Agent shall, on behalf of NSP, maintain at its
address referred to in Section 10.2 a copy of each Assignment and Acceptance
delivered to it and a register (the "REGISTER") for the recordation of the names
and addresses of the Lenders and the Commitment of, and the principal amount of
the Loans owing to, each Lender from time to time. The entries in the Register
shall be conclusive, in the absence of manifest error, and the Borrowers, each
other Loan Party, the Administrative Agent and the Lenders shall treat each
Person whose name is recorded in the Register as the owner of the Loans and any
Notes evidencing the Loans recorded therein for all purposes of this Agreement.
Any assignment of any Loan, whether or not evidenced by a Note, shall be
effective only upon appropriate entries with respect thereto being made in the
Register (and each Note shall expressly so provide). Any assignment or transfer
of all or part of a Loan evidenced by a Note shall be registered on the Register
only upon surrender for registration of assignment or transfer of the Note
evidencing such Loan, accompanied by a duly executed Assignment and Acceptance,
and thereupon one or more new Notes shall be issued to the designated Assignee.
(e) Upon its receipt of an Assignment and Acceptance executed by an
Assignor, an Assignee and any other Person whose consent is required by Section
10.6(c), together with
92
payment to the Administrative Agent of a registration and processing fee of
$3,500, the Administrative Agent shall (i) promptly accept such Assignment and
Acceptance and (ii) record the information contained therein in the Register on
the effective date determined pursuant thereto.
(f) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this Section 10.6 concerning assignments of Loans and
Notes relate only to absolute assignments and that such provisions do not
prohibit assignments creating security interests, including any pledge or
assignment by a Lender of any Loan or Note to any Federal Reserve Bank in
accordance with applicable law.
(g) The Borrowers, upon receipt of written notice from the relevant
Lender, agrees to issue Notes to any Lender requiring Notes to facilitate
transactions of the type described in paragraph (f) above.
10.7 ADJUSTMENTS; SET-OFF. (a) Except to the extent that this
Agreement expressly provides for payments to be allocated to a particular Lender
(other than the Canadian Lender) or to the Lenders under a particular Facility
(other than the Canadian Facility), if any Lender (a "BENEFITED LENDER") shall,
at any time after the Loans and other amounts payable hereunder shall
immediately become due and payable pursuant to Section 8, receive any payment of
all or part of the Obligations owing to it, or receive any collateral in respect
thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in Section 8(f), or otherwise), in a
greater proportion than any such payment to or collateral received by any other
Lender, if any, in respect of the Obligations owing to such other Lender, such
Benefited Lender shall purchase for cash from the other Lenders a participating
interest in such portion of the Obligations owing to each such other Lender, or
shall provide such other Lenders with the benefits of any such collateral, as
shall be necessary to cause such Benefited Lender to share the excess payment or
benefits of such collateral ratably with each of the Lenders; PROVIDED, however,
that if all or any portion of such excess payment or benefits is thereafter
recovered from such Benefited Lender, such purchase shall be rescinded, and the
purchase price and benefits returned, to the extent of such recovery, but
without interest.
(b) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right, without prior notice to any Borrower, any
such notice being expressly waived by the Borrowers to the extent permitted by
applicable law, upon any amount becoming due and payable by the Borrowers
hereunder (whether at the stated maturity, by acceleration or otherwise), to set
off and appropriate and apply against such amount any and all deposits (general
or special, time or demand, provisional or final), in any currency, and any
other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch or agency thereof to or for the
credit or the account of any Borrower, as the case may be. Each Lender agrees
promptly to notify NSP and the Administrative Agent after any such setoff and
application made by such Lender, PROVIDED that the failure to give such notice
shall not affect the validity of such setoff and application.
10.8 COUNTERPARTS. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts, and all of
said counterparts
93
taken together shall be deemed to constitute one and the same instrument.
Delivery of an executed signature page of this Agreement by facsimile
transmission shall be effective as delivery of a manually executed counterpart
hereof. A set of the copies of this Agreement signed by all the parties shall be
lodged with NSP, the Administrative Agent and the Canadian Lender.
10.9 SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10 INTEGRATION. This Agreement and the other Loan Documents
represent the agreement of the Borrowers, the Administrative Agent and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
NOTWITHSTANDING THE FOREGOING, HOWEVER, ALL CLAIMS AND RIGHTS OF ACTION OF THE
CANADIAN LENDER AGAINST THE CANADIAN BORROWER OR ANY OF THEM HEREUNDER OR UNDER
THE CANADIAN LOAN DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE PROVINCE OF
QUEBEC (EXCLUDING ANY PROVISION
THEREOF WHICH MAY MAKE THE LAWS OF ANOTHER JURISDICTION APPLICABLE) AND THE LAWS
OF CANADA APPLICABLE THEREIN.
10.12 SUBMISSION TO JURISDICTION; WAIVERS. Each Borrower hereby
irrevocably and unconditionally:
(a) if it is a U.S. Borrower or the Canadian Borrower, submits for
itself and its property in any legal action or proceeding relating to this
Agreement and the other Loan Documents to which it is a party, or for
recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the State of New York,
the courts of the United States for the Southern District of New York, and
appellate courts from any thereof; and, if it is the Canadian Borrower,
submits for itself and its property in any legal or proceeding relating to
this Agreement and the Canadian Loan Documents to which it is a party, or
for recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the Province of
Quebec;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
94
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to NSP, as
the case may be at its address set forth in Section 10.2 or at such other
address of which the Administrative Agent (and in the case of the Canadian
Borrower, the Canadian Lender) shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this Section any special, exemplary, punitive or consequential damages.
10.13 ACKNOWLEDGEMENTS. Each Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to any Borrower arising out of or in connection
with this Agreement or any of the other Loan Documents, and the
relationship between Administrative Agent and Lenders, on one hand, and the
Borrowers, on the other hand, in connection herewith or therewith is solely
that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among
the Lenders or among NSP and the Lenders.
10.14 CONFIDENTIALITY. Each of the Administrative Agent and each
Lender agrees to keep confidential all non-public information provided to it by
any Loan Party pursuant to this Agreement that is designated by such Loan Party
as confidential; PROVIDED that nothing herein shall prevent the Administrative
Agent or any Lender from disclosing any such information (a) to the
Administrative Agent, any other Lender or any affiliate of any Lender, (b) to
any Transferee or prospective Transferee that agrees to comply with the
provisions of this Section, (c) to its employees, directors, agents, attorneys,
accountants and other professional advisors or those of any of its affiliates,
(d) upon the request or demand of any Governmental Authority, (e) in response to
any order of any court or other Governmental Authority or as may otherwise be
required pursuant to any Requirement of Law, (f) if requested or required to do
so in connection with any litigation or similar proceeding, (g) that has been
publicly disclosed, (h) to the National Association of Insurance Commissioners
or any similar organization or any nationally recognized rating agency that
requires access to information about a Lender's investment portfolio in
connection with ratings issued with respect to such Lender, (i) in connection
with the exercise of any remedy hereunder or under any other Loan Document or
(j) to any direct or indirect contractual counterparty in swap agreements or
such contractual counterparty's advisor
95
(so long as such contractual counterparty agrees to be bound by the provisions
of this Section 10.14).
10.15 JOINT AND SEVERAL OBLIGATIONS. All of the obligations of the
U.S. Borrowers hereunder shall be joint and several; PROVIDED, however, that in
no event shall the maximum liability of any U.S. Borrower in respect of
Obligations arising out of Loans and other extensions of credit made to the
other U.S. Borrowers exceed the greater of (a) the actual loan to such U.S.
Borrower and (b) the maximum amount which can be guaranteed by such U.S.
Borrower under applicable Federal and state laws relating to the insolvency of
debtors.
10.16 WAIVERS OF JURY TRIAL. THE BORROWERS, THE ADMINISTRATIVE AGENT
AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
10.17 CANADIAN AMENDMENTS AND WAIVERS. Neither the Canadian Loan
Documents nor any terms in respect of the Canadian Commitment hereof or thereof
may be amended, supplemented or modified without the prior written consent of
the Canadian Lender.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
NORCROSS SAFETY PRODUCTS L.L.C.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Executive Vice President/
Chief Financial Officer
NORTH SAFETY PRODUCTS INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Executive Vice President/
Chief Financial Officer
MORNING PRIDE MANUFACTURING L.L.C.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Executive Vice President/
Chief Financial Officer
NORTH SAFETY PRODUCTS LTD.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Executive Vice President/
Chief Financial Officer
FLEET NATIONAL BANK, as Administrative
Agent and as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
CANADIAN IMPERIAL BANK OF
COMMERCE, as Syndication Agent and as
Canadian Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Director
CIBC World Markets Corp.,
as Agent
CIBC INC., as a Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Director
CIBC World Markets Corp.,
as Agent
GENERAL ELECTRIC CAPITAL
CORPORATION, as Documentation Agent and as
a Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
Annex A
PRICING GRID FOR U.S. REVOLVING LOANS, U.S. SWINGLINE LOANS,
CANADIAN LOANS AND THE COMMITMENT FEE RATE
Applicable Margin
for Eurodollar Loans Applicable Margin
Consolidated Total and Bankers' for ABR Loans and Commitment Fee
Leverage Ratio Acceptances C$ Prime Loans Rate
------------------------------------------------------------------------------------------------------------
X GREATER THAN 4.25x 3.50% 2.50% 0.750%*
4.00x LESS THAN X LESS THAN OR EQUAL TO 4.25x 3.50% 2.50% 0.625%*
3.50x LESS THAN X LESS THAN OR EQUAL TO 4.00x 3.25% 2.25% 0.500%
3.00x LESS THAN X LESS THAN OR EQUAL TO 3.50x 3.00% 2.00% 0.500%
2.50x LESS THAN X LESS THAN OR EQUAL TO 3.00x 2.75% 1.75% 0.500%
X LESS THAN OR EQUAL TO 2.50x 2.50% 1.50% 0.375%
Changes in the Applicable Margin and the Commitment Fee Rate resulting from
changes in the Consolidated Total Leverage Ratio shall become effective on the
date (the "ADJUSTMENT DATE") on which financial statements are delivered to the
Lenders pursuant to Section 6.1(a) (but in any event not later than the 45th day
after the end of each of the first three quarterly periods of each fiscal year
or the 90th day after the end of each fiscal year, as the case may be) and shall
remain in effect until the next change to be effected pursuant to this
paragraph; PROVIDED that the foregoing changes in the Applicable Margin and the
Commitment Fee Rate shall not be effective until at least two full fiscal
quarters of NSP after the Closing Date have been completed. If any financial
statements referred to above are not delivered within the time periods specified
above, then, until such financial statements are delivered the Consolidated
Total Leverage Ratio as at the end of the fiscal period that would have been
covered thereby shall for the purposes of this definition be deemed to be
greater than 4.25 to 1.0. In addition, at all times while an Event of Default
shall have occurred and be continuing, the Consolidated Total Leverage Ratio
shall for the purposes of this definition be deemed to be greater than 4.25 to
1.0. Each determination of the Consolidated Total Leverage Ratio pursuant to
this pricing grid shall be made with respect to (or, in the case of Consolidated
Total Debt, as at the end of) the period of four consecutive fiscal quarters of
NSP ending at the end of the period covered by the relevant financial
statements.
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* Indicated Commitment Fee Rate shall be reduced to 0.50% at any time when,
in the case of commitment fees payable pursuant to (a) Section 2.6(a) in
respect of the U.S. Revolving Facility, the then Available U.S. Revolving
Commitment is less than 50% of the then Total U.S. Revolving Commitments or
(b) Section 2.6(c) in respect of the Canadian Facility, the then aggregate
Canadian Extensions of Credit are greater than 50% of the then Canadian
Commitment.