Exhibit 10.1
CREDIT AGREEMENT
dated as of
March 29, 2002
among
MAVERICK TUBE CORPORATION
MAVERICK TUBE, L.P.
MAVERICK GP, INC.
PRECISION TUBE HOLDING CORPORATION
MAVERICK INVESTMENT CORPORATION
PRECISION GP, LLC
PRECISION TUBE TECHNOLOGY, L.P.
as the US Borrowers
and
PRUDENTIAL STEEL LTD.
MAVERICK TUBE (CANADA) INC.
MAVERICK EXCHANGECO (NOVA SCOTIA) ULC
PRECISION TUBE CANADA LIMITED
as the Canadian Borrowers
and
JPMORGAN CHASE BANK, Individually and
as Issuing Bank and as Administrative Agent,
and
CIT BUSINESS CREDIT CANADA INC.
Individually and as Issuing Bank and as Canadian Administrative Agent,
and
GENERAL ELECTRIC CAPITAL CORPORATION, Individually and
as Documentation Agent
and
FINANCIAL INSTITUTIONS,
NOW OR HEREAFTER PARTIES HERETO
as Lenders
Domestic Revolving Credit Facility
Multi-Currency Canadian Revolving Credit Facility
Term Loan Facility
TABLE OF CONTENTS
Page No.
ARTICLE 1
DEFINITIONS; CONSTRUCTION
Section 1.1 Definitions.....................................................................................
Section 1.2 Accounting Terms and Determinations............................................................
Section 1.3 Other Definitional Terms.......................................................................
ARTICLE 2
AMOUNT AND TERMS OF LOANS
Section 2.1 Loans and Commitments..........................................................................
Section 2.2 Borrowing Requests.............................................................................
Section 2.3 Letters of Credit..............................................................................
Section 2.4 Disbursement of Funds..........................................................................
Section 2.5 Notes and Maturity.............................................................................
Section 2.6 Interest.......................................................................................
Section 2.7 Interest Periods...............................................................................
Section 2.8 Bankers' Acceptances...........................................................................
Section 2.9 Repayment of Loans.............................................................................
Section 2.10 Voluntary Termination or Reduction of Revolving Credit Commitments.............................
Section 2.11 Mandatory Prepayments; Voluntary Prepayments; Order of Application.............................
Section 2.12 Continuation and Conversion Options............................................................
Section 2.13 Fees...........................................................................................
Section 2.14 Payments, etc..................................................................................
Section 2.15 Interest Rate Not Ascertainable, etc...........................................................
Section 2.16 Illegality.....................................................................................
Section 2.17 Increased Costs................................................................................
Section 2.18 Change of Lending Office.......................................................................
Section 2.19 Funding Losses.................................................................................
Section 2.20 Sharing of Payments, etc.......................................................................
Section 2.21 Taxes..........................................................................................
Section 2.22 Pro Rata Treatment.............................................................................
Section 2.23 Replacement of Lenders.........................................................................
Section 2.24 Advances of Revolving Credit Loans to Satisfy Lender Indebtedness..............................
Section 2.25 Joint and Several Liability of US Borrowers; Rights of Contribution among US
Borrowers......................................................................................
Section 2.26 Participations in US Swingline Loans...........................................................
Section 2.27 Sharing Events.................................................................................
ARTICLE 3
CONDITIONS TO BORROWINGS
Section 3.1 Closing........................................................................................
Section 3.2 Conditions Precedent to All Loans and Letters of Credit........................................
Section 3.3 Post Closing Conditions........................................................................
ARTICLE 4
SECURITY
Section 4.1 Security Granted by US Credit Parties..........................................................
Section 4.2 Security Granted by Canadian Credit Parties....................................................
Section 4.3 Establishment of US Lockbox....................................................................
Section 4.4 Establishment of Canadian Lockbox..............................................................
i
Section 4.5 Establishment of US Blocked Account............................................................
Section 4.6 Establishment of Canadian Blocked Account......................................................
Section 4.7 Application of Proceeds of US Blocked Account..................................................
Section 4.8 Application of Proceeds of Canadian Blocked Account............................................
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
Section 5.1 Corporate Existence............................................................................
Section 5.2 Corporate Power and Authorization..............................................................
Section 5.3 Binding Obligations............................................................................
Section 5.4 No Legal Bar or Resultant Lien.................................................................
Section 5.5 No Consent.....................................................................................
Section 5.6 Financial Information..........................................................................
Section 5.7 Litigation.....................................................................................
Section 5.8 Use of Proceeds................................................................................
Section 5.9 US Employee Benefits...........................................................................
Section 5.10 Canadian Employee Benefits.....................................................................
Section 5.11 Taxes; Governmental Charges....................................................................
Section 5.12 Titles, etc....................................................................................
Section 5.13 Defaults.......................................................................................
Section 5.14 Casualties; Taking of Properties...............................................................
Section 5.15 Compliance with the Law........................................................................
Section 5.16 No Material Misstatements......................................................................
Section 5.17 Investment Company Act.........................................................................
Section 5.18 Public Utility Holding Company Act.............................................................
Section 5.19 Capital Structure..............................................................................
Section 5.20 Insurance......................................................................................
Section 5.21 Environmental Matters..........................................................................
Section 5.22 Solvency.......................................................................................
Section 5.23 Employee Matters...............................................................................
Section 5.24 Real Property..................................................................................
Section 5.25 Perfection Certificate; Schedules to other Financing Documents................................
Section 5.26 Existing Indebtedness..........................................................................
Section 5.27 Purchase Documents............................................................................
Section 5.28 Representations With Respect to Certain Credit Parties.........................................
Section 5.29 Accounts.......................................................................................
ARTICLE 6
AFFIRMATIVE COVENANTS
Section 6.1 Maintenance and Compliance, etc................................................................
Section 6.2 Payment of Taxes and Claims, etc...............................................................
Section 6.3 Further Assurances.............................................................................
Section 6.4 Performance of Obligations.....................................................................
Section 6.5 Insurance......................................................................................
Section 6.6 Accounts and Records...........................................................................
Section 6.7 Right of Inspection............................................................................
Section 6.8 Operation and Maintenance of Property..........................................................
Section 6.9 New Subsidiaries; Additional Liens.............................................................
Section 6.10 Reporting Covenants............................................................................
ii
ARTICLE 7
NEGATIVE COVENANTS
Section 7.1 Financial Covenants...........................................................................
Section 7.2 Indebtedness..................................................................................
Section 7.3 Liens.........................................................................................
Section 7.4 Mergers, Sales, etc...........................................................................
Section 7.5 Dividends, etc................................................................................
Section 7.6 Investments, Loans, etc.......................................................................
Section 7.7 Sales and Leasebacks; Synthetic Leases........................................................
Section 7.8 Nature of Business............................................................................
Section 7.9 ERISA Compliance..............................................................................
Section 7.10 Sale or Discount of Receivables...............................................................
Section 7.11 Negative Pledge Agreements....................................................................
Section 7.12 Transactions with Affiliates..................................................................
Section 7.13 Unconditional Purchase Obligations............................................................
Section 7.14 Equity........................................................................................
Section 7.15 Capital Expenditures..........................................................................
Section 7.16 Intercompany Transactions.....................................................................
Section 7.17 Acquisitions; Creation of Subsidiaries........................................................
Section 7.18 Accounts......................................................................................
Section 7.19 Modifications to Indebtedness Agreements......................................................
Section 7.20 Fiscal Year...................................................................................
Section 7.21 Modification of Purchase Documents............................................................
Section 7.22 Negative Covenants With Respect to Certain Credit Parties.....................................
ARTICLE 8
EVENTS OF DEFAULT
Section 8.1 Payments......................................................................................
Section 8.2 Covenants Without Notice......................................................................
Section 8.3 Other Covenants...............................................................................
Section 8.4 Other Financing Document Obligations..........................................................
Section 8.5 Representations...............................................................................
Section 8.6 Non-Payments of Other Indebtedness............................................................
Section 8.7 Defaults Under Other Agreements...............................................................
Section 8.8 Bankruptcy Under US Law.......................................................................
Section 8.9 Bankruptcy Under Canadian Law.................................................................
Section 8.10 Money Judgment................................................................................
Section 8.11 Discontinuance of Business....................................................................
Section 8.12 Financing Documents...........................................................................
Section 8.13 Change of Control.............................................................................
ARTICLE 9
AGENTS
Section 9.1 Appointment of Agents.........................................................................
Section 9.2 Limitation of Duties of Agents................................................................
Section 9.3 Lack of Reliance on the Agents................................................................
Section 9.4 Certain Rights of the Agents..................................................................
Section 9.5 Reliance by Agents............................................................................
Section 9.6 Indemnification of Agents.....................................................................
Section 9.7 Agents in their Individual Capacity...........................................................
Section 9.8 May Treat Lender as Owner.....................................................................
Section 9.9 Successor Agent...............................................................................
iii
Section 9.10 Documentation Agent...........................................................................
ARTICLE 10
MISCELLANEOUS
Section 10.1 Notices.......................................................................................
Section 10.2 Amendments and Waivers........................................................................
Section 10.3 No Waiver; Remedies Cumulative................................................................
Section 10.4 Payment of Expenses, Indemnities, etc.........................................................
Section 10.5 Right of Setoff...............................................................................
Section 10.6 Benefit of Agreement..........................................................................
Section 10.7 Successors and Assigns; Participations and Assignments........................................
Section 10.8 Governing Law; Submission to Jurisdiction; etc................................................
Section 10.9 Independent Nature of Lenders' Rights.........................................................
Section 10.10 Invalidity....................................................................................
Section 10.11 Renewal, Extension or Rearrangement...........................................................
Section 10.12 Confidentiality...............................................................................
Section 10.13 Interest......................................................................................
Section 10.14 Entire Agreement..............................................................................
Section 10.15 Attachments...................................................................................
Section 10.16 Counterparts..................................................................................
Section 10.17 Survival of Indemnities.......................................................................
Section 10.18 Headings Descriptive..........................................................................
Section 10.19 Satisfaction Requirement......................................................................
Section 10.20 Exculpation Provisions........................................................................
Section 10.22 No Financial Assistance by Canadian Credit Parties............................................
Section 10.23 Missouri Law Provision........................................................................
SCHEDULES
Schedule 1.3 Projections
Schedule 3.3 Post-Closing Matters
Schedule 5.7 Litigation
Schedule 5.15 Compliance with Laws
Schedule 5.19 Capital Structure
Schedule 5.20 Insurance
Schedule 5.21 Environmental Matters
Schedule 5.23 Employee Matters
Schedule 5.24 Real Property Locations
Schedule 5.26 Indebtedness
Schedule 7.2 Permitted Indebtedness
Schedule 7.3 Permitted Liens
Schedule 7.6 Permitted Investments
Schedule 7.8 Nature of Business
EXHIBITS
Exhibit A-1 Form of US Borrowing Base Report
Exhibit A-2 Form of Canadian Borrowing Base Report
Exhibit B-1 Form of Borrowing Request (US Revolving Credit Loan)
Exhibit B-2 Form of Borrowing Request (Canadian Revolving Credit Loans)
Exhibit B-3 Form of Borrowing Request (US Letters of Credit)
Exhibit B-4 Form of Borrowing Request (Canadian Letters of Credit)
iv
Exhibit B-5 Form of Borrowing Request (US Swingline Loans)
Exhibit C-1 Form of Mortgage
Exhibit C-2 Form of Assignment of Rents
Exhibit D Form of Canadian Revolving Credit Note
Exhibit E Form of Canadian Security Agreement
Exhibit F Form of Guaranty and Security Agreement
Exhibit G Form of Perfection Certificate Update
Exhibit H Form of Term Lender Joinder Agreement
Exhibit I Form of Term Note
Exhibit J Form of US Real Estate Mortgage
Exhibit K Form of US Revolving Credit Note
Exhibit L Form of US Swingline Note
Exhibit M Form of B/A Equivalent Note
Exhibit N Form of Borrower Joinder Agreement
Exhibit O Form of Compliance Certificate
Exhibit P Form of Weekly Collateral Report
Exhibit Q Form of Inventory Designation Report
Exhibit R Form of Assignment and Acceptance
Exhibit S Form of Restricted Account Agreement
v
LIST OF DEFINED TERMS
---------------------
Page No.
--------
$......................................................................
[Intentionally Deleted]................................................
ABR....................................................................
ABR Loan...............................................................
Acceptance Fee.........................................................
Account Party..........................................................
Acquisition............................................................
Acquisition Transactions...............................................
Adjusted Interest Expense..............................................
Administrative Agent...................................................
Advance Notice.........................................................
Affiliate..............................................................
Agent..................................................................
Aggregate Canadian Revolving Credit Exposure...........................
Aggregate Revolving Credit Exposure....................................
Aggregate US Revolving Credit Exposure.................................
Agreement..............................................................
Applicable Commitment Fee Percentage...................................
applicable law.........................................................
Applicable Margin......................................................
Applicable Percentage..................................................
Application............................................................
Assessment Rate........................................................
Assignment and Acceptance..............................................
Availability Reserves..................................................
B/A....................................................................
B/A Cover..............................................................
B/A Equivalent Note....................................................
B/A Loan...............................................................
Bailee.................................................................
Bailee's Letter........................................................
Bankruptcy Code........................................................
Base CD Rate...........................................................
Beneficially Own.......................................................
Board..................................................................
Borrower...............................................................
Borrower" and "Borrowers...............................................
Borrowers..............................................................
Borrowing..............................................................
Borrowing Base Report..................................................
Borrowing Request......................................................
Business Day...........................................................
C$.....................................................................
C$ Denominated Loan....................................................
Canadian Administrative Agent..........................................
Canadian Blocked Account...............................................
Canadian Borrower......................................................
Canadian Borrowers.....................................................
vi
Canadian Borrowing Base................................................
Canadian Credit Party..................................................
Canadian Equipment Component...........................................
Canadian Excess Availability...........................................
Canadian Excess Cash Flow Amount.......................................
Canadian Fee Letter....................................................
Canadian Guaranty and Security Agreement...............................
Canadian Included-in-Transit Limit.....................................
Canadian Inventory Limit...............................................
Canadian Lender........................................................
Canadian Lender Indebtedness...........................................
Canadian Letter of Credit..............................................
Canadian Letter of Credit Liabilities..................................
Canadian Letters of Credit.............................................
Canadian Loans.........................................................
Canadian Lockbox.......................................................
Canadian Lockbox Bank..................................................
Canadian Maximum Available Amount......................................
Canadian Prime Rate....................................................
Canadian Prime Rate Loans..............................................
Canadian Priority Claims Reserve.......................................
Canadian Real Estate Mortgage..........................................
Canadian Revolving Credit Commitment...................................
Canadian Revolving Credit Commitments..................................
Canadian Revolving Credit Exposure.....................................
Canadian Revolving Credit Loan.........................................
Canadian Revolving Credit Note.........................................
Canadian Revolving Credit Percentage...................................
Canadian WIP Limit.....................................................
Capital Expenditures...................................................
Capital Lease Obligations..............................................
Cash Management Affiliate..............................................
Cash Management Agreement..............................................
Cash Management Reserves...............................................
CDOR Rate..............................................................
CERCLA.................................................................
Change of Control......................................................
Closing Date...........................................................
Code...................................................................
Coiled.................................................................
Collateral.............................................................
Combined Revolving Credit Commitment...................................
Commitment.............................................................
Company................................................................
Contract Period........................................................
Credit Parties.........................................................
Credit Party...........................................................
Credit Percentage......................................................
Current Information....................................................
Dated Assets...........................................................
Dated Liabilities......................................................
vii
Default....................................................................
Dilution...................................................................
Dilution Percentage........................................................
Disbursement Account.......................................................
Discount Proceeds..........................................................
Discount Rate..............................................................
disposal...................................................................
disposed...................................................................
Disposition................................................................
Documentary Letter of Credit...............................................
Documentation Agent.......................................................
Dollar.....................................................................
Dollar Denominated Loans...................................................
Dollar Equivalent..........................................................
EBITDA.....................................................................
Eligible Account...........................................................
Eligible Account Advance Percentage........................................
Eligible Bailee Inventory..................................................
Eligible ▇▇▇▇ and Hold Accounts............................................
Eligible Included-In-Transit Inventory.....................................
Eligible Inventory.........................................................
Eligible Inventory Advance Percentage......................................
Environmental Laws.........................................................
Equity.....................................................................
ERISA......................................................................
ERISA Affiliate............................................................
ERISA Termination Event....................................................
Eurodollar Loan............................................................
Eurodollar Rate............................................................
Event of Default...........................................................
Excess Availability........................................................
Excess Cash Flow...........................................................
Excess Net Cash Proceeds...................................................
Exchangeco.................................................................
Excluded Taxes.............................................................
Existing Indebtedness......................................................
Federal Funds Effective Rate...............................................
Fee Letter.................................................................
Financial Statements.......................................................
Financing Documents........................................................
Financing Parties..........................................................
Fiscal Quarter.............................................................
Fiscal Year................................................................
Fixed Charge Coverage Ratio................................................
Foreign Lender.............................................................
Funded Indebtedness........................................................
Funds Flow from Operations.................................................
GAAP.......................................................................
Governmental Authority.....................................................
Governmental Requirement...................................................
GP Inc.....................................................................
viii
GP LLC.....................................................................
Group......................................................................
Guaranty and Security Agreement............................................
hazardous substance........................................................
herein.....................................................................
hereof.....................................................................
hereunder..................................................................
Highest Lawful Rate........................................................
Holding....................................................................
Imbalance Lender...........................................................
Included-In-Transit Inventory..............................................
Included-in-Transit Limit..................................................
Indebtedness...............................................................
Indemnified Taxes..........................................................
Information................................................................
Initial Reserve............................................................
Interest Expense...........................................................
Interest Period............................................................
Inventory Limit............................................................
Investment.................................................................
Issuing Bank...............................................................
JPMorgan...................................................................
JPMorgan Canada............................................................
Judgment Currency..........................................................
L/C Cover..................................................................
Landlord Consent and Subordination Agreement...............................
Landlord Waiver Agreement..................................................
LaSalle Account............................................................
laws applicable to any Financing Party.....................................
Lender.....................................................................
Lender Indebtedness........................................................
Lenders....................................................................
Lending Office.............................................................
Letter of Credit Liabilities...............................................
Letters of Credit..........................................................
Lien.......................................................................
Loan.......................................................................
Lockbox....................................................................
Lockbox Agreement..........................................................
Longview Account...........................................................
Margin Stock...............................................................
Material Adverse Effect....................................................
Maturity Date..............................................................
Maverick International.....................................................
Minimum Excess Availability................................................
Mortgaged Real Property....................................................
Net Cash Proceeds..........................................................
New Subsidiary.............................................................
Non Financed Capital Expenditures..........................................
Notes......................................................................
Obligated Party............................................................
ix
oil........................................................................
OPA........................................................................
Other Taxes................................................................
Overadvance................................................................
Participant................................................................
Payment Office.............................................................
PBGC.......................................................................
Perfection Certificate Update..............................................
Perfection Certificates....................................................
Permitted Borrowing Base Adjustments.......................................
Permitted Liens............................................................
Person.....................................................................
Plan.......................................................................
Precision..................................................................
Precision Canada...........................................................
Precision International....................................................
Precision Scotland.........................................................
Precision Transactions.....................................................
Prime Rate.................................................................
Processing Reserves........................................................
Projections................................................................
Property...................................................................
Prudential.................................................................
PTTI.......................................................................
Purchase Agreement.........................................................
Purchase Documents.........................................................
Quarterly Dates............................................................
RCRA.......................................................................
Real Estate Mortgage.......................................................
Real Property..............................................................
Register...................................................................
Regulation D...............................................................
Regulations U and X........................................................
Reimbursement Obligations..................................................
Related Affiliate..........................................................
Related Person.............................................................
release....................................................................
Required Lenders...........................................................
Required Revolving Lenders.................................................
Required Term Lenders......................................................
Responsible Officer........................................................
Restated Account...........................................................
Restricted Account Agreement...............................................
Revolving Credit Commitments...............................................
Revolving Credit Exposure..................................................
Revolving Credit Loan......................................................
Revolving Credit Notes.....................................................
Revolving Lenders..........................................................
Rolling Period.............................................................
Secured Affiliate..........................................................
Security Instruments.......................................................
x
Sellers....................................................................
Settlement Date............................................................
Sharing Event..............................................................
solid waste................................................................
Solvent....................................................................
Southwest Account..........................................................
Spot Exchange Rate.........................................................
Standby Letter of Credit...................................................
Statutory Reserves.........................................................
Stock Repurchase...........................................................
Storage/Handling Reserves..................................................
subject Borrower...........................................................
Subsidiary.................................................................
Swap Agreement.............................................................
Swap Reserves..............................................................
Tax Benefit................................................................
Taxes......................................................................
Temporary Lockbox Institutions.............................................
Term.......................................................................
Term Commitment............................................................
Term Lender................................................................
Term Loans.................................................................
Term Note..................................................................
Term Percentage............................................................
threatened release.........................................................
Three-Month Secondary CD Rate..............................................
Transactions...............................................................
Transferee.................................................................
Tri-Party Agreement........................................................
Tube.......................................................................
Tube Canada................................................................
Type.......................................................................
UCC........................................................................
UCP........................................................................
Unrelated Person...........................................................
US Base Rate...............................................................
US Blocked Account.........................................................
US Borrower................................................................
US Borrowers...............................................................
US Borrowing Base..........................................................
US Credit Party............................................................
US Equipment Component.....................................................
US Excess Cash Flow Amount.................................................
US Funding Amount..........................................................
US Included-in-Transit Limit...............................................
US Inventory Limit.........................................................
US Lender..................................................................
US Lender Indebtedness.....................................................
US Letter of Credit Liabilities............................................
US Letters of Credit.......................................................
US Loans...................................................................
xi
US Lockbox.................................................................
US Maximum Available Amount................................................
US Real Estate Mortgage....................................................
US Revolving Credit Commitment.............................................
US Revolving Credit Commitments............................................
US Revolving Credit Exposure...............................................
US Revolving Credit Loan...................................................
US Revolving Credit Note...................................................
US Revolving Credit Percentage.............................................
US Revolving Lender........................................................
US Swingline Availability..................................................
US Swingline Commitment....................................................
US Swingline Exposure......................................................
US Swingline Lender........................................................
US Swingline Loan..........................................................
US Swingline Loans.........................................................
US Swingline Note..........................................................
US WIP Limit...............................................................
Voting Stock...............................................................
WIP Limit..................................................................
xii
CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "AGREEMENT") is made and entered into as of
the 29th day of March, 2002, among Maverick Tube Corporation, a Delaware
corporation (the "COMPANY"), Maverick Investment Corporation, a Delaware
corporation ("INVESTMENT"), Maverick Tube, L.P., a Delaware limited partnership
("TUBE"), Precision Tube Holding Corporation, a Delaware corporation
("HOLDING"), Maverick GP, Inc., a Delaware corporation ("GP INC."), Precision
GP, LLC, a Delaware limited liability company ("GP LLC"), Precision Tube
Technology, L.P., a Delaware limited partnership ("PRECISION" and collectively
with the Company, Investment, Tube, Holding, GP Inc. and GP LLC, the "US
BORROWERS" and individually, a "US BORROWER"), Prudential Steel Ltd., an Alberta
corporation ("PRUDENTIAL"), Maverick Exchangeco (Nova Scotia) ULC, a Nova Scotia
unlimited liability company ("EXCHANGECO"), Maverick Tube (Canada) Inc., an
Alberta corporation ("TUBE CANADA"), Precision Tube Canada Limited, an Alberta
corporation ("PRECISION CANADA" and collectively with Prudential, Exchangeco and
Tube Canada, the "Canadian Borrowers" and individually, a "CANADIAN BORROWER")
(the US Borrowers and the Canadian Borrowers are together referred to herein as
the "BORROWERS" and individually, a "BORROWER"), JPMorgan Chase Bank,
individually as Lender and Issuing Bank and as the Administrative Agent, CIT
Business Credit Canada Inc., individually as Lender and as the Canadian
Administrative Agent and as Issuing Bank, General Electric Capital Corporation,
as Documentation Agent, each additional Issuing Bank hereunder from time to
time, and each of the lenders that is a signatory hereto or which hereafter
becomes a party hereto as provided in Section 10.7 including, without
limitation, the US Swingline Lender (as defined below) (individually, a "LENDER"
and, collectively, the "LENDERS").
RECITALS:
Pursuant to that certain Stock Purchase Agreement (the "PURCHASE
AGREEMENT") dated as of February 12, 2002 by and among the Company, Holding and
the stockholders of Holding (such stockholders are referred to herein as
"SELLERS"), the Company agreed to (a) make certain capital contributions to
Holding to pay in full certain outstanding indebtedness of Holding, and (b)
purchase all of the issued and outstanding capital stock of Holding of every
class (collectively, the "ACQUISITION").
Immediately following the Acquisition, (a) Texas Coiled Tubing Property
Company, a Texas corporation and a wholly-owned subsidiary of PTTI (as defined
below) ("COILED") will merge with and into Precision Tube Technology, Inc., a
Texas corporation and wholly owned subsidiary of Holding ("PTTI"), (b) Holding
will form GP LLC and contribute five percent (5%) of the issued and outstanding
stock of PTTI to GP LLC, and (c) PTTI will convert from a Texas corporation to a
Texas limited partnership of which Holding will be a ninety-five percent (95%)
limited partner and GP LLC will be a five percent (5%) general partner
(collectively, the "PRECISION TRANSACTIONS" and together with the Acquisition,
the "ACQUISITION TRANSACTIONS").
Borrowers have requested that Lenders make certain Revolving Credit
Loans (as herein defined) and Term Loans (as herein defined) to Borrowers and
that the Issuing Banks (as herein defined) issue certain Letters of Credit (as
herein defined) for the account of Borrowers including, without limitation, to
finance the Acquisition.
Pursuant to the terms of this Agreement, the Revolving Lenders have
agreed to make Revolving Credit Loans to Borrowers and the Issuing Banks have
agreed to issue such Letters of Credit, and pursuant to one or more Term Lender
Joinder Agreements (as herein defined) which may hereafter be executed in
connection with this Agreement, one or more Term Lenders (as herein defined) may
be added as Term Lenders party to this Agreement and may make and hold Term
Loans hereunder (it being acknowledged that no Lender has agreed to make Term
Loans as of the date hereof).
1
Proceeds of the Revolving Credit Loans and Term Loans will be used
solely (a) to finance a portion of the purchase price of the Acquisition, (b) to
refinance certain existing indebtedness of the Borrowers, (c) to pay fees and
expenses related to the Acquisition, (d) to support working capital requirements
of the Borrowers, and (e) for general corporate purposes of Borrowers.
AGREEMENTS:
In consideration of the mutual covenants and agreements herein
contained, the Borrowers, the Administrative Agent, the Canadian Administrative
Agent, the Issuing Banks and the Lenders agree as follows:
ARTICLE 1
DEFINITIONS; CONSTRUCTION
SECTION 1.1 DEFINITIONS. As used herein, the following terms shall
have the meanings herein specified (to be equally applicable to both the
singular and plural forms of the terms defined). Reference to any party in a
Financing Document shall mean that party and its successors and assigns.
"ABR" shall have the meaning provided in Section 2.6(a).
"ABR LOAN" shall mean a Revolving Credit Loan, Term Loan or US
Swingline Loan bearing interest at the rate provided in Section 2.6(a).
"ACCEPTANCE FEE" shall mean a fee payable in C$ by the
Canadian Borrowers to a C$ Lender with respect to the acceptance or purchase of
a B/A by such Canadian Lender, calculated on the face amount of such B/A at a
rate per annum equal to the Applicable Margin with respect to B/A Loans on the
basis of the number of days in the applicable Contract Period (inclusive of the
first day and exclusive of the last day) and a year of 365 days (it being agreed
that the Applicable Margin in respect of a B/A Equivalent Note is equivalent to
the Applicable Margin otherwise applicable to a B/A having the same face amount
and Contract Period as the subject B/A Equivalent Note).
"ACCOUNT PARTY" shall have the meaning assigned to such term
in Section 2.3(d).
"ACQUISITION" shall have the meaning set forth in the recitals
hereto.
"ACQUISITION TRANSACTIONS" shall have the meaning set forth in
the recitals hereto.
"ADJUSTED INTEREST EXPENSE" shall mean, as to the Company and
its Subsidiaries on a consolidated basis and for any period, Interest Expense
less any non cash Interest Expense.
"ADMINISTRATIVE AGENT" shall mean JPMorgan Chase Bank, acting
in the manner and to the extent described in Article 9, and any successor to
JPMorgan Chase Bank acting in such manner.
"ADVANCE NOTICE" shall mean written or telecopy notice (with
telephonic confirmation in the case of telecopy notice), which in each case
shall be irrevocable, from the applicable Borrowers to be received by the
Administrative Agent (or Canadian Administrative Agent (with a copy to
Administrative Agent) in the case of any Borrowing, conversion, continuation or
prepayment of Canadian Loans) before 1:00 pm. (New York, New York time) (or
12:00 p.m. (noon) New York, New York time in the case of any Borrowing of ABR
Loans or B/A Loans and 11:00 a.m. New York, New York time in the case of any
Borrowing of Canadian Prime Rate Loans), by the number of Business Days in
advance of any
2
Borrowing, conversion, continuation or prepayment of any Loan or Loans pursuant
to this Agreement as respectively indicated below:
(a) Eurodollar Loans - 3 Business Days;
(b) ABR Loans - Same Business Day;
(c) Canadian Prime Rate Loans equal to or less
than C$10,000,000 - Same Business Day;
(d) Canadian Prime Rate Loans greater than
C$10,000,000 -- One Business Day; and
(e) B/A Loans - One Business Day.
For the purpose of determining the applicable period of
Advance Notice in the case of the conversion from one Type of Loan into another,
the Loans into which there is to be a conversion shall control. The
Administrative Agent, the Canadian Administrative Agent, each Issuing Bank and
each Lender are entitled to rely upon and act upon telecopy notice made or
purportedly made by Borrowers, and the Borrowers hereby waive the right to
dispute the authenticity and validity of any such transaction once the
Administrative Agent, the Canadian Administrative Agent or any Lender has
advanced funds or any Issuing Bank has issued Letters of Credit, absent manifest
error.
"AFFILIATE" shall mean (a) any Person controlling, controlled
by or under common control with any other Person, (b) with respect to any
Person, any other Person who is an officer, director, managing member, partner,
trustee or beneficiary of such Person, and (c) any Person who is a spouse,
sibling, parent, grandparent, child or grandchild of a Person described in
clauses (a) or (b) preceding. For purposes of this definition, "CONTROL"
(including "controlled by" and "under common control with") shall mean the
possession, directly or indirectly, of the power to either (a) vote 10% or more
of the Voting Stock of such Person or (b) direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.
"AGENT" shall mean any of Administrative Agent or
Documentation Agent.
"AGGREGATE CANADIAN REVOLVING CREDIT EXPOSURE" shall mean the
sum of all of the Canadian Lenders' Canadian Revolving Credit Exposures.
"AGGREGATE REVOLVING CREDIT EXPOSURE" shall mean the sum of
all of the Revolving Lenders' Revolving Credit Exposures.
"AGGREGATE US REVOLVING CREDIT EXPOSURE" shall mean the sum of
all of the US Lenders' US Revolving Credit Exposures.
"AGREEMENT" shall mean this Credit Agreement, as further
amended, modified or supplemented from time to time.
"APPLICABLE COMMITMENT FEE PERCENTAGE" shall mean, on any day,
the applicable per annum percentage set forth at the appropriate intersection in
the table shown below, based on the Minimum Excess Availability for the most
recently ended Fiscal Quarter:
3
MINIMUM EXCESS AVAILABILITY APPLICABLE COMMITMENT FEE PERCENTAGE
--------------------------- ------------------------------------
Less than or equal to $20,000,000 0.5000%
Greater than $20,000,000 but less than or equal to 0.5000%
$50,000,000
Greater than $50,000,000 but less than or equal to 0.4375%
$80,000,000
Greater than $80,000,000 0.3750%
Each change in the Applicable Commitment Fee Percentage shall be effective as of
the first day of the third month of each applicable Fiscal Quarter based on the
Minimum Excess Availability during the immediately preceding Fiscal Quarter.
Notwithstanding the foregoing, for the period from the Closing Date through
March 1, 2003, the Applicable Commitment Fee Percentage will be 0.5000%.
"APPLICABLE MARGIN" shall mean, on any day and with respect to
any Loan other than Term Loans, the applicable per annum percentage set forth at
the appropriate intersection in the table shown below, based on the Minimum
Excess Availability for the most recently ended Fiscal Quarter.
CANADIAN
PRIME RATE
EURODOLLAR B/A LOAN ABR LOAN LOAN
MINIMUM APPLICABLE APPLICABLE APPLICABLE APPLICABLE
EXCESS MARGIN MARGIN MARGIN MARGIN
AVAILABILITY PERCENTAGE PERCENTAGE PERCENTAGE PERCENTAGE
------------ ---------- ---------- ---------- ----------
Less than or equal 3.00% 3.00% 1.00% 1.75%
to $20,000,000
Greater than 2.75% 2.75% 0.75% 1.50%
$20,000,000 but
less than or equal
to $50,000,000
Greater than 2.50% 2.50% 0.50% 1.25%
$50,000,000 but
less than or equal
to $80,000,000
Greater than 2.25% 2.25% 0.25% 1.00%
$80,000,000
Each change in the Applicable Margin shall be effective as of the first day of
the third month of each applicable Fiscal Quarter based on the Minimum Excess
Availability for the immediately preceding Fiscal Quarter. Notwithstanding the
foregoing, for the period from the Closing Date through March 1, 2003, the
initial Eurodollar Loan Applicable Margin and B/A Loan Applicable Margin (other
than with respect to Term Loans) will be 2.75%, the initial ABR Loan Applicable
Margin shall be 0.75% and the initial Canadian Prime Rate Loan Applicable Margin
shall be 1.50%. The Applicable Margin with respect to Term Loans shall be as set
forth in the Term Lender Joinder Agreement.
"APPLICABLE PERCENTAGE" shall mean, (a) with respect to any US
Revolving Lender, such US Revolving Lender's US Revolving Credit Percentage, (b)
with respect to any Term Lender, such
4
Term Lender's Term Loan Percentage, and (c) with respect to any Canadian Lender,
such Canadian Lender's Canadian Revolving Credit Percentage, as applicable.
"APPLICATION" shall mean an "Application and Agreement for
Letters of Credit," or similar instruments or agreements, entered into between a
Borrower and an Issuing Bank in connection with any Letter of Credit.
"ASSESSMENT RATE" shall mean, for any day, the annual
assessment rate in effect on such day that is payable by a member of the Bank
Insurance Fund classified as "well-capitalized" and within supervisory subgroup
"B" (or a comparable successor risk classification) within the meaning of 12
C.F.R. Part 327 (or any successor provision) to the Federal Deposit Insurance
Corporation for insurance by such corporation of time deposits made in dollars
at the offices of such member in the United States; provided that if, as a
result of any change in any law, rule or regulation, it is no longer possible to
determine the Assessment Rate as aforesaid, then the Assessment Rate shall be
such annual rate as shall be determined in good faith by the Administrative
Agent to be representative of the cost of such insurance to the Lenders.
"ASSIGNMENT AND ACCEPTANCE" shall have the meaning provided in
Section 10.7.
"AVAILABILITY RESERVES" shall mean, as of any date of
determination, such amounts as Administrative Agent may from time to time
establish and revise in its sole but reasonable discretion reducing the US
Borrowing Base and/or Canadian Borrowing Base which would otherwise be available
to Borrowers under the lending formulas provided for herein: (a) to reflect
general eligibility criteria, events, conditions, contingencies or risks which,
as determined by Administrative Agent in its reasonable discretion, do or may
affect either (i) any component of the US Borrowing Base or Canadian Borrowing
Base or their value, (ii) the assets, business or prospects of any Credit Party,
or (iii) the security interests and other rights of Administrative Agent and
Canadian Administrative Agent in the Collateral (including the enforceability,
perfection and priority thereof), or (b) to reflect Administrative Agent's
customary practice or its belief that any collateral report or financial
information furnished by or on behalf of any Borrower to any Agent or any Lender
is or may have been incomplete, inaccurate or misleading in any material
respect, or (c) in respect of any state of facts which Administrative Agent
determines constitutes a Default or Event of Default. Without limiting the
foregoing, Administrative Agent may establish and/or increase Availability
Reserves in respect of (x) liabilities of any Credit Party under any Cash
Management Agreements, Swap Agreement or any other swap, cap, floor, collar,
futures contract or option designed to hedge against fluctuations in commodity
prices, securities prices or other financial market conditions, (y) statutory
claims, deemed trusts or inventory subject to rights of suppliers under Section
81.1 of Bankruptcy and Insolvency Act (Canada), or (z) employee related
liabilities. Without limiting the foregoing, the Initial Reserve will be
established as an Availability Reserve with respect to the US Borrowing Base
from the Closing Date until April 1, 2003.
"B/A" shall mean a non-interest bearing ▇▇▇▇ of exchange
denominated in C$, drawn by the Canadian Borrowers and accepted by a Canadian
Lender in accordance with this Agreement, provided that with respect to a
Canadian Lender that is not a chartered bank under the Bank Act (Canada) or that
has notified the Administrative Agent that it is otherwise unable to accept such
bills of exchange, it shall mean a B/A Equivalent Note.
"B/A COVER" when required by this Agreement for B/A Loans,
shall be effected by paying to Canadian Administrative Agent, in immediately
available funds, to be collaterally assigned as security pursuant to the
Financing Documents, an amount equal to the aggregate amount of all outstanding
B/A Loans. Such amount shall be retained by the Canadian Administrative Agent
and
5
applied to repay the principal of each B/A Loan upon the maturity thereof until
all such B/A Loans have been fully satisfied.
"B/A EQUIVALENT NOTE" shall have the meaning given such term
in Section 2.8(g) hereto.
"B/A LOAN" shall mean a Borrowing comprised of B/As.
"BAILEE" shall mean any Person who is in possession of any
inventory of any Borrower on behalf of such Borrower.
"BAILEE'S LETTER" shall mean a letter in form and substance
acceptable to Administrative Agent executed by any Person who is in possession
of inventory on behalf of any Borrower pursuant to which such Person
acknowledges Administrative Agent's Lien or Canadian Administrative Agent's
Lien, as applicable, with respect thereto.
"BANKRUPTCY CODE" shall have the meaning provided in Section
8.8.
"BASE CD RATE" shall mean the sum of (a) the Three-Month
Secondary CD Rate multiplied by the Statutory Reserve Rate plus (b) the
Assessment Rate.
"BLOCKED ACCOUNT" shall mean one or more demand deposit
accounts established by the Canadian Borrowers with the Canadian Lockbox Bank
and the US Borrowers with Administrative Agent which (a) the applicable
Borrowers and Administrative Agent or Canadian Lockbox Bank, as applicable,
jointly designate as a "Blocked Account," (b) into which all cash receipts of
the applicable Borrowers from whatever source (including, without limitation,
all currency, checks and drafts representing proceeds of the Collateral and
further including any of the foregoing received in the Lockbox) shall be
deposited pursuant to Section 4.3 and Section 4.4 hereof and pursuant to the
Security Documents, and (c) which are subject to the provisions of Section 4.5
and Section 4.6 hereof.
"BOARD" shall mean the Board of Governors of the Federal
Reserve System of the United States.
"BORROWER" AND "BORROWERS" shall have the meanings set forth
in the initial paragraph hereof.
"BORROWING" shall mean a borrowing pursuant to a Borrowing
Request, a borrowing pursuant to Section 2.2(c) or a continuation or a
conversion pursuant to Section 2.12 consisting, in each case, of the same Type
of Loans having, in the case of Eurodollar Loans or B/A Loans, the same Interest
Period or Contract Period (except as otherwise provided in Section 2.15 and
Section 2.16) and made previously or being made concurrently by all of the
Lenders.
"BORROWING BASE REPORT" shall mean the report of each of the
US Borrowers and the Canadian Borrowers concerning the amount of the US
Borrowing Base or the Canadian Borrowing Base, as applicable, to be delivered
pursuant to Section 6.10, substantially in the form attached as Exhibit A-1 or
A-2 (depending on which Borrowing Base is being computed).
"BORROWING REQUEST" shall mean a request for a Borrowing
pursuant to Section 2.2, substantially in the form attached as Exhibit B-1
through B-5 hereof (depending on the type of Loan with respect to which such
Borrowing Request is being submitted).
6
"BUSINESS DAY" shall mean any day excluding Saturday, Sunday
and any other day on which banks are required or authorized to close in Dallas,
Texas or New York, New York and, if the applicable Business Day relates to
Eurodollar Loans, on which trading is carried on by and between banks in Dollar
deposits in the Eurodollar market and, if the applicable Business Day relates to
Canadian Revolving Credit Loans, including B/A Loans, or the Dollar Equivalent
of any amount denominated in C$, shall also exclude any other day on which banks
are required or authorized to close in ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
"C$" shall mean lawful money of Canada.
"C$ DENOMINATED LOAN" shall mean Canadian Revolving Credit
Loans which are denominated in C$.
"CANADIAN ADMINISTRATIVE AGENT" shall mean CIT Business Credit
Canada Inc., acting in the manner and to the extent described in Article 9 and
any successor to CIT Business Credit Canada Inc. acting in such capacity.
"CANADIAN BLOCKED ACCOUNT" means a Blocked Account established
by the Canadian Borrowers with Canadian Lockbox Bank.
"CANADIAN BORROWERS" shall have the meaning set forth in the
initial paragraph hereof.
"CANADIAN BORROWING BASE" shall mean, only with respect to the
Canadian Borrowers, the amount equal to the sum of:
(a) the Eligible Account Advance Percentage of the
Canadian Borrowers' Eligible Accounts, plus
(b) the lesser of (i) the sum of (A) the Eligible
Inventory Advance Percentage of the Canadian Borrowers' Eligible Inventory
(other than work in process) and Eligible Bailee Inventory (other than work in
process) plus, (B) the lesser of (1) the Eligible Inventory Advance Percentage
of the Canadian Borrowers' Eligible Inventory consisting of work in process and
Eligible Bailee Inventory consisting of work in process, and (2) Canadian WIP
Limit, plus (C) the lesser of (1) the Eligible Inventory Advance Percentage of
the Canadian Borrowers' Eligible Included-In-Transit Inventory and (2) Canadian
Included-in-Transit Limit, or (ii) the Canadian Inventory Limit, plus
(c) the Canadian Equipment Component in effect as of the
date for which the Canadian Borrowing Base is being calculated;
provided, that, in no event will the component of the Canadian Borrowing Base
determined pursuant to clause (b) exceed 60% of the total Canadian Borrowing
Base (but solely for purposes of this calculation, the Canadian Equipment
Component shall remain constant at the amount in effect as the Closing Date
without giving effect to any subsequent reductions in the Canadian Equipment
Component pursuant to the definition of such term). The Canadian Borrowing Base
in effect under this Agreement at any time shall be the Canadian Borrowing Base
reflected on the most recent Canadian Borrowing Base Report delivered to
Canadian Administrative Agent and Administrative Agent pursuant to Section
6.10(g) hereof, subject to (a) the right of Canadian Administrative Agent,
Administrative Agent or Required Lenders to contest any components thereof or
the calculation thereof, and (b) immediate adjustment as result of (i)
establishment of Availability Reserves, (ii) reductions in advance rates
permitted herein, (iii) scheduled reductions in the Canadian Equipment
Component, (iv) more frequent reporting of certain
7
components of the Canadian Borrowing Base to the extent required in accordance
with Section 6.10(g), and (v) any changes in eligibility standards required by
Administrative Agent.
"CANADIAN CREDIT PARTY" shall mean the Canadian Borrowers and
each other Credit Party which is formed or organized under the federal laws of
Canada or under the laws of any province or territory in Canada.
"CANADIAN EQUIPMENT COMPONENT" shall mean $10,000,000 on the
Closing Date; provided that the Canadian Equipment Component shall be reduced
(a) by $151,515 on the first day of each month commencing with October 1, 2002
and continuing on the first day of each month thereafter throughout the term of
this Agreement, and (b) on April 1 of each calendar year commencing April 1,
2003, by the Canadian Excess Cash Flow Amount for the Fiscal Year most recently
ended.
"CANADIAN EXCESS AVAILABILITY" shall mean, as of any date, the
remainder of (a) the Canadian Borrowing Base as of such date, less (b) the
aggregate outstanding balance of the Canadian Lender Indebtedness as of such
date.
"CANADIAN EXCESS CASH FLOW AMOUNT" shall mean, with respect to
any Fiscal Year, the lesser of (a) $1,666,500 and (b) 40% of the Excess Cash
Flow of the Canadian Borrowers for such Fiscal Year. The Canadian Excess Cash
Flow Amount shall be determined for any Fiscal Year by the Administrative Agent
following the delivery of the Company's audited consolidated financial
statements for such Fiscal Year pursuant to Section 6.10(a) hereof; provided,
that, if the Company shall fail to deliver its audited consolidated financial
statements for any Fiscal Year on or before the date required pursuant to
Section 6.10(a) hereof, $1,666,500 shall be the Canadian Excess Cash Flow Amount
for such Fiscal Year.
"CANADIAN FEE LETTER" shall mean the letter agreement dated
March 28, 2002, regarding fees executed by CIT Business Credit Canada, Inc. and
accepted by Canadian Borrowers.
"CANADIAN INCLUDED-IN-TRANSIT LIMIT" shall mean the amount of
the Included-in-Transit Limit which the Canadian Borrowers designate as the
"Canadian Included-in-Transit Limit" on the Canadian Borrowing Base Report from
which the Canadian Borrowing Base is being calculated; provided, that, for any
date on which the Borrowing Bases are being reported, in no event shall the sum
of the Canadian Included-in-Transit Limit and the US Included-in-Transit Limit
ever exceed the Included-in-Transit Limit.
"CANADIAN INVENTORY LIMIT" shall mean the amount of the
Inventory Limit which the Canadian Borrowers designate as the "Canadian
Inventory Limit" on the Canadian Borrowing Base Report from which the Canadian
Borrowing Base is being calculated; provided, that, in no event shall the sum of
the Canadian Inventory Limit and the US Inventory Limit ever exceed the
Inventory Limit.
"CANADIAN LENDER" shall mean a Lender with a Canadian
Revolving Credit Commitment.
"CANADIAN LENDER INDEBTEDNESS" shall mean any and all amounts
owing or to be owing by any Canadian Credit Party to the Administrative Agent,
the Canadian Administrative Agent, the Issuing Banks or the Lenders with respect
to or in connection with the Canadian Loans, any Canadian Letter of Credit
Liabilities, the Notes, any Swap Agreement between any of the Canadian Borrowers
and JPMorgan or any of its Secured Affiliates, any Cash Management Agreement
between any of the Canadian Borrowers and a Canadian Lender or its Cash
Management Affiliate, this Agreement, or any other Financing Document and, as to
Swap Agreements with JPMorgan or any of its Secured Affiliates or any Cash
Management Agreement with any Lender or any Lender or its Cash Management
Affiliate, any
8
and all amounts owing or to be owing by any Canadian Credit Party thereunder to
JPMorgan or any of its Secured Affiliates or Cash Management Affiliate,
respectively.
"CANADIAN LETTER OF CREDIT" shall have the meaning set forth
in Section 2.3(b).
"CANADIAN LETTERS OF CREDIT" shall mean all Letters of Credit
issued under the Canadian Revolving Credit Commitments.
"CANADIAN LETTER OF CREDIT LIABILITIES" shall mean, at any
time and in respect of any Canadian Letter of Credit, the Dollar Equivalent at
such time of the sum of (a) the amount available for drawings under such
Canadian Letter of Credit as of the date of determination plus (b) the aggregate
unpaid amount of all Reimbursement Obligations due and payable as of the date of
determination in respect of previous drawings made under such Canadian Letter of
Credit.
"CANADIAN LOANS" shall mean the Canadian Revolving Credit
Loans.
"CANADIAN LOCKBOX" shall mean any lock box to be established
and operated pursuant to Section 4.4 hereof and the Canadian Lockbox Agreement.
"CANADIAN LOCKBOX AGREEMENT" shall mean an agreement between
the Canadian Borrowers and the Canadian Lockbox Bank governing the Canadian
Lockbox.
"CANADIAN LOCKBOX BANK" shall mean Royal Bank of Canada or any
other financial institution designated by Canadian Administrative Agent and
approved by the Administrative Agent to act as the Canadian Lockbox Bank and
consented to in writing by the Canadian Borrowers which consent shall not be
unreasonably withheld and which has entered into the Canadian Lockbox Agreement.
"CANADIAN MAXIMUM AVAILABLE AMOUNT" shall mean, at any date,
an amount equal to the lesser of (a) the Aggregate Canadian Revolving Credit
Commitments as of such date, and (b) the remainder of (i) the Canadian Borrowing
Base as of such date, minus (ii) the sum of (A) the Availability Reserves with
respect to the Canadian Borrowing Base as of such date, plus (B) Canadian
Priority Claims Reserve as of the day the Canadian Borrowing Base is calculated,
plus (C) the portion of the Swap Reserves, the Cash Management Reserves, the
Processing Reserves and Storage/Handling Reserves applicable to the Canadian
Borrowers as of the last day of the month for which the Canadian Borrowing Base
is being calculated.
"CANADIAN PRIME RATE" shall mean on any day, the annual rate
of interest (rounded upwards, if necessary, to the nearest 1/16 of 1%) equal to
the greater of: (a) the annual rate of interest announced from time to time by
JPMorgan Canada as its prime rate in effect at its principal office in ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ on such day being the reference rate used by JPMorgan Canada for
determining interest rates on C$ denominated commercial loans to its customers
in Canada; and (b) the annual rate of interest equal to the sum of (i) the CDOR
Rate in effect on such day, and (ii) 1%.
"CANADIAN PRIME RATE LOANS" shall mean C$ Denominated Loans
which bear interest at a rate based upon the Canadian Prime Rate.
"CANADIAN PRIORITY CLAIMS RESERVE" shall mean, as of the last
day of each month, the aggregate amount of all claims that Governmental
Authorities have against the Canadian Borrowers on such date, which if asserted
could have priority over the Canadian Lender Indebtedness pursuant to applicable
Canadian federal, provincial or territorial laws and shall include, without
limitation, claims with respect to accrued salaries and wages, accrued vacation
payable, Revenue Canada employment
9
taxes, employment post-retirement health and dental insurance, goods and
services, taxes and provincial sales taxes.
"CANADIAN REAL ESTATE MORTGAGE" shall mean a Mortgage and an
Assignment of Rents substantially in the form of Exhibits C-1 and C-2 and in
each case with such changes thereto as Canadian Administrative Agent shall deem
necessary or appropriate to comply with provincial and local Governmental
Requirements.
"CANADIAN REVOLVING CREDIT COMMITMENT" shall have the meaning
assigned to such term in Section 2.1(d).
"CANADIAN REVOLVING CREDIT EXPOSURE" shall mean, at any time
and as to each Canadian Lender, the Dollar Equivalent sum of (a) the aggregate
principal amount of the Canadian Revolving Credit Loans made by such Canadian
Lender outstanding as of such date plus (b) the accrued and unpaid interest on
the Canadian Revolving Credit Loans made by such Canadian Lender outstanding as
of such date plus (c) such Canadian Lender's Canadian Revolving Credit
Percentage of the aggregate amount of all Canadian Letter of Credit Liabilities
as of such date.
"CANADIAN REVOLVING CREDIT LOAN" shall have the meaning
provided in Section 2.1(a).
"CANADIAN REVOLVING CREDIT NOTE" shall mean a promissory note
of the Canadian Borrowers described in Section 2.5(b) payable to any Canadian
Lender and being substantially in the form of Exhibit D, evidencing the
aggregate Indebtedness of the Canadian Borrowers to such Canadian Lender
resulting from Canadian Revolving Credit Loans made by such Lender.
"CANADIAN REVOLVING CREDIT PERCENTAGE" shall mean as to any
Canadian Lender, the percentage of the aggregate Canadian Revolving Credit
Commitments constituted by its Canadian Revolving Credit Commitment (or, if the
Canadian Revolving Credit Commitments have terminated or expired, the percentage
which such Lender's Canadian Revolving Credit Exposure at such time constitutes
of the Aggregate Canadian Revolving Credit Exposure at such time).
"CANADIAN SECURITY AGREEMENT" shall mean any and all Security
Agreements executed by a Canadian Credit Party, substantially in the form of
Exhibit E, as amended, modified, renewed, supplemented or restated from time to
time.
"CANADIAN WIP LIMIT" shall mean the amount of the WIP Limit
which the Canadian Borrowers designate as the "Canadian WIP Limit" on the
Canadian Borrowing Base Report from which the Canadian Borrowing Base is being
calculated; provided, that, in no event shall the sum of the Canadian WIP Limit
and the US WIP Limit ever exceed the WIP Limit.
"CAPITAL EXPENDITURES" shall mean, as to any Person for any
period, all expenditures (whether paid in cash or accrued as a liability,
including the portion of Capital Lease Obligations originally incurred during
such period that are capitalized on the consolidated balance sheet of the
Company) by such Person and its Subsidiaries during such period, that, in
conformity with GAAP, are included in "capital expenditures," "additions to
property, plant or equipment" or comparable items in the consolidated financial
statements of such Person, but excluding expenditures for the restoration,
repair or replacement of any fixed or capital asset that was destroyed or
damaged, in whole or in part, in an amount equal to any insurance proceeds
received in connection with such destruction or damage.
"CAPITAL LEASE OBLIGATIONS" shall mean, as to any Person, the
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) real
10
and/or personal property which obligations are required to be classified and
accounted for as a liability for a capital lease on a balance sheet of such
Person and, for purposes of this Agreement, the amount of such obligations shall
be the capitalized amount thereof.
"CASH MANAGEMENT AFFILIATE" shall mean any Affiliate of any
Lender that has entered into a Cash Management Agreement with a Credit Party
with the obligations of such Credit Party thereunder being secured by one or
more Security Instruments.
"CASH MANAGEMENT AGREEMENT" shall mean any document,
instrument, agreement, arrangements or transactions with respect to cash
management services and includes, without limitation, any of the foregoing
related to deposit accounts, overdraft protection or automated clearing house
transactions.
"CASH MANAGEMENT RESERVES" shall mean, an amount (reflected in
Dollars) calculated as of the last day of each month and separately for the US
Borrowers and the Canadian Borrowers, equal to such Borrowers' liability under
the Cash Management Agreements to which such Borrowers are a party and any
exposure of the Lenders or Cash Management Affiliates with respect to such Cash
Management Agreements and the services performed thereunder on behalf of such
Borrowers.
"CDOR RATE" shall mean on any date, the annual rate of
interest which is the rate based on an average rate applicable to Canadian B/As
for a term of 30 days appearing on the "Reuters Screen CDOR Page" (as defined in
the International Swaps and Derivatives Association, Inc. definitions, as
modified and amended from time to time) at approximately 10:00 a.m. (Toronto,
Ontario Canada time), on such date, or if such date is not a Business Day, then
on the immediately preceding Business Day, provided that, if such rate does not
appear on the Reuters Screen CDOR Page as contemplated, then the CDOR Rate on
any date shall be calculated as the rate for the term referred to above
applicable to Canadian B/As quoted by JPMorgan Canada as of 10:00 a.m. (Toronto,
Ontario Canada time) on such date or, if such date is not a Business Day, then
on the immediately preceding Business Day.
"CHANGE OF CONTROL" shall be deemed to occur at any time when
any of the following occurs: (a) any Unrelated Person or any Unrelated Persons,
acting together, which would constitute a Group together with any Affiliates or
Related Persons thereof (in each case also constituting Unrelated Persons) shall
at any time either (1) Beneficially Own more than 30% of the aggregate voting
power of all classes of Voting Stock of the Company, or (2) succeed in having a
sufficient number of its or their nominees elected to the Board of Directors of
the Company such that such nominees, when added to any existing director
remaining on the Board of Directors of the Company after such election who is an
Affiliate or Related Person of such Person or Group, shall constitute a majority
of the Board of Directors of the Company, or (b) the Company ceasing to directly
or indirectly own 100% of the issued and outstanding Equity of each other Credit
Party on a fully diluted basis. As used herein (1) "BENEFICIALLY OWN" means
"beneficially own" as defined in Rule 13d-3 of the Securities Exchange Act of
1934, as amended, or any successor provision thereto; provided, however, that,
for purposes of this definition, a Person shall not be deemed to Beneficially
Own securities tendered pursuant to a tender or exchange offer made by or on
behalf of such Person or any of such Person's Affiliates until such tendered
securities are accepted for purchase or exchange; (2) "GROUP" means a "group"
for purposes of Section 13(d) of the Securities Exchange Act of 1934, as
amended; (3) "UNRELATED PERSON" means at any time any Person other than the
Company; and (4) "RELATED PERSON" of any Person means any other Person owning
(A) 10% or more of the outstanding common stock of such Person or (B) 10% or
more of the Voting Stock of such Person.
"CLOSING DATE" shall mean the "as of" date of this Agreement
set forth in the first paragraph hereof.
11
"CODE" shall mean the Internal Revenue Code of 1986, as
amended, and any successor statute.
"COILED" shall have the meaning set forth in the recitals
hereto.
"COLLATERAL" shall mean the Credit Parties' Properties
described in and subject to the Liens, privileges, priorities and security
interests purported to be created by any Security Instrument.
"COMBINED REVOLVING CREDIT COMMITMENT" shall mean, for any
Revolving Lender, the aggregate amount of such Revolving Lender's US and
Canadian Revolving Credit Commitments, and for purposes of this definition, a
Revolving Lender and its Related Affiliate shall be deemed to be one and the
same Revolving Lender.
"COMMITMENT" means any US Revolving Credit Commitment, US
Swingline Commitment, Term Commitment or Canadian Revolving Credit Commitment,
and "COMMITMENTS" means all such Commitments collectively.
"COMPANY" shall have the meaning set forth in the initial
paragraph hereof.
"CONTRACT PERIOD" shall mean the term of a B/A selected by the
Canadian Borrowers in accordance with Section 2.8 or Section 2.12 commencing on
the date of such Borrowing or any rollover date, as applicable, of such B/A
(which shall be a Business Day) and expiring on a Business Day which shall be
either one month, two months, three months, or with the consent of the Canadian
Lenders, six months later; provided that no Contract Period shall extend beyond
the Maturity Date. Notwithstanding the foregoing, whenever the last day of any
Contract Period would otherwise occur on a day which is not a Business Day, the
last day of such Contract Period shall occur on the next succeeding Business Day
and such extension of time shall in such case be included in computing the
Acceptance Fee in respect of the relevant B/A.
"CREDIT PARTIES" shall mean the Company, and each of its
Subsidiaries collectively, and "CREDIT PARTY" shall mean any such Person
individually.
"CREDIT PERCENTAGE" means, for each Lender, the percentage
obtained by dividing (a) the sum of the Revolving Credit Exposure of such Lender
and the outstanding principal balance of any Term Loans held by such Lender, by
(b) the sum of the Aggregate Revolving Credit Exposure, plus the aggregate
outstanding principal balance of all Term Loans.
"CURRENT INFORMATION" shall mean, as of any day, the financial
statements and other related information for any applicable period most recently
required to be delivered to the Administrative Agent pursuant to Section
6.10(a), Section 6.10(b), and Section 6.10(c).
"DATED ASSETS" has the meaning assigned to such term in
Section 2.25(c) hereof.
"DATED LIABILITIES" has the meaning assigned to such term in
Section 2.25(c) hereof.
"DEFAULT" shall mean an Event of Default or any condition or
event which, with notice or lapse of time or both, would constitute an Event of
Default.
"DILUTION" shall mean a reduction as determined by
Administrative Agent in the value of accounts caused by returns, allowances,
discounts, credits, and/or any other offsets asserted by customers or granted by
Borrowers having the effect of reducing the collections of accounts.
12
"DILUTION PERCENTAGE" shall mean, with respect to either the
US Borrowers or the Canadian Borrowers, the ratio as reasonably determined by
Administrative Agent of Dilution to the total sales of such Borrowers.
"DISBURSEMENT ACCOUNT" has the meaning assigned to such term
in Section 2.4(a).
"DISCOUNT PROCEEDS" shall mean for any B/A, an amount (rounded
to the nearest whole cent, and with one-half of one cent being rounded upwards)
calculated on the applicable date of the Borrowing of which such B/A is a part
or any rollover date for such Borrowing by multiplying: (a) the face amount of
the B/A; by (b) the quotient of one divided by the sum of one plus the product
of: (1) the Discount Rate (expressed as a decimal) applicable to such B/A, and
(2) a fraction, the numerator of which is the Contract Period of the B/A and the
denominator of which is 365, with the such quotient being rounded up or down to
the fifth decimal place, and .000005 being rounded up.
"DISCOUNT RATE" shall mean the percentage discount rate
(expressed to two decimal places and rounded upward, if necessary, to the
nearest 0.01%) quoted by JPMorgan Canada as the percentage discount rate at
which JPMorgan Canada would, in accordance with its normal practices, at or
about 10:00 a.m., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ time, on such date, be prepared to
purchase bankers' acceptances accepted by JPMorgan Canada having a face amount
and term comparable to the face amount and term of such B/A.
"DISPOSITION" shall mean the sale by the applicable US
Borrower of either of the following: (a) the Real Property located in Longview,
Washington and described on Schedule 5.24 hereto, and (b) the Real Property
located in ▇▇▇▇▇▇▇, Arkansas described on Schedule 5.24 hereto, to the extent
subject to a purchase option pursuant to Article 22 of that certain Lease
Agreement dated January 10, 2001 between the Company and Commercial Resins
Company, Inc.
"DOCUMENTARY LETTER OF CREDIT" shall mean a letter of credit
issued pursuant to this Credit Agreement that supports payment or performance
for a single identified purchase or exchange of products in the ordinary course
of business of the Borrowers.
"DOCUMENTATION AGENT" shall mean General Electric Capital
Corporation, acting in the manner and to the extent described in Article 9, and
any successor to General Electric Capital Corporation acting in such manner
"DOLLAR" and the sign "$," without the letter "C" before it,
shall mean lawful money of the United States of America.
"DOLLAR DENOMINATED LOANS" shall mean US Revolving Credit
Loans and any Canadian Revolving Credit Loans which are denominated in Dollars
and Dollars Denominated Loans shall include all Term Loans.
"DOLLAR EQUIVALENT" shall mean, on any date of determination,
with respect to any amount expressed in C$, the amount of Dollars that may be
purchased with such amount of C$ at the Spot Exchange Rate on such date.
"EBITDA" shall mean, as to the Company for any period, without
duplication, the amount equal to the following calculated for the Company and
its wholly owned consolidated Subsidiaries on a consolidated basis; net income
determined in accordance with GAAP, plus to the extent deducted from net income,
Interest Expense, depreciation, amortization, other non-cash expenses, and
13
income and franchise tax expenses; provided, that, extraordinary gains or losses
for any such period, including but not limited to gains or losses on the
disposition of assets, shall not be included in EBITDA.
"ELIGIBLE ACCOUNT" shall mean at any time with respect to any
Person the invoice amount, net of all goods and services, harmonized and sales
taxes, (which shall be the Dollar Equivalent at such time of any amount
denominated in C$) owing on each account (which shall mean (a) any "account" as
such term is defined in Section 9-102(a)(2) of the UCC and (b) any "chattel
paper" as such term is defined in Section 9-102(a)(11) of the UCC) of such
Person (net of any credit balance, returns, trade discounts, unapplied cash,
unbilled amounts or retention or finance charges) which meet such standards of
eligibility as Administrative Agent shall establish from time to time in its
sole reasonable discretion; provided that no account shall be deemed an Eligible
Account unless each of the following statements is accurate and complete (and
the Person by including such account in any computation of the applicable
Borrowing Base shall be deemed to represent and warrant to the Administrative
Agent, each Issuing Bank and the Lenders the accuracy and completeness of such
statements; provided, that such Person will not be deemed to have represented or
warranted to Administrative Agent's general satisfaction with the credit
standing of any obligor (as provided in clause (12) hereof) or with letters of
credit or export/input insurance (as provided in clause (13) hereof)):
(1) Said account is a binding and valid obligation of the
obligor thereon in full force and effect;
(2) Said account is evidenced by an invoice;
(3) Said account is genuine as appearing on its face or
as represented in the books and records of the Person;
(4) Said account is free from claims regarding
rescission, cancellation or avoidance, whether by operation of law or otherwise;
(5) Payment of said account is less than 90 days past the
original invoice date thereof, other than accounts of up to three (3) obligors
owed to the Canadian Borrowers that have been extended 60 day terms by a
Canadian Borrower so long as payment of said accounts of such obligors are less
than 120 days past the original invoice date thereof;
(6) Said account is net of concessions, offset,
deduction, contras, chargebacks or understandings with the obligor thereon that
in any way could reasonably be expected to adversely affect the payment of, or
the amount of, said account;
(7) The Administrative Agent, or the Canadian
Administrative Agent, as the case may be, on behalf of the applicable Lenders,
the Cash Management Affiliates and the Secured Affiliates, has a first-priority
perfected Lien covering said account and said account is, and at all times will
be, free and clear of all other Liens other than Permitted Liens;
(8) The obligor on said account is not (a) an Affiliate
of any of the Borrowers, or (b) an employee of any of the Borrowers;
(9) Said account arose in the ordinary course of business
of the Person;
(10) Said account is not payable by an obligor who is more
than 90 days past the original invoice date thereof with regard to 50% or more
of the total aggregate accounts owed to the Person by such obligor and all of
its Affiliates;
14
(11) All consents, licenses, approvals or authorizations
of, or registrations or declarations with, any Governmental Authority required
to be obtained, effected or given in connection with the execution, delivery and
performance of said account by each party obligated thereunder have been duly
obtained, effected or given and are in full force and effect;
(12) The obligor on said account is not the subject of any
bankruptcy or insolvency proceeding, has not had a trustee or receiver appointed
for all or a substantial part of its property, has not made an assignment for
the benefit of creditors, admitted its inability to pay its debts as they mature
or suspended its business, and the Administrative Agent, in its reasonable
discretion, is otherwise satisfied with the credit standing of such obligor;
(13) The obligor of said account is organized and existing
under the laws of the United States of America or a State thereof or the federal
laws of Canada, a province or territory thereof, or if the obligor is not so
organized and existing, said account is covered under letters of credit or
export/import insurance reasonably satisfactory to Administrative Agent;
(14) The obligor of said account is not a state,
commonwealth, provincial, federal, foreign, territorial, or other court or
governmental department, commission, board, bureau, agency or instrumentality
other than the federal government of the United States of America, the federal
government of Canada or the government of any province or territory of Canada or
political subdivision thereof, and then only to the extent that such Person has
complied in all respects with the relevant provisions of the Federal Assignment
of Claims Act of 1940 (for a US Borrower) or the Financial Administration Act
(Canada) or similar provincial or territorial legislation or municipal ordinance
of similar purpose (for a Canadian Borrower);
(15) In the case of the sale of goods, the subject goods
have been sold and shipped or delivered to an obligor on a true sale basis on
open account, or subject to contract, and not on consignment, on approval, on a
"sale or return" basis, or on a "▇▇▇▇ and hold" or "pre-sale" basis or subject
to any other repurchase or return agreement, no material part of the subject
goods has been returned, rejected, lost or damaged, and said account is not
evidenced by chattel paper or an instrument of any kind;
(16) Each of the representations and warranties set forth
herein and in the Security Instruments with respect to said account is true and
correct on such date; and
(17) The obligor of said account is not an individual or
individual proprietorship which does not transact with the Borrower in the
ordinary course of business of the Borrower;
provided that, if any Eligible Account, when added to all other accounts that
are obligations of the same obligor and its Affiliates, results in a total sum
that exceeds 20% of the total balance then due on all Eligible Accounts owed to
the Borrowers (without giving effect to any reduction in Eligible Accounts
pursuant to this proviso), unless the accounts of such obligors or group of
Affiliated obligors are insured pursuant to credit insurance acceptable to
Administrative Agent which has been assigned to Administrative Agent or Canadian
Administrative Agent (as applicable), the amount of said accounts in excess of
20% of such total balance then due shall be excluded from Eligible Accounts of
the Borrowers to whom said accounts are owed; provided, that, if said accounts
of such obligor (or group of Affiliated obligors) are owed to both the US
Borrowers and Canadian Borrowers, such excess amount shall be excluded from the
Eligible Accounts of the Canadian Borrowers and the US Borrowers in the same
proportion as all amounts from such obligor are owed to the Canadian Borrowers
and the US Borrowers.
"ELIGIBLE ACCOUNT ADVANCE PERCENTAGE" shall mean 85%;
provided, that, Administrative Agent may, in its sole discretion lower such
percentage to such lesser percentage as it
15
deems appropriate in its sole discretion at any time the applicable Borrowers'
Dilution Percentage exceeds five percent (5%).
"ELIGIBLE BAILEE INVENTORY" shall mean all "inventory" (as
such term is defined in Section 9-102(a)(48) of the UCC) of the Borrowers which
would be "Eligible Inventory" but for the requirement set forth in clause (2) of
the definition of Eligible Inventory because such inventory is located on Real
Property that is not owned or leased by the Borrowers, and with respect to which
the Administrative Agent shall have received a Bailee's Letter in a form and
substance satisfactory to the Administrative Agent in its sole discretion.
"ELIGIBLE ▇▇▇▇ AND HOLD ACCOUNTS" shall mean any "account" as
such term is defined in Section 9-102(a)(2) of the UCC and (b) any "chattel
paper" as such term is defined in Section 9-102(a)(11) of the UCC) of any US
Borrower which would be an "Eligible Account" but for the requirement set forth
in clause (15) of the definition of Eligible Account because it is a "▇▇▇▇ and
hold" account, and with respect to which, (i) such account is less than 60 days
from its original invoice date and (ii) the Administrative Agent shall have
received an agreement from the obligor thereof confirming its unconditional
obligation to pay such "▇▇▇▇ and hold" accounts in form and substance
satisfactory to the Administrative Agent in its sole discretion.
"ELIGIBLE INCLUDED-IN-TRANSIT INVENTORY" shall mean
Included-In-Transit Inventory which would be "Eligible Inventory" but for the
requirement set forth in clause (2) of the definition of Eligible Inventory.
"ELIGIBLE INVENTORY" shall mean, at any time with respect to
any Person, all "inventory" (as such term is defined in Section 9-102(a)(48) of
the UCC) of such Person valued in Dollars on a lower of cost (on a FIFO basis
and excluding any component of cost representing intercompany profit in the case
of inventory acquired from an Affiliate) or market basis in accordance with GAAP
(with detailed calculations of lower of cost or market to occur on at least a
quarterly basis (until such time as Excess Availability is less than $20,000,000
at which time such calculations will be required on a monthly basis until Excess
Availability has exceeded $20,000,000 for ninety (90) consecutive days) for
which each of the following statements is accurate and complete (and such Person
by including such inventory in any computation of the applicable Borrowing Base
shall be deemed to represent and warrant to the Administrative Agent, each
Issuing Bank and each Lender the accuracy and completeness of such statements
(subject to Permitted Borrowing Base Adjustments)):
(1) Said inventory is in good condition, meets all
standards imposed by any Governmental Authority having regulatory authority over
it or its use and/or sale and is not obsolete and is either currently usable or
currently salable in the normal course of business of such Person;
(2) Said inventory is either (i) inventory the payment
for which has been provided for by the issuance of a Documentary Letter of
Credit hereunder, or (ii) is in possession of such Person and (1) located on
Real Property owned or leased by such Person and described in Schedule 5.24
hereto, and (2) within the United States or Canada; provided, that, if said
inventory is located on Real Property leased by such Person, the landlord of
such Real Property shall have executed a Landlord Waiver Agreement;
(3) Each of the representations and warranties set forth
in the Security Instruments with respect to said inventory is true and correct
on such date;
(4) The Administrative Agent or the Canadian
Administrative Agent, as the case may be, on behalf of the applicable Lenders,
has a first-priority perfected Lien covering said inventory,
16
other than Permitted Liens, and said inventory is, and at all times will be,
free and clear of all Liens except for Permitted Liens;
(5) Said inventory does not include goods that are not
owned by such Person, that are held by such Person pursuant to a consignment
agreement or which have been sold by such Person on a ▇▇▇▇ and hold basis to the
extent such inventory has been paid for or has given rise to an Eligible ▇▇▇▇
and Hold Account;
(6) Said inventory is not subject to repossession under
the Bankruptcy and Insolvency Act (Canada) except to the extent the applicable
vendor has entered into an agreement with Canadian Administrative Agent waiving
its right to repossession, which agreement shall be acceptable to Canadian
Administrative Agent; and
(7) Said inventory does not consist of spools, store room
materials, supplies or parts. Standards of eligibility for inventory may be
fixed and revised prospectively from time to time solely by the Administrative
Agent in its sole reasonable judgment.
"ELIGIBLE INVENTORY ADVANCE PERCENTAGE" shall mean (a) for
Eligible Inventory, Eligible Included-in-Transit Inventory and Eligible Bailee
Inventory consisting of steel coil raw material, 60%, and (b) for all other
Eligible Inventory, Eligible Included-in-Transit Inventory and Eligible Bailee
Inventory, 50%; provided that the percentage in effect pursuant to this clause
(b) shall reduce by 0.5% on the first day of each month commencing on July 1,
2002 and continuing until it reaches 45%; provided, further, the Eligible
Inventory Advance Percentages in effect pursuant to clause (a) and (b) preceding
are subject to reduction by Administrative Agent in its reasonable discretion
based on the results of inventory appraisals provided to the Agents and Lenders
from time to time pursuant to Section 6.10(o) hereof.
"ENVIRONMENTAL LAWS" shall mean any and all laws, statutes,
ordinances, rules, regulations, orders, or determinations of any Governmental
Authority pertaining to health or the environment in effect in any and all
jurisdictions in which any Credit Party is conducting or at any time has
conducted business, or where any Property of any Credit Party is located, or
where any hazardous substances generated by or disposed of by any of the Credit
Parties are located, including but not limited to the Oil Pollution Act of 1990
("OPA"), the Clean Air Act, as amended, the Comprehensive Environmental,
Response, Compensation, and Liability Act of 1980 ("CERCLA"), as amended, the
Federal Water Pollution Control Act, as amended, the Occupational Safety and
Health Act of 1970, as amended, the Resource Conservation and Recovery Act of
1976 ("RCRA"), as amended, the Safe Drinking Water Act, as amended, the Toxic
Substances Control Act, as amended, the Superfund Amendments and Reauthorization
Act of 1986, as amended, and other environmental conservation or protection
laws. The term "OIL" shall have the meaning specified in OPA; the terms
"HAZARDOUS SUBSTANCE," "RELEASE" and "THREATENED RELEASE" have the meanings
specified in CERCLA, and the terms "SOLID WASTE" and "DISPOSAL" (or "DISPOSED")
have the meanings specified in RCRA; provided, however, in the event either
CERCLA or RCRA is amended so as to change the meaning of any term defined
thereby, such changed meaning shall apply subsequent to the effective date of
such amendment, and provided, further, that, to the extent the laws of the state
in which any Property of any Credit Party is located establish a meaning for
"oil," "hazardous substance," "release," "solid waste" or "disposal" which is
broader than that specified in either OPA, CERCLA or RCRA, such broader meaning
shall apply.
"EQUITY" shall mean shares of capital stock or a partnership,
profits, capital or member interest, or options, warrants or any other right to
substitute for or otherwise acquire the capital stock or a partnership, profits,
capital or member interest of any Credit Party and shall expressly include all
"stock appreciation rights", "phantom stock" "profit participations" and other
similar interests.
17
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended, and any successor statute.
"ERISA AFFILIATE" shall mean each trade or business (whether
or not incorporated) which together with any Borrower would be deemed to be a
"single employer" within the meaning of Section 4001(b)(1) of ERISA or
Subsections 414(b), (c), (m) or (o) of the Code.
"ERISA TERMINATION EVENT" shall mean (a) a "Reportable Event"
described in Section 4043 of ERISA and the regulations issued thereunder (other
than a "Reportable Event" not subject to the provision for 30-day notice to the
PBGC pursuant to regulations under Section 4043 of ERISA, (b) the withdrawal of
any Credit Party or any ERISA Affiliate from a Plan during a plan year in which
it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA, (c)
the filing of a notice of intent to terminate a Plan or the treatment of a Plan
amendment as a termination under Section 4041(c) of ERISA, (d) the institution
of proceedings to terminate a Plan by the PBGC, or (e) any other event or
condition which could reasonably be expected to constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan.
"EURODOLLAR LOAN" shall mean a US Revolving Credit Loan, a
Canadian Revolving Credit Loan or a Term Loan that is a Dollar Denominated Loan
bearing interest at the rate provided in Section 2.6(b).
"EURODOLLAR RATE" shall mean, with respect to any Borrowing of
Eurodollar Loans for any Interest Period, the product of (a) (1) the interest
rate per annum shown on page 3750 of the Dow ▇▇▇▇▇ & Company Telerate screen or
any successor page as the composite offered rate for London interbank deposits
with a period comparable to the Interest Period for such Eurodollar Loan, as
shown under the heading "USD" at 11:00 A.M. (London time) two Business Days
prior to the first day of such Interest Period or (2) if the rate in clause (1)
of this definition is not shown for any particular day, the average interest
rate per annum (rounded upwards, if necessary, to the next 1/16th of 1%) offered
to the Administrative Agent in the interbank Eurodollar market for Dollar
deposits of amounts in funds comparable to the principal amount of the
Eurodollar Loan to which such Eurodollar Rate is to be applicable with
maturities comparable to the Interest Period for which such Eurodollar Rate will
apply as of approximately 10:00 a.m. (New York, New York time) two Business Days
prior to the commencement of such Interest Period, times (b) Statutory Reserves,
if any.
"EVENT OF DEFAULT" shall have the meaning provided in Article
8.
"EXCESS AVAILABILITY" shall mean, as of any date, the sum of
(a) the Canadian Excess Availability as of such date and (b) the US Excess
Availability as of such date.
"EXCESS CASH FLOW" shall mean, as to either the US Borrowers
or the Canadian Borrowers, (a) Funds Flow from Operations for the US Borrowers
or the Canadian Borrowers, as applicable, for any Fiscal Year, minus (b) for
each such Fiscal Year and for the US Borrowers or the Canadian Borrowers, as
applicable, the sum of (x) the sum of each of the following, to the extent
actually paid: (1) the principal portion of scheduled payments under Capital
Lease Obligations, (2) Non-Financed Capital Expenditures, plus (y) all scheduled
reductions in the Canadian Equipment Component and the US Equipment Component
occurring during such period.
"EXCESS NET CASH PROCEEDS" shall mean, with respect to any
Disposition, the amount by which Net Cash Proceeds received by the applicable US
Borrower in such Disposition exceeds (i) in the case of the Longview, Washington
Real Property, $3,250,000 and (ii) in the case of the ▇▇▇▇▇▇▇, Arkansas Real
Property, $550,000.
18
"EXCHANGECO" shall have the meaning set forth in the initial
paragraph hereof.
"EXCLUDED TAXES" shall mean, with respect to the
Administrative Agent, any Lender, any Issuing Bank or any other recipient of any
payment to be made by or on account of any obligation of any Borrower hereunder,
(a) income or franchise taxes imposed on (or measured by) its net income by the
United States of America, or by the jurisdiction under the laws of which such
recipient is organized or in which its principal office is located or, in the
case of any Lender, in which its applicable lending office is located, (b) any
branch profits taxes imposed by the United States of America or any similar tax
imposed by any other jurisdiction in which the Company is located, and (c) in
the case of a Foreign Lender any withholding tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party
to this Agreement (or designates a new lending office) or is attributable to
such Foreign Lender's failure to comply with Section 2.21(f), except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrowers with respect to such withholding tax
pursuant to Section 2.21(a). Notwithstanding the foregoing, "Excluded Taxes"
shall not include withholding taxes attributable to any amount payable by any US
Credit Party in respect of Canadian Lender Indebtedness pursuant to the Guaranty
and Security Agreement or any other Financing Document.
"EXISTING INDEBTEDNESS" shall mean all Funded Indebtedness of
the Credit Parties on the Closing Date, but excluding Loans and Letter of Credit
Liabilities.
"FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any day, the
per annum rate equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.
"FEE LETTER" shall mean the letter agreement dated February 6,
2002, regarding fees, executed by JPMorgan and accepted and agreed to by the
Company as of February 6, 2002.
"FINANCIAL STATEMENTS" shall mean (a) the audited consolidated
financial statements of the Company for the Fiscal Years ended December 31,
1999, 2000, and 2001, and the unaudited consolidated financial statements of the
Company for the months ended January 31, 2002 and February 28, 2002, and (b) the
audited consolidated financial statement of Holding for its fiscal years ending
March 31, 2000 and 2001 and the unaudited consolidated financial statements of
Holding for the nine months ended December 31, 2001.
"FINANCING DOCUMENTS" shall mean this Agreement, the Notes,
the Security Instruments, the Applications, Borrowing Requests, Borrowing Base
Reports, the Cash Collateral Account Agreements, the Canadian Fee Letter, the
Fee Letter, and the other documents, instruments or agreements described in
Section 3.1 and Section 3.2, together with any other document, instrument or
agreement (other than participation, agency or similar agreements among the
Lenders or between any Lender and any other bank or creditor with respect to any
indebtedness or obligations of the Company or its Subsidiaries hereunder or
thereunder) now or hereafter entered into in connection with the Loans, the
Lender Indebtedness or the Collateral, as such documents, instruments or
agreements may be amended, modified or supplemented from time to time.
"FISCAL QUARTER" shall mean the fiscal quarter of the Company
and each of the Borrowers, ending on the last day of each March, June, September
and December of each year.
19
"FISCAL YEAR" shall mean the fiscal year of the Company and
each of the Borrowers, ending on the last day of December of each year.
"FIXED CHARGE COVERAGE RATIO" shall mean, as to the Company
and its Subsidiaries on a consolidated basis, determined for any period, the
ratio of (a) EBITDA for such period minus the sum of (1) Non Financed Capital
Expenditures made during such period, plus (2) cash taxes paid during such
period, plus (3) cash distributions or dividends actually paid during such
period by the Company to its stockholders and all amounts paid by the Company to
repurchase Equity from its stockholders during such period, to (b) the sum of
(1) scheduled principal payments on Funded Indebtedness during such period
(including scheduled reductions in the Canadian Equipment Component and the US
Equipment Component assuming that such reduction commenced on April 1, 2002),
plus (2) Adjusted Interest Expense for such period.
"FOREIGN LENDER" shall mean, as to the US Borrowers, any US
Lender that is organized under the laws of a jurisdiction other than that in
which the US Borrowers are located. For purposes of this definition, the United
States of America, each State thereof and the District of Columbia shall be
deemed to constitute a single jurisdiction.
"FUNDED INDEBTEDNESS" shall mean, as to any Person, without
duplication, all Indebtedness for borrowed money, all obligations evidenced by
bonds, debentures, notes, or other similar instruments, all Capital Lease
Obligations, and all guaranties of Funded Indebtedness of other Persons.
"FUNDS FLOW FROM OPERATIONS" shall mean, as to the Company for
any period, without duplication, the amount equal to net income for the Company
and its Subsidiaries determined on a consolidated basis in accordance with GAAP,
plus to the extent deducted from net income, depreciation, amortization,
non-cash Interest Expense and any other non-cash expense; provided, however,
that the results of operations of all Affiliates of the Company (other than
wholly owned Subsidiaries of the Company) shall only be included in Funds Flow
from Operations to the extent the Company or one of its wholly owned
Subsidiaries actually receives cash distributions or dividends in respect of its
ownership interest in such Affiliate during the period for which Funds Flow from
Operations is being calculated.
"GAAP" shall mean generally accepted accounting principles in
effect in the United States as applied in accordance with Section 1.2 as of the
date hereof consistently applied.
"GOVERNMENTAL AUTHORITY" shall mean any (domestic or foreign)
federal, state, province, territory, county, city, municipal or other political
subdivision or government, department, commission, board, bureau, court, agency
or any other instrumentality of any of them, which exercises jurisdiction over
any Credit Party or any Property (including, but not limited to, the use and/or
sale thereof) of any Credit Party or any Plan.
"GOVERNMENTAL REQUIREMENT" shall mean any law, statute, code,
ordinance, order, rule, regulation, judgment, decree, injunction, franchise,
permit, certificate, license, authorization or other direction or requirement
(including but not limited to any of the foregoing which relate to Environmental
Laws, energy regulations and occupational, safety and health standards or
controls) of any Governmental Authority.
"GP INC." shall have the meaning set forth in the initial
paragraph hereto.
"GP LLC" shall have the meaning set forth in the initial
paragraph hereto.
20
"GUARANTY AND SECURITY AGREEMENT" shall mean any and all
Guaranty and Security Agreements executed by any US Credit Party, substantially
in the form of Exhibit F, as amended, modified, renewed, supplemented or
restated from time to time.
"HIGHEST LAWFUL RATE" shall mean, with respect to each Lender,
the maximum non-usurious interest rate, if any, that at any time or from time to
time may be contracted for, taken, reserved, charged or received on the Notes or
on other Lender Indebtedness, as the case may be, owed to it under the law of
any jurisdiction whose laws may be mandatorily applicable to such Lender
notwithstanding other provisions of this Agreement, or law of the United States
of America, Canada, or any other jurisdiction applicable to such Lender and the
Transactions, which would permit such Lender to contract for, charge, take,
reserve or receive a greater amount of interest than under such jurisdiction's
law.
"HOLDING" shall have the meaning set forth in the initial
paragraph hereto.
"IMBALANCE LENDER" shall mean any Lender with a Canadian
Revolving Credit Percentage which is not the same as its US Revolving Credit
Percentage, and for purposes of this definition, a Revolving Lender and its
Related Affiliate shall be deemed to be one and the same Revolving Lender.
"INCLUDED-IN-TRANSIT INVENTORY" means inventory which (a) has
been placed with a common carrier for shipment to a Borrower, (b) has been
inspected and approved by a Borrower or an agent of a Borrower, (c) is the
subject of a ▇▇▇▇ of lading or other document of title, all counterparts which,
to the extent Administrative Agent or Canadian Administrative Agent has
requested, are in the possession of Administrative Agent or Canadian
Administrative Agent, as applicable, vesting title to such inventory in a
Borrower, and (d) has been insured pursuant to one or more policies of insurance
meeting the requirements of Section 6.5 hereof.
"INCLUDED-IN-TRANSIT LIMIT" shall mean $15,000,000.
"INDEBTEDNESS" of any Person shall mean:
(a) all obligations of such Person for borrowed money and
obligations evidenced by bonds, debentures, notes or other similar instruments;
(b) all obligations of such Person (whether contingent or
otherwise) in respect of bankers' acceptances, letters of credit, surety or
other bonds and similar instruments;
(c) all obligations of such Person to pay the deferred
purchase price of Property or services (other than for borrowed money);
(d) all Capital Lease Obligations in respect of which
such Person is liable, contingently or otherwise, as obligor, guarantor or
otherwise, or in respect of which obligations such Person otherwise assures a
creditor against loss;
(e) all guaranties (direct or indirect), and other
contingent obligations of such Person in respect of, or obligations to purchase
or otherwise acquire or to assure payment of, Indebtedness or other obligations
of other Persons;
(f) Indebtedness of others secured by any Lien upon
Property owned by such Person, whether or not assumed;
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(g) all obligations or undertakings of such Person to
maintain or cause to be maintained the financial position or financial covenants
of other Persons;
(h) obligations to deliver goods or services in
consideration of advance payments, excluding such obligations incurred in the
ordinary course of business as conducted by the Borrowers as of the Closing
Date;
(i) the net amount of obligations of such Person under
agreements of the types described in the definition of Swap Agreements; and
(j) any "synthetic lease", "tax retained operating lease"
or similar lease financing arrangements under which the tenant is treated as the
owner of property for tax purposes but such lease is treated as an operating
lease in accordance with GAAP.
"INDEMNIFIED TAXES" shall mean Taxes other than Excluded
Taxes.
"INTEREST EXPENSE" shall mean, as to any Person for any
period, without duplication, total interest expenses, whether paid or accrued as
liabilities (including the interest component of Capital Lease Obligations),
with respect to all outstanding Indebtedness, including, without limitation, all
commissions, discounts and other fees and charges owed with respect to any
financing or letters of credit and net costs under any Swap Agreement to the
extent that such costs are included within interest expense in the Company's
financial statements prepared in accordance with GAAP.
"INTEREST PERIOD" shall mean, with respect to each Borrowing
of Eurodollar Loans, an interest period complying with the terms and provisions
of Section 2.7.
"INITIAL RESERVE" shall mean an Availability Reserve in the
amount of $5,000,000 established with respect to the US Borrowing Base and which
shall expire on the first anniversary of the Closing Date.
"INVENTORY LIMIT" shall mean $80,000,000.
"INVESTMENT" shall have the meaning set forth in the initial
paragraph hereof.
"ISSUING BANK" shall mean (a) for each US Letter of Credit,
JPMorgan, as the issuing bank for such US Letter of Credit and (b) for each
Canadian Letter of Credit, JPMorgan Canada (or any other Lender designated by
the Canadian Borrowers and approved in writing by the Canadian Administrative
Agent such approval not to be unreasonably withheld), as the issuing bank for
such Canadian Letter of Credit.
"JPMORGAN" shall mean JPMorgan Chase Bank, in its individual
capacity or as an Issuing Bank, as the case may be, and not as Administrative
Agent.
"JPMORGAN CANADA" shall mean ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
Branch.
"LANDLORD CONSENT AND SUBORDINATION AGREEMENT" shall mean an
agreement executed and delivered by each landlord of Real Property leased by any
Credit Party and subject to a Real Estate Mortgage pursuant to which such
landlord (a) consents to the execution and delivery of a Real Estate Mortgage by
such Credit Party in favor of Administrative Agent or the Canadian
Administrative Agent, as applicable with respect to the leased Real Property,
and (b) subordinates all of its Liens to the Liens of Administrative Agent or
the Canadian Administrative Agent, as applicable, in the Property of such Credit
Party located on the leased Real Property.
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"LANDLORD WAIVER AGREEMENT" shall mean an agreement executed
and delivered by each landlord of Real Property leased by any Borrower pursuant
to which such landlord subordinates or waives all of its Liens to the Liens of
Administrative Agent or Canadian Administrative Agent (as applicable) in the
Property of such Borrower located on the leased Real Property.
"LASALLE ACCOUNT" shall mean account number ▇▇▇▇▇▇▇ maintained
by Precision with LaSalle Bank, N.A.
"L/C COVER" when required by this Agreement for Letter of
Credit Liabilities of an Account Party, shall be effected by paying to the
Administrative Agent in the case of US Letter of Credit Liabilities or Canadian
Administrative Agent in the case of Canadian Letter of Credit Liabilities in
immediately available funds, to be held by the Administrative Agent or Canadian
Administrative Agent, as applicable, in a collateral account maintained by the
Administrative Agent or the Canadian Administrative Agent, as applicable, and
which accounts may be Blocked Accounts maintained with Administrative Agent or
Canadian Administrative Agent, as applicable, and collaterally assigned as
security pursuant to the Financing Documents, an amount equal to the maximum
amount of each applicable Letter of Credit issued for the account of such
account party which is available for drawing at any time. Such amount shall be
retained by the Administrative Agent or Canadian Administrative Agent, as
applicable, in such collateral account until such time as the applicable Letter
of Credit shall have expired and the Reimbursement Obligations, if any, with
respect thereto shall have been fully satisfied.
"LENDER" shall have the meaning set forth in the opening
paragraph hereof but shall include any Term Lender hereafter made a party to
this Agreement pursuant to a Term Lender Joinder Agreement.
"LENDER INDEBTEDNESS" shall mean any and all amounts owing or
to be owing by any Credit Party to the Administrative Agent, the Canadian
Administrative Agent, the Issuing Banks or the Lenders with respect to or in
connection with the Loans, any Overadvance Loans, any Letter of Credit
Liabilities, the Notes, any Swap Agreement between a Credit Party and JPMorgan
or one of its Secured Affiliates, any Cash Management Agreement between a Credit
Party and any Lender or one of its Cash Management Affiliates, this Agreement,
or any other Financing Document and, as to Swap Agreements and Cash Management
Agreements, any and all amounts owing or to be owing by any Credit Party
thereunder to JPMorgan or any of its Secured Affiliates or any Lender or its
Cash Management Affiliates, as applicable.
"LENDING OFFICE" shall mean for each Lender the office
specified opposite such Lender's name on the signature pages hereof, or in the
Assignment and Acceptance pursuant to which it became a Lender, with respect to
each Type of Loan, or such other office as such Lender may designate in writing
from time to time to the Company and the Administrative Agent with respect to
such Type of Loan; provided that Lending Offices for Canadian Lenders shall be
in Canada and for US Lenders shall be in the United States.
"LETTERS OF CREDIT" shall mean Canadian Letters of Credit and
US Letters of Credit, collectively.
"LETTER OF CREDIT LIABILITIES" shall mean the US Letter of
Credit Liabilities and Canadian Letter of Credit Liabilities, collectively.
"LIEN" shall mean any interest in Property securing an
obligation owed to, or a claim by, a Person other than the owner of the
Property, whether such interest is based on contract, constitutional, common, or
statutory law, and including but not limited to the lien or security interest
arising from a
23
mortgage, encumbrance, pledge, security agreement, conditional sale or trust
receipt or a lease, consignment or bailment for security purposes. The term
"Lien" shall include reservations, exceptions, encroachments, easements, rights
of way, covenants, conditions, restrictions, liens and other statutory,
constitutional, or common law rights of landlords, leases and other title
exceptions and encumbrances affecting Property. For the purposes of this
Agreement, any Borrower shall be deemed to be the owner of any Property which it
has acquired or holds subject to a conditional sale agreement, financing lease
or other arrangement pursuant to which title to the Property has been retained
by or vested in some other Person for security purposes.
"LOAN" shall mean a Revolving Credit Loan, a Term Loan or a US
Swingline Loan and "Loans" shall mean the Revolving Credit Loans, Term Loans and
the US Swingline Loans or one or more of them as provided herein.
"LOCKBOX" shall mean any lockbox to be established and
operated pursuant to Section 4.3 hereof and the Lockbox Agreement.
"LOCKBOX AGREEMENT" shall mean one or more lockbox agreements,
tri-party agreements, or similar documents to be entered into between Borrowers
(or any of them) and Administrative Agent or Canadian Lockbox Bank on
Administrative Agent's or Canadian Lockbox Bank's standard form (with such
modifications thereto as Administrative Agent, Canadian Administrative Agent or
Canadian Lockbox Bank shall reasonably require) setting forth certain terms
applicable to the establishment and operation of the applicable Lockbox.
"LONGVIEW ACCOUNT" shall mean account number 153505804539
maintained by Tube at U.S. Bank National Association.
"MATURITY DATE" shall mean March 28, 2006.
"MARGIN STOCK" shall have the meaning provided in Regulations
U and X.
"MATERIAL ADVERSE EFFECT" shall mean any material and adverse
effect on (a) the business, operations, assets, liabilities, condition
(financial or otherwise), prospects, or results of operations of (i) the US
Borrowers taken as a whole, or (ii) the Canadian Borrowers taken as a whole, (b)
the validity or enforceability of any of the Financing Documents or the rights
and remedies of the Administrative Agent, the Canadian Administrative Agent or
the Lenders thereunder, or (c) the perfection or priority of any Liens securing
the Canadian Lender Indebtedness or the Lender Indebtedness.
"MAVERICK INTERNATIONAL" shall mean Maverick Tube
International, Inc., a Barbados foreign sales corporation.
"MINIMUM EXCESS AVAILABILITY" shall mean, for any period, the
lowest amount of Excess Availability at the opening of business on any Business
Day in such period; provided, that for purposes of determining Minimum Excess
Availability, the Initial Reserve shall be disregarded.
"MORTGAGED REAL PROPERTY" shall mean the Real Property of the
Borrowers described on Part I of Schedule 5.24 hereto and all other Real
Property which may hereafter be mortgaged to Administrative Agent or Canadian
pursuant to a Real Estate Mortgage.
"NET CASH PROCEEDS" shall mean the remainder of (a) the gross
proceeds received by any US Borrower from any Disposition less (b) commissions,
broker's fees, legal and other professional fees
24
and expenses and other usual and customary transaction costs, in each case only
to the extent paid or payable by a US Borrower in cash and related to such
Disposition.
"NEW SUBSIDIARY" has the meaning assigned to such term in
Section 6.9 hereof.
"NON FINANCED CAPITAL EXPENDITURES" shall mean Capital
Expenditures made by any Credit Party which are not financed pursuant to the
incurrence of Indebtedness, the issuance of Equity or receipt of an equity
contribution, a Capitalized Lease Obligation or a Loan.
"NOTES" shall mean the Revolving Credit Notes, the Term Notes
and the US Swingline Note.
"OBLIGATED PARTY" shall mean any Borrower and any other Person
who is a Party to a Financing Document for purposes of guaranteeing or securing
the Lender Indebtedness or any part thereof; provided, that, Obligated Parties
do not include any Bailee, suppliers, landlords or account debtors of any
Borrower that have executed Bailee Letters, Landlord Consents and Subordination
Agreements, Landlord Waiver Agreements, ▇▇▇▇-and-hold agreements or waivers of
repossession rights under Bankruptcy and Insolvency Act (Canada).
"OTHER TAXES" shall mean any and all present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement.
"OVERADVANCE" shall have the meaning assigned such term in
Section 2.11(a) hereof.
"PAYMENT OFFICE" shall mean (a) with respect to US Loans, the
Administrative Agent's office located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (or such other office or individual as the Administrative Agent
may hereafter designate in writing to the other parties hereto), and (b) with
respect to Canadian Loans, the Canadian Administrative Agent's office located at
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or
any successor thereto.
"PERFECTION CERTIFICATES" shall mean that certain Perfection
Certificate dated March 28, 2002, executed by each Borrower and addressed to
Administrative Agent.
"PERFECTION CERTIFICATE UPDATE" shall mean a Certificate from
a Responsible Officer of the Company in the form of Exhibit G hereto to be
delivered to Administrative Agent monthly pursuant to Section 6.10(g) hereof and
setting forth all changes that would be required to be made to the Perfection
Certificates (as updated pursuant to any prior Perfection Certificate Updates)
to cause the Perfection Certificates to be accurate and complete if reissued as
of the last day of the month immediately preceding the month in which the
Perfection Certificate is required to be delivered pursuant to Section 6.10(g)
hereof.
"PERMITTED BORROWING BASE ADJUSTMENTS" means adjustments to
the Canadian Borrowing Base or US Borrowing Base reflected on any Borrowing Base
Report delivered pursuant to Section 6.10(g) (a) made within ten (10) days after
delivery of such Borrowing Base Report, (b) solely to eliminate any intercompany
profit reflected in the cost of inventory acquired by any Borrower from an
Affiliate, and (c) which does not result in a reduction in the US Borrowing Base
and Canadian Borrowing Base (considered in the aggregate) of greater than
$500,000.
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"PERMITTED LIENS" shall have the meaning assigned in Section
7.3 hereof.
"PERSON" shall mean any individual, partnership (including,
but not limited to, Tube) firm, corporation (including, but not limited to, all
Borrowers (other than Tube)), limited liability companies, association, joint
venture, trust or other entity, or any government or political subdivision or
agency, department or instrumentality thereof; provided, however, for the
purpose of the definition of "Change of Control," "Person" shall mean a "person"
or group of persons within the meaning of Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended.
"PLAN" shall mean any employee pension benefit plan, as
defined in Section 3(2) of ERISA (including, but not limited to, an employee
pension benefit plan, such as a foreign plan, which is not subject to the
provisions of ERISA), which (a) is currently or hereafter sponsored, maintained
or contributed to by any Credit Party or an ERISA Affiliate, or (b) was at any
time during the six preceding Fiscal Years sponsored, maintained or contributed
to by any Credit Party or an ERISA Affiliate.
"PRECISION" shall have the meaning set forth in the initial
paragraph hereof.
"PRECISION CANADA" shall have the meaning set forth in the
initial paragraph hereof.
"PRECISION INTERNATIONAL" shall mean Precision Tube Technology
International, Inc., a United States Virgin Islands foreign sales corporation.
"PRECISION SCOTLAND" shall mean Precision Tube Technology,
Ltd., a Scottish limited liability company.
"PRECISION TRANSACTIONS" shall have the meaning set forth in
the recitals hereto.
"PRIME RATE" shall mean the rate which the Administrative
Agent announces from time to time as its prime rate, effective as of the date
announced as the effective date of any change in such prime rate. Without notice
to the Company or any other Person, the Prime Rate shall change automatically
from time to time as and in the amount by which such prime rate shall fluctuate.
The Prime Rate is a reference rate and does not necessarily represent the lowest
or best rate actually charged to any customer. The Administrative Agent may make
commercial loans or other loans at rates of interest at, above or below the
Prime Rate.
"PROCESSING RESERVES" shall mean the aggregate of all amounts
due from any Borrower to a Bailee at the end of each month in respect of any
processing of such Borrower's inventory performed by such Bailee. The Processing
Reserves shall be calculated separately for the US Borrowers and the Canadian
Borrowers and shall be the Dollar Equivalent of any amounts otherwise expressed
in Canadian Dollars.
"PROJECTIONS" shall mean the projections of the results of
operations and financial condition of the Company and its consolidated
Subsidiaries for Fiscal Year ending on December 31, 2002, a copy of which have
been provided to the Administrative Agent and the Lenders and is attached hereto
as Schedule 1.3.
"PROPERTY" shall mean any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"PRUDENTIAL" shall have the meaning set forth in the initial
paragraph hereof.
26
"PTTI" shall have the meaning set forth in the recitals
hereto.
"PURCHASE AGREEMENT" shall have the meaning set forth in the
recitals hereto.
"PURCHASE DOCUMENTS" shall have the meaning set forth in
Section 5.27 hereto.
"QUARTERLY DATES" shall mean the first day of each April,
July, October and January in each year.
"REAL ESTATE MORTGAGE" shall mean a Canadian Real Estate
Mortgage or a US Real Estate Mortgage, as the case may be.
"REAL PROPERTY" shall mean any right, title or interest in and
to real property, including any fee interest, leasehold interest, easement, or
license and any other right to use or occupy real property, including any right
arising by contract.
"REGISTER" shall have the meaning assigned in Section 10.7(c).
"REGULATION D", "REGULATIONS U AND X" shall mean,
respectively, Regulation D under the Securities Act of 1933, as amended or
modified from time to time, and Regulation U and Regulation X of the Board of
Governors of the Federal Reserve System, as such regulations are from time to
time in effect and any successor regulations thereto.
"REIMBURSEMENT OBLIGATIONS" shall mean, at any date, the
obligation of the Canadian Borrowers then outstanding in respect of Canadian
Letters of Credit and the obligation of the US Borrowers then outstanding in
respect of US Letters of Credit, to reimburse the Administrative Agent or
Canadian Administrative Agent, as applicable, for the account of the Issuing
Bank for the amount paid by the Issuing Bank in respect of any drawings under
such Letters of Credit.
"RELATED AFFILIATE" shall mean (a) with respect to any US
Lender, such Lender's Affiliate which is a Canadian Lender hereunder if any, and
(b) with respect to any Canadian Lender, such Lender's Affiliate which is a US
Lender hereunder if any.
"REQUIRED LENDERS" shall mean: (a) at any time that no Term
Loans are outstanding, Required Revolving Lenders; (b) at any time that Term
Loans are outstanding but no Revolving Loans Commitments are in effect and no
Revolving Credit Exposure is outstanding, Required Term Lenders, and (c) at all
other times (i) that the Revolving Commitments remain in effect, Lenders with
aggregate Revolving Credit Commitments and Lenders holding Term Loans in an
aggregate amount equal to or in excess of 66 2/3% of the sum of all Revolving
Commitments plus the aggregate principal amount of Term Loans then outstanding,
and (ii) after the Revolving Commitments have terminated, Lenders having
Revolving Credit Exposure and Lenders holding Term Loans in an aggregate amount
equal to or in excess of 66 2/3% of the sum of the Aggregate Revolving Credit
Exposure plus the aggregate principal amount of Term Loans then outstanding.
"REQUIRED REVOLVING LENDERS" shall mean Lenders having 66 2/3%
or more of the combined aggregate amount at such time of the Revolving Credit
Commitments, until terminated, and thereafter, Lenders having 66 2/3% or more of
the Aggregate Revolving Credit Exposure.
"REQUIRED TERM LENDERS" shall mean Term Lenders holding 66
2/3% or more of the aggregate principal balance of Term Loans then outstanding.
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"RESPONSIBLE OFFICER" shall mean, with respect to any
corporation, the chairman of the board, the president, any vice president, the
chief executive officer or the chief operating officer, or any equivalent
officer (regardless of his or her title), and, in respect of financial or
accounting matters, the chief financial officer, the vice president of finance,
the treasurer, the controller, or any equivalent officer (regardless of his or
her title). Unless otherwise specified, all references to a Responsible Officer
herein shall mean a Responsible Officer of all Borrowers.
"RESTRICTED ACCOUNT AGREEMENT" shall mean a letter agreement
in substantially the form of Exhibit S hereto to be entered into between the
Administrative Agent and the applicable depository banks with respect to the
Longview Account, LaSalle Account and Southwest Account.
"REVOLVING CREDIT COMMITMENTS" shall mean collectively, the US
Revolving Credit Commitments and Canadian Revolving Credit Commitments.
"REVOLVING CREDIT EXPOSURE" shall mean, at any time for each
Revolving Lender, the sum of such Lender's US Revolving Credit Exposure and
Canadian Revolving Credit Exposure at such time.
"REVOLVING CREDIT LOAN" shall mean, collectively, the US
Revolving Credit Loans and Canadian Revolving Credit Loans.
"REVOLVING CREDIT NOTES" shall mean, collectively, the US
Revolving Credit Notes and Canadian Revolving Credit Notes.
"REVOLVING LENDERS" shall mean, collectively, the US Revolving
Lenders and the Canadian Lenders.
"ROLLING PERIOD" shall mean any period of four consecutive
Fiscal Quarters.
"SECURED AFFILIATE" shall mean any Affiliate of JPMorgan that
has entered into a Swap Agreement with any Credit Party with the obligations of
such Credit Party thereunder being secured by one or more Security Instruments.
"SECURITY INSTRUMENTS" shall mean any and all agreements or
instruments now or hereafter executed and delivered by any Credit Party or any
other Person as security for the payment or performance of the Lender
Indebtedness or Canadian Lender Indebtedness, as any of the foregoing may be
amended, modified or supplemented.
"SELLERS" shall have the meaning set forth in the recitals
hereof.
"SETTLEMENT DATE" shall mean the date, weekly, and more
frequently, at the discretion of the Canadian Administrative Agent, upon the
occurrence of an Event of Default or a continuing decline or increase of the
Canadian Revolving Credit Loans, that the Canadian Administrative Agent and the
Canadian Lenders shall settle amongst themselves so that (a) the Canadian
Administrative Agent shall not have, as the agent for the Canadian Lenders, any
money at risk, and (b) on such Settlement Date the Canadian Lenders shall have
their respective Canadian Revolving Credit Percentage of the Aggregate Canadian
Revolving Credit Exposure; provided that each Settlement Date for a Canadian
Lender shall be a Business Day on which such Canadian Lender and its bank are
open for business, as applicable; provided, further, each Canadian Lender shall
have at least one Business Day's notice of a Settlement Date and the amount owed
by such Canadian Lender on that date.
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"SHARING EVENT" means (a) the occurrence of an Event of
Default with respect any Borrower pursuant to Section 8.8 or 8.9, (b) and the
acceleration of the Loans pursuant to Article 8, or (c) the termination of the
Commitments pursuant to Article 8.
"SOLVENT" shall mean with respect to any Person on a
particular date, the condition that, on such date, (a) the fair value of the
property of such Person is greater than the total amount of liabilities,
including, without limitation, contingent liabilities, of such Person, (b) the
present fair salable value of the assets of such Person is not less than the
amount that will be required to pay the probable liabilities of such Person on
its debts as they become absolute and matured, (c) such Person does not intend
to, and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature, and (d) such
Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person's property would constitute
an unreasonably small amount of capital.
"SOUTHWEST ACCOUNT" shall mean account number 27839 maintained
by Precision with Southwest Bank of Texas, N.A.
"SPOT EXCHANGE RATE" shall mean, on any day, the spot rate at
which Dollars are offered on such day by JPMorgan Canada in ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇ for C$ at approximately 11:00 a.m. (Toronto, Ontario Canada time).
"STANDBY LETTER OF CREDIT" shall mean a letter of credit that
(a) is used in lieu or in support of performance guarantees or performance,
surety or other similar bonds (but expressly excluding stay and appeal bonds)
arising in the ordinary course of business, (b) is used in lieu or in support of
stay or appeal bonds, (c) supports the payment of insurance premiums for
reasonably necessary casualty insurance carried by any of the Borrowers, or (d)
supports payment or performance for identified purchases or exchanges of
products or services in the ordinary course of business.
"STATUTORY RESERVES" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum applicable reserve
percentages, including any marginal, special, emergency or supplemental reserves
(expressed as a decimal) established by the Board and any other banking
authority to which the Lenders are subject for Eurocurrency Liabilities (as
defined in Regulation D) or any other category of deposits or liabilities by
reference to which the Eurodollar Rate is determined. Such reserve percentages
shall include those imposed pursuant to Regulation D. Eurodollar Loans shall be
deemed to constitute Eurocurrency Liabilities and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Lender under such Regulation D.
Statutory Reserves shall be adjusted automatically on and as of the effective
date of any change in any reserve percentage.
"STORAGE/HANDLING RESERVES" shall mean an amount, calculated
as of the last day of each month and calculated separately for the US Borrowers
and the Canadian Borrowers, equal to the aggregate of all amounts for storage,
handling and other services (other than amounts for processing work) charged by
each Bailee to such Borrowers for the three month period then ended; provided,
however, such amounts charged by Bailees who are no longer Bailees at end of the
period for which Storage/Handling Reserves are being calculated shall be
excluded in calculating Storage/Handling Reserves for such period; provided,
further, if a Bailee at the end of any period for which Storage/Handling
Reserves are being calculated has not been a Bailee for all of such period, all
such amounts paid to such Bailee shall be included in the Storage/Handling
Reserves on a pro forma basis as if such Bailee had been a Bailee since the
beginning of such period.
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"SUBSIDIARY" of any Person shall mean a corporation, limited
liability company, partnership or other entity of which a majority of the
outstanding shares of stock of each class having ordinary voting power or other
equity interests is owned by such Person, by one or more Subsidiaries of such
Person, or by such Person and one or more of its Subsidiaries.
"SWAP AGREEMENT" shall mean any interest rate, currency or
commodity swap, cap, floor, collar, forward agreement, futures contract or other
protection agreement or option with respect to any such transaction, designed to
hedge against fluctuations in interest rates, currency exchange rates or
commodity prices.
"SWAP RESERVES" shall mean, an amount (reflected in Dollars)
calculated as of the last day of each month and separately for the US Borrowers
and the Canadian Borrowers, equal to such Borrowers' net liability under the
Swap Agreements to which such Borrowers are a party, calculated in accordance
with GAAP, with such calculation subject to review and approval by the
Administrative Agent.
"TAXES" shall mean any and all present or future taxes,
levies, imposts, duties, deductions, charges or withholdings imposed by any
Governmental Authority.
"TEMPORARY LOCKBOX INSTITUTIONS" shall mean ▇▇▇▇▇▇ Trust and
Savings Bank and LaSalle Bank, N.A. and Southwest Bank of Texas, N.A.
"TERM COMMITMENT" shall have the meaning set forth in Section
2.1(a)(ii).
"TERM LENDER" shall mean a Lender which holds Term Loans in
its capacity as such.
"TERM LENDER JOINDER AGREEMENT" means a Term Lender Joinder
Agreement substantially in the form of Exhibit H attached hereto to be executed
by a Term Lender, the US Borrowers and Administrative Agent, pursuant to which
such Term Lender (a) becomes a party to this Agreement as Term Lender, and (b)
evidences such Term Lender's Term Commitment.
"TERM LOANS" shall mean term loans made by Term Lenders
pursuant to Section 2.1(a)(2) hereof and pursuant to such Term Lenders' Term
Lender Joinder Agreements.
"TERM NOTE" shall mean a promissory note of the US Borrowers
described in Section 2.5(d) payable to any Term Lender and being substantially
in the form of Exhibit I, evidencing the Term Loans held by such Term Lender.
"TERM PERCENTAGE" shall mean as to any Term Lender, the
percentage which the outstanding principal balance of the Term Loans held by
such Term Lender at such time constitutes of the aggregate outstanding principal
balance of Term Loans at such time.
"THREE-MONTH SECONDARY CD RATE" shall mean, for any day, the
secondary market rate for three-month certificates of deposit reported as being
in effect on such day (or, if such day is not a Business Day, the next preceding
Business Day) by the Board through the public information telephone line of the
Federal Reserve Bank of New York (which rate will, under the current practices
of the Board, be published in Federal Reserve Statistical Release H.15(519)
during the week following such day) or, if such rate is not so reported on such
day or such next preceding Business Day, the average of the secondary market
quotations for three-month certificates of deposit of major money center banks
in New York City received at approximately 12:00 noon, New York City time, on
such day (or, if such day is not
30
a Business Day, on the next preceding Business Day) by the Administrative Agent
from three negotiable certificate of deposit dealers of recognized standing
selected by it.
"TRANSACTIONS" shall mean the transactions provided for in and
contemplated by this Agreement and the other Financing Documents.
"TRI-PARTY AGREEMENT" means a Tri-Party Agreement among the
applicable Borrower, the Administrative Agent and a Temporary Lockbox
Institution pursuant to which, among other things, such Temporary Lockbox
Institution agrees to forward on a daily basis to the Administrative Agent all
such Borrower's funds in the lockbox maintained with such Temporary Lockbox
Institution.
"TUBE" shall have the meaning set forth in the initial
paragraph hereof.
"TUBE CANADA" shall have the meaning set forth in the initial
paragraph hereof.
"TYPE" of Loan shall mean an ABR Loan, a Eurodollar Loan, a
Canadian Prime Rate Loan, or a B/A Loan and shall also refer to a C$ Denominated
Loan or a Dollar Denominated Loan.
"UCC" shall mean the Uniform Commercial Code as from time to
time in effect in the State of New York or, where applicable as to specific
Credit Party or Collateral, any other relevant state. In addition, "UCC" shall
mean with respect to the Canadian Credit Parties or any Property of the Canadian
Credit Parties subject thereto, the Personal Property Security Act or similar
legislation as from time to time in effect in the Province of Alberta or, where
applicable as to any specific Canadian Credit Party or Collateral, any other
relevant province or territory.
"US BASE RATE" shall mean the rate of interest for Dollar
denominated loans publicly announced by JPMorgan Canada from time to time as its
US Base Rate in effect at its principal office in Toronto, Ontario for
commercial loans made in Canada.
"US BLOCKED ACCOUNT" means a Blocked Account established by
the US Borrowers with Administrative Agent.
"US BORROWERS" shall have the meaning set forth in the initial
paragraph hereof.
"US BORROWING BASE" shall mean, only with respect to the US
Borrowers, the amount equal to the sum of:
(a) the Eligible Account Advance Percentage of the US
Borrowers' Eligible Accounts, plus
(b) the lesser of (i) the sum of (A) the Eligible
Inventory Advance Percentage of the US Borrowers' Eligible Inventory (other than
work in process) and Eligible Bailee Inventory (other than work in process),
plus (B) the lesser of (1) the Eligible Inventory Advance Percentage of the US
Borrowers' Eligible Inventory consisting of work in process and Eligible Bailee
Inventory consisting of work in process and (2) US WIP Limit, plus (C) the
lesser of (i) the Eligible Inventory Advance Percentage of the US Borrowers'
Eligible Included-In-Transit Inventory and (2) US Included-In-Transit Limit, or
(ii) the US Inventory Limit, plus
(c) the US Equipment Component in effect as of the date
for which the US Borrowing Base is being calculated; plus
31
(d) the lesser of (i) the Eligible Account Advance
Percentage of US Borrowers' Eligible ▇▇▇▇ and Hold Accounts and (ii)
$10,000,000.
provided, that, in no event will the component of the US Borrowing Base
determined pursuant to clause (b) exceed 60% of the total US Borrowing Base (but
solely for purposes of this calculation, the US Equipment Component shall remain
constant at the amount in effect on the Closing Date without giving effect to
any subsequent reductions in the US Equipment Component pursuant to the
definition of such term). The US Borrowing Base in effect under this Agreement
at any time shall be the US Borrowing Base reflected on the most recent US
Borrowing Base Report delivered to Administrative Agent and Canadian
Administrative Agent pursuant to Section 6.10(g) hereof subject to (a) the right
of Administrative Agent, Canadian Administrative Agent or Required Lenders to
contest any components thereof or the calculation thereof, and (b) immediate
adjustment as result of (i) establishment of Availability Reserves, (ii)
reductions in advance rates permitted hereunder, (iii) scheduled reductions in
the US Equipment Component, (iv) more frequent reporting of certain components
of the US Borrowing Base to the extent required in accordance with Section
6.10(g), (v) any changes in eligibility standards required by Administrative
Agent, and (vi) the occurrence of any Disposition.
"US CREDIT PARTY" shall mean the US Borrowers and any other
Credit Party which is organized or formed under the laws of any state of the
United States or any political subdivision thereof.
"US EQUIPMENT COMPONENT" shall mean $20,000,000 on the Closing
Date; provided that the US Equipment Component shall be reduced (a) by $303,030
on the first day of each month commencing with October 1, 2002 and continuing on
the first day of each month thereafter throughout the term of this Agreement,
(b) on April 1 of each calendar year commencing April 1, 2003, by the US Excess
Cash Flow Amount for the Fiscal Year most recently ended, and (c) on the date of
any Disposition, by the amount of the Excess Net Cash Proceeds received by the
US Borrowers in such Disposition.
"US EXCESS AVAILABILITY" shall mean, as of any date, the
remainder of (a) the US Borrowing Base as of such date, less (b) the aggregate
outstanding balance of the US Lender Indebtedness as of such date.
"US EXCESS CASH FLOW AMOUNT" shall mean, with respect to any
Fiscal Year, the lesser of (a) $3,333,500 and (b) 40% of the Excess Cash Flow of
the US Borrowers for such Fiscal Year. The US Excess Cash Flow Amount shall be
determined for any Fiscal Year by the Administrative Agent following the
delivery of the Company's audited consolidated financial statements for such
Fiscal Year pursuant to Section 6.10(a) hereof; provided, that, if the Company
shall fail to deliver its audited consolidated financial statements for any
Fiscal Year on or before the date required pursuant to Section 6.10(a) hereof,
$3,333,500 shall be the US Excess Cash Flow Amount for such Fiscal Year.
"US FUNDING AMOUNT" shall have the meaning set forth in
Section 2.2(c).
"US INCLUDED-IN-TRANSIT LIMIT" shall mean the amount of the
Included-in-Transit Limit which the US Borrowers designate as the "US
Included-in-Transit Limit" on the US Borrowing Base Report from which the US
Borrowing Base is being calculated; provided, that, for any date on which the
Borrowing Bases are being reported, in no event shall the sum of the US
Included-in-Transit Limit and the Canadian Included-in-Transit Limit ever exceed
the Included-in-Transit Limit.
"US INVENTORY LIMIT" shall mean the amount of the Inventory
Limit which the US Borrowers designate as the "US Inventory Limit" on the US
Borrowing Base Report from which the US
32
Borrowing Base is being calculated; provided, that, in no event shall the sum of
the Canadian Inventory Limit and the US Inventory Limit ever exceed the
Inventory Limit.
"US LENDER" shall mean a US Revolving Lender or a Term Lender
and "US LENDERS" means all US Revolving Lenders and Term Lenders, collectively.
"US LENDER INDEBTEDNESS" shall mean any and all amounts owing
or to be owing by any US Credit Party to the Administrative Agent, the Canadian
Administrative Agent, the Issuing Banks or the Lenders with respect to or in
connection with the US Loans, any US Letter of Credit Liabilities, the US
Revolving Credit Notes and Term Notes, any Swap Agreement between any of the US
Borrowers and JPMorgan or any Secured Affiliate thereof, any Cash Management
Agreement between any of the US Borrowers and Lender or its Cash Management
Affiliate, this Agreement, or any other Financing Document and, as to Swap
Agreements or any Cash Management Agreement, any and all amounts owing or to be
owing by any US Credit Party thereunder to any JPMorgan or any of its Secured
Affiliates or any Lender or its Cash Management Affiliate, respectively.
"US LETTERS OF CREDIT" shall have the meaning assigned to such
term under Section 2.3(a).
"US LETTER OF CREDIT LIABILITIES" shall mean, at any time and
in respect of any US Letter of Credit, the sum of (a) the amount available for
drawings under such US Letter of Credit as of the date of determination plus (b)
the aggregate unpaid amount of all Reimbursement Obligations due and payable as
of the date of determination in respect of previous drawings made under such US
Letter of Credit.
"US LOCKBOX" shall mean any lockbox to be established and
operated pursuant to Section 4.3 hereof and the US Lockbox Agreement.
"US LOCKBOX AGREEMENT" shall mean an agreement between the US
Borrowers and the Administrative Agent governing the US Lockbox.
"US LOANS" shall mean the US Revolving Credit Loans, the Term
Loans and the US Swingline Loans.
"US MAXIMUM AVAILABLE AMOUNT" shall mean, at any date, an
amount equal to the the lesser of (a) the aggregate US Revolving Credit
Commitments as of such date, and (b) the remainder of (i) the US Borrowing Base
as of such date, minus (ii) the sum of (A) the Availability Reserves with
respect to the US Borrowing Base as of such date, plus (B) the portion of the
Swap Reserves, the Cash Management Reserves, Processing Reserves and
Storage/Handling Reserves applicable to the US Borrowers as of the last day of
the month for which the US Borrowing Base is being calculated.
"US REAL ESTATE MORTGAGE" shall mean a Mortgage, Deed of
Trust, Security Agreement, Assignment and Financing Statement substantially in
the form of Exhibit J and in each case with such changes thereto as
Administrative Agent shall deem necessary or appropriate to comply with state
and local Governmental Requirements.
"US REVOLVING CREDIT COMMITMENT" shall have the meaning
assigned to such term in Section 2.1(c).
"US REVOLVING CREDIT EXPOSURE" shall mean, at any time and as
to each US Revolving Lender, the sum of (a) the aggregate principal amount of US
Revolving Credit Loans made by such US Revolving Lender outstanding as of such
date plus (b) the accrued and unpaid interest on US Revolving
33
Credit Loans made by such US Revolving Lender outstanding as of such date plus
(c) such US Revolving Lender's US Revolving Credit Percentage of the aggregate
amount of all US Letter of Credit Liabilities as of such date plus (d) such US
Revolving Lender's US Revolving Credit Percentage of the US Swingline Exposure
as of such date.
"US REVOLVING CREDIT LOAN" shall have the meaning provided in
Section 2.1(a); the US Revolving Credit Loans shall not include any US Letter of
Credit Liabilities.
"US REVOLVING CREDIT NOTE" shall mean a promissory note of the
US Borrowers described in Section 2.5(a) payable to any US Revolving Lender and
being substantially in the form of Exhibit K, evidencing the aggregate
Indebtedness of the US Borrowers to such US Revolving Lender resulting from US
Revolving Credit Loans made by such US Lender.
"US REVOLVING CREDIT PERCENTAGE" shall mean as to any US
Revolving Lender, the percentage of the aggregate US Revolving Credit
Commitments constituted by its US Revolving Credit Commitment (or, if the US
Revolving Credit Commitments have terminated or expired, the percentage which
such US Revolving Lender's Revolving Credit Exposure at such time constitutes of
the Aggregate US Revolving Credit Exposure at such time).
"US REVOLVING LENDER" shall mean a Lender with a US Revolving
Credit Commitment.
"US SWINGLINE AVAILABILITY" shall mean, on any date, an amount
equal to the remainder of (a) the US Swingline Commitment minus (b) the US
Swingline Exposure on such date.
"US SWINGLINE COMMITMENT" shall have the meaning assigned to
such term in Section 2.1(e).
"US SWINGLINE EXPOSURE" shall mean, at any time, the aggregate
principal amount of all US Swingline Loans made to the US Borrowers outstanding
at such time.
"US SWINGLINE LENDER" shall mean JPMorgan, in its capacity as
lender of US Swingline Loans hereunder.
"US SWINGLINE LOANS" shall have the meaning assigned to such
term in Section 2.1(a).
"US SWINGLINE NOTE" shall mean a promissory note of the US
Borrowers described in Section 2.5(c) payable to the US Swingline Lender and
being substantially in the form of Exhibit L, evidencing the aggregate
Indebtedness of the US Borrowers to the US Swingline Lender resulting from US
Swingline Loans made by the US Swingline Lender.
"US WIP LIMIT" shall mean the amount of the WIP Limit which
the US Borrowers designate as the "US WIP Limit" on the US Borrowing Base Report
from which the US Borrowing Base is being calculated; provided, that, in no
event shall the sum of the Canadian WIP Limit and the US WIP Limit ever exceed
the WIP Limit.
"VOTING STOCK" of any Person shall mean Equity of such Person
which ordinarily has voting power for the election of directors (or persons
performing similar functions) of such Person, whether at all times or only so
long as no senior class of securities has such voting power by reason of any
contingency.
"WIP LIMIT" shall mean $7,500,000.
34
Section 1.2 ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise
defined or specified herein, all accounting terms shall be construed herein, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with GAAP
applied on a basis consistent with the Financial Statements.
Section 1.3 OTHER DEFINITIONAL TERMS. The words "HEREOF," "HEREIN" and
"HEREUNDER" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement, and article, section, schedule, exhibit and like references are to
this Agreement unless otherwise specified.
ARTICLE 2
AMOUNT AND TERMS OF LOANS
Section 2.1 LOANS AND COMMITMENTS.
(a) LOANS.
(1) Subject to the terms and conditions and
relying on the representations and warranties contained herein, (A) on
any Business Day from and after the Closing Date, but prior to the
Maturity Date, each US Revolving Lender severally agrees to make
revolving credit loans in Dollars (each a "US REVOLVING CREDIT LOAN")
to the US Borrowers, (B) on any Business Day from and after the Closing
Date, but prior to the Maturity Date, each Canadian Lender severally
agrees to make revolving credit loans in either Dollars or C$ and
including by means of B/As (each a "CANADIAN REVOLVING CREDIT LOAN") to
the Canadian Borrowers, and (C) on any Business Day from and after the
Closing Date, but prior to the Maturity Date, the US Swingline Lender
agrees to make revolving swingline loans in Dollars (each a "US
SWINGLINE LOAN") to the US Borrowers.
(2) From and after the date of this Agreement but
prior to the Maturity Date, at the request of the US Borrowers and
subject to the approval of Administrative Agent and Required Revolving
Lenders, one or more Persons may agree to become a party to this
Agreement as a Term Lender hereunder and make Dollar Denominated term
loans ("TERM LOANS") to the US Borrowers hereunder. Any such agreement
shall be evidenced by the execution and delivery by the US Borrowers,
such Term Lender(s) and Administrative Agent of a Term Lender Joinder
Agreement setting forth (A) the commitment of such Term Lender(s) to
make Term Loans, including the amount thereof (for each Term Lender,
its "TERM COMMITMENT"), (B) the Applicable Margin applicable to Term
Loans held by such Term Lender (which may be a floating margin in
accordance with a pricing grid), and (C) the date on which the proceeds
of such Term Loans are to be made available to US Borrowers. Upon the
execution and delivery of any Term Lender Joinder Agreement, US
Borrowers shall issue to each Term Lender party thereto Term Notes to
evidence the Term Loans made by such Term Lender pursuant to its Term
Commitment.
35
(b) TYPES OF LOANS. (1) The Dollar Denominated Loans made
pursuant hereto shall, at the option of the US Borrowers or the Canadian
Borrowers, as applicable, be either ABR Loans or Eurodollar Loans and may be
continued or converted pursuant to Section 2.12; provided, that, all Term Loans
shall be ABR Loans, (2) the C$ Denominated Loans made pursuant hereto shall, at
the option of the Canadian Borrowers, be either Canadian Prime Rate Loans or B/A
Loans and may be continued or converted pursuant to Section 2.12, and (3) the
Dollar Denominated US Swingline Loans made pursuant hereto shall be ABR Loans;
provided that, except as otherwise specifically provided herein, all Loans made
pursuant to the same Borrowing shall be of the same Type.
(c) US REVOLVING CREDIT COMMITMENTS. Each US Revolving
Lender's US Revolving Credit Exposure shall not exceed at any one time the
amount set forth opposite such US Revolving Lender's name on Annex I under the
caption "US Revolving Credit Commitment" (as the same may be reduced pursuant to
Section 2.10 or otherwise from time to time modified pursuant to Section 10.7),
its "US REVOLVING CREDIT COMMITMENT," and collectively for all US Revolving
Lenders, the "US REVOLVING CREDIT COMMITMENTS"; the term "US Revolving Credit
Commitments" includes the requirements of the US Revolving Lenders to purchase
participations in the US Swingline Loans pursuant to Section 2.26 hereof;
provided, however that the Aggregate US Revolving Credit Exposure at any one
time outstanding shall not exceed the US Maximum Available Amount in effect at
such time. Within the foregoing limits and subject to the conditions set forth
in Article 3, the US Borrowers may obtain Borrowings of US Revolving Credit
Loans, repay or prepay such US Revolving Credit Loans, and reborrow such US
Revolving Credit Loans.
(d) CANADIAN REVOLVING CREDIT COMMITMENTS. Subject to Section
2.9(i) hereof, the Dollar Equivalent of each Canadian Lender's Canadian
Revolving Credit Exposure shall not exceed at any one time the amount set forth
opposite such Canadian Lender's name on Annex I under the caption "Canadian
Revolving Credit Commitment" (as the same may be reduced pursuant to Section
2.10 or otherwise from time to time modified pursuant to Section 10.7, its
"CANADIAN REVOLVING CREDIT COMMITMENT," and collectively for all Canadian
Lenders, the "CANADIAN REVOLVING CREDIT COMMITMENTS"; provided, however, that
the Dollar Equivalent of the Aggregate Canadian Revolving Credit Exposure at any
one time outstanding shall not exceed the Canadian Maximum Available Amount in
effect at such time. Within the foregoing limits and subject to the conditions
set forth in Article 3, the Canadian Borrowers may obtain Borrowings of Canadian
Revolving Credit Loans, repay or prepay such Canadian Revolving Credit Loans,
and reborrow such Canadian Revolving Credit Loans.
(e) US SWINGLINE LOANS. The US Swingline Lender's US Swingline
Exposure shall not exceed at any one time the amount set forth opposite the US
Swingline Lender's name on Annex I under the caption "US Swingline Loan
Commitment" (the "US SWINGLINE COMMITMENT"); provided, however, the Aggregate US
Revolving Credit Exposure at any one time outstanding shall not exceed the US
Maximum Available Amount in effect at such time. Within the foregoing limits set
forth in Article 3, the US Borrowers may obtain Borrowings of US Swingline
Loans, repay or prepay such US Swingline Loans, and reborrow such US Swingline
Loans.
(f) AMOUNTS OF BORROWINGS, ETC. The aggregate principal amount
of each Borrowing (1) of Eurodollar Loans shall be (A) in an amount sufficient
to cause each Lender's share thereof to be not less than $500,000, and (B) in an
integral multiple of $100,000, (2) of US Revolving Credit Loans which are ABR
Loans shall be in minimum amount of $1,000,000 and shall be in an integral
multiple of $100,000 (other than Borrowings of the US Funding Amount, which
shall be in the amount required for the US Funding Amount), (3) of Canadian
Revolving Credit Loans which are ABR Loans shall be not less than $100,000 and
shall be in an integral multiple of $50,000 (other than Borrowings of the
Canadian Funding Amount, which shall be in the amount required for the Canadian
Funding Amount), (4) of Canadian Prime Rate Loans shall be not less than
C$100,000 and shall be in an integral multiple of
36
C$50,000, (5) of B/A Loans shall be not less than C$500,000 and shall be in an
integral multiple of C$100,000, and (6) of US Swingline Loans shall be in any
amount. Borrowings of more than one Type may be outstanding at the same time;
provided, however, that the Borrowers shall not be entitled to request any
Borrowing that, if made, would result in an aggregate of more than five separate
Borrowings of Eurodollar Loans or five separate B/A Loans being outstanding at
(i) any one time. For purposes of the foregoing, Borrowings having different
Interest Periods or Contract Periods, regardless of whether they commence on the
same date, shall be considered separate Borrowings.
Section 2.2 BORROWING REQUESTS.
(a) BORROWING REQUESTS. Whenever any of the Borrowers desires
to make a Borrowing hereunder, they shall give Advance Notice to Administrative
Agent (in the case of any Borrowing of US Revolving Credit Loans or US Swingline
Loans) or Canadian Administrative Agent (with a simultaneous copy to
Administrative Agent (in the case of any Borrowing of Canadian Loans)) in the
form of a Borrowing Request, specifying, subject to the provisions hereof, (1)
the aggregate principal amount of the Loan to be made pursuant to such
Borrowing, (2) whether such Loan is a US Revolving Credit Loan, Canadian
Revolving Credit Loan, or US Swingline Loan, (3) in the case of a Canadian
Revolving Credit Loan, whether such Loan is to be a Dollar Denominated Loan or a
C$ Denominated Loan, (4) the date of Borrowing (which shall be a Business Day),
(5) whether the Dollar Denominated Loans being made pursuant to such Borrowing
are to be ABR Loans or Eurodollar Loans, (6) whether the C$ Dollar Denominated
Loans being made pursuant thereto are to be Canadian Prime Rate Loans or B/A
Loans, and (7) in the case of Eurodollar Loans or B/A Loans, the Interest Period
or Contract Period, respectively, to be applicable thereto.
(b) NOTICE BY ADMINISTRATIVE AGENT. Subject to Section 2.9(i)
with respect to Canadian Revolving Credit Loans, the Administrative Agent or the
Canadian Administrative Agent (as applicable) shall promptly give the Canadian
Administrative Agent and each applicable Lender telecopy or telephonic notice
(and, in the case of telephonic notices, confirmed by telecopy or otherwise in
writing) of the proposed Borrowing (other than Borrowings of US Swingline Loans
in which case notice shall only be given the US Swingline Lender), of such
Lender's Applicable Percentage thereof and of the other matters covered by the
Advance Notice. The Borrowers hereby waive the right to dispute the
Administrative Agent's record of the terms of such telephonic notice, absent
manifest error.
(c) AUTOMATIC FUNDING TO US DISBURSEMENT ACCOUNTS.
Notwithstanding Section 2.2(a) and Section 2.2(b), on each Business Day, the US
Borrowers will be deemed to have requested pursuant to a Borrowing Request a
Borrowing to be made on such day in an amount (the "US FUNDING AMOUNT") equal to
the amount of all checks, drafts and other items submitted for payment from the
US Borrowers' Disbursement Account on such Business Day. Such Borrowing shall be
a Borrowing of US Swingline Loans to the extent of the remaining US Swingline
Availability and, thereafter, such Borrowings shall be US Revolving Credit Loans
which shall be ABR Loans. Subject to the satisfaction of the conditions
precedent set forth in Article 3, the US Funding Amount shall be deposited into
the US Borrower's Disbursement Account.
Section 2.3 LETTERS OF CREDIT.
(a) ISSUANCE OF US LETTERS OF CREDIT. Subject to the terms and
conditions hereof, the US Borrowers shall have the right, in addition to US
Revolving Credit Loans provided for in Section 2.1, to utilize the US Revolving
Credit Commitments from time to time prior to the Maturity Date by obtaining the
issuance of either Documentary Letters of Credit or Standby Letters of Credit
for the accounts of any of the US Borrowers by an Issuing Bank if the US
Borrowers shall so request in the notice referred to in Section 2.3(d)(1) (such
letters of credit being collectively referred to as the "US
37
LETTERS OF CREDIT"); provided, however, that the Aggregate US Revolving Credit
Exposure at any one time outstanding shall not exceed the US Maximum Available
Amount in effect at such time and the aggregate of all US Letter of Credit
Liabilities and Canadian Letter of Credit Liabilities at any one time
outstanding shall not exceed $10,000,000. US Letters of Credit shall be
denominated in Dollars and may be issued to support the obligations of the US
Borrowers only. Upon the date of the issuance of a US Letter of Credit, the
applicable Issuing Bank shall be deemed, without further action by any party
hereto, to have sold to each US Revolving Lender, and each US Revolving Lender
shall be deemed, without further action by any party hereto, to have purchased
from such Issuing Bank, a participation, to the extent of such applicable
Lender's US Revolving Credit Percentage, in such US Letter of Credit and the
related US Letter of Credit Liabilities.
(b) ISSUANCE OF CANADIAN LETTERS OF CREDIT. Subject to the
terms and conditions hereof, the Canadian Borrowers shall have the right, in
addition to Canadian Revolving Credit Loans provided for in Section 2.1, to
utilize the Canadian Revolving Credit Commitments from time to time prior to the
Maturity Date by obtaining the issuance of either Documentary Letters of Credit
or Standby Letters of Credit for the account of any of the Canadian Borrowers by
an Issuing Bank if the Canadian Borrowers shall so request in the notice
referred to in Section 2.3(d)(1) (such letters of credit being collectively
referred to as the "CANADIAN LETTERS OF CREDIT"); provided, however, that, the
Dollar Equivalent of the Aggregate Canadian Revolving Credit Exposure at any one
time outstanding shall not exceed the Canadian Maximum Available Amount in
effect at such time and the Dollar Equivalent of the aggregate of all Canadian
Letter of Credit Liabilities and US Letter of Credit Liabilities at any one time
outstanding shall not exceed $10,000,000. Canadian Letters of Credit shall be
denominated in Dollars or C$ as the Canadian Borrowers shall elect and may be
issued to support the obligations of the Canadian Borrowers only. Upon the date
of the issuance of a Canadian Letter of Credit, the applicable Issuing Bank
shall be deemed, without further action by any party hereto, to have sold to
each Canadian Lender, and each Canadian Lender shall be deemed, without further
action by any party hereto, to have purchased from such Issuing Bank, a
participation, to the extent of such applicable Lender's Canadian Revolving
Credit Percentage, in such Canadian Letter of Credit and the related Canadian
Letter of Credit Liabilities.
(c) CERTAIN LIMITATION ON LETTERS OF CREDIT. No Letter of
Credit issued pursuant to this Agreement shall have an expiry date beyond the
earlier of one year after the date of issuance or sixty (60) days prior to the
Maturity Date. Any Letter of Credit may give the beneficiary thereof the right
to draw upon the Letter of Credit upon its expiry date to the extent not
extended. No Letter of Credit shall be issued within sixty (60) days of the
Maturity Date.
(d) ADDITIONAL LETTER OF CREDIT PROVISIONS. The following
additional provisions shall apply to each Letter of Credit:
(1) Any of the Borrowers which desires an Issuing
Bank to issue a Letter of Credit for its account (an "ACCOUNT PARTY")
shall give the Administrative Agent (or the Canadian Administrative
Agent in the event such Letter of Credit is a Canadian Letter of
Credit) and the Issuing Bank at least five (5) Business Days' prior
notice in the form of a Borrowing Request (effective upon receipt), or
in each case, such shorter period as may be agreed to by the
Administrative Agent (or the Canadian Administrative Agent, as
applicable) and such Issuing Bank, specifying the date such Letter of
Credit is to be issued (which shall be a Business Day) and describing:
(A) the face amount of the Letter of Credit and, in the case of any
Canadian Letter of Credit, the type of currency (Dollars or C$) in
which such Letter of Credit is to be denominated, (B) the expiration
date of the Letter of Credit, (C) the name and address of the
beneficiary, (D) information concerning the transaction proposed to be
supported by such Letter of Credit as the Administrative Agent (or the
Canadian Administrative Agent, as applicable) or such Issuing Bank may
reasonably request, (E) such other information and documents relating
to
38
the Letter of Credit as the Administrative Agent (or the Canadian
Administrative Agent, as applicable) or such Issuing Bank may
reasonably request, and (F) a precise description of documents and the
verbatim text of any certificate to be presented by the beneficiary,
which, if presented prior to the expiry date of the Letter of Credit,
would require such Issuing Bank to make payment under the Letter of
Credit; provided that such Issuing Bank, in its reasonable judgment,
may require reasonable changes in such documents and certificates; and
provided further that such Issuing Bank shall not be required to issue
any Letter of Credit that on its terms requires payment thereunder
prior to the next Business Day following receipt by such Issuing Bank
of such documents and certificates. Each such notice shall be
accompanied by the applicable Issuing Bank's Application and by a
certificate executed by a Responsible Officer setting forth
calculations evidencing availability for such Letter of Credit pursuant
to Section 2.3(d)(2) and stating that all conditions precedent to such
issuance have been satisfied. Each Letter of Credit shall, to the
extent not inconsistent with the express terms hereof or the applicable
Application, be subject to the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500 (together with any subsequent revisions thereof
approved by a Congress of the International Chamber of Commerce, the
"UCP"), and shall, as to matters not governed by the UCP, be governed
by, and construed and interpreted in accordance with, the laws of the
State of New York.
(2) No US Letter of Credit or Canadian Letter of Credit may be
issued if after giving effect thereto the Aggregate US Revolving Credit
Exposure or the Aggregate Canadian Revolving Credit Exposure would
exceed the US Maximum Available Amount or the Canadian Maximum
Available Amount, respectively. On each day during the period
commencing with the issuance of any Letter of Credit and until such
Letter of Credit shall have expired or have been terminated, the US or
Canadian Revolving Credit Commitment (as applicable) of each Lender
shall be deemed to be utilized for all purposes hereof in an amount
equal to such Lender's Revolving Credit Percentage of the amount of the
Letter of Credit Liabilities related to such Letter of Credit.
(3) Upon receipt from the beneficiary of any Letter of Credit
of any demand for payment thereunder, the Issuing Bank shall promptly
notify the Account Party for whose account such Letter of Credit was
issued and the Administrative Agent (or the Canadian Administrative
Agent if such Letter of Credit is a Canadian Letter of Credit) of such
demand (provided that the failure of an the Issuing Bank to give such
notice shall not affect the Reimbursement Obligations of the Account
Party hereunder) and the Account Party shall immediately, and in any
event no later than 10:00 a.m. (New York, New York time) on the date of
such drawing, reimburse the Administrative Agent (or the Canadian
Administrative Agent, as applicable) for the account of the applicable
Issuing Bank for any amount paid by the Issuing Bank upon any drawing
under such Letter of Credit, without presentment, demand, protest or
other formalities of any kind in an amount, in same day funds, equal to
the amount of such drawing. Unless prior to 10:00 a.m. (New York, New
York time) on the date of such drawing, the Account Party shall have
either notified the Issuing Bank and the Administrative Agent (or the
Canadian Administrative Agent, as applicable) that the Account Party
intends to reimburse the Administrative Agent (or the Canadian
Administrative Agent, as applicable) for the account of the applicable
Issuing Bank for the amount of such drawing with funds other than the
proceeds of Loans or delivered to the Administrative Agent (or the
Canadian Administrative Agent, as applicable) a Borrowing Request for
Loans in an amount equal to such drawing, the Account Party will be
deemed to have given a Borrowing Request to the Administrative Agent
(or the Canadian Administrative Agent, as applicable) requesting that
the Lenders make Revolving Credit Loans on the date on which such
drawing is honored in an amount equal to the amount of such drawing.
Any Loans made pursuant to the preceding sentence shall be (A) US
Revolving Credit Loans which are ABR
39
Loans if the underlying Letter of Credit was a US Letter of Credit, (B)
Canadian Revolving Credit Loans if the underlying Letter of Credit was
a Canadian Letter of Credit, and (C) (i) Dollar Denominated Loans and
ABR Loans if the underlying Letter of Credit was denominated in
Dollars, and (ii) C$ Denominated Loans and Canadian Prime Rate Loans if
the underlying Letter of Credit was denominated in C$. The obligation
of Lenders to make Revolving Credit Loans pursuant to this Section 2.3
(but not the participation obligations of the Lenders pursuant to
Section 2.3(d)(4) below) shall be subject to a) the satisfaction of the
conditions in Article 3 and b) the existence of availability of the US
Maximum Available Amount or Canadian Maximum Available Amount (as
applicable) pursuant to Section 2.1(c) or Section 2.1(d) hereof (after
giving effect to repayment of the applicable Reimbursement Obligations
with the proceeds of the proposed Revolving Credit Loans). Subject to
the preceding sentence, if so requested by the Administrative Agent (or
the Canadian Administrative Agent, as applicable), each of the US
Revolving Lenders or Canadian Lenders (as applicable) shall, on the
date of such drawing, make such Revolving Credit Loans in an amount
equal to such Lender's Revolving Credit Percentage of such drawing or
the full amount of the unused US or Maximum Available Amount pursuant
to Section 2.1(c) or Section 2.1(d) as applicable, the proceeds of
which shall be applied directly by the Administrative Agent (or the
Canadian Administrative Agent, as applicable) to reimburse the
applicable Issuing Bank to the extent of such proceeds.
(4) If the appropriate Account Party fails to reimburse the
applicable Issuing Bank as provided in Section 2.3(d)(3) above for any
reason, including, but not limited to, failure to satisfy the
conditions in Article 3 or insufficient availability under the Maximum
Available Amount pursuant to Section 2.1(c) or Section 2.1(d) such
Issuing Bank shall promptly notify the Administrative Agent (or the
Canadian Administrative Agent, as applicable) and the Administrative
Agent (or the Canadian Administrative Agent, as applicable) shall
notify each US Revolving Lender or Canadian Lender (as applicable) of
the unreimbursed amount of such drawing and of such Lender's respective
participation therein based on such Lender's US or Canadian Revolving
Credit Percentage (as applicable). Each such Lender will pay to the
Administrative Agent (or the Canadian Administrative Agent, as
applicable) for the account of the applicable Issuing Bank on the date
of such notice an amount equal to such Lender's US or Canadian
Revolving Credit Percentage (as applicable) of such unreimbursed
drawing (or, if such notice is made after 1:00 p.m. (New York, New York
time) on such date, on the next succeeding Business Day). If any Lender
fails to make available to such Issuing Bank the amount of such
Lender's participation in such Letter of Credit as provided in this
Section 2.3(d)(4), such Issuing Bank shall be entitled to recover such
amount on demand from such Lender together with interest at the Federal
Funds Effective Rate for one Business Day and thereafter at the ABR.
Nothing in this Section 2.3(d)(4) shall be deemed to prejudice the
right of any Lender to recover from such Issuing Bank any amounts made
available by such Lender to such Issuing Bank pursuant to this Section
2.3(d)(4) if it is determined by a court of competent jurisdiction that
the payment with respect to a Letter of Credit by such Issuing Bank was
wrongful and such wrongful payment was the result of gross negligence
or willful misconduct on the part of such Issuing Bank. The applicable
Issuing Bank shall pay to the Administrative Agent (or the Canadian
Administrative Agent, as applicable) and the Administrative Agent (or
the Canadian Administrative Agent, as applicable) shall pay to each
Lender such Lender's US or Canadian Revolving Credit Percentage (as
applicable) of all amounts received from the Account Party for payment,
in whole or in part, of the Reimbursement Obligation in respect of any
Letter of Credit, but only to the extent such Lender has made payment
to such Issuing Bank in respect of such Letter of Credit pursuant to
this Section 2.3(d)(4).
(5) The issuance by the applicable Issuing Bank of each Letter
of Credit shall, in addition to the conditions precedent set forth in
Article 3, be subject to the conditions precedent
40
that such Letter of Credit shall be in the form and contain such terms
as shall be reasonably satisfactory to such Issuing Bank, and that the
Account Party shall have executed and delivered such other instruments
and agreements relating to the Letter of Credit as such Issuing Bank
shall have reasonably requested and that are not inconsistent with the
terms of this Agreement including the applicable Issuing Bank's
Application therefor. In the event of a conflict between the terms of
this Agreement and the terms of any Application, the terms of this
Agreement shall control.
(6) As between any Account Party and any Issuing Bank, the
Account Party assumes all risks of the acts and omissions of or misuse
of the Letters of Credit issued by such Issuing Bank by the respective
beneficiaries of such Letters of Credit. In furtherance and not in
limitation of the foregoing, such Issuing Bank shall not be
responsible: (A) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any Person in
connection with the application for or issuance of such Letters of
Credit, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged; (B) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in part,
which may prove to be invalid or ineffective for any reason; (C) for
errors, omissions, interruptions or delays in transmission or delivery
of any messages, by mail, cable, telegraph, telex or otherwise, whether
or not they are in cipher; (D) for errors in interpretation of
technical terms; (E) for any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any
such Letter of Credit or of the proceeds thereof; (F) for the
misapplication by the beneficiary of any such Letter of Credit of the
proceeds of any drawing under such Letter of Credit; and (G) for any
consequences arising from causes beyond the control of such Issuing
Bank, including, without limitation, the actions of any governmental
authority. None of the above shall affect, impair, or prevent the
vesting of any of such Issuing Bank's rights or powers hereunder.
Notwithstanding anything to the contrary contained in this Section
2.3(d)(6), no Account Party shall assume any risk, and shall have no
obligation to indemnify any Issuing Bank, in respect of any liability
incurred by such Issuing Bank arising primarily out of the gross
negligence or willful misconduct of such Issuing Bank, as finally
determined by a court of competent jurisdiction.
(7) Each Issuing Bank will send to the applicable Account
Party and the Administrative Agent (or the Canadian Administrative
Agent, as applicable) immediately upon issuance of any Letter of
Credit, or an amendment thereto, a true and complete copy of such
Letter of Credit, or such amendment thereto. Upon issuance of any
Letter of Credit or an amendment thereto, the Administrative Agent (or
the Canadian Administrative Agent, as applicable) shall promptly notify
each Lender of the terms of such Letter of Credit or amendment thereto,
and of such Lender's US or Canadian Revolving Credit Percentage (as
applicable) of the amount of such Letter of Credit or amendment
thereto, and the Administrative Agent (or the Canadian Administrative
Agent, as applicable) shall provide to each Lender a copy of such
Letter of Credit or such amendment thereto. Upon cancellation or
termination of any Letter of Credit, the applicable Issuing Bank shall
promptly notify the Administrative Agent (or the Canadian
Administrative Agent, as applicable) and the applicable Account Party,
and the Administrative Agent (or the Canadian Administrative Agent, as
applicable) will then promptly notify each Lender, of such cancellation
or termination.
(8) The obligation of each Account Party to reimburse each
Issuing Bank for Reimbursement Obligations with regard to the Letters
of Credit issued by such Issuing Bank for such Account Party and the
obligations of the US Revolving Lenders and Canadian Lenders under
Section 2.3(d)(4) shall be unconditional and irrevocable and shall be
paid strictly in
41
accordance with the terms of this Agreement and under all circumstances
including, without limitation, the following circumstances:
(A) any lack of validity or enforceability of any
Letter of Credit;
(B) the existence of any claim, set-off, defense or
other right that any of the Borrowers may have at any time
against a beneficiary or any transferee of any Letter of
Credit (or any Persons for whom any such transferee may be
acting), any Lender or any other Person, whether in connection
with this Agreement, the transactions contemplated herein or
any unrelated transaction (including any underlying
transaction between the Account Party and the beneficiary for
which the Letter of Credit was procured) other than a defense
based on the gross negligence (as opposed to ordinary
negligence) or willful misconduct of such Issuing Bank, as
determined by a court of competent jurisdiction;
(C) any draft, demand, certificate or any other
document presented under any Letter of Credit is proved to be
forged, fraudulent, invalid or insufficient in any respect or
any statement therein is untrue or inaccurate in any respect;
(D) any adverse change in the condition (financial or
otherwise) of any Credit Party;
(E) any breach of this Agreement or any other
Financing Document by any of the Borrowers, Administrative
Agent, Canadian Administrative Agent or any Lender (other than
the applicable Issuing Bank);
(F) any other circumstance or happening whatsoever
which is similar to any of the foregoing; provided that such
other occurrence or happening is not the result of the gross
negligence (as opposed to ordinary negligence) or willful
misconduct of such Issuing Bank, as determined by a court of
competent jurisdiction; or
(G) the fact that a Default shall have occurred and
be continuing.
Section 2.4 DISBURSEMENT OF FUNDS.
(a) AVAILABILITY. Subject to Section 2.2(c), and, with respect to
Canadian Lenders, Section 2.9(i), no later than 11:00 a.m. (or, in the case of
ABR Loans or Canadian Prime Rate Loans, 1:00 p.m.) (New York, New York time) on
the date of each Borrowing (other than Borrowings consisting of US Swingline
Loans), each US Revolving Lender (in the case of any Borrowing of US Revolving
Credit Loans) and each Canadian Lender (in the case of any Borrowing of Canadian
Loans) will make available to the Administrative Agent (or the Canadian
Administrative Agent, in the case of a Borrowing of Canadian Loans) such
Lender's Applicable Percentage of the principal amount of the Borrowing
requested to be made on such date reduced by the principal amount of Revolving
Credit Loans (if any) of such Lender maturing on such date (provided, that no
Borrowing comprised of Canadian Revolving Credit Loans shall be reduced in
respect of US Loans maturing on such date) in immediately available funds at the
Payment Office (unless such Borrowing is to be made under the Canadian Revolving
Credit Facility and the Canadian Borrowers have requested a Borrowing in C$, in
which case such funds shall be C$). The Administrative Agent (or the Canadian
Administrative Agent, in the case of a Borrowing of Canadian Loans) will make
available to the applicable Borrowers at the Payment Office of such Agent the
aggregate of the amounts (if any) so made available by the Lenders by either
(1)depositing such amounts, in immediately available funds, to the account of
such Borrower at the Administrative Agent or Canadian
42
Administrative Agent (as applicable) designated by the applicable Borrowers for
such purpose (for each of the Borrowers, its "DISBURSEMENT ACCOUNT"), or (2)
disbursing such amounts in accordance with such other lawful instructions of
such Borrowers as such Borrowers shall specify in the applicable Borrowing
Request. To the extent that any Loans mature or Reimbursement Obligations are
due and owing on the date of a requested Borrowing of Revolving Credit Loans,
the Lenders shall apply the proceeds of the Revolving Credit Loans then being
made, to the extent thereof, to the repayment of such maturing Loans or
Reimbursement Obligations, such Loans or Reimbursement Obligations and
repayments intended to be a contemporaneous exchange (provided, that the
proceeds of any Borrowing comprised of Canadian Revolving Credit Loans shall not
be applied to pay US Revolving Credit Loans maturing on such date). In respect
of US Swingline Loans, the US Swingline Lender will make available to the
applicable US Borrowers (or, in the case of a US Swingline Loan made to pay
Reimbursement Obligations of such US Borrowers, by remittance to the applicable
Issuing Bank) the proceeds of such US Swingline Loan in accordance with this
Section 2.4(a) on or before 3:00 p.m. (New York, New York time) on the date
requested for such Borrowing or as provided in Section 2.2(c).
(b) FUNDS TO THE ADMINISTRATIVE AGENT OR CANADIAN ADMINISTRATIVE AGENT.
Unless the Administrative Agent or Canadian Administrative Agent shall have been
notified by any Lender prior to the date of a Borrowing (other than a Borrowing
consisting of US Swingline Loans) that such Lender does not intend to make
available to the Administrative Agent or Canadian Administrative Agent (as
applicable) such Lender's US Revolving Commitment Percentage and Canadian
Revolving Commitment Percentage of the Borrowing to be made on such date,
subject to Section 2.9(i) with respect to Canadian Revolving Credit Loans, the
Administrative Agent or Canadian Administrative Agent (as applicable) may assume
that such Lender has made such amount available to the Administrative Agent or
Canadian Administrative Agent (as applicable) on such date, and the
Administrative Agent or Canadian Administrative Agent (as applicable) may make
available to or for the account of the applicable Borrowers a corresponding
amount. If such corresponding amount is not in fact made available to the
Administrative Agent or Canadian Administrative Agent (as applicable) by such
Lender on the date of a Borrowing, the Administrative Agent or Canadian
Administrative Agent (as applicable) shall be entitled to recover such
corresponding amount on demand from such Lender together with interest at such
Agent's cost of funds (as determined by such Agent). If such Lender does not pay
such corresponding amount forthwith upon the Administrative Agent's or Canadian
Administrative Agent's (as applicable) demand therefor, the Administrative Agent
or Canadian Administrative Agent (as applicable) shall promptly notify the
applicable Borrowers and the applicable Borrowers shall immediately pay such
corresponding amount to the Administrative Agent or Canadian Administrative
Agent (as applicable) together with interest at the rate specified for the
Borrowing which includes such amount paid. Nothing in this Section 2.4 shall be
deemed to relieve any Lender from its obligation to fulfill its Revolving Loan
Commitments hereunder or to prejudice any rights which the Borrowers may have
against any Lender as a result of any default by such Lender hereunder.
(c) LENDERS' RESPONSIBILITIES. No Lender shall be responsible for any
default by any other Lender in its obligation to make Loans hereunder, and each
Lender shall be obligated to make only such Loans provided to be made by it
hereunder, regardless of the failure of any other Lender to fulfill its
Commitment hereunder.
Section 2.5 NOTES AND MATURITY.
(a) US REVOLVING CREDIT NOTES. The US Borrowers' obligations
to pay the principal of, and interest on, the US Revolving Credit Loans made by
each US Lender shall be further evidenced by the US Borrowers issuance,
execution and delivery of a US Revolving Credit Note payable to the order of
each such US Lender in the amount of such US Lender's US Revolving Credit
Commitment and shall be
43
dated as of the date of issuance of such US Revolving Credit Note. The principal
amount of each US Revolving Credit Note shall be payable on or before the
Maturity Date.
(b) CANADIAN REVOLVING CREDIT NOTES. The Canadian Borrowers'
obligations to pay the principal of, and interest on, the Canadian Revolving
Credit Loans made by each Canadian Lender shall be further evidenced by the
Canadian Borrowers issuance, execution and delivery of a Canadian Revolving
Credit Note payable to the order of each such Canadian Lender in the amount of
such Canadian Lender's Canadian Revolving Credit Commitment and shall be dated
as of the date of issuance of such Canadian Revolving Credit Note. The principal
amount of each Canadian Revolving Credit Note shall be payable on or before
Maturity Date.
(c) US SWINGLINE NOTES. The US Borrowers' obligations to pay
the principal of, and interest on, the US Swingline Loans made by the US
Swingline Lender shall be further evidenced by the US Borrowers issuance,
execution and delivery of a US Swingline Note payable to the order of the US
Swingline Lender in the amount of the US Swingline Commitment and shall be dated
as of the date of issuance of such US Swingline Note. All US Swingline Loans
shall mature on the last Business Day of the month in which such US Swingline
Loans are borrowed; provided, however, in the event such US Swingline Loans are
borrowed on the last Business Day of any month, such US Swingline Loans shall
mature on the first Business Day of the next succeeding month; provided,
further, that the principal amount of the US Swingline Note and all outstanding
US Swingline Loans shall be payable on or before the Maturity Date.
(d) TERM NOTES. The US Borrowers' obligations to pay the
principal of, and interest on, the Term Loans made by each Term Lender shall be
further evidenced by the US Borrowers issuance, execution and delivery of a Term
Note payable to the order of each such Term Lender in the amount of such Term
Lender's Term Commitment and shall be dated as of the date of issuance of such
Term Note. The principal amount of each Term Note shall be payable on or before
the Maturity Date. Any part of the Term Loans which are repaid may not be
re-borrowed.
Section 2.6 INTEREST. In all cases subject to Section 10.13:
(a) ABR LOANS. Subject to Section 2.6(d), each of the
Borrowers agrees to pay interest in respect of the unpaid principal amount of
each ABR Loan made to such Borrowers from the date thereof until payment in full
thereof at a rate per annum which shall be, for any day, equal to the sum of the
Applicable Margin plus the ABR in effect on such day, but in no event to exceed
the Highest Lawful Rate; provided, that, the rate of interest in effect pursuant
to this Section 2.6(a) with respect to the Term Loans shall be subject to such
maximum and minimum interest rates as may be specified in the Term Lender
Joinder Agreement pertaining to such Term Loans (to the extent such maximum and
minimum interest rates are set forth therein). The term "ABR" shall mean, for
any day (1) for any US Loan and US Swingline Loan which is an ABR Loan, the
highest of (A) the Prime Rate in effect on such day, (B) one-half of one percent
(1/2%) plus the Federal Funds Effective Rate in effect for such day (rounded
upwards, if necessary, to the nearest 1/16th of 1%), and (C) one percent (1%)
plus the Base CD Rate (rounded upwards, if necessary, to the nearest 1/16th of
1%), but in no event to exceed the Highest Lawful Rate, and (2) for any Canadian
Loan which is an ABR Loan the highest of (A) the US Base Rate in effect on such
day, or (B) one half of one percent (1/2%) plus the Federal Funds Effective
Rate in effect for such day (rounded upwards in necessary, to the nearest 1/16th
of 1%), but in no event to exceed the Highest Lawful Rate. For purposes of this
Agreement, any change in the ABR due to a change in the Federal Funds Effective
Rate, the Prime Rate, the US Base Rate or the Base CD Rate shall be effective as
of the opening of business on the effective date of such change in the Federal
Funds Effective Rate, the Prime Rate, the US Base Rate or the Base CD Rate, as
the case may be.
44
(b) EURODOLLAR LOANS. Subject to Section 2.6(d), each of the
Borrowers agrees to pay interest in respect of the unpaid principal amount of
each Eurodollar Loan made to such Borrowers from the date thereof until payment
in full thereof at a rate per annum which shall be the sum of the relevant
Applicable Margin plus the Eurodollar Rate, but in no event to exceed the
Highest Lawful Rate.
(c) CANADIAN PRIME RATE LOANS. Subject to Section 2.6(d), the
Canadian Borrowers agree to pay interest in respect of the unpaid principal
amount of each Canadian Prime Rate Loan from the date thereof until payment in
full thereof at a rate per annum which shall be, for any day, equal to the sum
of the Applicable Margin plus the Canadian Prime Rate in effect on such day, but
in no event to exceed the Highest Lawful Rate.
(d) DEFAULT INTEREST. After the occurrence and during the
continuance of any Default or Event of Default, the US Borrowers shall, on
demand from time to time, pay interest, to the extent permitted by law, on the
outstanding US Lender Indebtedness, and the Canadian Borrowers shall, on demand
from time to time, pay interest, to the extent permitted by law, on the Canadian
Lender Indebtedness (after as well as before judgment) at a rate per annum equal
to (1) in the case of any Eurodollar Loan, the rate that would be applicable
under Section 2.6(b) to such Eurodollar Loan, plus 2% per annum, (2) in the case
of any Canadian Prime Rate Loan, the rate that would be applicable under Section
2.6(c) to such Canadian Prime Rate Loan, plus 2% per annum, and (3) in the case
of any other amount, the rate that would be applicable under Section 2.6(a) to
an ABR Loan, plus 2% per annum, but in no event to exceed the Highest Lawful
Rate.
(e) INTEREST PAYMENT DATES. Interest on each ABR Loan,
Eurodollar Loan and Canadian Prime Rate Loan shall accrue from and including the
date of such Loan to but excluding the date of payment in full thereof. Interest
on each Eurodollar Loan shall be payable on the last Business Day of each
Interest Period applicable thereto and, in the case of an Interest Period in
excess of three months, on each day which occurs at three month intervals of the
initial date of such Interest Period (unless such day is not a Business Day in
which event such payment shall be made on the next succeeding Business Day), and
on any prepayment (on the amount prepaid), at maturity (whether by acceleration
or otherwise) and, after maturity, on demand. Interest on each ABR Loan and
Canadian Prime Rate Loan shall be payable on the first Business Day of each
calendar month, commencing on the first of such days to occur after such Loan is
made, at maturity (whether by acceleration or otherwise) and, after maturity, on
demand.
(f) NOTICE BY THE ADMINISTRATIVE AGENT. The Administrative
Agent or the Canadian Administrative Agent, upon determining the Eurodollar Rate
for any Interest Period and the Discount Rate for any Contract Period, shall
promptly notify by telecopy or telephone (in the case of telephonic notices,
confirmed by telecopy or otherwise in writing) or in writing to the Borrowers
and the Lenders.
Section 2.7 INTEREST PERIODS. In connection with each Borrowing of
Eurodollar Loans, the applicable Borrowers shall elect an Interest Period to be
applicable to such Borrowing, which Interest Period shall begin on and include,
as the case may be, the date selected by such Borrowers pursuant to Section
2.2(a), the conversion date or the date of expiration of the then current
Interest Period applicable thereto, and end on but exclude the date which is
either one, two, three or six months thereafter, as selected by such Borrowers;
provided, that, the US Borrowers shall be permitted to obtain a 15-day Interest
Period once during the term of this Agreement; provided further:
(a) BUSINESS DAYS. If any Interest Period would otherwise
expire on a day which is not a Business Day, such Interest Period shall expire
on the next succeeding Business Day, provided, further, that if any Interest
Period (other than in respect of a Borrowing of Eurodollar Loans the Interest
Period of which is expiring pursuant to Section 2.16(b) hereof) would otherwise
expire on a day which is not a
45
Business Day but is a day of the month after which no further Business Day
occurs in such month, such Interest Period shall expire on the next preceding
Business Day;
(b) MONTH END. Any Interest Period which begins on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall, subject to Section 2.7(c) below, end on the last Business Day of a
calendar month;
(c) PAYMENT LIMITATIONS. No Interest Period shall extend
beyond any date that any principal payment or prepayment is scheduled to be due
unless the aggregate principal amount of Borrowings which are Borrowings of ABR
Loans or which are Borrowings of Eurodollar Loans which have Interest Periods
which will expire on or before such date, less the aggregate amount of any other
principal payments or prepayments due during such Interest Period, is equal to
or in excess of the amount of such principal payment or prepayment; and
(d) MATURITY DATES. No Interest Period shall extend beyond the
Maturity Date.
Section 2.8 BANKERS' ACCEPTANCES.
(a) Subject to the terms and conditions of this Agreement, the
Canadian Borrowers may request Borrowings of Canadian Revolving Credit Loans by
presenting drafts for acceptance and purchase as B/As by the Canadian Lenders.
(b) To facilitate availment of B/A Borrowings, the Canadian
Borrowers hereby appoint each Canadian Lender as their attorney to sign and
endorse on their behalf, in handwriting or by facsimile or mechanical signature
as and when deemed necessary by such Canadian Lender, blank forms of B/As in the
form requested by such Canadian Lender. In this respect, it is each Canadian
Lender's responsibility to maintain an adequate supply of blank forms of B/As
for acceptance under this Agreement. The Canadian Borrowers recognize and agree
that all B/As signed and/or endorsed on its behalf by a Canadian Lender shall
jointly and severally bind the Canadian Borrowers as fully and effectually as if
signed in the handwriting of and duly issued by the proper signing officers of
each Canadian Borrower. Each Canadian Lender is hereby authorized to issue such
B/As endorsed in blank in such face amounts as may be determined by such
Canadian Lender, provided that the aggregate amount thereof is equal to the
aggregate amount of B/As required to be accepted and purchased by such Canadian
Lender. No Canadian Lender or any Affiliate thereof shall be liable for any
damage, loss or other claim arising by reason of any loss or improper use of any
such instrument except the gross negligence or willful misconduct of such
Canadian Lender or its Affiliate, as applicable, or its officers, employees,
agents or representatives. Each Canadian Lender shall maintain a record with
respect to B/As (1) received by it in blank hereunder, (2) voided by it for any
reason, (3) accepted and purchased by it hereunder and (4) canceled at their
respective maturities. Each Canadian Lender further agrees to retain such
records in the manner and for the statutory periods provided in the various
provincial or federal statutes and regulations which apply to such Canadian
Lender. Each Canadian Lender agrees to provide a copy of such records to the
Canadian Borrowers at the Canadian Borrowers' expense upon request. On request
by or on behalf of the Canadian Borrowers, a Canadian Lender shall cancel all
forms of B/As which have been pre-signed or pre-endorsed on behalf of the
Canadian Borrowers and which are held by such Canadian Lender and are not
required to be issued in accordance with the Canadian Borrowers' irrevocable
notice. The Canadian Borrowers agree that, at the request of the Canadian
Administrative Agent, they shall deliver to the Canadian Administrative Agent a
"depository note" which complies with the requirements of the Depository Bills
and Notes Act (Canada) and consents to the deposit of any such depository note
in the book-based clearance system maintained by the Canadian Depository for
Securities.
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(c) Drafts of the Canadian Borrowers to be accepted as B/As
hereunder shall be signed as set forth in this Section 2.8. Notwithstanding that
any person whose signature appears on any B/A may no longer be an authorized
signatory for any Canadian Lender or the Canadian Borrowers at the date of
issuance of a B/A, such signature shall nevertheless be valid and sufficient for
all purposes as if such authority had remained in force at the time of such
issuance and any such B/A so signed shall be binding on the Canadian Borrowers.
(d) Promptly following receipt of a Borrowing Request or
notice of rollover pursuant to this Section 2.8 or Section 2.12 by way of B/As,
the Canadian Administrative Agent shall so advise the Canadian Lenders and shall
advise each Canadian Lender of the aggregate face amount of the B/As to be
accepted by it and the applicable Contract Period (which shall be identical for
all Canadian Lenders). The aggregate face amount of the B/As to be accepted by
the Canadian Lenders in respect of any Borrowing or rollover of B/A Loans shall
be not less than C$500,000 and shall be in an integral multiple of C$100,000.
(e) Upon acceptance of a B/A by a Canadian Lender, such
Canadian Lender shall purchase, or arrange the purchase of, such B/A from the
Canadian Borrowers at the Discount Rate for such Canadian Lender applicable to
such B/A accepted by it and provide to Canadian Administrative Agent the
Discount Proceeds for the account of the Canadian Borrowers in which event an
Acceptance Fee shall be payable by the Canadian Borrowers to such Canadian
Lender in respect of such B/A and shall be set off against the Discount Proceeds
payable by such Canadian Lender under this Section 2.8(e).
(f) Each Canadian Lender may at any time and from time to time
hold, sell, rediscount or otherwise dispose of any or all B/As accepted and
purchased by it.
(g) If a Canadian Lender is not a chartered bank under the
Bank Act (Canada) or if a Canadian Lender notifies the Administrative Agent in
writing that it is otherwise unable or unwilling to accept B/As, such Canadian
Lender will, instead of accepting and purchasing B/As, purchase from the
Canadian Borrowers a non-interest bearing note denominated in C$ (a "B/A
EQUIVALENT NOTE"), in the form of Exhibit M, issued by the Canadian Borrowers in
the amount and for the same term as the draft which such Canadian Lender would
otherwise have been required to accept and purchase hereunder. Each such
Canadian Lender will provide to the Canadian Administrative Agent the Discount
Proceeds of such B/A Equivalent Loan for the account of any Canadian Borrower.
Each such B/A Equivalent Loan will bear interest at the same rate which would
result if such Canadian Lender had accepted (and been paid an Acceptance Fee)
and purchased (on a discounted basis) a B/A for the relevant Contract Period (it
being the intention of the parties that each such B/A Equivalent Loan shall have
the same economic consequences for the Canadian Lenders and any Canadian
Borrower as the B/A which such B/A Equivalent Loan replaces). All such interest
shall be paid in advance on the date such B/A Loan is made, and will be deducted
from the principal amount of such B/A Equivalent Loan in the same manner in
which the Discount Proceeds of a B/A would be deducted from the face amount of
the B/A. Subject to repayment requirements, on the last day of the relevant
Contract Period for such B/A Equivalent Loan, any Canadian Borrower shall be
entitled to convert each such B/A Equivalent Loan into another type of Loan, or
to roll over each such B/A Equivalent Loan into another B/A Equivalent Loan, all
in accordance with the applicable provisions of this Agreement.
(h) The Canadian Borrowers waive presentment for payment and
any other defense to payment of any amounts due to a Canadian Lender in respect
of a B/A accepted and purchased by it pursuant to this Agreement which might
exist solely by reason of such B/A being held, at the maturity thereof, by such
Canadian Lender in its own right and the Canadian Borrowers agree not to claim
any days of grace if such Canadian Lender as holder sues the Canadian Borrowers
on the B/A for payment of the amount payable by the Canadian Borrowers
thereunder. On the specified maturity date of a B/A, or
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such earlier date as may be required or permitted pursuant to the provisions of
this Agreement, the Canadian Borrowers shall jointly and severally pay, through
the Canadian Administrative Agent, the Canadian Lender that has accepted and
purchased such B/A the full face amount of such B/A and after such payment, the
Canadian Borrowers shall have no further liability in respect of such B/A and
such Canadian Lender shall be entitled to all benefits of, and be responsible
for all payments due to third parties under, such B/A.
(i) If a Canadian Lender grants a participation in a portion
of its rights under this Agreement to a participant under Section 10.6, then in
respect of any B/A Borrowing, a portion thereof may, at the option of such
Canadian Lender, be by way of B/A accepted by such participant. In such event,
the Canadian Borrowers shall upon request of the Canadian Administrative Agent
or the Canadian Lender granting the participation execute and deliver a form of
B/A indemnity in favor of such participant for delivery to such participant.
(j) Notwithstanding anything herein to the contrary, no B/A
may be prepaid prior to the maturity date thereof, except as provided in Article
8.
Section 2.9 REPAYMENT OF LOANS.
(a) The US Borrowers hereby unconditionally, jointly and
severally promise to pay to the Administrative Agent for the account of each US
Revolving Lender, (1) the then unpaid principal amount of each US Revolving
Credit Loan of such Lender on the Maturity Date (or such earlier date on which
the Revolving Credit Loans become due and payable pursuant to Article 8); and
(2) the amounts specified in Section 2.11 on the dates specified in Section
2.11. The US Borrowers hereby unconditionally, jointly and severally promise to
pay to Administrative Agent for the account of each Term Lender the then unpaid
principal amount of each Term Loan on the Maturity Date (or on such earlier date
on which the Term Loans come due and payable pursuant to Article 8). The US
Borrowers hereby unconditionally, jointly and severally promise to pay to the US
Swingline Lender the then-unpaid principal amount of each US Swingline Loan on
the date on which such US Swingline Loan becomes due and payable as provided in
Section 2.5(c) hereof (or such earlier date on which such US Swingline Loans
become due and payable pursuant to Article 8). The US Borrowers hereby further
agree to jointly and severally pay interest on the unpaid principal amount of
the Loans and the US Swingline Loans made to the US Borrowers, from time to time
outstanding from the date hereof until payment in full thereof at the rates per
annum, and on the dates, set forth in Section 2.6.
(b) The Canadian Borrowers hereby jointly, severally and
unconditionally promise to pay to the Canadian Administrative Agent for the
account of each Canadian Lender, (1) the then unpaid principal amount of each
Canadian Revolving Credit Loan of such Lender on the Maturity Date (or such
earlier date on which the Revolving Credit Loans become due and payable pursuant
to Article 8); and (2) the amounts specified in Section 2.11 on the dates
specified in Section 2.11. The Canadian Borrowers hereby further jointly and
severally agree to pay interest on the unpaid principal amount of the Loans made
to the Canadian Borrowers from time to time outstanding from the date hereof
until payment in full thereof at the rates per annum, and on the dates, set
forth in Section 2.6.
(c) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrowers to such
Lender resulting from each Loan of such Lender from time to time, including,
without limitation, the amounts of principal and interest payable and paid to
such Lender from time to time under this Agreement.
(d) The Administrative Agent shall maintain the Register
pursuant to Section 10.7(c), and a subaccount therein for each US Lender, in
which shall be recorded (1) the amount of each US Loan
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made hereunder, the Type thereof and each Interest Period, if any, applicable
thereto, (2) the amount of any principal or interest due and payable or to
become due and payable from the US Borrowers to each US Lender hereunder, and
(3) both the amount of any sum received by the Administrative Agent hereunder
from the US Borrowers and each US Lender's Applicable Percentage thereof. The
Administrative Agent shall maintain a separate register with respect to the US
Swingline Loans which Register shall contain the same information as the
Register with respect to the US Loans.
(e) The Canadian Administrative Agent shall maintain the
Register pursuant to Section 10.7(c), and a subaccount therein for each Canadian
Lender, in which shall be recorded (1) the amount of each Canadian Loan made
hereunder, the Type thereof and each Interest Period or Contract Period, if any,
applicable thereto, (2) the amount of any principal or interest due and payable
or to become due and payable from the Canadian Borrowers to each Canadian Lender
hereunder, and (3) both the amount of any sum received by the Canadian
Administrative Agent hereunder from the Borrowers and each Canadian Lender's
Applicable Percentage thereof.
(f) The entries made in the Registers and the accounts of each
Lender maintained pursuant to Section 2.9(d) and Section 2.9(e) shall, absent
manifest error, to the extent permitted by applicable law, be prima facie
evidence of the existence and amounts of the obligations of the Borrowers
therein recorded; provided, however, that the failure of any Lender or Agent to
maintain a Register or any such account, or any error therein, shall not in any
manner affect the obligations of each Borrower to repay (with applicable
interest) the Loans made to such Borrower by such Lender in accordance with the
terms of this Agreement.
(g) The US Administrative Agent shall render to the US
Borrowers each month a statement of the US Borrowers' account setting forth the
following information for the period from the date of the most recent preceding
statement: the aggregate principal amount of new US Revolving Credit Loans and
US Swingline Loans made to the US Borrowers, the aggregate amount of new
Reimbursement Obligations which have not been reimbursed, the aggregate face
amount of new US Letters of Credit issued for the accounts of the US Borrowers,
the amount of remittances and payments actually collected and applied by the US
Administrative Agent to reduce the outstanding principal balance of the US
Swingline Loans, US Revolving Credit Loans and Term Loans, to reimburse
Reimbursement Obligations and establish L/C Cover during such period and the
outstanding principal balances of the US Swingline Loans, US Revolving Credit
Loans and Term Loans, and the aggregate US Letter of Credit Liabilities
outstanding at the end of such period. Such statement shall be deemed to be
correct and accepted by and be binding upon the US Borrowers unless the US
Administrative Agent receives a written statement of the US Borrowers'
exceptions to such account statement within twenty (20) days after such
statement was rendered to the US Borrowers.
(h) The Canadian Administrative Agent shall render to the
Canadian Borrowers each month a statement of the Canadian Borrowers' account
setting forth the following information for the period from the date of the most
recent preceding statement: the aggregate principal amount of new Canadian
Revolving Credit Loans made to the Canadian Borrowers, the aggregate amount of
new Reimbursement Obligations which have not been reimbursed, the aggregate face
amount of new Canadian Letters of Credit issued for the accounts of the Canadian
Borrowers, the amount of remittances and payments actually collected and applied
by the Canadian Administrative Agent to reduce the outstanding principal balance
of the Canadian Revolving Credit Loans, to reimburse Reimbursement Obligations
during such period and establish L/C Cover and the outstanding principal
balances of the Canadian Revolving Credit Loans and the aggregate Canadian
Letter of Credit Liabilities outstanding at the end of such period. Such
statement shall be deemed to be correct and accepted by and be binding upon the
Canadian Borrowers unless the Canadian Administrative Agent receives a written
statement of the
49
Canadian Borrowers' exceptions to such account statement within twenty (20) days
after such statement was rendered to the Canadian Borrowers.
(i) The Canadian Administrative Agent shall on any Settlement
Date, and upon notice given by the Canadian Administrative Agent no later than
12:00 noon Toronto, Canada time, request each Canadian Lender to make and each
Canadian Lender hereby agrees to make, a Canadian Revolving Credit Loan in an
amount equal to such Canadian Lender's Canadian Revolving Credit Percentage of
the aggregate amount of the Canadian Revolving Credit Loans made by the Canadian
Administrative Agent from the preceding Settlement Date to the date of such
notice. Each Canadian Lender's obligation to make the Canadian Revolving Credit
Loans referred to in this Section 2.9(i) and to make the settlements pursuant to
this Section 2.9(i) shall not be affected by any circumstance, including,
without limitation, (i) any set-off, counterclaim, recoupment, defence or other
right which any such Canadian Lender or the Canadian Borrowers may have against
the Canadian Administrative Agent, any Canadian Borrower, any Canadian Lender or
any other Person for any reason whatsoever; (ii) any adverse change in the
condition (financial or otherwise) of the Canadian Borrowers; or (iii) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing. Without limiting the liability and obligation of each Canadian
Lender to make such advances, the Canadian Borrowers authorize the Canadian
Administrative Agent to charge the Canadian Borrower's account to the extent
amounts received from the Canadian Lenders are not sufficient to repay in full
the amount of any such deficiency. On the Settlement Date, the Canadian
Administrative Agent and the Canadian Lenders shall each remit to the other, in
immediately available funds, all amounts necessary so as to ensure that, as of
the Settlement Date, the Canadian Lenders shall have their respective Canadian
Revolving Credit Percentage of all outstanding Canadian Revolving Credit
Exposure. The Canadian Lenders acknowledge and agree that the Canadian Revolving
Credit Exposure of the Canadian Administrative Agent may exceed the amount of
its Canadian Revolving Credit Commitment (the "Canadian Administrative Agent
Overline") solely as a result of the Canadian Administrative Agent making
advances on behalf of the other Canadian Lenders pending settlement pursuant to
this Section 2.9(i), but that such Canadian Administrative Agent Overline shall
in no way affect, limit or modify in any respect the other Canadian Lenders'
obligations to settle with the Canadian Administrative Agent provided in this
Section 2.9(i). The Canadian Administrative Agent shall, after receipt of any
interest and fees earned under this Agreement, promptly remit to the Canadian
Lenders their pro rata portion (based on their respective Canadian Revolving
Credit Commitments) of any (i) fees they are entitled to receive, and (ii)
interest computed at the rate and as provided for in Section 2.6 of this
Agreement on all outstanding amounts advanced by the Canadian Lenders on each
Settlement Date, prior to adjustment for such settlement, which fees and
interest are subsequent to the last remittance by the Canadian Administrative
Agent to the Canadian Lenders of such interest amounts, provided, however, that
the Canadian Lenders (other than the Canadian Administrative Agent in its role
as the agent for and on behalf of the Canadian Lenders) shall not share in any
of the fees provided for in the Canadian Fee Letter. The Canadian Administrative
Agent shall not be permitted to make any B/A Loans or Eurodollar Loans on behalf
of the other Canadian Lenders.
(j) The US Borrowers agree, that solely for purposes of
computing the charges under this Agreement (including interest), all items of
payment shall be deemed applied by the Administrative Agent one Business Day
after receipt by the Administrative Agent of funds which have been finally
credited to the US Loans whether such funds are received directly from the US
Borrowers or from the US Blocked Account.
(k) The Canadian Borrowers agree, that for purposes of
computing the interest charges under this Agreement (including interest), all
items of payment shall be deemed applied by the Canadian Administrative Agent
one Business Day after receipt by the Canadian Administrative Agent of funds
which have been finally credited to the Canadian Loans, whether such funds are
received directly from the Canadian Borrowers or from Canadian Lockbox Bank or
from the Canadian Blocked Account.
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Section 2.10. VOLUNTARY TERMINATION OR REDUCTION OF REVOLVING CREDIT
COMMITMENTS. Each of the Borrowers may, upon at least five Business Days' notice
to the Administrative Agent and Canadian Administrative Agent, terminate
entirely at any time, or partially reduce from time to time by an aggregate
amount of $1,000,000 or any larger multiple of $100,000, the unused portions of
the US Revolving Credit Commitment or Canadian Revolving Credit Commitments,
provided that any such reduction shall apply proportionately to the US Revolving
Credit Commitment or Canadian Revolving Credit Commitment, as applicable, of
each Lender. The US Swingline Commitment may not be partially terminated by the
US Borrowers and may only be entirely terminated by the US Borrowers in
connection with the entire termination of the Commitments. If the US Revolving
Credit Commitments or Canadian Revolving Credit Commitments are terminated in
their entirety, in addition to the termination fee described in Section 2.13(e)
hereof, all accrued commitment fees with respect thereto shall be payable on the
effective date of such termination. Upon termination of the US Revolving Credit
Commitments and Canadian Revolving Credit Commitments in full, the commitments
of the US Swingline Lender to make US Swingline Loans shall terminate as well.
Section 2.11 MANDATORY PREPAYMENTS; VOLUNTARY PREPAYMENTS; ORDER OF
APPLICATION.
(a) MANDATORY PREPAYMENTS OF US REVOLVING LOANS. Subject to
the last sentence of this Section 2.11(a), if at any time the Aggregate US
Revolving Credit Exposure is in excess of the US Maximum Available Amount, the
US Borrowers shall immediately jointly and severally pay to the Administrative
Agent, for the account of the US Revolving Lenders, the amount of such excess to
be applied (1) as a prepayment of the US Revolving Credit Loans and
Reimbursement Obligations with respect to US Letters of Credit, and (2) after
payment in full of the US Revolving Credit Loans and Reimbursement Obligations,
as L/C Cover for the US Letter of Credit Liabilities in an amount of such
remaining excess; provided, however, to the extent any mandatory prepayment
under this Section 2.11(a) is required as result of a reduction in the US
Borrowing Base resulting from any (i) establishment of additional, or
modification of existing, eligibility standards for any component of the US
Borrowing Base, (ii) reduction of the advance rate for any component of the US
Borrowing Base, or (iii) establishment of Availability Reserves against the US
Borrowing Base, then such required mandatory prepayment shall be due and payable
within three (3) Business Days of the date on which such US Borrowing Base
reductions are effective. Each US Revolving Lender acknowledges and agrees that
notwithstanding anything to the contrary set forth in this Agreement, the
Administrative Agent, in its sole discretion, may, for the account and credit
risk of the US Revolving Credit Lenders, (a) make or permit to remain
outstanding US Swingline Loans, and/or (b) cause each US Revolving Lenders to
make, or permit to remain outstanding US Revolving Credit Loans, or issue, or
permit to remain outstanding, US Letters of Credit, which in any case results in
the Aggregate US Revolving Credit Exposure exceeding the US Maximum Available
Amount (collectively "OVERADVANCES"); provided, however, (a) no Overadvance may
cause the Aggregate US Revolving Credit Exposure to exceed the total US
Revolving Credit Commitments of all US Revolving Lenders, (b) the aggregate
amount of all Overadvances outstanding at any time shall be not exceed
$5,000,000, (c) no Overadvance shall be outstanding for more than 30 consecutive
days and (d) there can only be one Overadvance during any 180-day period.
(b) MANDATORY PREPAYMENT OF CANADIAN REVOLVING LOANS. If at
any time the Dollar Equivalent of the Aggregate Canadian Revolving Credit
Exposure is in excess of the Canadian Maximum Available Amount, the Canadian
Borrowers shall immediately jointly and severally pay to the Canadian
Administrative Agent, for the account of the Canadian Lenders, the amount of
such excess to be applied (1) as a prepayment of the Canadian Revolving Credit
Loans (other than B/A Loans) and Reimbursement Obligations with respect to
Canadian Letters of Credit, (2) after payment in full of the Canadian Revolving
Credit Loans (other than B/A Loans) and Reimbursement Obligations, as B/A Cover
for B/A Loans, and (3) after B/A Cover has been effected for all outstanding B/A
Loans, as L/C Cover for the Canadian Letter of Credit Liabilities in an amount
of such remaining excess; provided, however, to the
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extent any mandatory prepayment under this Section 2.11(b) is required as result
of a reduction in the Canadian Borrowing Base resulting from any (i)
establishment of additional, or modification of existing, eligibility standards
for any component of the Canadian Borrowing Base, (ii) reduction of the advance
rate for any component of the Canadian Borrowing Base, or (iii) establishment of
Availability Reserves against the Canadian Borrowing Base, then such required
mandatory prepayment shall be due and payable within three (3) Business Days of
the date on which such Canadian Borrowing Base reductions are effective.
(c) APPLICATION OF PROCEEDS FROM US BLOCKED ACCOUNT. On or
before 11:00 a.m. (New York, New York time) on each Business Day, Administrative
Agent shall disburse to the appropriate Agent or Lenders for application in
accordance with Section 2.11(f) and Section 2.11(h), all amounts then on deposit
in the US Blocked Account which Administrative Agent shall have determined
constitute "collected funds" in accordance with the policies of Administrative
Agent then in effect.
(d) APPLICATION OF PROCEEDS FROM CANADIAN BLOCKED ACCOUNT.
Subject to Section 2.9(i), on or before 11:00 a.m. (New York, New York time) on
each Business Day, Canadian Administrative Agent shall disburse (or cause
Canadian Lockbox Bank to disburse) to the appropriate Agent or Lenders for
application in accordance with Section 2.11(g) and Section 2.11(i) hereof all
amounts then on deposit in the Canadian Blocked Account which Canadian
Administrative Agent shall have determined constitute "collected funds" in
accordance with the policies of Canadian Administrative Agent then in effect.
(e) VOLUNTARY PREPAYMENTS. Subject to Section 2.11(j) hereof,
each of the Borrowers may, at their option, at any time and from time to time,
prepay the Loans (other than B/A Loans) and the Reimbursement Obligations, in
whole or in part, without premium or penalty except for breakage costs with
respect to Eurodollar Loans as provided in Section 2.19 and the fees set forth
in Section 2.13(e), in the event of a prepayment in full of the Revolving Loans
and termination of the Revolving Commitments, upon giving, in the case of any
Eurodollar Loan, five Business Days' prior written notice to the Administrative
Agent, and, in the case of any ABR Loan or Canadian Prime Rate Loan, prior
written notice on the same Business Day to the Administrative Agent (in the case
of prepayment of US Loans) or Canadian Administrative Agent (in the case of a
prepayment of Canadian Loans). Such notice shall specify (1) in the case of any
prepayment of Loans, the date and amount of prepayment and whether the
prepayment is (i) of US Revolving Credit Loans, Canadian Revolving Credit Loans,
US Swingline Loans and (subject to the limitations on prepayment of the Term
Loans set forth herein) the Term Loans, or a combination thereof and (ii) of
Eurodollar Loans, ABR Loans or Canadian Prime Rate Loans, or a combination
thereof, and, in each case if a combination thereof, the principal amount
allocable to each; and ii) in the case of any prepayment of Reimbursement
Obligations, the date and amount of prepayment, the identity of the applicable
Letter of Credit or Letters of Credit and the amount allocable to each of such
Reimbursement Obligations. Upon receipt of such notice, the Administrative Agent
or Canadian Administrative Agent (as applicable) shall promptly notify each
Lender of the contents thereof and of such Lender's Applicable Percentage of
such prepayment. If any such notice is given, the amount specified in such
notice shall be due and payable on the date specified therein, together with (if
a Eurodollar Loan is prepaid other than at the end of the Interest Period
applicable thereto) any amounts payable pursuant to Section 2.19. Each
prepayment of US Revolving Credit Loans and Term Loans which are ABR Loans may
be in any amount; each prepayment of Canadian Revolving Credit Loans which are
ABR Loans shall be in a minimum principal amount of $100,000 and shall be in an
integral multiple of $50,000, each prepayment of Canadian Prime Rate Loans shall
be in the minimum principal amount of C$100,000 and in integral multiple of
$50,000; each prepayment of Eurodollar Loans shall be in the minimum principal
amount of $500,000 and in integral multiples of $100,000 or, in the case of any
of ABR Loans, Eurodollar Loans, or Canadian Prime Rate Loans, the aggregate
principal balance outstanding on such Loans.
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(f) ORDER OF PAYMENTS PRIOR TO DEFAULT (US BORROWERS). Subject
to Section 2.11(j) hereof, unless an Event of Default has occurred and is
continuing, (1) any voluntary prepayments of the US Loans made pursuant to
Section 2.11(e) above shall be applied to the US Loans specified to be prepaid
in the notice of prepayment delivered by the US Borrowers pursuant to Section
2.11(e), (2) any other payments by any of the US Borrowers (including, without
limitation, any application of the proceeds of Collateral of the US Borrowers)
in respect of the Lender Indebtedness, including, without limitation, amounts
applied pursuant to Section 2.11(c), shall be applied to the Lender Indebtedness
in the following order (i) first, to the payment in full of all costs, expenses
and other charges (but not fees) of Administrative Agent then due and payable by
Borrowers under the Financing Documents, (ii) second, to the payment in full of
all costs, expenses and other charges (but not fees) of US Revolving Lenders
payable by Borrowers under the Financing Agreements and all indemnities payable
by Borrowers under the Financing Agreements then due to any US Revolving Lender,
(iii) third, to the payment in full of all fees payable by the Borrowers to the
Administrative Agent in its capacity as such, (iv) fourth, to the payment in
full of all interest then due and payable in respect of the US Swingline Loans,
(v) fifth, to the payment in full of all interest then due and payable in
respect of the US Revolving Credit Loans, (vi) sixth, to the payment in full of
all fees then due and payable to the US Revolving Lenders pursuant to Section
2.13(a) hereof, (vii) seventh, to the payment in full of all principal then due
and payable under Section 2.11(a) above (for application first to the US
Swingline Loans to the extent necessary to pay the US Swingline Loans in full,
and then to the Revolving Loans), (viii) eighth, to the payment of any interest
then due and payable in respect of the Term Loans, (ix) ninth, to the payment of
principal of the US Swingline Loans, (x) tenth, to the payment of principal of
the US Revolving Credit Loans, (xi) eleventh, to any other Lender Indebtedness
to the extent then due and payable, and (xii) twelfth, after giving effect to
the payment in full of all amounts due and payable pursuant to clauses (i)
through (xiii) preceding, to the US Borrowers by depositing the net amount
thereof in the Disbursement Account for the US Borrowers.
(g) ORDER OF PAYMENTS PRIOR TO DEFAULT (CANADIAN BORROWERS).
Unless an Event of Default has occurred and is continuing, (1) any voluntary
prepayments of the Canadian Loans made pursuant to Section 2.11(e) above shall
be applied to the Canadian Loans specified to be prepaid in the notice of
prepayment delivered by the Canadian Borrowers pursuant to Section 2.11(e), (2)
any other payments by any of the Canadian Borrowers (including, without
limitation, any application of the proceeds of Collateral of the Canadian
Borrowers) in respect of the Canadian Lender Indebtedness, including, without
limitation, amounts applied pursuant to Section 2.11(d), shall be applied to the
Canadian Lender Indebtedness in the following order (i) first, to the payment in
full of all costs, expenses and other charges (but not fees) of the Canadian
Administrative Agent then due and payable by Canadian Borrowers under the
Financing Documents, (ii) second, to the payment in full of all costs, expenses
and other charges (but not fees) of Canadian Lenders payable by Canadian
Borrowers under the Financing Agreements and all indemnities payable by Canadian
Borrowers under the Financing Agreements then due to any Lender, (iii) third, to
the payment in full of all fees payable by the Canadian Borrowers to the
Canadian Administrative Agent in its capacity as such, (iv) fourth, to the
payment in full of all interest then due and payable in respect of the Canadian
Revolving Credit Loans, (v) fifth, to the payment in full of all fees then due
and payable to the Canadian Lenders pursuant to Section 2.13(b) hereof, (vi)
sixth, to the payment in full of all principal then due and payable under
Section 2.11(b) above, (vii) seventh, to the re-payment of principal of the
Canadian Revolving Credit Loans, (viii) eighth, to any other Canadian Lender
Indebtedness to the extent then due and payable, and (ix) ninth, after giving
effect to the payment in full of all amounts due and payable pursuant to clauses
(i) through (viii) preceding, to the Canadian Borrowers by depositing the net
amount thereof in the Disbursement Account for the Canadian Borrowers.
(h) ORDER OF PAYMENTS DURING DEFAULT (US BORROWERS). During
the existence of any Event of Default, any payments in respect of the Lender
Indebtedness by or for the account of any of the
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US Borrowers or in respect of any of the proceeds of Collateral of the US
Borrowers, including, without limitation, amounts applied pursuant to Section
2.11(c), shall be applied to the Lender Indebtedness (1) first, to the payment
in full of all costs, expenses and other charges (but not fees) of
Administrative Agent or Canadian Administrative Agent incurred in connection
with the collection and enforcement of the Lender Indebtedness and for the
protection, preservation or sale, disposition or other realization upon the
Collateral, including all expenses, liabilities and advances incurred or made by
or on behalf of Administrative Agent or Canadian Administrative Agent in their
capacity as such, including attorneys' fees and legal expenses, (2) then to the
remaining Lender Indebtedness (including to establish L/C Cover for all
outstanding Letters of Credit) in such order as Administrative Agent shall
determine in its sole discretion, but expressly excluding any portion of the
Term Loans (including principal and accrued interest thereon) or other amounts
owing to Term Lenders in their capacity as such, including, without limitation,
expenses, fees, indemnity obligations and other amounts owing to the Term
Lenders, provided, that, any Lender Indebtedness consisting of amounts owed by
any Credit Party in respect of any Swap Agreement or Cash Management Agreement
that are in excess of the Swap Reserves and Cash Management Reserves,
respectively, (set forth in the most recent US Borrowing Base Report (or
Availability Reserves established with respect to such liabilities) shall only
be paid after payment in full of all other Lender Indebtedness to be paid
pursuant to the clause (2), and (3) third, after giving effect to the payment in
full of all amounts required pursuant to clauses (1) and (2) preceding, to the
repayment of the Term Loans (including principal and accrued interest thereon)
and other amounts owing to Term Lenders in their capacity as such, including,
without limitation, expenses, fees, indemnity obligations and other amounts
owing to the Term Lenders.
(i) ORDER OF PAYMENT DURING DEFAULT (CANADIAN BORROWERS).
During the existence of any Event of Default, any payments in respect of the
Lender Indebtedness by or for the account of any of the Canadian Borrowers or in
respect of any of the proceeds of Collateral of the Canadian Borrowers,
including, without limitation, amounts applied pursuant to Section 2.11(d) shall
be applied to the Canadian Lender Indebtedness (1) first, to the payment in full
of all costs, expenses and other charges (but not fees) of the Canadian
Administrative Agent incurred in connection with the collection and enforcement
of the Canadian Lender Indebtedness and for the protection, preservation or
sale, disposition or other realization upon the Collateral provided by Canadian
Borrowers, including all expenses, liabilities and advances incurred or made by
or on behalf of Canadian Administrative Agent in its capacity as such, including
attorneys' fees and legal expenses, and (2) then to the remaining Canadian
Lender Indebtedness (including to establish L/C Cover for all outstanding
Canadian Letters of Credit) in such order as Canadian Administrative Agent shall
determine in its sole discretion provided, that, any Canadian Lender
Indebtedness consisting of amounts owed by any Credit Party in respect of any
Swap Agreement or Cash Management Agreement that are in excess of the Swap
Reserves and Cash Management Reserves, respectively, (set forth in the most
recent Canadian Borrowing Base Report (or Availability Reserves established
with respect to such liabilities) shall only be paid in full after payment in
full of all other Canadian Lender Indebtedness to be paid pursuant to this
clause (2).
(j) RESTRICTIONS ON PAYMENT OF TERM LOANS. Except as expressly
provided in this clause (j) no payment of the Term Loans and no other payment to
the Term Lenders in their capacity as such, including, without limitation, any
payment of expenses, fees, indemnity obligations and other amounts owing to the
Term Lenders, shall be made at any time that any other Lender Indebtedness is
outstanding hereunder or any Revolving Commitment remains in effect.
Notwithstanding the foregoing, so long as no Default has occurred which is
continuing, US Borrowers shall be permitted to (1) pay regularly scheduled
payments of interest on the Term Loans when due, and (2) prepay the Term Loans
in whole or in part; provided, that no prepayment of Term Loans shall be
permitted pursuant to this clause (2) (i) unless US Borrowers shall have
provided each Agent and Lender with written notice of their intention to make
such prepayment not less than 10 Business Days prior to the effective date of
such prepayment setting forth the amount to be prepaid and the scheduled date
for prepayment (which shall not be accelerated), (ii) unless US Excess
Availability has been equal to or greater than $40,000,000 for each day during
the thirty (30) day period prior to the date of such prepayment assuming that
such repayment occurred on the first day of such period, and (iii) unless US
Excess Availability will be equal to or greater than $40,000,000 after giving
effect to such prepayment. In the event any Term Lender shall receive any
payment or prepayment of any type which it is prohibited from receiving pursuant
to this Section 2.11(j), it shall hold such payment in trust and promptly (and
in all events within one Business Days following demand by Administrative Agent
therefore) deliver the same over to Administrative Agent for application to the
Lender Indebtedness in the order provided by this Section 2.11.
Section 2.12 CONTINUATION AND CONVERSION OPTIONS.
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(a) CONTINUATION. The Borrowers may elect to continue all or
any part of any Borrowing of Eurodollar Loans beyond the expiration of the then
current Interest Period relating thereto by giving Advance Notice (which shall
be irrevocable to the Administrative Agent or Canadian Administrative Agent)
(with a simultaneous copy to Administrative Agent) (as applicable) of such
election, specifying the Eurodollar Loans or portion thereof to be continued and
the Interest Period therefor. In the absence of such a timely and proper
election with regard to Eurodollar Loans, the Borrowers shall be deemed to have
elected to convert such Eurodollar Loans to ABR Loans pursuant to Section
2.12(d).
(b) AMOUNT OF CONTINUATIONS. All or part of any Eurodollar
Loans may be continued as provided herein, provided that any continuation of
such Loans shall not be (as to each Borrowing of such Loans as continued for an
applicable Interest Period) less than $500,000 for each Lender and shall be in
an integral multiple of $100,000.
(c) CONTINUATION OR CONVERSION UPON DEFAULT. If no Default
shall have occurred and be continuing, each Eurodollar Loan may be continued or
converted as provided in this Section. If a Default shall have occurred and be
continuing, the Borrowers shall not have the option to elect to continue any
such Eurodollar Loan pursuant to Section 2.12(a) or to convert ABR Loans to
Eurodollar Loans pursuant to Section 2.12(e).
(d) CONVERSION TO ABR. The Borrowers may elect to convert any
Eurodollar Loan on the last day of the then current Interest Period relating
thereto to an ABR Loan by giving Advance Notice to the Administrative Agent of
such election.
(e) CONVERSION TO EURODOLLAR RATE. The Borrowers may elect to
convert any ABR Loan at any time or from time to time to a Eurodollar Loan by
giving Advance Notice (which shall be irrevocable to the Administrative Agent of
such election, specifying each Interest Period therefor.
(f) AMOUNTS OF CONVERSIONS. All or any part of the outstanding
Loans may be converted as provided herein, provided that any conversion of such
Loans to a Eurodollar Loan shall result in a Borrowing of Eurodollar Loans in an
amount not less than $500,000 for each Lender and in an integral multiple of
$100,000.
(g) ROLLOVER OF B/A LOANS. With respect to each B/A Borrowing,
at or before 12:00 p.m. (noon), Toronto time, three Business Days before the
maturity date of such B/As, the Canadian Borrowers shall notify in writing the
Canadian Administrative Agent, if the Canadian Borrowers intend to issue B/As on
such maturity date to provide for the payment of such maturing B/As. If the
Canadian Borrowers fail to notify the Canadian Administrative Agent of their
intention to issue B/As on such maturity the Canadian Borrowers shall provide
payment to the Canadian Administrative Agent for the account of the Canadian
Lenders of an amount equal to the aggregate face amount of such B/As on the
maturity date of such B/As. If the Canadian Borrowers fail to make such payment,
such maturing B/As shall be deemed to have been converted on their maturity date
into a Canadian Prime Rate Loan in an aggregate principal amount equal to the
aggregate face amounts of such B/As and the Canadian Borrowers shall on demand
jointly and severally pay any losses, costs or penalties that may have been
incurred by the Canadian Administrative Agent or any Canadian Lender due to the
failure of the Canadian Borrowers to make such payment. No B/A may be rolled
over when any Default has occurred and is continuing and the Canadian
Administrative Agent has or the Canadian Lenders have determined in its or their
sole discretion that such conversion is not appropriate.
(h) CONVERSION INTO B/A LOANS. Subject to the provisions of
this Agreement, the Canadian Borrowers may, prior to the Maturity Date,
effective on any Business Day, convert in whole or
55
part, Canadian Prime Rate Loans into B/As or vice versa (but only on the last
day of a Contract Period in the case of conversions of B/As) upon giving to the
Canadian Administrative Agent Advance Notice, provided that: (1) no Canadian
Prime Rate Loan may be converted into a B/A when any Default has occurred and is
continuing and the Canadian Administrative Agent has or the Canadian Lenders
have determined in its or their sole reasonable discretion that such conversion
is not appropriate; and (2) each conversion pursuant to this paragraph shall be
not be less than C$500,000 and shall in an integral multiple of C$100,000. In
the case of conversions of Canadian Prime Rate Loans into B/As, the Canadian
Borrowers shall jointly and severally pay to the Administrative Agent, for the
account of the Canadian Lender accepting such B/A, on the date of such
conversion an amount equal to (A) the difference between the principal amount of
the converted Canadian Prime Rate Loan less the Discount Proceeds plus (B) the
Acceptance Fee to which such Canadian Lender is entitled upon acceptance of such
B/A. If the Canadian Borrowers shall not have delivered a Borrowing Request in
accordance with this Section 2.12(h) prior to the maturity date then in effect
for any B/A Borrowing requesting that such Borrowing be refinanced with another
B/A Borrowing or converted to a Canadian Prime Borrowing, then the Canadian
Borrowers shall (unless the Canadian Borrowers have notified the Administrative
Agent, before 11:00 a.m., Toronto time, not less than one Business Day prior to
such maturity date, that such Borrowing is to be repaid on such maturity date)
be deemed to have delivered a Borrowing Request requesting that such Borrowing
be refinanced with a new Borrowing of the same amount, and such new Borrowing
shall be a Canadian Prime Borrowing.
Section 2.13 FEES.
(a) US REVOLVING CREDIT COMMITMENTS. The US Borrowers shall
jointly and severally pay to the Administrative Agent for the account of and
distribution to each US Revolving Lender in accordance with its US Revolving
Credit Percentage a commitment fee for the period commencing on the Closing
Date, to and including the Maturity Date (or such earlier date as the US
Revolving Credit Commitments shall have been terminated entirely) computed at a
rate per annum equal to the Applicable Commitment Fee Percentage on the average
daily excess amount of the US Revolving Credit Commitments over the US Revolving
Credit Exposure. The commitment fees on the US Revolving Credit Commitments
earned from and after the Closing Date shall be payable in arrears on the
Quarterly Date, commencing on July 1, 2002.
(b) CANADIAN REVOLVING CREDIT COMMITMENTS. The Canadian
Borrowers shall jointly and severally pay to the Canadian Administrative Agent
for the account of and distribution to each Canadian Lender in accordance with
its Canadian Revolving Credit Percentage a commitment fee for the period
commencing on the Closing Date, to and including the Maturity Date (or such
earlier date as the Canadian Revolving Credit Commitments shall have been
terminated entirely) computed at a rate per annum equal to the Applicable
Commitment Fee Percentage on the average daily excess amount of the Canadian
Revolving Credit Commitments over the Canadian Revolving Credit Exposure. The
commitment fees on the Canadian Revolving Credit Commitments earned from and
after the Closing Date shall be payable in arrears on the Quarterly Date,
commencing on July 1, 2002.
(c) US LETTERS OF CREDIT.
(1) As consideration for acting as the Issuing Bank
with respect to any US Letter of Credit, the US Borrowers will jointly
and severally pay to the applicable Issuing Bank a fee computed at a
rate per annum equal to 0.25% on the daily average amount available for
drawing on the applicable Letter of Credit, payable in arrears on the
last Business Day of each calendar month. The US Borrowers shall
jointly and severally pay to the applicable Issuing Bank, with respect
to any issuance, amendment, transfer, or cancellation prior to
expiration of any US Letter of Credit and for each drawing made
thereunder, documentary and processing charges
56
in accordance with such Issuing Bank's standard schedule for such
charges in effect at the time of, and payable at the time of, such
issuance, amendment, transfer, cancellation or drawing, as the case may
be. All fees payable pursuant to this Section 2.13(c)(1) shall be
retained by the applicable Issuing Bank.
(2) The US Borrowers will jointly and severally pay
to the Administrative Agent for the account of and pro rata
distribution to each US Revolving Lender a fee on the daily average
amount available for drawings under each US Letter of Credit, in each
case for the period from and including the date of issuance of such US
Letter of Credit to and excluding the date of expiration or termination
thereof computed at a per annum rate for each day equal to the
Applicable Margin for US Revolving Credit Loans that are Eurodollar
Loans in effect on such day. Such fees shall be payable in arrears on
the first day of each month.
(d) CANADIAN LETTERS OF CREDIT.
(1) As consideration for acting as the Issuing Bank
with respect to any Canadian Letter of Credit, the Canadian Borrowers
will pay to the applicable Issuing Bank a fee computed at a rate per
annum equal to 0.25% on the daily average amount available for drawing
on the applicable Letter of Credit, payable in arrears on the last
Business Day of each calendar month. The Canadian Borrowers shall
jointly and severally pay to the applicable Issuing Bank, with respect
to any issuance, amendment, transfer, or cancellation prior to
expiration of any Canadian Letter of Credit and for each drawing made
thereunder, documentary and processing charges in accordance with such
Issuing Bank's standard schedule for such charges in effect at the time
of, and payable at the time of, such issuance, amendment, transfer,
cancellation or drawing, as the case may be. All fees payable pursuant
to this Section 2.13(d)(1) shall be retained by the applicable Issuing
Bank.
(2) The Canadian Borrowers will jointly and severally
pay to the Canadian Administrative Agent for the account of and pro
rata distribution to each Canadian Lender a fee on the daily average
amount available for drawings under each Canadian Letter of Credit, in
each case for the period from and including the date of issuance of
such Canadian Letter of Credit to and excluding the date of expiration
or termination thereof computed at a per annum rate for each day equal
to the Applicable Margin for Canadian Revolving Credit Loans that are
Eurodollar Loans in effect on such day. Such fees shall be payable in
arrears on the first day of each month.
(e) TERMINATION FEE. In the event all Revolving Commitments
are terminated in their entirety on or before March 28, 2004 (including, without
limitation, a termination pursuant to Article 8 hereof), (1) the Canadian
Borrowers shall pay to Canadian Administrative Agent for distribution to the
Canadian Lenders in accordance with their respective Applicable Percentages, a
termination fee in the amount of $275,000, and (2) the US Borrowers shall pay to
the Administrative Agent for distribution to the US Revolving Lenders in
accordance with their respective Applicable Percentages a termination fee in the
amount of $475,000. The termination fees provided for herein shall be due and
payable on the effective date of such termination.
(f) FEE LETTERS. The US Borrowers shall jointly and severally
pay to the Administrative Agent such fees as are set forth in the Fee Letter, as
the same has been or may be hereafter amended or supplemented, on the dates and
in the manner specified therein, and the Canadian Borrower shall jointly and
severally pay to the Canadian Administrative Agent such fees as are set forth in
the Canadian Fee Letter as the same has been or may hereafter be amended or
supplemented, on the dates and in the manner set forth therein.
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Section 2.14 PAYMENTS, ETC.
(a) WITHOUT SETOFF, ETC. Except as otherwise specifically
provided herein, all payments under this Agreement shall be made to the
Administrative Agent (if such payment is made on or in respect of US Loans or US
Commitments) or to Canadian Administrative Agent (if such payment is made on or
in respect of Canadian Loans or Canadian Commitments) for the account of the
appropriate Lenders without defense, set-off or counterclaim not later than
11:00 a.m. New York, New York time on the date when due and shall be made in
Dollars (unless such payment is a payment of principal or interest on C$
Denominated Loans or Reimbursement Obligations with respect to Canadian Letters
of Credit denominated in C$, in which case such payments shall be in C$) in
immediately available funds at the Payment Office of the appropriate Agent. The
Administrative Agent or the Canadian Administrative Agent will promptly
thereafter distribute funds in the form received relating to the payment of
principal or interest or commitment fees ratably to the appropriate Lenders for
the account of their respective Lending Offices, and funds in the form received
relating to the payment of any other amount payable to any Lender to such Lender
for the account of its applicable Lending Office.
(b) NON-BUSINESS DAYS. Whenever any payment to be made
hereunder or under any Note shall be stated to be due on a day which is not a
Business Day, the due date thereof shall be extended to the next succeeding
Business Day (except as otherwise provided in Section 2.7 hereof) and, with
respect to payments of principal, interest thereon shall be payable at the
applicable rate during such extension.
(c) COMPUTATIONS. All computations of interest shall be made
on the basis of a year of 360 days (unless such calculation would result in a
usurious rate, in which case interest shall be calculated on the basis of a year
of 365 or 366 days, as the case may be) for the actual number of days (including
the first day but excluding the last day) occurring in the period for which such
interest or fees are payable. Each determination by the Administrative Agent or
Canadian Administrative Agent of an interest rate or fee hereunder shall, except
for manifest error, be final, conclusive and binding for all purposes, provided
that such determination shall be made in good faith in a manner generally
consistent with the Administrative Agent's or the Canadian Administrative
Agent's standard practice. If the Administrative Agent or Canadian
Administrative Agent and the Borrowers determine that manifest error exists,
said parties shall correct such error by way of an adjustment to the next
payment due hereunder. For the purposes of the Interest Act (Canada) and
disclosure thereunder, whenever any interest or any fee to be paid hereunder or
in connection herewith is to be calculated on the basis of any period of time
that is less than a calendar year, the yearly rate of interest to which the rate
used in such calculation is equivalent is the rate so used multiplied by the
actual number of days in the calendar year in which the same is to be
ascertained and divided by 360. The rates of interest under this Agreement are
nominal rates, and not effective rates or yields. The principle of deemed
reinvestment of interest does not apply to any interest calculation under this
Agreement.
Section 2.15 INTEREST RATE NOT ASCERTAINABLE, ETC. In the event that
the Administrative Agent shall have determined (which determination shall be
reasonably exercised and shall, absent manifest error, be final, conclusive and
binding upon all parties) that on any date for determining the Eurodollar Rate
for any Interest Period, by reason of any changes arising after the date of this
Agreement affecting the interbank Eurodollar market, or any Lender's position in
such market, adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in the definition of
Eurodollar Rate, then, and in any such event, the Administrative Agent shall
forthwith give notice (by telephone confirmed in writing) to the Borrowers and
to the Lenders of such determination. Until the Administrative Agent notifies
the Borrowers that the circumstances giving rise to the suspension described
herein no longer exist, the obligations of the Lenders to make Eurodollar Loans
shall be immediately suspended; any Borrowing of Eurodollar Loans that is
requested (by continuation,
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conversion or otherwise) shall instead be made as a Borrowing of ABR Loans, and
any outstanding Eurodollar Loan shall be converted, on the last day of the then
current Interest Period applicable thereto, to a ABR Loan.
Section 2.16 ILLEGALITY.
(a) DETERMINATIONS OF ILLEGALITY OF EURODOLLAR LOAN. In the
event that any Lender shall have determined (which determination shall be
reasonably exercised and shall, absent manifest error, be final, conclusive and
binding upon all parties) at any time that the making or continuance of any
Eurodollar Loan has become unlawful as a result of compliance by such Lender in
good faith with any applicable law, governmental rule, regulation, guideline or
order (whether or not having the force of law and whether or not failure to
comply therewith would be unlawful), then, in any such event, the Lender shall
give prompt notice (by telephone confirmed in writing) to the Borrowers and to
the Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to the other Lenders).
(b) EURODOLLAR LOANS SUSPENDED. Upon the giving of the notice
to the Borrowers referred to in Section 2.16(a) above, (1) the Borrowers' right
to request (by continuation, conversion or otherwise) and such Lender's
obligation to make Eurodollar Loans shall be immediately suspended, and
thereafter, any requested Borrowing of Eurodollar Loans shall, as to such Lender
only, be deemed to be a request for a ABR Loan, and (2) if the affected
Eurodollar Loan or Loans are then outstanding, the Borrowers shall immediately,
or if permitted by applicable law, no later than the date permitted thereby,
upon at least one Business Day's written notice to the Administrative Agent and
the affected Lender, convert each such Eurodollar Loan into a ABR Loan, provided
that if more than one Lender is affected at any time, then all affected Lenders
must be treated the same pursuant to this subsection.
(c) DETERMINATIONS OF ILLEGALITY OF DOLLAR DENOMINATED LOANS.
In the event that any Canadian Lender shall have determined (which determination
shall be reasonably exercised and shall, absent manifest error, be final,
conclusive and binding upon all parties) at any time that the making or
continuance of any Dollar Denominated Loan has become unlawful as a result of
compliance by such Canadian Lender in good faith with any applicable law,
governmental rule, regulation, guideline or order (whether or not having the
force of law and whether or not failure to comply therewith would be unlawful),
then, in any such event, the Canadian Lender shall give prompt notice (by
telephone confirmed in writing) to the Canadian Borrowers and to the Canadian
Administrative Agent of such determination (which notice the Canadian
Administrative Agent shall promptly transmit to the other Canadian Lenders).
(d) DOLLAR DENOMINATED LOAN SUSPENDED. Upon the giving of the
notice to the Canadian Borrowers referred to in Section 2.16(c) above, (1) the
Canadian Borrowers' right to request (by continuation, conversion or otherwise)
and such Canadian Lender's obligation to make Dollar Denominated Loans shall be
immediately suspended, and thereafter, any requested Borrowing of Dollar
Denominated Loans shall, as to such Canadian Lender only, be deemed to be a
request for a Canadian Revolving Credit Loan, and (2) if the affected Dollar
Denominated Loan or Loans are then outstanding, the Canadian Borrowers shall
immediately, or if permitted by applicable law, no later than the date permitted
thereby, upon at least one Business Day's written notice to the Canadian
Administrative Agent and the affected Canadian Lender, convert each such Dollar
Denominated Loan which is a Eurodollar Loan into a B/A Loan and convert each
such Dollar Denominated Loan which is a ABR Loan into a Canadian Prime Rate
Loan, provided that if more than one Lender is affected at any time, then all
affected Lenders must be treated the same pursuant to this subsection.
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Section 2.17 INCREASED COSTS.
(a) EURODOLLAR REGULATIONS, ETC. If, by reason of (x) the
introduction of or any change after the date hereof (including, but not limited
to, any change by way of imposition or increase of reserve requirements) in or
in the interpretation of any law or regulation, or (y) the compliance with any
guideline or request issued after the date hereof by any central bank or other
governmental authority or quasi-governmental authority exercising control over
banks or financial institutions generally (whether or not having the force of
law):
(1) any Lender (or its applicable Lending Office)
shall be subject to any tax, duty or other charge with respect to its
Eurodollar Loans or its obligation to make Eurodollar Loans, or shall
change the basis of taxation of payments to any Lender of the principal
of or interest on its Eurodollar Loans or its obligation to make
Eurodollar Loans (except for changes in the rate of tax on the overall
net income or gross receipts of such Lender or its applicable Lending
Office imposed by the jurisdiction in which such Lender's principal
executive office or applicable Lending Office is located); or
(2) any reserve (including, but not limited to, any
imposed by the Board of Governors of the Federal Reserve System, but
excluding any such reserve requirement that is reflected in the
Eurodollar Rate), special deposit or similar requirement against assets
of, deposits with or for the account of, or credit extended by, any
Lender or its applicable Lending Office shall be imposed or deemed
applicable or any other condition affecting its Eurodollar Loans or its
obligations to make Eurodollar Loans shall be imposed on any Lender or
its applicable Lending Office or the interbank Eurodollar market or the
secondary certificate of deposit market;
and as a result thereof there shall be any increase in the cost to such Lender
of agreeing to make or making, funding or maintaining Eurodollar Loans (except
to the extent already included in the determination of the applicable Eurodollar
Rate) or there shall be a reduction in the amount received or receivable by such
Lender or its applicable Lending Office, then the applicable Borrowers shall
from time to time, upon written notice from and demand by such Lender (with a
copy of such notice and demand to the Administrative Agent), pay to such Lender
on demand additional amounts determined by such Lender in a reasonable manner to
be sufficient to indemnify such Lender against such increased cost; provided
that, the Borrowers shall not be required to compensate any Lender pursuant to
this Section 2.17(a) for any amounts incurred more than six months prior to the
date that such Lender notifies such Borrowers of such Lender's intention to
claim compensation therefor; and provided further that (A) if the circumstances
giving rise to such claim have a retroactive effect, then such six-month period
shall be extended to include the period of such retroactive effect, and (B) the
limitation set forth in this proviso shall not apply to amounts already included
in the determination of the applicable Eurodollar Rate. A certificate as to the
amount of such increased cost and the calculation thereof, submitted to the
Borrowers and the Administrative Agent by such Lender, shall, except for
manifest error, be final, conclusive and binding for all purposes.
(b) COSTS. If any Lender shall advise the Administrative Agent
or Canadian Administrative Agent that at any time, because of the circumstances
described in clauses (x) or (y) in Section 2.17(a) or any other circumstances
affecting such Lender or the interbank Eurodollar market or such Lender's
position in such market, the Eurodollar Rate, as determined in good faith by the
Administrative Agent or Canadian Administrative Agent, will not adequately and
fairly reflect the cost to such Lender of funding its Eurodollar Loans, then,
and in any such event:
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(1) the Administrative Agent or Canadian
Administrative Agent shall forthwith give notice (by telephone
confirmed in writing) to the Borrowers and to the Lenders of such
advice;
(2) the Borrowers' right to request a Borrowing of
Eurodollar Loans from such Lender and such Lender's obligation to make
Eurodollar Loans shall be immediately suspended, any such Borrowing of
Eurodollar Loans that is requested (by continuation, conversion or
otherwise) shall, as to such Lender only, be deemed to be a request for
a ABR Loan, and any such outstanding Eurodollar Loan from such Lender
shall be converted, on the last day of the then current Interest Period
applicable thereto, to a ABR Loan.
(c) CAPITAL ADEQUACY. If by reason of (1) the introduction of
or any change after the date hereof (including, but not limited to, any change
by way of imposition or increase of reserve requirements) in or in the
interpretation of any law or regulation, or (2) the compliance with any
guideline or request issued by any central bank or other governmental authority
or quasi-governmental authority exercising control over banks or financial
institutions generally (whether or not having the force of law), affects or
would affect the amount of capital required to be maintained by any Lender or
any corporation controlling such Lender, and the amount of such capital is
increased by or based upon the existence of such Lender's Loans or such Lender's
commitment to lend hereunder and other commitments of this type or of the
Letters of Credit (or similar contingent obligations), then, upon written
request therefor by such Lender (with a copy of such request to the
Administrative Agent), the applicable Borrowers shall pay to such Lender, from
time to time as specified by such Lender, additional amounts sufficient to
compensate such Lender for the increased cost of such additional capital in
light of such circumstances, to the extent that such Lender reasonably
determines such increase in capital to be allocable to the existence of such
Lender's Loans or such Lender's commitment to lend hereunder or to the issuance
or maintenance of the Letters of Credit and such Lender is generally charging
such costs to other similarly situated borrowers under similar credit
facilities; provided that, the Borrowers shall not be required to compensate any
Lender pursuant to this Section 2.17(c) for any amounts incurred more than six
months prior to the date that such Lender notifies such Borrowers of such
Lender's intention to claim compensation therefor; and provided further that, if
the circumstances giving rise to such claim have a retroactive effect, then such
six-month period shall be extended to include the period of such retroactive
effect. A certificate as to such amounts and the calculation thereof, submitted
to the Borrowers and the Administrative Agent by such Lender, shall be
conclusive and binding for all purposes, absent manifest error.
(d) ISSUING BANK. The rights and benefits of the Lenders under
this Section 2.17 shall also apply to any Issuing Bank in its capacity as such.
Section 2.18 CHANGE OF LENDING OFFICE. Each Lender agrees that it will
use reasonable efforts to designate an alternate Lending Office with respect to
any of its Eurodollar Loans affected by the matters or circumstances described
in Section 2.15, Section 2.16 or Section 2.17 to reduce the liability of the
Borrowers or avoid the results provided thereunder, so long as such designation
is not disadvantageous to such Lender as determined by such Lender in its sole
discretion; provided that such Lender shall have no obligation to so designate
an alternate Lending Office located in the United States.
Section 2.19 FUNDING LOSSES. Each of the Borrowers shall compensate
each Lender, upon its written request (which request shall set forth the basis
for requesting such amounts and shall, absent manifest error, be final,
conclusive and binding upon all of the parties hereto), for all losses, expenses
and liabilities (including, but not limited to, any interest paid by such Lender
to lenders of funds borrowed by it to make or carry its Eurodollar Loans or B/A
Loans to such Borrowers to the extent not recovered by the Lender in connection
with the re-employment of such funds) ("losses"), which the Lender may sustain:
(a) if for any reason (other than a default by such Lender) a Borrowing of
Eurodollar Loans or
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B/A Loans does not occur on the date specified therefor in a Borrowing Request
(whether or not withdrawn), including, but not limited to a failure by the
applicable Borrowers to fulfill on the date of any Borrowing of Eurodollar Loans
or B/A Loans the conditions set forth in Article 3, or to convert, continue any
Eurodollar Loan or B/A Loan hereunder after irrevocable notice of such
conversion or continuation has been given pursuant to Section 2.12; (b) if any
payment, prepayment or conversion of any of its Eurodollar Loans or B/A Loans
required or permitted by any other provision of this Agreement or otherwise, or
any assignment of a Eurodollar Loan or B/A Loan pursuant to Section 2.23, in
each case is made or deemed made on a date which is not the last day of the
Interest Period applicable thereto; or (c) if, for any reason, either of the
Borrowers defaults in their obligation to repay its Eurodollar Loans or B/A
Loans or roll over or interest accrued thereon as and when due and payable (at
the due date thereof, whether at scheduled maturity, by acceleration,
irrevocable notice of prepayment or otherwise). Notwithstanding the foregoing,
the Canadian Borrowers shall not be required to compensate any US Lender in
respect of losses arising with respect to US Loans.
Section 2.20 SHARING OF PAYMENTS, ETC.
(a) (i) If any US Revolving Lender shall obtain any payment or
reduction (including, but not limited to, any amounts received as adequate
protection of a deposit treated as cash collateral under the Bankruptcy Code) of
any obligations of the US Borrowers hereunder (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise) in excess of its
ratable share of payments or reductions on account of such obligations obtained
by all the US Revolving Lenders, such US Revolving Lender shall forthwith (1)
notify each of the other US Revolving Lenders and the Administrative Agent of
such receipt, and (2) purchase from the other US Revolving Lenders such
participations in the affected obligations as shall be necessary to cause such
purchasing US Revolving Lender to share the excess payment or reduction, net of
costs incurred in connection therewith, ratably with each of them, provided that
if all or any portion of such excess payment or reduction is thereafter
recovered from such purchasing US Revolving Lender or additional costs are
incurred, the purchase shall be rescinded and the purchase price restored to the
extent of such recovery or such additional costs, but without interest. The US
Borrowers agree that any US Revolving Lender so purchasing a participation from
another US Revolving Lender pursuant to this Section may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off) with respect to such participation as fully as if such US Revolving
Lender were the direct creditor of the US Borrowers in the amount of such
participation.
(ii) If any Term Lender shall obtain any payment or
reduction (including, but not limited to, any amounts received as adequate
protection of a deposit treated as cash collateral under the Bankruptcy Code) of
any obligations of the US Borrowers hereunder (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise) in excess of its
ratable share of payments or reductions on account of such obligations obtained
by all the Term Lenders, such Term Lender shall forthwith (1) notify each of the
other Term Lenders and the Administrative Agent of such receipt, and (2)
purchase from the other Term Lenders such participations in the affected
obligations as shall be necessary to cause such purchasing Term Lender to share
the excess payment or reduction, net of costs incurred in connection therewith,
ratably with each of them, provided that if all or any portion of such excess
payment or reduction is thereafter recovered from such purchasing Term Lender or
additional costs are incurred, the purchase shall be rescinded and the purchase
price restored to the extent of such recovery or such additional costs, but
without interest. The US Borrowers agree that any Term Lender so purchasing a
participation from another Term Lender pursuant to this Section may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off) with respect to such participation as fully as if such
Term Lender were the direct creditor of the US Borrowers in the amount of such
participation.
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(b) If any Canadian Lender shall obtain any payment or
reduction of any obligation of the Canadian Borrowers hereunder (whether
voluntary, involuntary, through the exercise of any right of set-off, or
otherwise) in excess of its ratable share of payments or reductions on account
of such obligations obtained by all the Canadian Lenders, such Canadian Lender
shall forthwith (1) notify each of the other Canadian Lenders and the Canadian
Administrative Agent of such receipt, and (2) purchase from the other Canadian
Lenders such Participations in the affected obligations as shall be necessary to
cause such purchasing Canadian Lender to share the excess payment or reduction,
net of costs incurred in connection therewith, ratably with each of them,
provided that if all or any portion of such excess payment or reduction is
thereafter recovered from such purchasing Canadian Lender or additional costs
are incurred, the purchase shall be rescinded and the purchase price restored to
the extent of such recovery or such additional costs, but without interest. The
Canadian Borrowers agree that any Canadian Lender so purchasing a participation
from another Canadian Lender pursuant to this Section may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off) with respect to such participation as fully as if such Canadian Lender
were the direct creditor of the Canadian Borrowers in the amount of such
participation.
Section 2.21 TAXES.
(a) PAYMENTS FREE AND CLEAR. Any and all payments by or on
account of any obligation of any of the Borrowers hereunder shall be made free
and clear of and without deduction for any Indemnified Taxes or Other Taxes;
provided that if any of the Borrowers shall be required to deduct any
Indemnified Taxes or Other Taxes from such payments, then (1) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.21) the Administrative Agent, the Canadian Administrative Agent, Lender or
Issuing Bank (as the case may be) receives an amount equal to the sum it would
have received had no such deductions been made, (2) the applicable Borrowers
shall make such deductions, and (3) such Borrowers shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law.
(b) OTHER TAXES. In addition, the applicable Borrowers shall
pay any Other Taxes to the relevant Governmental Authority in accordance with
applicable law.
(c) INDEMNIFICATION. Each of the Borrowers shall indemnify the
Administrative Agent, the Canadian Administrative Agent, each Lender and each
Issuing Bank, upon written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Administrative Agent, the Canadian
Administrative Agent, such Lender or such Issuing Bank, as the case may be, on
or with respect to any payment by or on account of any obligation of such
Borrowers hereunder (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section 2.21) and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to the
applicable Borrowers by US Revolving Lender or an Issuing Bank, or by the
Administrative Agent or the Canadian Administrative Agent, as applicable, on its
own behalf or on behalf of US Revolving Lender or an Issuing Bank, shall be
conclusive absent manifest error. Notwithstanding the foregoing, the Canadian
Borrowers shall not be required to indemnify any US Lender in respect of any
Indemnified Taxes or Other Taxes arising with respect to US Loans.
(d) RECEIPTS. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by any of the Borrowers to a Governmental
Authority, such Borrowers shall deliver to the Administrative Agent or the
Canadian Administrative Agent, as applicable, the original or a certified copy
of a receipt issued by such Governmental Authority evidencing such payment, a
copy of the return
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reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.
(e) SURVIVAL. Without prejudice to the survival of any other
agreement contained herein, the agreements and obligations contained in this
Section 2.21 shall survive the payment in full of principal and interest
hereunder.
(f) LENDER REPRESENTATIONS AND AGREEMENTS. Any Foreign Lender
that is entitled to an exemption from or reduction of withholding tax under the
law of the jurisdiction in which any Borrower is located, or any treaty to which
such jurisdiction is a party, with respect to payments under this Agreement
shall deliver to the US Borrowers (with a copy to the Administrative Agent), at
the time or times prescribed by applicable law, such properly completed and
executed documentation prescribed by applicable law or reasonably requested by
the US Borrowers as will permit such payments to be made without withholding or
at a reduced rate.
(g) Refunds. If any Borrower pays any additional amount under
this Section 2.21 to a Lender and such Lender determines in its sole discretion
that it has actually received or realized in connection therewith any refund or
any reduction of, or credit against, its Tax liabilities in or with respect to
the taxable year in which the additional amount is paid (a "TAX BENEFIT"), such
Lender shall pay to such Borrower an amount that the Lender shall, in its sole
discretion, determine is equal to the net benefit, after tax, which was obtained
by the Lender in such year as a consequence of such Tax Benefit; provided,
however, that (i) any Lender may determine, in its sole discretion consistent
with the policies of such Lender, whether to seek a Tax Benefit; (ii) any Taxes
that are imposed on a Lender as a result of a disallowance or reduction
(including through the expiration of any tax credit carryover or carryback of
such Lender that otherwise would not have expired) of any Tax Benefit with
respect to which such Lender has made a payment to such Borrower pursuant to
this Section 2.21 shall be treated as a tax for which such Borrower is obligated
to indemnify such Lender pursuant to this Section 2.21 without any exclusions or
defenses; and (iii) nothing in this Section 2.21(g) shall require the Lender to
disclose any confidential information to any Borrower (including, without
limitation, its tax returns).
Section 2.22 PRO RATA TREATMENT. Subject to Section 2.4(b) each
Borrowing of US Revolving Credit Loans shall be made, each payment on account of
any commitment fee in respect of the US Revolving Credit Commitments hereunder
shall be allocated by the Administrative Agent, and any reduction of the US
Revolving Credit Commitments of the US Revolving Lenders shall be allocated by
the Administrative Agent, pro rata according to the relevant US Revolving Credit
Percentages of the US Revolving Lenders. Subject to Section 2.4(b), each payment
(including each prepayment) on account of principal of and interest on any US
Revolving Credit Loans shall be allocated by the Administrative Agent pro rata
according to the respective outstanding principal amounts of such US Revolving
Credit Loans then held by the US Revolving Lenders. Subject to Section 2.4(b),
each payment (including each prepayment) on account of principal of and interest
on any Term Loans shall be allocated by the Administrative Agent pro rata
according to the respective outstanding principal amounts of such Term Loans
then held by the Term Lenders. Subject to Section 2.4(b), each Borrowing of
Canadian Revolving Credit Loans shall be made, each payment on account of any
commitment fee in respect of the Canadian Revolving Credit Commitments hereunder
shall be allocated by the Canadian Administrative Agent, and any reduction of
the Canadian Revolving Credit Commitments of the Canadian Lenders shall be
allocated by the Canadian Administrative Agent, pro rata according to the
relevant Canadian Revolving Credit Percentages of the Canadian Lenders. Subject
to Section 2.4(b), each payment (including each prepayment) on account of
principal of and interest on any Canadian Revolving Credit Loans shall be
allocated by the Canadian Administrative Agent pro rata according to the
respective outstanding principal amounts of such Canadian Revolving Credit Loans
then held by the Canadian Lenders.
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Section 2.23 REPLACEMENT OF LENDERS. If any Lender does not make a
Eurodollar Loan pursuant to Section 2.16, seeks indemnification for increased
costs pursuant to Section 2.17, fails to designate an alternate Lending Office
pursuant to Section 2.18, or is owed or reasonably anticipates being owed
additional amounts pursuant to Section 2.21, the Borrowers shall have the right,
if no Default then exists, to replace such Lender with another bank or financial
institution with the consent of the Administrative Agent and Canadian
Administrative Agent, which consent shall not be unreasonably withheld, provided
that (a) the obligations of the Borrowers owing hereunder or under any other
Financing Document to the Lender being replaced (including such increased costs)
that are not being assigned to the replacement lender shall be paid in full to
the Lender being replaced concurrently with such replacement lender, (b) the
replacement lender shall execute an Assignment and Acceptance pursuant to which
it shall become a party hereto as provided in Section 10.7, and (c) upon
compliance with the provisions for assignment provided in Section 10.7 and the
payment of amounts referred to in clause (a), the replacement lender shall
constitute a "Lender" hereunder and the Lender being so replaced shall no longer
constitute a "Lender" hereunder.
Section 2.24 ADVANCES OF REVOLVING CREDIT LOANS TO SATISFY LENDER
INDEBTEDNESS. Each of the Borrowers and each Lender hereby agree with
Administrative Agent, the Canadian Administrative Agent and each other Lender
that, on each date on which any payment of interest, fees, principal or other
amounts are due and owing hereunder or under any of the other Financing
Documents, Administrative Agent or the Canadian Administrative Agent may, in its
sole discretion, but without any obligation to do so and subject to all other
terms of this Agreement (other than any request for delivery of a Borrowing
Request hereunder) cause a Borrowing of (a) US Swingline Loans to the extent of
the remaining US Swingline Availability, and thereafter such Borrowings shall be
US Revolving Credit Loans which shall be ABR Loans or (b) Dollar Denominated
Canadian Revolving Credit Loans which shall be ABR Loans to be made on such date
in an amount sufficient to satisfy in full all such payments of interest, fees
or other amounts which are then due hereunder, and, subject to Section 2.9(i)
with respect to Canadian Lenders, Administrative Agent or Canadian
Administrative Agent shall disburse the proceeds of such Borrowing to each other
Agent and Lender to satisfy all such obligations and liabilities which are then
due and Administrative Agent or Canadian Administrative Agent shall give
Borrowers prompt notice of any such Advances. Notwithstanding the foregoing,
neither Administrative Agent or Canadian Administrative Agent shall be permitted
to cause a Borrowing of Canadian Revolving Credit Loans to satisfy any Lender
Indebtedness which is not Canadian Lender Indebtedness.
Section 2.25 JOINT AND SEVERAL LIABILITY OF US BORROWERS; RIGHTS OF
CONTRIBUTION AMONG US BORROWERS.
(a) Each US Borrower states and acknowledges that: (1)
pursuant to this Agreement, the US Borrowers desire to utilize their borrowing
potential on a consolidated basis to the same extent possible if they were
merged into a single corporate entity; (2) each US Borrower has determined that
it will benefit specifically and materially from the advances of credit
contemplated by this Agreement; (3) it is both a condition precedent to the
obligations of the Administrative Agent, the Canadian Administrative Agent and
Lenders hereunder and a desire of each US Borrower that each US Borrower execute
and deliver to Lender this Agreement; and (4) each US Borrower has requested and
bargained for the structure and terms of and security for the advances
contemplated by this Agreement.
(b) Each US Borrower hereby irrevocably and unconditionally:
(i) agrees that it is jointly and severally liable to the Administrative Agent
and Lenders for the full and prompt payment and performance of the obligations
of each Borrower under this Agreement and each other Financing Document that may
specify that a particular Borrower is responsible for a given payment or
performance; (ii) agrees to fully and promptly perform all of its obligations
hereunder with respect to each advance of credit hereunder as if such advance
had been made directly to it; and (iii) agrees as a primary obligation to
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indemnify Administrative Agent, the Canadian Administrative Agent and each
Lender, on demand for and against any loss incurred by Administrative Agent, the
Canadian Administrative or any Lender as a result of any of the obligations of
any Borrower (the "SUBJECT BORROWER") being or becoming void, voidable,
unenforceable or ineffective for any reason whatsoever, whether or not known to
the subject Borrower or any Person, the amount of such loss being the amount
which Administrative Agent, the Canadian Administrative Agent or Lender would
otherwise have been entitled to recover from the Borrower.
(c) It is the intent of each US Borrower that the
indebtedness, obligations and liabilities hereunder of no one of them be subject
to challenge on any basis related to any federal or state law dealing with
fraudulent conveyances or any other law related to transfers for less than fair
or reasonably equivalent value. Accordingly, as of the date hereof, the
liability of each US Borrower under this Section 2.25 together with all of its
other liabilities to all persons as of the date hereof and as of any other date
on which a transfer is deemed to occur by virtue of this Agreement, calculated
in amount sufficient to pay its probable net liabilities on its existing
indebtedness as the same become absolute and matured ("DATED LIABILITIES") is
and is to be, less than the amount of the aggregate of a fair valuation of its
property as of such corresponding date ("DATED Assets"). To this end, each US
Borrower under this Section 2.25(i) grants to and recognizes in each other US
Borrower ratably, rights of subrogation and contribution in the amount, if any,
by which the Dated Assets of such US Borrower, but for the aggregate rights of
subrogation and contribution in its favor recognized herein, would exceed the
Dated Liabilities of such US Borrower or, as the case may be, (1) acknowledges
receipt of and recognizes its right to subrogation and contribution ratably from
the other US Borrowers in the amount, if any, by which the Dated Liabilities of
such US Borrower, but for the aggregate of subrogation and contribution in its
favor recognized herein, would exceed the Dated Assets of such US Borrower under
this Section 2.25. In recognizing the value of the Dated Assets and the Dated
Liabilities, it is understood that each US Borrower will recognize, to at least
the same extent of their aggregate recognition of liabilities hereunder, their
rights to subrogation and contribution hereunder. It is a material objective of
this Section 2.25 that each US Borrower recognizes rights to subrogation and
contribution rather than be deemed to be insolvent (or in contemplation thereof)
by reason of an arbitrary interpretation of its joint and several obligations
hereunder.
(d) Each US Borrower agrees and acknowledges that the present
structure of the credit facilities detailed in this Agreement is based in part
upon the financial and other information presently known to Administrative
Agent, the Canadian Administrative Agent and Lenders regarding each Borrower,
the corporate structure of the Borrowers, and the present financial condition of
each Borrower. Upon or after the occurrence of an Event of Default under Section
8.1 or Section 8.2 and so long as it is continuing, each US Borrower hereby
agrees that Required Lenders shall have the right, in their sole credit
judgment, to require that any or all of the following changes be made to these
credit facilities: (1) further restrict loans and advances between the
Borrowers, (2) establish separate lockbox and Blocked Accounts for each US
Borrower, (3) separate the US Swingline Loans and US Revolving Credit Loans into
separate revolving credit loans to each of the US Borrowers as shall be
determined by Required Lenders, and (4) establish such other procedures as shall
be reasonably deemed by Required Lenders to be useful in tracking where Loans
are made under this Agreement and the source of payments received by Lenders on
such Loans.
Section 2.26 PARTICIPATIONS IN US SWINGLINE LOANS. The US Swingline
Lender may by written notice given to the Administrative Agent not later than
10:00 a.m. (New York, New York time), on any Business Day require the US
Revolving Lenders to acquire participations within one (1) Business Day in all
or a portion of the US Swingline Loans outstanding. Such notice to the
Administrative Agent shall specify the aggregate amount of US Swingline Loans in
which US Revolving Lenders will participate. Promptly upon receipt of such
notice, the Administrative Agent will give notice thereof to
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each US Revolving Lender, specifying in such notice such US Revolving Lender's
Revolving Credit Percentage of such US Swingline Loan or Loans. Each US
Revolving Lender hereby absolutely and unconditionally agrees, upon receipt of
notice as provided above in this paragraph, to pay to the Administrative Agent,
for account of the US Swingline Lender, such US Revolving Lender's US Revolving
Credit Percentage of such US Swingline Loan or Loans. Each US Revolving Lender
acknowledges and agrees that its obligation to acquire participations in US
Swingline Loans pursuant to this paragraph is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including the occurrence
and continuance of a Default or Event of Default or reduction or termination of
the Aggregate US Revolving Credit Commitments, and that each such payment shall
be made without any offset, abatement, withholding or reduction whatsoever. Each
US Revolving Lender shall comply with its obligation under this paragraph by
wire transfer of immediately available funds, in the same manner as provided in
Section 2.4(a) with respect to Loans made by such US Revolving Lender (and
Section 2.4(a) shall apply, mutatis mutandis, to the payment obligations of the
US Revolving Lenders), and the Administrative Agent shall promptly pay to the US
Swingline Lender the amounts so received by it from the US Revolving Lenders.
The Administrative Agent shall notify the US Borrowers of any participations in
any US Swingline Loan acquired pursuant to this paragraph, and thereafter
payments in respect of such US Swingline Loan shall be made to the
Administrative Agent and not to the US Swingline Lender. Any amounts received by
the US Swingline Lender from the US Borrower (or other party on behalf of the US
Borrower) in respect of a US Swingline Loan after receipt by the US Swingline
Lender of the proceeds of a sale of participations therein shall be promptly
remitted to the Administrative Agent; any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the US Lenders that shall have made their payments pursuant to this paragraph
and to the US Swingline Lender, as their interests may appear. The purchase of
participations in a US Swingline Loan pursuant to this paragraph shall not
relieve the US Borrowers of any default in the payment thereof.
Section 2.27 SHARING EVENTS
(a) CONVERSION OF EURODOLLAR AND CANADIAN DOLLAR LOANS. Upon
the occurrence of a Sharing Event, automatically (and without the taking of any
action) (i) all then outstanding Loans denominated in Canadian Dollars and all
Eurodollar Loans shall be automatically converted into ABR Loans denominated in
Dollars (in the case of such Loans denominated in Canadian Dollars in an amount
equal to the Dollar Equivalent of the aggregate principal amount of the Loans on
the date such Sharing Event first occurred), which Loans denominated in Dollars
(A) shall thereafter be deemed to be ABR Loans and (B) unless the Sharing Event
resulted solely from a termination of the Commitments, shall be immediately due
and payable on the date such Sharing Event has occurred, and (ii) unless the
Sharing Event resulted solely from a termination of the Commitments, all accrued
and unpaid interest and other amounts owing with respect to such Loans shall be
immediately due and payable in Dollars, taking the Dollar Equivalent of such
accrued and unpaid interest and other amounts.
(b) PURCHASE AND SALE OF PARTICIPATIONS. Upon the occurrence
of a Sharing Event, and after giving effect to any automatic conversion pursuant
to Section 2.27(a), each Imbalance Lender shall (and hereby unconditionally and
irrevocably agrees to) purchase and sell (in each case in Dollars) undivided
participating interests in all Revolving Credit Loans outstanding to, and any
unpaid L/C Reimbursement Obligations with respect to any of Letter of Credit
owing by, the Borrowers in such amounts so that each such Imbalance Lender
ceases to be an Imbalance Lender (although if because of fluctuations in
currency exchange rates any Imbalance Lender would be required to purchase
participations under this Section 2.27 that would cause such Lender's Revolving
Credit Exposure (including participations therein purchased pursuant to this
Section 2.27) to exceed such Revolving Lender's Combined Revolving Credit
Commitment (immediately prior to giving effect to any termination thereof), then
such excess participations shall not be sold and the related credit exposure
shall be retained
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by the Revolving Lenders holding the same ratably in accordance with their
Applicable Percentage for Loans of that type (US Revolving Credit Loans or
Canadian Revolving Credit Loans (as applicable)). Upon any such occurrence, the
Administrative Agent shall notify each Revolving Lender and shall specify the
amount of Dollars required from such Revolving Lender in order to effect the
purchases and sales by the various Revolving Lenders of participating interests
in the amounts required above (together with accrued interest with respect to
the period from the last interest payment date through the date of the Sharing
Event plus any additional amounts payable by the Borrowers pursuant to Section
2.21 in respect of such accrued but unpaid interest); provided, in the event
that a Sharing Event shall have occurred, each Imbalance Lender shall be deemed
to have purchased and sold, as applicable, automatically and without request,
such participating interests. Promptly upon receipt of such request, each
Imbalance Lender shall deliver to the Administrative Agent (in immediately
available funds in Dollars) the net amounts as specified by the Administrative
Agent. The Administrative Agent shall promptly deliver the amounts so received
to the various Revolving Lenders in such amounts as are needed to effect the
purchases and sales of participations as provided above. Promptly following
receipt thereof, each Lender which has sold participations in any of its
Revolving Loans (through the Administrative Agent) will deliver to each Lender
(through the Administrative Agent) which has so purchased a participating
interest a participation certificate dated the date of receipt of such funds and
in such amount. It is understood that the amount of funds delivered by each
Revolving Lender shall be calculated on a net basis, giving effect to both the
sales and purchases of participations by the various Lenders as required above.
(c) TERMINATION OF COMMITMENTS; ACCELERATION. Upon the
occurrence of a Sharing Event (i) no further Loans shall be made and (b) the
Revolving Credit Commitments of the Revolving Lenders shall be automatically
terminated. Notwithstanding anything to the contrary contained above, the
failure of any Revolving Lender to purchase its participating interest in any
Loans upon the occurrence of a Sharing Event shall not relieve any other
Revolving Lender of its obligation hereunder to purchase its participating
interests in a timely manner, but no Revolving Lender shall be responsible for
the failure of any other Revolving Lender to purchase the participating interest
to be purchased by such other Lender on any date.
(d) FUNDING OBLIGATION. If any amount required to be paid by
any Lender pursuant to Section 2.27(b) is not paid to the Administrative Agent
within one Business Day following the date upon which such Revolving Lender
receives notice from the Administrative Agent of the amount of its
participations required to be purchased pursuant to said Section 2.27(b), such
Revolving Lender shall also pay to the Administrative Agent on demand an amount
equal to the product of (i) the amount so required to be paid by such Revolving
Lender for the purchase of its participations times (ii) the daily average
Federal Funds Effective Rate during the period from and including the date of
request for payment to the date on which such payment is immediately available
to the Administrative Agent times (iii) a fraction the numerator of which is the
number of days that elapsed during such period and the denominator of which is
360. If any such amount required to be paid by any Revolving Lender pursuant to
Section 2.27(b) is not in fact made available to the Administrative Agent within
three Business Days following the date upon which such Revolving Lender receives
notice from the Administrative Agent as to the amount of participations required
to be purchased by it, the Administrative Agent shall be entitled to recover
from such Revolving Lender on demand, such amount with interest thereon
calculated from (and including) such third Business Day at the rate per annum
applicable to ABR Loans hereunder. Any such amount set forth in a certificate of
the Administrative Agent submitted to any Revolving Lender with respect to any
amounts payable by any Revolving Lender pursuant to this Section 2.27 shall be
paid to the Administrative Agent for the account of the relevant Revolving
Lenders; provided that, if the Administrative Agent (in its sole discretion) has
elected to fund on behalf of such Revolving Lender the amounts owing to such
Revolving Lenders, then the amounts shall be paid to the Administrative Agent
for its own account.
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(e) DISTRIBUTION OF PAYMENTS. Whenever, at any time after any
Revolving Lender sells a participation pursuant to this Section 2.27, such
selling Revolving Lender receives any payment on account thereof, such selling
Revolving Lender will distribute to the Administrative Agent, for the account of
the purchasing Revolving Lenders participating therein, such Revolving Lenders'
participating interests in such amounts (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such
participations were outstanding) in like funds as received; provided, however,
that in the event that such payment received by any selling Revolving Lenders
are required to be returned, the purchasing Revolving Lenders who received
previous distributions in respect of their participating interests therein will
return to the respective selling Revolving Lenders any portion thereof
previously so distributed to them in like funds as such payment is required to
be returned by the respective Revolving Lenders.
(f) UNCONDITIONAL OBLIGATION. Each Imbalance Lender's
obligation to purchase participating interests pursuant to this Section 2.27
shall be absolute and unconditional and shall not be affected by any
circumstance including, without limitation, (a) any setoff, counterclaim,
recoupment, defense or other right which such Revolving Lender may have against
any other Revolving Lender, the Borrower or any other Person for any reason
whatsoever, (b) the occurrence or continuance of an Event of Default, (c) any
adverse change in the condition (financial or otherwise) of the Borrowers or any
other Person, (d) any breach of this Agreement or any other Financing Document
by the Borrowers, any other Obligated Party or any Revolving Lender or any other
Person, or (e) any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing.
(g) YIELD PROTECTION. Notwithstanding anything to the contrary
contained elsewhere in this Agreement, upon any purchase of participations as
required above, each Revolving Lender which has purchased such participations
shall be entitled to receive from the relevant Borrowers any increased costs and
indemnities directly from such Borrowers to the same extent as if it were the
direct Revolving Lender as opposed to a participant therein. The Borrowers
acknowledge and agree that, upon the occurrence of a Sharing Event and after
giving effect to the requirements of this Section 2.27, increased Taxes may be
owing by relevant Borrowers pursuant to Section 2.21, which Taxes shall be paid
(to the extent provided in Section 2.21) by such Borrowers, without any claim
that the increased Taxes are not payable because same resulted from the
participations effected as otherwise required by this Section 2.27. The
Borrowers also acknowledge and agree that, upon the occurrence of a Sharing
Event and after giving effect to the requirements of this Section 2.27, the
Borrowers may be liable for losses under Section 2.19 as a result of the
conversion of Eurodollar Loans or B/A Loan on a date which is not the last day
of the Interest Period or Contract Period applicable thereto.
ARTICLE 3
CONDITIONS TO BORROWINGS
Section 3.1 CLOSING. The obligation of each Lender to make its initial
Loan and each Issuing Bank to issue its Letter of Credit hereunder is subject to
(x) receipt by the Administrative Agent or Canadian Administrative Agent, as
applicable, of the following items which are to be delivered, in form and
substance satisfactory to each Lender, with a copy (except for the Notes and
this Agreement) for each Lender and (y) the satisfaction of the following
conditions prior to or substantially simultaneously with the making of such
initial Loan and the issuance of such initial Letter of Credit:
(a) US REVOLVING CREDIT NOTES. A duly completed and executed
US Revolving Credit Note for each US Lender and in each case dated as of the
Closing Date, and payable to the order of such US Lender.
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(b) CANADIAN REVOLVING CREDIT NOTES. A duly completed and
executed Canadian Revolving Credit Note for each Canadian Lender and in each
case dated as of the Closing Date, and payable to the order of such Canadian
Lender.
(c) US SWINGLINE NOTE. A duly completed and executed US
Swingline Note dated as of the Closing Date and payable to the order of the US
Swingline Lender.
(d) RESOLUTIONS AND INCUMBENCY CERTIFICATES.
(1) certified copies of the resolutions of the Board
of Directors of each Credit Party dated as of the Closing Date and
approving, as appropriate, the Loans, the Notes, this Agreement and the
other Financing Documents, and all other documents, if any, to which
each Credit Party is a party and evidencing corporate authorization
with respect to such documents;
(2) a certificate of the Secretary or an Assistant
Secretary of each Credit Party dated as of the Closing Date and
certifying (A) the name, title and true signature of each officer of
such Person authorized to execute the Notes, this Agreement,
Applications and the other Financing Documents to which it is a party,
(B) the name, title and true signature of each officer of such Person
authorized to provide the certifications required pursuant to this
Agreement including, but not limited to, certifications required
pursuant to Section 6.10, Borrowing Requests, and Borrowing Base
Reports, and (C) that attached hereto is a true and complete copy of
the certificate of incorporation certified by the appropriate
Governmental Authority of the jurisdiction of incorporation or
organization of each Credit Party and the bylaws of each Credit Party,
each as amended to date, recent good standing certificates and/or
certificates of existence for each Credit Party and certificates of
foreign qualification for each Credit Party in such jurisdictions as
Administrative Agent shall require; and
(3) certain letter agreements certifying to the names
and signatures of officers of the Borrowers authorized to issue
Borrowing Requests, issue Borrowing Base Reports, initiate wire
transfers and take other actions with respect to the credit facilities
contemplated hereby.
(e) OPINIONS OF COUNSEL.
(1) An opinion of Gallop, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.,
counsel to each Credit Party dated as of the Closing Date addressed to
the Administrative Agent, the Issuing Banks and the Lenders and
covering such matters as the Administrative Agent, the Issuing Banks or
the Lenders may reasonably request;
(2) An opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ LLP, Canadian counsel
to the Canadian Borrowers dated as of the Closing Date addressed to the
Administrative Agent, the Issuing Banks and the Lenders and covering
such matters as the Administrative Agent, the Issuing Banks or the
Lenders may reasonably request; and
(3) An opinions of counsel to the US Credit Parties
in Arkansas, Texas and Washington dated as of the Closing Date
addressed to the Administrative Agent, the Issuing Banks and the
Lenders and covering such matters as the Administrative Agent, the
Issuing Banks or the Lenders may reasonably request.
(4) A letter from ▇▇▇▇▇▇ & ▇▇▇▇▇▇, counsel to
Holdings and Sellers, authorizing each Agent and Lender to rely on the
opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ delivered pursuant to the Purchase
Agreement.
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(f) THE SECURITY INSTRUMENTS.
(1) a Guaranty and Security Agreement, dated as of
the Closing Date and duly executed by each of the US Borrowers (A)
guaranteeing the repayment of the Canadian Lender Indebtedness by each
such US Borrower and (B) granting to the Administrative Agent a first
priority security interest in all of the personal property of each US
Borrower, as security for the Lender Indebtedness;
(2) a Canadian Security Agreement, dated as of the
Closing Date and duly executed by each Canadian Borrower granting to
the Canadian Administrative Agent a first priority security interest in
all of the personal property of each Canadian Credit Party, as security
for the Canadian Lender Indebtedness;
(3) completed UCC-1 financing statements necessary to
perfect the security interests created by the Guaranty and Security
Agreements and the Real Estate Mortgages;
(4) in addition to the UCC-1 financing statement
required by clause (5) preceding, such other documents, instruments and
agreements as Administrative Agent or Canadian Administrative Agent
shall reasonably request to fully evidence and perfect the Liens
created by the Security Instruments;
(5) [Intentionally Deleted]
(6) a Lockbox Agreement duly executed by the US
Borrowers and establishing the US Lockbox;
(7) a Lockbox Agreement duly executed by the Canadian
Borrowers, the Canadian Administrative Agent and establishing the
Canadian Lockbox and the Canadian Blocked Account;
(8) Real Estate Mortgages dated as of the Closing
Date and duly executed by Tube, Precision Canada and Prudential
granting to Administrative Agent or Canadian Administrative Agent, as
applicable, a first priority perfected lien in and to all Mortgaged
Real Property owned by Tube, Precision Canada and Prudential as of the
Closing Date subject to Permitted Liens;
(9) Landlord Consent and Subordination Agreements
duly executed and delivered by each landlord of Mortgaged Real Property
leasehold interests in such real property constitutes Mortgaged Real
Property;
(10) Landlord Waiver Agreements duly executed and
delivered by each landlord of Real Property leased by any Borrower
(other than Mortgaged Real Property), in form and substance
satisfactory to the Administrative Agent;
(11) original stock certificates and duly executed
corresponding stock powers to perfect the Administrative Agent's or
Canadian Administrative Agent's security in the equity pledged by the
Guaranty and Security Agreements and the Canadian Security Agreements;
and
(12) all Property in which the Administrative Agent
or Canadian Administrative Agent shall, at such time, be entitled to
have a Lien pursuant to this Agreement or any other Financing Document
shall have been physically delivered to the possession of the
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Administrative Agent or Canadian Administrative Agent to the extent
that such possession is necessary for the purpose of perfecting the
Administrative Agent's or the Canadian Administrative Agent's Lien in
such Collateral.
(g) THE CONSUMMATION OF THE ACQUISITION TRANSACTIONS. The
Company shall have completed the Acquisition for the purchase price and on the
other terms and conditions set forth in the Purchase Agreement, and the assets
of Holdings and its Subsidiaries shall be free and clear of all Liens, claims
and encumbrances other than Permitted Liens.
(h) INSURANCE. Copies of all insurance binders together with a
certificate of insurance coverage, dated as of the Closing Date evidencing that
the Borrowers maintain insurance in accordance with Section 6.5 hereof.
(i) FINANCIAL STATEMENTS AND PROJECTIONS. The financial
condition of the Borrowers reflected in the Financial Statements and the other
financial information and Projections of the Borrowers shall not be changed as
of the Closing Date in such a way as cause or result in a Material Adverse
Effect (after giving effect to the Acquisition Transactions).
(j) SELLER CONSENT. A consent executed by each Seller party to
the Purchase Agreement pursuant to which each Seller consents to the assignment
of the rights of the Company under the Purchase Agreement to Administrative
Agent and Canadian Administrative Agent for the benefit of Lenders and
acknowledges that each Lender, the Administrative Agent and Canadian
Administrative Agent are third party beneficiaries of all obligations and
liabilities of such Sellers under such Purchase Agreement, or if the
Administrative Agent reasonably requires, an agreement among the Company, each
Seller, the Canadian Administrative Agent and the Administrative Agent to the
same effect.
(k) BORROWING BASE REPORT. A Borrowing Base Report prepared as
of February 28, 2002 and setting forth the US Borrowing Base and Canadian
Borrowing Base to be in effect under this Agreement on the Closing Date and,
after giving effect to the consummation of the transactions contemplated herein,
including the Acquisition Transactions and the initial Loans hereunder, (1) the
US Excess Availability shall not be less than $15,000,000 and (2) the Canadian
Excess Availability shall not be less than $5,000,000; provided, that, in
calculating the US Excess Availability for purposes of this condition, the
Initial Reserve shall be disregarded. It is understood that this condition
contemplates that all Existing Indebtedness not permitted to remain outstanding
under Section 7.2 has been prepaid, and debts and obligations are current, and
that all accounts payable are being handled in the normal course of the
Borrowers' business consistent with its past practices.
(l) CERTIFICATE OF CHIEF FINANCIAL OFFICER. A certificate of
the Chief Financial Officer of each of the Borrowers dated as of the Closing
Date and certifying, before and after giving effect to the Acquisition
Transaction and before and after the making of the initial Loans and the
issuance of the initial Letter of Credit, that (1) each Borrower is Solvent, (2)
no Default then, or thereafter would, exist, (3) each of the conditions to
Closing have been satisfied, and (4) each representation and warranty of the
Borrowers contained herein is true and correct in all material respects.
(m) CORPORATE STRUCTURE. Each Lender shall be satisfied in its
sole judgment with the corporate, capital, legal and management structure and
tax liabilities of each Borrower and the flow of funds among the Borrowers
including without limitation those necessary for the consummation of the
Acquisition.
(n) LIEN SEARCHES. Lien searches reflecting no prior Liens on
the Collateral other than Permitted Liens.
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(o) REAL ESTATE APPRAISALS. The Administrative Agent shall
have received fair market value appraisals for all owned real estate by
appraisers satisfactory to the Administrative Agent which reflect appraised
values of not less than $28,000,000 and which are otherwise acceptable to the
Administrative Agent.
(p) FEES AND EXPENSES. Payment and/or reimbursement of (1)
Administrative Agent's and Canadian Administrative Agent's counsel's fees and
expenses incurred through the Closing Date, to the extent invoiced, and (2) any
fees or expenses required to be paid pursuant to the Fee Letter.
(q) DOCUMENTATION. Administrative Agent shall have received
such other documents as Administrative Agent (or any Lender acting through
Administrative Agent) may reasonably request, all in form and substance
reasonably satisfactory to the Administrative Agent.
(r) REPAYMENT OF INDEBTEDNESS. All Existing Indebtedness of
the Credit Parties other than the Indebtedness permitted pursuant to Section 7.2
shall have been paid in full and all Liens securing payment of such Indebtedness
shall have been canceled or released.
(s) ENVIRONMENTAL REVIEW. Administrative Agent and its counsel
shall have completed a review of environmental conditions and environmental
compliance with respect to the Borrowers' operations and Properties and the
results of such review shall be satisfactory to Administrative Agent.
(t) SURVEYS. Surveys in form and substance acceptable to
Administrative Agent with respect to all Mortgaged Real Property.
(u) TITLE COMMITMENT. A Commitment for a Mortgagee's Policy of
Title Insurance in form and substance satisfactory to Administrative Agent with
respect to the Mortgaged Real Property, together with evidence satisfactory to
Administrative Agent that Mortgagees's Policies of Title Insurance will be
issued pursuant to each such commitment and all premiums therefore have been
paid; provided, however, with respect to any Mortgaged Real Property located in
Canada, opinion of counsel with respect to the applicable Borrower's title in
the Mortgaged Real Property in form and substance acceptable to the
Administrative Agent and the Canadian Administrative Agent may be delivered
instead of title insurance.
(v) BAILEE'S LETTERS. Bailee's Letters duly executed and
delivered by any Person who is in possession of inventory on behalf of any
Borrower
(w) CASH MANAGEMENT ARRANGEMENTS. The Administrative Agent and
the Canadian Administrative shall be satisfied in their sole discretion with all
aspects of the Borrowers' cash management arrangements. Without limiting the
foregoing, each Temporary Lockbox Institution shall have executed and delivered
to the Administrative Agent, a Tri-Party Agreement in form and substance
acceptable to the Administrative Agent in its sole discretion.
Section 3.2 CONDITIONS PRECEDENT TO ALL LOANS AND LETTERS OF CREDIT.
The obligation of each Lender to make each Loan hereunder (including the initial
Loan) and the obligation of each Issuing Bank to issue each Letter of Credit
(including the initial Letter of Credit) is subject to fulfillment of the
following conditions immediately prior to or contemporaneously with each such
Loan or issuance:
(a) REPRESENTATIONS AND WARRANTIES. All representations and
warranties contained herein and in the other Financing Documents executed and
delivered on or after the Closing Date shall be true and correct in all material
respects with the same effect as though such representations and warranties had
been made on and as of the date of such Loan (unless such representation and
warranty is expressly limited to an earlier date).
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(b) NO DEFAULT. There shall not exist a Default or Event of
Default hereunder.
(c) MAXIMUM AVAILABLE AMOUNT. The Aggregate US Revolving
Credit Exposure and the Aggregate Canadian Revolving Credit Exposure, after
giving effect to such proposed Loan or Letter of Credit shall not exceed the US
Maximum Available Amount and Canadian Maximum Available Amount, respectively,
then in effect.
(d) BORROWING REQUESTS. Except in the case of any Borrowing
pursuant to Section 2.2(c), the applicable Borrowers shall have provided Advance
Notice of the requested Borrowing by completion, execution and delivery of a
Borrowing Request.
Section 3.3 POST CLOSING CONDITIONS. Borrowers shall deliver, or cause
to be delivered to the appropriate Agent, each document, instrument or
agreement, and take each action, or cause to be taken, each action set forth on
Schedule 3.3 hereto, in each case on or prior to the date specified on such
Schedule.
ARTICLE 4
SECURITY
Section 4.1 SECURITY GRANTED BY US CREDIT PARTIES. The Lender
Indebtedness shall be secured by perfected, first priority Liens in and
encumbering all assets of each US Credit Party, whether now owned or hereafter
acquired and wherever located; provided, that, only 65% of the Voting Stock of
any Person that is organized under the laws of a jurisdiction other than the
United States of America, a State thereof or the District of Columbia, shall be
pledged to secure the US Lender Indebtedness. In furtherance of the foregoing,
the US Borrowers hereby agree to execute and deliver (and to cause each other US
Credit Party and any other appropriate Person to execute and deliver) to
Administrative Agent for the benefit of US Lenders, promptly upon request by
Administrative Agent, such Security Documents and other documents, instruments,
agreements and certificates, as Administrative Agent shall deem necessary or
appropriate in its sole discretion to create, evidence and perfect the Liens
contemplated by this Section 4.1.
Section 4.2 SECURITY GRANTED BY CANADIAN CREDIT PARTIES. The Canadian
Lender Indebtedness shall be secured by perfected, first priority Liens in and
encumbering all assets of each Canadian Credit Party, whether now owned or
hereafter acquired and wherever located. In furtherance of the foregoing, the
Canadian Borrowers hereby agree to execute and deliver (and to cause each other
Canadian Credit Party and any other appropriate Person to execute and deliver)
to Canadian Administrative Agent for the benefit of Canadian Lenders, promptly
upon request by Canadian Administrative Agent, such Security Documents and other
documents, instruments, agreements and certificates, as Canadian Administrative
Agent shall deem necessary or appropriate in its sole discretion to create,
evidence and perfect the Liens contemplated by this Section 4.2.
Section 4.3 ESTABLISHMENT OF US LOCKBOX. Each US Credit Party shall
enter into the Lockbox Agreement with Administrative Agent pursuant to which
each US Credit Party will establish a US Lockbox to be operated by
Administrative Agent. At all times from and after the Closing Date, each US
Credit Party shall direct all account debtors with respect to such US Credit
Party's accounts and all other Persons obligated to make payments of any type to
any US Credit Party in respect of the Collateral to direct such payments to the
US Lockbox. All invoices issued by any US Credit Party after the Closing Date
shall contain a notation requiring the accounts evidenced by such invoice to be
paid to the US Lockbox. Administrative Agent shall have sole and exclusive
access to the US Lockbox. All monies, checks and other drafts received in the US
Lockbox shall be endorsed in accordance with the Lockbox Agreement and deposited
by Administrative Agent each Business Day in the US Blocked Account.
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Section 4.4 ESTABLISHMENT OF CANADIAN LOCKBOX. Each Canadian Credit
Party shall enter into the Lockbox Agreement with Canadian Administrative Agent
and Canadian Lockbox Bank pursuant to which each Canadian Credit Party will
establish a Canadian Lockbox to be operated by the Canadian Lockbox Bank. At all
times from and after the Closing Date, each Canadian Credit Party after the
Closing Date shall direct all account debtors with respect to such Canadian
Credit Party's accounts and all other Persons obligated to make payments of any
type to any Canadian Credit Party to direct such payments to the Canadian
Lockbox. All invoices issued by any Canadian Credit Party shall contain a
notation requiring the Accounts evidenced by such invoice to be paid to the
Canadian Lockbox. Canadian Lockbox Bank, for the benefit of Canadian
Administrative Agent, shall have sole and exclusive access to the Canadian
Lockbox. All monies, checks and other drafts received in the Canadian Lockbox
shall be endorsed in accordance with the Lockbox Agreement and deposited by
Canadian Lockbox Bank each Business Day in the Canadian Blocked Account.
Section 4.5 ESTABLISHMENT OF US BLOCKED ACCOUNT. From and after the
Closing Date, so long as this Agreement is in effect or any Lender Indebtedness
shall be outstanding, the US Borrowers agree that all funds received by any US
Credit Party from any source, shall be deposited in the US Blocked Account not
later than one Business Day following the date of receipt. Such deposit shall be
made in the exact form received subject only to any necessary endorsements. The
US Borrowers hereby acknowledge and agree (a) that none of them nor the other
Credit Parties have any power of withdrawal over the funds in the US Blocked
Account, (b) that each US Credit Party has granted a Lien on and pledged to
Administrative Agent as additional collateral security for the US Lender
Indebtedness, in the US Blocked Account and all funds on deposit therein and
"control" has been established with respect to such US Blocked Account as
defined in Section 9.104 of the UCC, (c) no US Credit Party may unilaterally
terminate the US Blocked Account, and (d) the US Blocked Account and all funds
on deposit therein shall be subject to the absolute dominion and control of
Administrative Agent. Each of US Borrowers and the Administrative Agent agree
that the US Blocked Account is a "deposit account" within the meaning of
9-102(a)(29) of the UCC and that for purposes of Section 9-304 of this UCC, the
State of New York shall be the jurisdiction of the Administrative Agent.
Section 4.6 ESTABLISHMENT OF CANADIAN BLOCKED ACCOUNT. From and after
the Closing Date, so long as this Agreement is in effect or any Canadian Lender
Indebtedness shall be outstanding, the Canadian Borrowers agree that all funds
received by any Canadian Credit Party from any source (including without
limitation items of payment and other amounts deposited in the Canadian Lockbox)
shall be deposited in the Canadian Blocked Account not later than one Business
Day following the date of receipt. The Canadian Borrowers hereby acknowledge and
agree (a) that none of them nor the other Credit Parties have any power of
withdrawal over the funds in the Canadian Blocked Account, (b) that each
Canadian Credit Party has granted a Lien on and pledged to Canadian
Administrative Agent as additional collateral security for the Canadian Lender
Indebtedness, the Canadian Blocked Account and all funds on deposit therein, (c)
no Canadian Credit Party may unilaterally terminate the Canadian Blocked
Account, and (d) the Canadian Blocked Account and all funds on deposit therein
shall be subject to the absolute dominion and control of Canadian Administrative
Agent.
Section 4.7 APPLICATION OF PROCEEDS OF US BLOCKED ACCOUNT. All funds
received by Administrative Agent in the US Blocked Account shall be applied to
the Lender Indebtedness in the manner set forth in Section 2.11(c) herein.
Section 4.8 APPLICATION OF PROCEEDS OF CANADIAN BLOCKED ACCOUNT. All
funds received by Canadian Administrative Agent from the Canadian Blocked
Account or otherwise from the Canadian Lockbox Bank shall be applied to the
Canadian Lender Indebtedness in the manner set forth in Section 2.11(d) herein.
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES
In order to induce the Agents and Lenders to enter into this Agreement,
each Borrower hereby represents and warrants to each Agent and each Lender that
each statement set forth in this Article 5 is true and correct on the date
hereof and will be true and correct on the date each Borrowing and each Letter
of Credit is requested hereunder and on the date each Borrowing is disbursed and
each Letter of Credit is issued hereunder; provided, that, each Canadian
Borrower is only making such representations and warranties in regard to itself
and each other Canadian Borrower and only to the Canadian Administrative Agent
on behalf of Canadian Lenders; provided, that, the breach of any representations
and warranties which pertain to the US Borrowers in any material respect (even
though not made by the Canadian Borrowers) will give rise to an Event of Default
and will result in Canadian Administrative Agent, Administrative Agent and
Canadian Lenders having the right to exercise all rights and remedies applicable
upon an Event of Default, including, without limitation, rights and remedies
with respect to the Canadian Borrowers and their assets. Except to the extent
expressly provided otherwise herein, to the extent such representations and
warranties are made prior to the consummation of the Acquisition Transactions,
such representations and warranties shall be deemed to be made as if the
Acquisition Transactions had occurred immediately prior to giving effect
thereto. Each such representation and warranty shall survive the execution and
delivery of this Agreement and any Borrowing or issuance of any Letter of Credit
hereunder and shall not be qualified or limited by any investigation undertaken
by any Agent or any Lender or any actual or constructive knowledge any Agent or
any Lender may have or be charged with indicating that any such representation
or warranty is inaccurate or incomplete in any respect.
Section 5.1 CORPORATE EXISTENCE. Each Credit Party is duly organized,
legally existing and in good standing under the laws of the jurisdictions in
which it is organized and is duly qualified to transact business and in good
standing in all jurisdictions wherein the Property owned or the business
transacted by it makes such qualification necessary, except where the failure to
be so qualified could not reasonably be expected to have a Material Adverse
Effect.
Section 5.2 CORPORATE POWER AND AUTHORIZATION. Each Borrower is
authorized and empowered to create and issue the Notes; each Obligated Party is
duly authorized and empowered to execute, deliver and perform the Financing
Documents, including this Agreement, to which it is a party; and all corporate,
partnership or other action on any Obligated Party's part requisite for the due
creation and issuance of the Notes and for the due execution, delivery and
performance of the Financing Documents, including this Agreement, to which the
Obligated Parties (or any of them) are parties has been duly and effectively
taken.
Section 5.3 BINDING OBLIGATIONS. This Agreement does, and the Notes and
other Financing Documents to which any Obligated Party is a party will, when
issued and delivered under this Agreement, constitute legal, valid and binding
obligations of each Obligated Party that is a party thereto, and will be
enforceable in accordance with their respective terms (except that enforcement
may be subject to any applicable bankruptcy, insolvency or similar laws
generally affecting the enforcement of creditors' rights and subject to the
availability of equitable remedies).
Section 5.4 NO LEGAL BAR OR RESULTANT LIEN. The execution, delivery and
performance of the Notes and the other Financing Documents, including this
Agreement, to which the Obligated Parties (or any of them) are parties do not
and will not violate or create a default under any provisions of the articles or
certificate of incorporation, bylaws, partnership agreement or other
organizational documents of any Obligated Party, or any contract, agreement,
instrument or Governmental Requirement to which any
76
Obligated Party is subject which violation or default could have a Material
Adverse Effect, or result in the creation or imposition of any Lien upon any
Properties of any Obligated Party.
Section 5.5 NO CONSENT. Each Obligated Party's execution, delivery and
performance of the Notes and the other Financing Documents, including this
Agreement, to which such Obligated Party (or any of them) is a party, and the
consummation of the Acquisition Transaction do not require notice to or filing
or registration with, or the authorization, consent or approval of or other
action by any other Person, including, but not limited to, any Governmental
Authority, except those obtained or made or where the failure to do so could not
reasonably be expected to have a Material Adverse Effect.
Section 5.6 FINANCIAL INFORMATION.
(a) FINANCIAL STATEMENTS. The Financial Statements and the
Current Financials were prepared in accordance with GAAP and fairly present the
consolidated financial condition and results of operations of each of the
Company and Holding as of the dates and for the periods reflected therein.
(b) [INTENTIONALLY DELETED]
(c) PRO-FORMA CONSOLIDATING BALANCE SHEETS. The pro forma
consolidating balance sheets of each of Tube, PTTI, and Prudential as of
February 28, 2002 fairly present in conformity with GAAP the consolidating
financial condition of Tube, PTTI, and Prudential as of such date adjusted to
give effect to the Acquisition Transactions and the incurrence of the Lender
Indebtedness to be incurred on the Closing Date (and allocating such Lender
Indebtedness among each of PTTI, Tube, and Prudential as set forth in such pro
forma consolidating balance sheets).
(d) PROJECTIONS. The Projections set forth the Company's
reasonable best estimate as of the date hereof of the Company's consolidated
financial condition and results of operations as of the dates and for the
periods covered thereby. The Projections were prepared in good faith in
accordance with sound financial planning practices on the basis of the
assumptions stated therein, which assumptions were believed by the Company to be
reasonable at the time made and which the Company continues to believe are
reasonable on the date hereof.
(e) NO MATERIAL ADVERSE EFFECT. Since December 31, 2001, there
has been no event, condition or occurrence that has had or could reasonably be
expected to have a Material Adverse Effect.
Section 5.7 LITIGATION. There is no action, suit, claim, grievance or
proceeding, or any governmental investigation or any arbitration proceeding, in
each case pending (including any unsatisfied settlement, judgment decree or
order) or, to the knowledge of any Borrower, threatened against any Credit Party
or any Property of any Credit Party before any court or arbitrator or any
Governmental Authority, or pursuant to any collective bargaining agreement,
which (a) challenges the validity of this Agreement, any Note, any Application,
any Security Instrument or any of the other Financing Documents or (b) could
reasonably be expected to have a Material Adverse Effect. As of the Closing
Date, except as set forth in Schedule 5.7, there is no material action, suit or
proceeding, or any governmental investigation or any arbitration, in each case
pending or, to the knowledge of the Company or any Borrower, threatened against
any Credit Party or any Property thereof before any court or arbitrator or any
Governmental Authority.
Section 5.8 USE OF PROCEEDS. The Borrowers will use the proceeds of the
Loans only for the purposes specified in the Recitals to this Agreement. The
Letters of Credit will be used only for the purposes provided in Section 2.3. No
Credit Party is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose, whether immediate, incidental
or ultimate,
77
of buying or carrying Margin Stock (within the meaning of Regulation U or X) and
no part of the proceeds of any Loan hereunder will be used to buy or carry any
Margin Stock in violation of Regulation U or X. No Credit Party nor any Person
acting on behalf of any Credit Party has taken or will take any action which
could reasonably be expected to cause the Notes or any of the Financing
Documents, including this Agreement, to violate Regulations U or X or any other
regulation of the Board, in each case as now in effect or as the same may
hereinafter be in effect.
Section 5.9 US EMPLOYEE BENEFITS.
(a) (1) Each US Credit Party and each ERISA Affiliate have
complied in all material respects with all applicable laws regarding each Plan;
(A) each Plan is, and has been, maintained and administered in substantial
compliance with its terms, applicable collective bargaining agreements, and all
applicable laws; and (B) no act, omission or transaction has occurred which
could result in an imposition on any US Credit Party or any ERISA Affiliate
(whether directly or indirectly) of (C) either a civil penalty assessed pursuant
to Subsections (c), (i) or (l) of Section 502 of ERISA or a tax imposed pursuant
to Chapter 43 of Subtitle D of the Code or (D) breach of fiduciary duty
liability damages under Section 409 of ERISA which could reasonably be expected
to have a Material Adverse Effect.
(b) There exists no outstanding liability of any US Credit
Party or any ERISA Affiliate with respect to any Plan that has been terminated.
No material liability to the PBGC (other than for the payment of current
premiums which are not past due) by any US Credit Party or any ERISA Affiliate
has been or is expected by any US Credit Party or any ERISA Affiliate to be
incurred with respect to any Plan. No ERISA Termination Event with respect to
any Plan has occurred or is reasonably expected to occur.
(c) Full payment when due has been made of all amounts which
any US Credit Party or any ERISA Affiliate is required under the terms of each
Plan or applicable law to have paid as contributions to such Plan (excluding any
nonpayment involving an amount that is not material), and no accumulated funding
deficiency (as defined in Section 302 of ERISA and Section 412 of the Code),
whether or not waived, exists with respect to any Plan.
(d) The actuarial present value of the benefit liabilities
(computed on an accumulated benefit obligation basis in accordance with GAAP)
under all Plans in the aggregate that are subject to Title IV of ERISA does not,
as of the end of the most recently ended fiscal year of such Plans, exceed the
current value of the assets of all Plans in the aggregate that are allocable to
such benefit liabilities. The term "actuarial present value of the benefit
liabilities" shall have the meaning specified in Section 4041 of ERISA.
(e) Neither any US Credit Party nor any ERISA Affiliate
sponsors, maintains or contributes to, or has at any time sponsored, maintained
or contributed to, any "multiemployer plan" (as defined in Section 3(37) or
4001(a)(3) of ERISA).
(f) Neither any US Credit Party nor any ERISA Affiliate is
required to provide security to a Plan pursuant to Section 401(a)(29) of the
Code.
Section 5.10 CANADIAN EMPLOYEE BENEFITS.
(a) Except as could not reasonably be expected to have a
Material Adverse Effect (1) each Canadian Credit Party has complied in all
material respects with all applicable laws regarding each Plan (including, where
applicable, the Employment Pension Plans Act (Alberta) and the Income Tax Act
(Canada)); or (2) each Plan is, and has been, maintained and administered in
substantial compliance with
78
its terms, applicable collective bargaining agreements, and all applicable laws
(including, where applicable, the Employment Pension Plans Act (Alberta) and the
Income Tax Act (Canada)).
(b) There exists no material outstanding liability of any
Canadian Credit Party with respect to any Plan that has been terminated.
(c) Except for the funding deficiency in the Prudential Steel,
Ltd. Hourly Plan which deficiency was $2,158,000 at December 31, 2001, full
payment when due has been made of all amounts which any Canadian Credit Party is
required under the terms of each Plan or applicable law to have paid as
contributions to such Plan (excluding any nonpayment involving an amount that is
not material), and no accumulated funding deficiency, whether or not waived,
resulting from the action or inaction of any Canadian Credit Party exists with
respect to any Plan.
(d) Each Plan relating to a Canadian Credit Party is fully
funded, on a going concern basis, in accordance with its terms and regulatory
requirements as outlined by the Employment Pension Plans Act (Alberta),
administrative requirements of the Superintendent of Pensions of Alberta and the
most recent actuarial report filed with the Superintendent of Pensions of
Alberta in respect of such Plan, as and to the extent applicable, except to the
extent any failure to do so could not reasonably be expected to have a Material
Adverse Effect.
(e) No Canadian Credit Party sponsors, maintains or
contributes to, or has at any time sponsored, maintained or contributed to any
"specified multi-employer plan" (as defined in the Employment Pension Plans Act
(Alberta).
Section 5.11 TAXES; GOVERNMENTAL CHARGES. Each Credit Party has filed
all tax returns and reports required to be filed and has paid all taxes,
assessments, fees and other governmental charges levied upon any of them or upon
any of their respective Properties or income which are due and payable after all
available extension periods, including interest and penalties or have except to
the extent being diligently contested in good faith by appropriate proceedings
and with respect to which such Credit Party has provided adequate reserves for
the payment thereof if required in accordance with GAAP.
Section 5.12 TITLES, ETC. Each Credit Party has good and indefeasible
title to its respective Properties, and with respect to leased Properties, good
and indefeasible title to the leasehold estate with respect thereto, pursuant to
valid and enforceable leases, free and clear of all Liens except Liens otherwise
permitted or contemplated by this Agreement or the other Financing Documents.
Section 5.13 DEFAULTS. No Credit Party is in default nor has any event
or circumstance occurred which, but for the passage of time or the giving of
notice, or both, would constitute a default (in any respect that could
individually or in the aggregate, have a Material Adverse Effect) under any loan
or credit agreement, indenture, mortgage, deed of trust, security agreement or
other instrument or agreement evidencing or pertaining to any Indebtedness of
any Credit Party, or under any agreement or instrument to which any Credit Party
is a party or by which any Credit Party is bound. No Default hereunder has
occurred and is continuing.
Section 5.14 CASUALTIES; TAKING OF PROPERTIES. Neither the business nor
the Properties of any Credit Party has been affected in a manner that has or
could have a Material Adverse Effect as a result of any fire, explosion,
earthquake, flood, drought, windstorm, accident, strike or other labor
disturbance, embargo, requisition or taking of Property or cancellation of
contracts, permits or concessions by any domestic or foreign government or any
agency thereof, riot, activities of armed forces or acts of God or of any public
enemy.
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Section 5.15 COMPLIANCE WITH THE LAW. Except as set forth in Schedule
5.15, no Credit Party:
(a) is in violation of any Governmental Requirement; or
(b) has failed to obtain any license, permit, right-of-way,
franchise or other right or governmental authorization necessary to the
ownership of any of their respective Properties or the conduct of their
respective business;
which violation or failure could, individually or in the aggregate, have (in the
event that such a violation or failure were asserted by any Person through
appropriate action) a Material Adverse Effect.
Section 5.16 NO MATERIAL MISSTATEMENTS. No written information,
exhibit, schedule or report prepared by or on behalf of any Borrower and
furnished to the Administrative Agent or the Lenders by or at the direction of
any Borrower in connection with the negotiation of this Agreement contained any
material misstatement of fact or, when such statement is considered with all
other written statements furnished to the Lenders in that connection, omitted to
state a material fact or any fact necessary to make the statement contained
therein not misleading; provided, that, except as provided in Section 5.6(d) no
representation or warranty is made with respect to the Projections.
Section 5.17 INVESTMENT COMPANY ACT. No Borrower is an "investment
company" or a company "controlled" by an "investment company" that is
incorporated in or organized under the laws of the United States or any "State,"
as those terms are defined in the Investment Company Act of 1940, as amended.
The execution and delivery by the Obligated Parties of this Agreement and the
other Financing Documents to which they respectively are parties and their
respective performance of the obligations provided for therein, will not result
in a violation of the Investment Company Act of 1940, as amended.
Section 5.18 PUBLIC UTILITY HOLDING COMPANY ACT. No Borrower is a
"holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company," or a "public utility" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
Section 5.19 CAPITAL STRUCTURE. Schedule 5.19 hereto accurately
reflects, as of the date hereof (a) the jurisdiction of incorporation or
organization of each Credit Party, (b) each jurisdiction in which each Credit
Party is qualified to transact business as a foreign corporation, foreign
partnership or foreign limited liability company, (c) the authorized, issued and
outstanding Equity of each Credit Party, including the names of (and number of
shares or other Equity interest held by) the record and beneficial owners of
such securities (other than with respect to the Company). Except as set forth in
Schedule 5.19 hereto, there are no outstanding shareholders agreements, voting
agreements or other agreements of any nature which in any way restrict or effect
the transfer, pledge or voting of any of the Equity securities of any Credit
Party or subject any of such securities to any put, call, redemption obligation
or similar right or obligation of any nature.
Section 5.20 INSURANCE. All policies of fire, liability, workmen's
compensation, casualty, flood, business interruption and other forms of
insurance owned or held by each Credit Party are sufficient for compliance with
all requirements of law and of all agreements to which each Credit Party is a
party; are valid, outstanding and enforceable policies; provide adequate
insurance coverage in at least such amounts and against at least such risks (but
including in any event public liability) as are usually insured against in the
same general area by companies engaged in the same or a similar business for the
assets and operations of the Credit Parties; and will not in any way be affected
by, or terminate or lapse by reason of, the transactions contemplated by this
Agreement. All such policies are in full force and
80
effect, all premiums with respect thereto have been paid in accordance with
their respective terms, and no notice of cancellation or termination has been
received with respect to any such policy. Except as provided on Schedule 5.20
hereto, no Credit Party maintains any formalized self-insurance program with
respect to its assets or operations or risks with respect thereto. The
certificate of insurance delivered to the Lenders pursuant to Section 3.1(f)
contains an accurate and complete description of all policies of insurance owned
or held by each Credit Party on the Closing Date.
Section 5.21 ENVIRONMENTAL MATTERS.
(a) ENVIRONMENTAL LAWS, ETC. Except as disclosed on Schedule
5.21 hereto, neither any Property of any Credit Party nor the operations
conducted thereon violate any applicable order of any court or Governmental
Authority or Environmental Laws, which violation could reasonably be expected to
have a Material Adverse Effect or which could reasonably be expected to result
in remedial obligations having a Material Adverse Effect assuming disclosure to
the applicable Governmental Authority of all relevant facts, conditions and
circumstances, if any, pertaining to the relevant Property.
(b) NO LITIGATION. Except as disclosed on Schedule 5.21
hereto, no Property of any Credit Party nor the operations currently conducted
thereon or by any prior owner or operator of such Property or operation, are
subject to any existing, pending or, to the knowledge of the Company and each
Borrower, threatened action, suit, investigation, inquiry or proceeding by or
before any court or Governmental Authority or to any remedial obligations under
Environmental Laws.
(c) NOTICES, PERMITS, ETC. Except as disclosed on Schedule
5.21 hereto, all notices, permits, licenses or similar authorizations, if any,
required to be obtained or filed by any Credit Party in connection with the
operation or use of any and all Property of the Credit Parties, including but
not limited to past or present treatment, storage, disposal or release of a
hazardous substance or solid waste into the environment, have been duly obtained
or filed except for those notices, permits, licenses or authorizations the
failure of which to obtain could not reasonably be expected to have a Material
Adverse Effect assuming disclosure to the applicable Governmental Authority of
all relevant facts, conditions and circumstances, if any, pertaining to such
operations or use.
(d) HAZARDOUS SUBSTANCES CARRIERS. Except as disclosed on
Schedule 5.21 hereto, all hazardous substances or solid waste generated at any
and all Property of any Credit Party have in the past been transported, treated
and disposed of only by carriers maintaining valid permits under RCRA (or
comparable legislative provisions in Canada for Canadian Borrowers) and any
other Environmental Law, and only at treatment, storage and disposal facilities
maintaining valid permits under RCRA and any other Environmental Law, which
carriers and facilities have been and are operating in compliance with such
permits.
(e) HAZARDOUS SUBSTANCES DISPOSAL. Each Credit Party has taken
all reasonable steps necessary to determine and has determined that no hazardous
substances or solid waste has been disposed of or otherwise released and there
has been no threatened release of any hazardous substances on or to any Property
of any Credit Party except in compliance with Environmental Laws.
(f) NO CONTINGENT LIABILITY. The Credit Parties have no
contingent liability in connection with any release or threatened release of any
hazardous substance or solid waste into the environment other than such
contingent liabilities at any one time and from time to time which could not
reasonably be expected to exceed $1,000,000.
81
Section 5.22 SOLVENCY. Each Credit Party is Solvent, both before and
after giving affect to the Acquisition Transactions and the incurrence of all
Lender Indebtedness to be incurred in connection therewith.
Section 5.23 EMPLOYEE MATTERS. Except as disclosed on Schedule 5.23, no
Credit Party, nor any of their respective employees, is subject to any
collective bargaining agreement. There are no strikes, slowdowns, work
stoppages, union organizing campaigns or representation petitions, unfair labor
practices or labor disputes pending or, to the best knowledge of the Borrowers,
threatened against any Credit Party, or their respective employees, which could
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect. As of the Closing Date, except as set forth in Schedule
5.23, no employees are subject to an employment contract or other arrangement
obligating a Credit Party to pay an employee an amount in excess of such
employee's regular salary, wages or benefits (whether or not such payment is
based on a contingent event including but not limited to termination of
employment or change of control of a Credit Party).
Section 5.24 REAL PROPERTY. Schedule 5.24 hereto accurately reflects,
as of the date hereof, all Real Property in which any Credit Party holds any
right, title or interest including any leasehold interest. Schedule 5.24 further
accurately reflects, in respect of each parcel of Real Property described
thereon, the name of the Credit Party which is the owner and holder of record
title thereto, the nature of the interest of the Credit Parties therein (fee,
leasehold or other), and, in the case of any leasehold interest described
therein, the name of the landlord under such lease and a description of such
lease, including all amendments thereto. No Credit Party is in monetary default
or in default of any other material obligation under any such Lease, and, to
each Borrower's knowledge, no landlord under any such lease is in default of any
material obligation of such landlord thereunder. No Credit Party has received
any written notice alleging any default or any written notice of actual or
threatened termination or cancellation of any such lease.
Section 5.25 PERFECTION CERTIFICATE; SCHEDULES TO OTHER FINANCING
DOCUMENTS. All information in each Perfection Certificate and all information
set forth in all disclosure schedules to each of the other Financing Documents
is true, correct and complete.
Section 5.26 EXISTING INDEBTEDNESS. Schedule 5.26 hereto contains an
accurate and complete list and description of all Existing Indebtedness of the
Credit Parties on the Closing Date prior to giving effect to the repayment of
any such Indebtedness to be repaid on the Closing Date, and including, with
respect to each such item of Existing Indebtedness: (a) the current lender or
holder of such Indebtedness, (b) the principal amount of such Indebtedness on
the Closing Date, (c) a description of the material loan agreements, promissory
notes and other documents evidencing, governing or otherwise pertaining to such
Indebtedness, and (d) a description of all property which stands as security for
such Indebtedness.
Section 5.27 PURCHASE DOCUMENTS. Borrowers have provided to the
Administrative Agent a true and correct copy of the Purchase Agreement and all
other material documents, instruments and agreements entered into by and between
or among any Credit Party and the Sellers related to the Acquisition, including
all amendments and modifications thereto (whether characterized as an amendment,
modification, waiver, consent or similar document) (collectively, the "PURCHASE
DOCUMENTS"). No material rights or obligations of any party to any of the
Purchase Documents have been waived and no party to any of the Purchase
Documents is in default of its obligations or in breach of any representations
or warranties made thereunder. Each of the Purchase Documents is a valid,
binding and enforceable obligation of each party thereto in accordance with its
terms and is in full force and effect. Each representation and warranty made by
each party in the Purchase Documents is true and correct on the date hereof and
will be true and correct on the Closing Date.
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Section 5.28 REPRESENTATIONS WITH RESPECT TO CERTAIN CREDIT PARTIES.
None of Precision International, Maverick International or Exchangeco (a)
conducts any business or operations, (b) owns, leases, licenses or otherwise has
the right to use any Property (other than Exchangeco's ownership of all of the
issued and outstanding Equity of Tube Canada), (c) has any liabilities or
obligations to any Person, or (d) has any employees.
Section 5.29 ACCOUNTS. Other than the accounts specifically permitted
by Section 7.18 hereof, none of the Borrowers maintains any account with any
bank or other depository institution into which any cash or cash equivalents are
deposited or cash or cash equivalents or maintained.
ARTICLE 6
AFFIRMATIVE COVENANTS
So long as any Lender has any Commitment hereunder or any Loan remains
unpaid or any Revolving Credit Exposure remains outstanding, each Borrower will
at all times comply with the following covenants; provided, that,
notwithstanding anything to the contrary set forth in any Section of this
Article 6, no Canadian Borrower will be obligated to cause anyone other than
other Canadian Borrowers to comply with the covenants of this Article 6 or be
obligated in regard to any such covenants to the extent they do not relate to
the Canadian Borrowers or any of them; provided, that the non-performance of
such covenants with respect to the US Borrowers (even though the Canadian
Borrowers are not obligated to ensure compliance with such covenants) will,
subject to Article 8, give rise to Events of Default and will result in Canadian
Administrative Agent, Administrative Agent and Canadian Lenders having the right
to exercise all rights and remedies applicable upon an Event of Default,
including, without limitation, rights and remedies with respect to the Canadian
Borrowers and their assets.
Section 6.1 MAINTENANCE AND COMPLIANCE, ETC. Each Borrower will and
will cause each other Credit Party to (a) observe and comply with all
Governmental Requirements, except where failure to do so could not reasonably be
expected to have a Material Adverse Effect, and (b) preserve and maintain its
corporate existence. Notwithstanding the foregoing, the Precision Transactions
shall be expressly permitted hereunder.
Section 6.2 PAYMENT OF TAXES AND CLAIMS, ETC. Each Borrower will pay,
and cause each other Credit Party to pay, (a) all material taxes, assessments
and governmental charges imposed upon it or upon its Property, and (b) all
material claims (including, but not limited to, claims for labor, materials,
supplies or services) which could reasonably be expected, if unpaid, to become a
Lien upon its Property, unless, in each case, the validity or amount thereof is
being contested in good faith by appropriate action or proceedings and the
Borrowers have made adequate reserves for the payment thereof if required in
accordance with GAAP.
Section 6.3 FURTHER ASSURANCES. Each Borrower will and will cause each
other Obligated Party to cure promptly any defects in the creation and issuance
of the Notes, and the execution and delivery of the Financing Documents,
including this Agreement. Each Borrower at its expense will, as promptly as
practical, execute and deliver to the Administrative Agent or the applicable
Issuing Bank upon request all such other and further documents, agreements and
instruments (or cause any of the other Obligated Parties to take such action) in
compliance with or performance of the covenants and agreements of the Borrowers
in the Financing Documents, including this Agreement, or to further evidence and
more fully describe the Collateral, or to correct any omissions in the Financing
Documents, or more fully to state the security obligations set out herein or in
any of the Financing Documents, or to perfect, protect or preserve
83
any Liens created pursuant to any of the Financing Documents, or to make any
recordings, to file any notices, or obtain any consents, all as may be necessary
or appropriate in connection therewith.
Section 6.4 PERFORMANCE OF OBLIGATIONS. Each Borrower will pay or cause
to be paid, the Notes with respect to which it is a maker or guarantor according
to the reading, tenor and effect thereof; and each Borrower will do and perform
every act and discharge all of the obligations provided to be performed and
discharged by it under the Financing Documents, including this Agreement, at the
time or times and in the manner specified, and cause each other Credit Party to
take such action with respect to their obligations to be performed and
discharged under the Financing Documents to which they respectively are parties.
Section 6.5 INSURANCE. Each Borrower will and will cause each of the
other Credit Parties to maintain or cause to be maintained, with financially
sound and reputable insurers, insurance with respect to their respective
Properties and business against such liabilities, casualties, risks and
contingencies and in such types (including business interruption insurance,
marine insurance insuring all Included-In-Transit Inventory, and flood
insurance) and amounts as Administrative Agent shall require and as shall be
required in accordance with any Governmental Requirement. Each Borrower will
obtain endorsements to the policies naming the Administrative Agent or Canadian
Administrative Agent, as applicable, as a loss payee and as an additional
insured, as applicable, and containing provisions that such policies will not be
canceled without 30 days prior written notice having been given by the insurance
company to the Administrative Agent or Canadian Administrative Agent, as
applicable.
Section 6.6 ACCOUNTS AND RECORDS. Each Borrower will keep and will
cause each of the other Credit Parties to keep proper books of record and
account in accordance with GAAP.
Section 6.7 RIGHT OF INSPECTION. Each Borrower will permit and will
cause each of the other Credit Parties to permit any officer, employee or agent
of the Administrative Agent or any Lender to visit and inspect any of the
Properties of the Credit Parties, examine any Credit Party's books of record and
accounts, take copies and extracts therefrom, and discuss the affairs, finances
and accounts of the Credit Parties with any Credit Party's executive officers,
accountants and auditors, as often and all at such reasonable times during
normal business hours and upon reasonable advance notice all as may be
reasonably requested by the Administrative Agent or the Required Lenders;
provided, that, such inspection rights shall not be limited or conditioned by
reasonable prior notice or reasonable times during the existence of a Default or
Event of Default without limiting the foregoing, the Borrowers agree to hold a
meeting with all Lenders at least once a year to discuss the business and
affairs of the Borrowers.
Section 6.8 OPERATION AND MAINTENANCE OF PROPERTY. Each Borrower will,
and will cause each other Credit Party to, operate its Properties or cause its
Properties to be operated and maintained (a) in accordance with prudent industry
practice in all material respects and in compliance in all material respects
with the terms and provisions of all applicable leases, contracts and agreements
and (b) in compliance with all applicable laws of the jurisdiction in which such
Properties may be situated, and all applicable laws, rules and regulations of
every other Governmental Authority from time to time constituted to regulate the
ownership and operation of such Properties, except where the noncompliance
therewith could not reasonably be expected to cause or result in a Material
Adverse Effect.
Section 6.9 NEW SUBSIDIARIES; ADDITIONAL LIENS.
(a) If at any time after the Closing Date, any Borrower
creates or acquires (subject to Section 7.6, Section 7.16, and Section 7.17) any
one or more Subsidiaries (a "NEW SUBSIDIARY") each Borrower shall cause such New
Subsidiary to execute and deliver, at the time of such Subsidiary's creation or
acquisition, to (1) the Administrative Agent a Borrower Joinder Agreement (a
"Borrower Joinder Agreement") in the form of Exhibit N, attached hereto pursuant
to which such Subsidiary
84
becomes a party to this Credit Agreement and a U.S. or Canadian Borrower
hereunder as applicable, (2) the Administrative Agent, if such New Subsidiary is
a US Credit Party, for the benefit of Administrative Agent, the Lenders and the
Issuing Banks, (i) an Addendum to the Guaranty and Security Agreement in the
manner contemplated by Section 8.13 of the Guaranty and Security Agreement, and
(ii) other appropriate Security Instruments covering such New Subsidiary's
Property as security for the Lender Indebtedness, in form and substance
acceptable to the Administrative Agent, and (3) Canadian Administrative Agent,
if such New Subsidiary is a Canadian Credit Party, for the benefit of Canadian
Administrative Agent, the Lenders and the Issuing Banks, (i) an Addendum to the
Canadian Security Agreement in the manner contemplated by Section 7.13 of the
Canadian Security Agreement, and (ii) other appropriate Security Instruments
covering such New Subsidiary's Property as security for the Canadian Lender
Indebtedness, in form and substance acceptable to the Canadian Administrative
Agent.
(b) In connection with the execution and delivery of any
Borrower Joinder Agreement, Addendum or Security Document pursuant to this
Section 6.9, the Borrowers shall, or shall cause the relevant New Subsidiary to,
deliver to the Administrative Agent or the Canadian Administrative Agent, as
applicable, for the benefit of Lenders, resolutions, member or partner consents,
certificates, legal opinions and such other related documents as shall be
reasonably requested by the Administrative Agent and Canadian Administrative
Agent and consistent with the relevant forms and types thereof delivered on the
Closing Date or as shall be otherwise reasonably acceptable to the Required
Lenders. Each Security Instrument delivered pursuant to this Section 6.9 shall
be deemed to be a Security Instrument from and after the date of execution
thereof.
Section 6.10 REPORTING COVENANTS. So long as any Lender has any
Commitment hereunder or any Loan remains unpaid or any Revolving Credit Exposure
remains outstanding, the Company and the Borrowers will furnish the following to
each of the Lenders:
(a) ANNUAL FINANCIAL STATEMENTS. As soon as available and in
any event within 90 days after the end of each Fiscal Year, consolidating and
consolidated balance sheets of the Company and its Subsidiaries as at the end of
such year and the related consolidating and consolidated statements of income,
retained earnings and cash flows of the Company and its Subsidiaries for such
Fiscal Year, setting forth in each case in comparative form the figures for the
previous Fiscal Year, all in reasonable detail and accompanied by the
unqualified report thereon of independent public accountants of recognized
national standing, which report shall state that such consolidated financial
statements present fairly the consolidated financial condition as at the end of
such Fiscal Year, and the consolidated results of operations and cash flows for
such Fiscal Year, of the Company and its Subsidiaries in accordance with GAAP,
applied on a consistent basis; provided, that, the consolidating balance sheets
and consolidating statements of income, retained earnings and cash flow of the
Company and its Subsidiaries are not required to be audited.
(b) MONTHLY FINANCIAL STATEMENTS. As soon as available and in
any event within 30 days after the end of each calendar month of the Company,
consolidating and consolidated balance sheet of the Company and its Subsidiaries
as at the end of such month and the related consolidating and consolidated
statements of income, retained earnings and cash flows of the Company and its
Subsidiaries for such calendar month and for the portion of the Company's Fiscal
Year ended at the end of such month, setting forth in each case in comparative
form the figures for the corresponding month and the corresponding portion of
the Company's previous Fiscal Year, all in reasonable detail and certified by a
Responsible Officer that such financial statements are complete and correct and
fairly present the consolidated financial condition as at the end of such
calendar month, and the consolidating and consolidated results of operations and
cash flows for such calendar month and such portion of the Company's Fiscal
Year, of the Company and its Subsidiaries in accordance with GAAP (subject to
normal, year-end adjustments and the absence of footnotes).
85
(c) NO DEFAULT/COMPLIANCE CERTIFICATE. Together with the
financial statements required pursuant to Section 6.10(a) and Section 6.10(b)
above, a certificate of the Company, which shall be substantially in the form of
Exhibit O hereto and signed by a Responsible Officer (1) stating that a review
of such financial statements during the period covered thereby and of the
activities of the Company and its Subsidiaries has been made under such
Responsible Officer's supervision with a view to determining whether the Company
and its Subsidiaries have fulfilled in all material respects all of their
obligations under this Agreement, the other Financing Documents, and the Notes;
(2) stating that the Company and its Subsidiaries have fulfilled in all material
respects their obligations under such instruments and that all representations
made in this Agreement continue to be true and correct in all material respects
(or specifying the nature of any change), or if there shall be a Default or
Event of Default, specifying the nature and status thereof and the Company's
proposed response thereto; (3) demonstrating in reasonable detail compliance
(including, but not limited to, showing all material calculations) as at the end
of such Fiscal Year or such Fiscal Quarter with Section 7.1(a), Section 7.2(f),
Section 7.2(g), Section 7.2(h), and Section 7.15; (4) containing or accompanied
by such financial or other details, information and material as the
Administrative Agent may reasonably request to evidence such compliance; and (5)
stating that no event has occurred or condition exists that has had or
reasonably could be expected to have a Material Adverse Effect.
(d) MANAGEMENT LETTERS. Together with the financial statements
required pursuant to Section 6.10(a) above, copies of each management letter, if
any, issued to the Company by such accountants promptly following consideration
or review by the Board of Directors of the Company, or any committee thereof
(together with any response thereto prepared by the Company).
(e) TITLE INFORMATION. Within a reasonable time after a
request by the Administrative Agent, additional title information in form and
substance acceptable to the Required Lenders as is reasonably necessary covering
the Collateral so that the Lenders shall have received, together with the title
information previously received by the Lenders, satisfactory title information
covering all of the Collateral.
(f) EVENTS OR CIRCUMSTANCES WITH RESPECT TO COLLATERAL.
Promptly after the occurrence of any event or circumstance concerning or
changing any of the Collateral that could have a Material Adverse Effect, notice
of such event or circumstance in reasonable detail.
(g) BORROWING BASE REPORTS; PERFECTION CERTIFICATE UPDATE. As
soon as available, and in any event on or before the 20th day of each calendar
month (or the next succeeding Business Day if such day is not a Business Day),
(1) a Canadian Borrowing Base Report and a US Borrowing Base Report, dated and
reflecting the US Borrowing Base and US Maximum Available Amount and the
Canadian Borrowing Base and Canadian Maximum Available Amount as of the close of
business on the last Business Day of the preceding calendar month (subject to
Borrower's rights to make Permitted Borrowing Base Adjustments), (2) a
Perfection Certificate Update prepared as of the close of business on the last
Business Day of the preceding calendar month, (3) an accounts receivable aging,
payables aging and inventory aging prepared as of the close of business on the
last Business Day of the preceding calendar month, and (4) a summary of all Swap
Agreements to which any Borrower is subject as of the last Business Day of the
preceding calendar month, in form, substance and detail acceptable to the
Administrative Agent; provided, however, (x) at any time that Excess
Availability shall be below $30,000,000, the Administrative Agent, in its
discretion, may require the delivery of reports setting forth the Eligible
Accounts and Eligible ▇▇▇▇ and Hold Accounts components of the US Borrowing Base
and Canadian Borrowing Base more frequently than monthly (including daily) in
which event the US Borrowing Base and Canadian Borrowing Base (as applicable)
would be adjusted immediately upon delivery of such reports based on the
Eligible Accounts and Eligible ▇▇▇▇ and Hold Accounts reflected in such reports,
and (y) at any time that Excess Availability shall be below $15,000,000, the
Administrative
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Agent, in its discretion, may require the delivery of reports setting forth the
Eligible Inventory, Eligible Included-in-Transit Inventory, Eligible WIP
Inventory, and Eligible Bailee Inventory on a weekly basis, in which event the
Eligible Inventory, Eligible Included-in-Transit Inventory, Eligible WIP
Inventory, and Eligible Bailee Inventory, components of the US Borrowing Base
and Canadian Borrowing Base (as applicable) would be adjusted immediately upon
delivery of such reports. In the event more frequent reporting of the accounts
and inventory components of the US Borrowing Base and the Canadian Borrowing
Base is required pursuant to this Section 6.10(g), such reports shall be in the
form of the Interim Account Reports attached hereto as Exhibits P-1 and P-2, as
applicable, and the Inventory Designation Reports attached hereto as Exhibits
Q-1 and Q-2, as applicable.
(h) NOTICE OF CERTAIN EVENTS. Promptly after any Borrower
learns of the receipt or occurrence of any of the following, a certificate of
the Borrowers, signed by a Responsible Officer specifying (1) any official
notice of any violation, possible violation, non-compliance or possible
non-compliance, or claim made by any Governmental Authority pertaining to all or
any part of the Properties of any Credit Party which could reasonably be
expected to have a Material Adverse Effect; (2) any event which constitutes a
Default or Event of Default, together with a detailed statement specifying the
nature thereof and the steps being taken to cure such Default or Event of
Default; (3) the receipt of any notice from, or the taking of any other action
by, the holder of any promissory note, debenture or other evidence of
Indebtedness in excess of $1,000,000 of any Credit Party with respect to a
claimed default, together with a detailed statement specifying the notice given
or other action taken by such holder and the nature of the claimed default and
what action the Borrowers are taking or propose to take with respect thereto;
(4) any default or noncompliance of any party to any of the Financing Documents
with any of the terms and conditions thereof or any notice of termination or
other proceedings or actions which could reasonably be expected to adversely
affect any of the Financing Documents; (5) the creation, dissolution, merger or
acquisition of any Credit Party; (6) any event or condition not previously
disclosed to Administrative Agent, which violates any Environmental Law or which
could reasonably be expected to have a Material Adverse Effect; (7) any material
amendment to, termination of, or default under any material contract or any
execution of, or material amendment to, termination of, or material default
under, any material collective bargaining agreement; or (8) any event or
condition which may reasonably be expected to have a Material Adverse Effect.
(i) SHAREHOLDER COMMUNICATIONS, FILINGS. Promptly upon the
mailing, filing, or making thereof, copies of all registration statements,
periodic reports and other documents (excluding the related exhibits except to
the extent expressly requested by the Administrative Agent) filed by any Credit
Party with the Securities and Exchange Commission (or any successor thereto) or
any national or Canadian regional securities exchange or provincial securities
commission.
(j) LITIGATION. Promptly after the occurrence thereof, notice
of the institution of or any material adverse development in any action, suit,
claim, grievance or proceeding or any governmental investigation or any
arbitration, before any arbitrator or any Governmental Authority, or pursuant to
any collective bargaining agreement against any Credit Party or any material
Property of any thereof, in which the amount involved is material and is not
covered by insurance or which, if adversely determined, would have a Material
Adverse Effect.
(k) ERISA. Promptly after (1) any Credit Party obtaining
knowledge of the occurrence thereof, notice that an ERISA Termination Event or a
"prohibited transaction," as such term is defined in Section 406 of ERISA or
Section 4975 of the Code, with respect to any Plan has occurred (for which there
is no exemption), which such notice shall specify the nature thereof, the
Borrowers' proposed response thereto (and, if applicable, the proposed response
thereto of any Subsidiary of the Borrowers and of any ERISA Affiliate) and,
where known, any action taken or proposed by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto, (2) any Credit Party's
obtaining
87
knowledge thereof, copies of any notice of the PBGC's intention to terminate or
to have a trustee appointed to administer any Plan, and (3) the filing thereof
with any Governmental Authority copies of each annual and other report
(including applicable schedules) with respect to each Plan or any trust created
thereunder (if requested by the Administrative Agent).
(l) BORROWING BASE AUDIT. Two times during any Fiscal Year, as
of a date to be designated by the Administrative Agent, but at the cost of the
Borrowers, a report of a collateral field examiner approved by the
Administrative Agent in writing and reasonably acceptable to the Borrowers
(which may be the Administrative Agent or an affiliate thereof) with respect to
the Eligible Accounts, Eligible Included-In-Transit Inventory, Eligible Bailee
Inventory and Eligible Inventory components for each of the Borrowers included
in the US Borrowing Base and the Canadian Borrowing Base and such other matters
regarding the Credit Parties or the Collateral as Administrative Agent or
Canadian Administrative Agent shall reasonably require, and after the occurrence
and during the continuance of a Default or if Excess Availability shall fall
below $15,000,000, the Administrative Agent shall have the option to receive at
the cost of the Borrowers such additional reports as the Administrative Agent or
the Required Lenders shall reasonably request.
(m) ANNUAL BUDGET. As soon as available and in any event not
later than 30 days prior to the end of each Fiscal Year, a budget of the Company
and its Subsidiaries on a consolidating and consolidated basis for the
succeeding Fiscal Year (prepared on a quarterly basis), reviewed by the Board of
Directors of the Company, setting forth in reasonable detail, the projected
revenues and expenses of the Company for such Fiscal Years.
(n) EXCESS CASH FLOW CERTIFICATE. Not later than March 31, of
each year, beginning March 31, 2003 the Company's calculation of its
consolidated US Excess Cash Flow and Canadian Excess Cash Flow for the Fiscal
Year ending the immediately preceding December 31.
(o) INVENTORY APPRAISALS. Once during any Fiscal Year, the
Administrative Agent may require, at the cost of the Borrowers, an appraisal of
the Borrower's inventory in scope and detail and prepared by an independent
appraisal firm acceptable to Administrative Agent; provided, that after the
occurrence and during the continuance of a Default, the Administrative Agent
shall have the option to receive at the cost of the Borrowers such additional
inventory appraisals as the Administrative Agent or the Required Lenders shall
reasonably request. If an Event of Default exists, the Administrative Agent
shall require an inventory appraisal if the most recently conducted inventory
appraisal is more than one year old.
(p) OTHER INFORMATION. With reasonable promptness, such other
information about the business and affairs and financial condition of any Credit
Party as Administrative Agent may reasonably request from time to time,
including, without limitation, monthly accounts receivable aging and
reconciliation, accounts payable aging and reconciliation, sales reports and
inventory designations.
ARTICLE 7
NEGATIVE COVENANTS
Notwithstanding anything to the contrary set forth in any Section of
this Article 7, no Canadian Borrower will be obligated to cause anyone other
than other Canadian Borrowers to comply with the covenants of this Article 7 or
be obligated in regard to any such covenants to the extent they do not relate to
the Canadian Borrowers or any of them; provided, that the non-performance of
such covenants with respect to the US Borrowers (even though the Canadian
Borrowers are not obligated to ensure compliance with such covenants) will,
subject to Article 8, give rise to Events of Default and will result in Canadian
Administrative Agent, Administrative Agent and Canadian Lenders having the right
to exercise all rights
88
and remedies applicable upon an Event of Default, including, without limitation,
rights and remedies with respect to the Canadian Borrowers and their assets. So
long as any Lender has any Commitment hereunder or any Loan remains unpaid or
any Revolving Credit Exposure remains outstanding, neither the Company nor the
Borrowers will:
Section 7.1 FINANCIAL COVENANTS. Permit the Fixed Charge Coverage Ratio
for any period of to be less than the ratio for the period indicated below:
Period Ratio
------ -----
Three months ending June 30, 2002 1.10 to 1.00
Six months ending September 30, 2002 1.10 to 1.00
Nine months ending December 31, 2002 1.10 to 1.00
Twelve months ending March 31, 2003 1.10 to 1.00
Each Rolling Period ending during the
period beginning with the Rolling Period
ending June 30, 2003 and continuing
through and including the Rolling Period
ending March 31, 2004 1.15 to 1.00
Each Rolling Period ending thereafter 1.25 to 1.00
provided, however, Borrowers' obligation to comply with this Section 7.1 shall
be suspended for any period for which the Fixed Charge Coverage Ratio is to be
tested to the extent that Excess Availability (for this purpose calculated with
out giving effect to the Initial Reserve) at all times during the final Fiscal
Quarter in such period was never less than $30,000,000.
Section 7.2 INDEBTEDNESS. Create, incur, assume or suffer to exist, any
Indebtedness, other than:
(a) the Lender Indebtedness;
(b) Indebtedness outstanding on the date hereof which is set
forth on Schedule 7.2 but expressly excluding any refinancings, refundings,
renewals or extensions thereof;
(c) trade or accounts payable (for the deferred purchase price
of Property or services) from time to time incurred in the ordinary course of
business and guaranties by the US Borrowers given in the ordinary course of
business of any such obligations incurred or accrued by any other US Borrower
and guaranties by the Canadian Borrowers given in the ordinary course of
business of any such obligations incurred or accrued by any other Canadian
Borrowers ;
(d) obligations for current taxes, assessments and other
governmental charges and taxes, assessments or other governmental charges which
are not yet due or are being contested in good faith by appropriate action or
proceeding promptly initiated and diligently conducted, if reserves required
pursuant to Section 6.2 hereof have been established with respect thereto;
(e) Indebtedness owing pursuant to Swap Agreements entered
into in the ordinary course of business for the purpose of hedging against risks
actually incurred by Borrower with respect to interest rates, $/C$ exchange
rates and commodity prices;
(f) in addition to the Indebtedness permitted by Section
7.2(b) above, Indebtedness in respect of Capital Lease Obligations and purchase
money Indebtedness in an aggregate amount not in excess of $4,000,000
outstanding at any time;
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(g) advances made by any US Borrower to any other US Borrower
and by Canadian Borrowers to any other Canadian Borrower;
(h) other unsecured Indebtedness in an aggregate amount not in
excess of $1,000,000 outstanding at any time.
Section 7.3 LIENS. Create, incur, assume or suffer to exist, any Lien
on any of its Property now owned or hereafter acquired to secure any
Indebtedness of any Credit Party or any other Person, other than (collectively,
the "PERMITTED LIENS"):
(a) Liens existing on the date hereof and set forth on
Schedule 7.3;
(b) Liens securing the Lender Indebtedness;
(c) Liens for taxes, assessments or other governmental charges
or levies not yet due or which are being contested in good faith by appropriate
action or proceedings and with respect to which reserves required by Section 6.2
hereof are maintained;
(d) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen, repairmen, workmen, and other Liens
imposed by law created in the ordinary course of business for amounts which are
not past due for more than 30 days or which are being contested in good faith by
appropriate action or proceedings and with respect to which reserves required by
Section 6.2 are maintained;
(e) Liens incurred or deposits or pledges made in the ordinary
course of business in connection with workers' compensation, unemployment
insurance and other types of social security, old age or other similar
obligations, or to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government contracts, performance and
return-of-money bonds and other similar obligations (exclusive of obligations
for the payment of borrowed money) but not exceeding an aggregate amount
outstanding at any time of $1,000,000;
(f) minor irregularities in title, easements, rights-of-way,
restrictions, servitudes, permits, reservations, exceptions, conditions,
covenants and other similar charges or encumbrances not materially interfering
with the occupation, use and enjoyment by any Borrower of any of their
respective Properties in the normal course of business or materially impairing
the value thereof ;
(g) any obligations or duties affecting any of the Property of
any Credit Party to any municipality or public authority with respect to any
franchise, grant, license or permit which do not materially impair the use of
such Property for the purposes for which it is held;
(h) Liens securing Indebtedness permitted by Section 7.2(f)
provided that (1) such Liens relate only to the Property being leased or
acquired, (2) the creation of such Lien or the incurrence of the Indebtedness
secured by such Lien does not violate this Agreement or any of the other
Financing Documents and (3) the principal amount of the Indebtedness being
secured does not exceed 80% of the total purchase price of the Property being
leased or acquired, and
(i) exceptions, qualifications and reservations in respect of
title to Real Property under applicable federal, state, provincial, territorial,
municipal and local statutes, regulations, laws, by-laws and ordinances but only
to the extent of the general application of such matters and not arising as a
result of the failure of Borrowers to comply with such matters.
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provided, however, that the foregoing list of Permitted Liens is not intended
to, and shall not be construed as, subordinating or postponing, or as an
agreement to subordinate or postpone, any Lien created by any of the Financing
Documents to any such permitted Lien.
Section 7.4 MERGERS, SALES, ETC. Merge into or with or consolidate or
amalgamate with, or permit any other Credit Party to merge into or with or
consolidate or amalgamate with, any other Person, or sell, lease or otherwise
dispose of, or permit any other Credit Party to sell, lease or otherwise dispose
of (whether in one transaction or in a series of transactions) all or any part
of its Property to any other Person. Notwithstanding the foregoing limitation
(a) the Credit Parties may sell inventory in the ordinary course of business,
(b) any Credit Party may sell, redeem or trade cash equivalent investments
permitted under Section 7.6 hereof, (c) any US Borrower shall be permitted to
consolidate or merge with any other US Borrower (provided, that, in the case of
any merger involving the Company, the Company shall be the surviving entity),
(d) any Canadian Borrower shall be permitted to consolidate, amalgamate or merge
with any other Canadian Borrower, (e) any Borrower shall be permitted to sell,
assign or convey all or any part of its Property to any US Borrower, (f) any
Canadian Borrower shall be permitted to sell, assign or convey all or any part
of its Property to any other Canadian Borrower, (g) the Precision Transactions
shall be expressly permitted hereunder, (h) the Borrowers may sell assets not
material to the operations and business of the Borrowers so long as the
aggregate sale price for all assets sold in any Fiscal Year does not exceed
$1,000,000, and (i) the US Borrowers may enter into a Lay Down Real Estate Lease
with Stone & ▇▇▇▇▇▇▇ Construction, Inc., a Louisiana corporation for
approximately five acres and certain improvements of the US Borrowers' Longview,
Washington facility.
Section 7.5 DIVIDENDS, ETC. Declare or pay any dividend on its Equity,
make any payment to purchase, redeem, retire or otherwise acquire any of its
Equity now or hereafter outstanding, return any capital to its stockholders,
partners or members, make any distribution of its assets, Equity, obligations or
securities to its stockholders, partners or members (an "equity distribution"),
except (a) that any Credit Party may make equity distributions to any US
Borrower, (b) any Canadian Borrower may make equity distributions to other
Canadian Borrowers, (c) the Company may purchase, redeem, retire or otherwise
acquire its outstanding Equity (a "STOCK REPURCHASE") so long as (1) Excess
Availability was not less than $40,000,000 at any time during the thirty (30)
day period ending on the date of such Stock Repurchase assuming that such Stock
Repurchase occurred on the first day of such period, (2)Excess Availability will
be not less than $40,000,000 immediately after giving effect to such Stock
Repurchase, (3) no Default exists or will exist after giving effect to such
Stock Repurchase, (4) the aggregate amount paid for all such Stock Repurchases
does not exceed (i) $5,000,000 in any period of twelve consecutive months, or
(ii) $10,000,000 during the term of this Agreement, and (d) the Company may pay
dividends on its outstanding Equity so long as (i) Excess Availability was not
less than $40,000,000 at any time during the thirty (30) day period ending on
the date such dividends are paid assuming that such dividends were paid in the
first day of such period, (ii) Excess Availability will be not less than
$40,000,000 immediately after giving effect to the payment of such dividends,
(iii) no Default exists or will exist after giving effect to the payment of such
dividend, (iv) the aggregate amount of all dividends paid does not exceed (1)
$5,000,000 in any period of twelve consecutive months, or (2) $10,000,000 during
the term of this Agreement.
Section 7.6 INVESTMENTS, LOANS, ETC. Make, permit or hold any loans to
or investments in any Person, or permit any other Credit Party to make, permit
or hold any loans to or investments in any Person, other than:
(a) investments, loans or advances, the material details of
which have been set forth on Schedule 7.6;
91
(b) investments in direct obligations of, or obligations the
principal of and interest on which are unconditionally guaranteed by, the United
States of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America), in each
case maturing within one year from the date of acquisition thereof;
(c) investments in certificates of deposit of maturities less
than one year, issued by commercial banks in the United States having capital
and surplus in excess of $500,000,000 and having short-term credit ratings of at
least A1 and P1 by Standard & Poor's Ratings Group and ▇▇▇▇▇'▇ Investors
Service, Inc., respectively;
(d) investments in commercial paper of maturities of not more
than 180 days rated the highest credit rating obtainable from Standard & Poor's
Ratings Group and ▇▇▇▇▇'▇ Investors Service, Inc.;
(e) investments in securities that are obligations of the
United States government purchased by any Credit Party under fully
collateralized repurchase agreements pursuant to which arrangements are made
with selling financial institutions (being a financial institution having
unimpaired capital and surplus of not less than $5,000,000,000 and with
short-term credit ratings of at least A1 and P1 by Standard & Poor's Ratings
Group and ▇▇▇▇▇'▇ Investors Service, Inc., respectively) for such financial
institutions to repurchase such securities within 30 days from the date of
purchase by any Credit Party, and other similar short-term investments made in
connection with any Credit Party's cash management practices;
(f) investments in money market mutual funds having assets in
excess of $2,000,000,000;
(g) investments and loans by any US Borrower to or in any
other US Borrower and investments and loans by any Canadian Borrower to or in
any Canadian Borrower;
(h) (1) investments in direct obligations of, or obligations
the principal of and interest on which are unconditionally guaranteed by, the
Government of Canada or of any Canadian province (or by any agency thereof to
the extent such obligations are backed by the full faith and credit of the
Government of Canada or of such Canadian province), in each case maturing within
one year from the date of acquisition thereof; (2) investments in commercial
paper maturing within 180 days from the date of acquisition thereof and having,
at such date of acquisition, the highest credit rating obtainable from CBRS
Inc., Dominion Bond Rating Service, ▇▇▇▇▇'▇ Investor Service, Inc. or Standard
and Poor's Corporation; (3) investments in certificates of deposit, banker's
acceptances and time deposits maturing within 180 days from the date of
acquisition thereof issued or guaranteed by or placed with, and money market
deposit accounts issued or offered by, any domestic office of any commercial
bank organized under the laws of Canada or of any Canadian province which has a
combined capital surplus and undivided profits of not less than C$250,000,000;
and (4) investments in fully collateralized repurchase agreements with a term of
not more than 30 days for securities described in clause (1) above and entered
into with a financial institution satisfying the criteria described in clause
(3) above; and
(i) other investments not to exceed an aggregate of $1,000,000
of investments made during the term of this Agreement.
Notwithstanding the foregoing, investments of the type described in
clauses (b), (c), (d), (e), (f) and (h) shall not be permitted to be made or
maintained (1) by any Canadian Borrower at any time that Canadian Loans are
outstanding hereunder, or (2) by US Borrowers at any time that US Revolving
Loans are outstanding hereunder.
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Section 7.7 SALES AND LEASEBACKS. Enter into, any arrangement, directly
or indirectly, with any Person whereby any Credit Party shall sell or transfer
any Property, whether now owned or hereafter acquired, and whereby any Credit
Party shall then or thereafter rent or lease as lessee such Property or any part
thereof or other Property which a Credit Party intends to use for substantially
the same purpose or purposes as the Property sold or transferred.
Section 7.8 NATURE OF BUSINESS. Engage in, or permit any other Credit
Party to engage in, any business other than the businesses in which they are
engaged as of the Closing Date or that are directly related thereto, which
businesses in which the Company and each Borrower are currently involved are
described in Schedule 7.8 hereto.
Section 7.9 ERISA COMPLIANCE.
(a) Engage in, or permit any ERISA Affiliate to engage in, any
transaction in connection with which any US Credit Party or any ERISA Affiliate
could be subjected to either a civil penalty assessed pursuant to Sections
502(c), (i) or (l) of ERISA or a tax imposed by Chapter 43 of Subtitle D of the
Code which could reasonably be expected to have a Material Adverse Effect;
(b) Terminate, or permit any other US Credit Party or any
ERISA Affiliate to terminate, any Plan in a manner, or take any other action
with respect to any Plan, which could reasonably be expected to result in any
material liability of any US Credit Party or any ERISA Affiliate to the PBGC or
any other Governmental Authority;
(c) Fail to make, or permit any other US Credit Party or any
ERISA Affiliate to fail to make, full payment when due of all amounts which,
under the provisions of any Plan, agreement relating thereto or applicable law,
any US Credit Party or any ERISA Affiliate is required to pay as contributions
thereto;
(d) Permit to exist, or allow any other US Credit Party or any
ERISA Affiliate to permit to exist, any accumulated funding deficiency within
the meaning of Section 302 of ERISA or Section 412 of the Code, whether or not
waived, with respect to any Plan; (e) Contribute to or assume an obligation to
contribute to, or permit any US Credit Party or any ERISA Affiliate to
contribute to or assume an obligation to contribute to, any "multiemployer plan"
as such term is defined in Section 3(37) or 4001(a)(3) of ERISA;
(f) Acquire, or permit any other US Credit Party or any ERISA
Affiliate to acquire, an interest in any Person that causes such Person to
become an ERISA Affiliate with respect to any US Credit Party or with respect to
any ERISA Affiliate of any US Credit Party if such Person sponsors, maintains or
contributes to, or at any time preceding such acquisition has sponsored,
maintained, or contributed to, any "multiemployer plan" as such term is defined
in Section 3(37) or 4001(a)(3) of ERISA;
(g) Fail to pay, or cause to be paid, to the PBGC in a timely
manner, and without incurring any late payment or underpayment charge or
penalty, all premiums required pursuant to Sections 4006 and 4007 of ERISA;
(h) Amend, or permit any other US Credit Party or any ERISA
Affiliate to amend, a Plan resulting in an increase in current liability such
that any US Credit Party or any ERISA Affiliate is required to provide security
to such Plan under Section 401(a)(29) of the Code;
93
(i) Incur, or permit any other US Credit Party or any ERISA
Affiliate to incur, a material liability to or on account of a Plan under
Sections 515, 4062, 4063, 4064, 4201 or 4204 of ERISA; or
(j) Permit, or allow any other US Credit Party or any ERISA
Affiliate to permit, the actuarial present value of the benefit liabilities
(computed on an accumulated benefit obligation basis in accordance with GAAP)
under all Plans in the aggregate to exceed the current value of the assets of
all Plans in the aggregate that are allocable to such benefit liabilities.
(k) CANADIAN PLAN COMPLIANCE. As regards to any Canadian
Party:
(1) Terminate, or permit to terminate, any Plan in a
manner, or take any other action with respect to any Plan, which could
reasonably be expected to result in any material liability of such
Canadian Credit Party to any Governmental Authority;
(2) Fail to make, or permit any other Canadian Credit
Party to fail to make, full payment when due of all amounts which,
under the provisions of any Plan, agreement relating thereto or
applicable law, such Canadian Credit Party is required to pay as
contributions thereto, except where the failure to make such payments
could not reasonably be expected to have Material Adverse Effect;
(3) Permit to exist, or allow any other Canadian
Credit Party to permit to exist, any accumulated funding deficiency,
whether or not waived, with respect to any Plan in an amount which
could reasonably be expected to cause a Material Adverse Effect;
(4) Contribute to or assume an obligation to
contribute to, or permit any other Canadian Credit Party to contribute
to or assume an obligation to contribute to, any "specified
multi-employer plan" as such term is defined in the Employment Pensions
Plans Act (Alberta);
(5) Acquire, or permit any other Canadian Credit
Party to acquire, an interest in any Person if such Person sponsors,
maintains or contributes to, or at any time preceding such acquisition
has sponsored, maintained, or contributed to any "specified
multi-employer plan" as such term is defined in the Employment Pension
Plans Act (Alberta);
(6) Permit, or allow any other Canadian Credit Party
to permit, the actuarial present value of the benefit liabilities
(computed on an accumulated benefit obligation basis in accordance with
GAAP) under all Plans in the aggregate to exceed the current value of
the assets of all Plans in the aggregate that are allocable to such
benefit liabilities, in each case only to the extent such liabilities
and assets relate to benefits to be paid to employees of such Canadian
Credit Party, by an amount that could reasonably be expected to cause a
Material Adverse Effect.
Section 7.10 SALE OR DISCOUNT OF RECEIVABLES. Sell, or allow any other
Credit Party to sell, with or without recourse, for discount or otherwise, any
notes or accounts receivable.
Section 7.11 NEGATIVE PLEDGE AGREEMENTS. Create, incur, assume or
suffer to exist, any contract, agreement or understanding which in any way
prohibits or restricts the granting, conveying, creation or imposition of any
Lien on any Property of any Credit Party, or which requires the consent of or
notice to other Persons in connection therewith, other than (a) this Agreement
and the other Financing Documents and (b) any agreements governing any purchase
money Liens or Capital Lease Obligations otherwise permitted hereby provided
that any such prohibition or limitation is only effective against the Property
financed thereby.
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Section 7.12 TRANSACTIONS WITH AFFILIATES. Except to the extent
otherwise specifically permitted herein, enter into any transaction or series of
transactions, with Affiliates of any Credit Party which involve an outflow of
money or other Property from any Credit Party to an Affiliate of any Credit
Party, including but not limited to repayment of Indebtedness, management fees,
compensation, salaries, asset purchase payments or any other type of fees or
payments similar in nature except for those which are in the ordinary course of
business of the Credit Parties and are on fair and reasonable terms no less
favorable than would be obtained in a comparable arm's length transaction with a
Person not an Affiliate.
Section 7.13 UNCONDITIONAL PURCHASE OBLIGATIONS. Enter into or be a
party to, or permit any other Credit Party to enter into or be a party to, any
material contract for the purchase of materials, supplies or other property or
services, if such contract requires that payment be made by it regardless of
whether or not delivery is ever made of such materials, supplies or other
property or services.
Section 7.14 EQUITY. Authorize or issue, or permit any other Credit
Party to authorize or issue (a) Equity to any Person other than (1) issuances of
Equity of the Company if no Change of Control results therefrom, and (2)
issuance by any other Credit Party to any of the Borrowers, or (b) any preferred
stock or other equity securities providing for the payment of dividends or other
distributions on a current basis or a mandatory redemption right existing with
regard thereto.
Section 7.15 CAPITAL EXPENDITURES. Make Capital Expenditures in any
Fiscal Year in excess of $25,000,000 in the aggregate for all Borrowers;
provided that no Capital Expenditures shall be made (and no Borrower shall enter
into any commitment to make any Capital Expenditure) if, before or after giving
effect to the making of such Capital Expenditure (or entering into such
Commitment), a Default exists or would result therefrom.
Section 7.16 INTERCOMPANY TRANSACTIONS. Create or otherwise cause or
permit to exist or become effective, except as may be expressly permitted or
required by the Financing Documents, any consensual encumbrance or restriction
of any kind on the ability of any Credit Party to (a) pay dividends or make any
other distribution in respect of such Credit Party's Equity or with respect to
any other interest or participation in, or measured by, its profits, (b) pay any
indebtedness owed any Credit Party, (c) make any loan or advance to any Credit
Party, or (d) sell, lease or transfer any of its Property to any Credit Party.
Section 7.17 ACQUISITIONS; CREATION OF SUBSIDIARIES. Create or acquire
any Subsidiary or any asset or operating division of any other Person other than
the purchase of inventory in the ordinary course of business and the purchase of
capital assets expressly permitted hereunder.
Section 7.18 ACCOUNTS. The Borrowers will not maintain accounts with
any bank or other depository institution or otherwise maintain cash or cash
equivalents other than (a) as permitted by Section 7.6 hereof, (b) the
Disbursement Accounts and Blocked Accounts maintained with Administrative Agent
and Canadian Lockbox Bank, (c) a payroll account maintained by Tube at a local
bank in ▇▇▇▇▇▇▇, Arkansas for the purpose of funding payroll at Tube's ▇▇▇▇▇▇▇,
Arkansas facility, (d) payroll accounts maintained with Canadian Lockbox Bank
and Administrative Agent for the limited purpose of funding payroll, (e) lockbox
accounts at the Temporary Lockbox Institutions provided that such lockbox
accounts shall be closed as soon as reasonably practical following the Closing
Date, but not later than September 30, 2002 and provided, further, that such
Temporary Lockbox Institutions shall have entered into Tri-Party Agreements with
Administrative Agent, (f) the Longview Account provided that such account shall
be closed as soon as practical following the Closing Date but not later than
July 31, 2002; provided further the Borrowers shall not be permitted to maintain
more than $750,000 in the Longview Account unless the depository institution
with respect to such account has executed and delivered to Administrative Agent
a Restricted Account Agreement, and (g) the Southwest Account and the LaSalle
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Account provided that each such account shall be closed as soon as practical
following the Closing Date but not later than May 31, 2002; provided, further,
the Borrowers shall not be permitted to maintain more than $750,000 in the
Southwest Account or $300,000 in the LaSalle Account unless the depository
institution with respect to such account has executed and delivered to
Administrative Agent a Restricted Account Agreement. In no event will Borrowers
maintain in any payroll account permitted pursuant to this Section 7.18 funds in
an amount in excess of the aggregate payroll for one pay period for the
employees of such Borrowers paid from such accounts.
Section 7.19 MODIFICATIONS TO INDEBTEDNESS AGREEMENTS.
(a) Amend, modify, or waive any covenant contained then in any
instrument, document or agreement governing the Indebtedness of the Credit
Parties set forth on Schedule 7.2 hereto or any other Indebtedness permitted by
Section 7.2 hereof if the effect of such amendment, modification, or waiver
would be to make the terms of such Indebtedness materially more onerous to any
Credit Party;
(b) Amend, modify, or waive any provision of any instrument,
document or agreement governing the Indebtedness of the Credit Parties set forth
on Schedule 7.2 hereto or any other Indebtedness permitted by Section 7.2 hereof
if the effect of such amendment, modification or waiver (1) subjects any Credit
Party to any additional material obligation, (2) increases the principal
thereunder, or (3) accelerates the date fixed for any payment of principal or
interest on such Indebtedness.
(c) Make any voluntary prepayment of, or optionally redeem, or
make any payment in defeasance of, any part of the Indebtedness of the Credit
Parties set forth on Schedule 7.2 hereto or any other Indebtedness permitted by
Section 7.2 hereof.
Section 7.20 FISCAL YEAR. Change its Fiscal Year.
Section 7.21 MODIFICATION OF PURCHASE DOCUMENTS. Amend, modify or waive
any provision of any of the Purchase Documents.
Section 7.22 NEGATIVE COVENANTS WITH RESPECT TO CERTAIN CREDIT PARTIES.
Permit, allow or cause any of Precision International, Maverick International or
Exchangeco to (a) conduct any business or operations, (b) own, lease, license or
otherwise have the right to use any Property (other than Exchangeco's ownership
of all of the issued and outstanding Equity of Tube Canada), (c) incur any
liabilities or obligations to any Person, or (d) employ any employees.
ARTICLE 8
EVENTS OF DEFAULT
Upon the occurrence and during the continuance of any of the following
specified events (each an "EVENT OF DEFAULT"):
Section 8.1 PAYMENTS.
(a) Any of the Borrowers shall fail to pay when due
(including, but not limited to, any mandatory prepayment required pursuant to
Section 2.11) any principal of any Loan or any Note, or any Reimbursement
Obligation or any fee or any other amount payable hereunder or under the Fee
Letter or any other Financing Document; or
(b) any of the Borrowers shall fail to pay when due any
interest on any Loan or any Note and such failure to pay shall continue
unremedied for a period of three days.
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Section 8.2 COVENANTS WITHOUT NOTICE. Any of the Borrowers shall fail
to observe or perform any covenant or agreement contained in Article 4, Section
6.1, Section 6.5, Section 6.7, Section 6.10 or Article 7.
Section 8.3 OTHER COVENANTS. Any Borrower shall fail to observe or
perform any covenant or agreement contained in this Agreement, other than those
referred to in Section 8.1 or Section 8.2 and, if capable of being remedied,
such failure shall remain unremedied for 20 days after the earlier of (a) any
Credit Party's obtaining knowledge thereof, or (b) written notice thereof shall
have been given to the Company or any Borrower by any Lender, any Issuing Bank,
Canadian Administrative Agent or Administrative Agent.
Section 8.4 OTHER FINANCING DOCUMENT OBLIGATIONS. Default is made in
the due observance or performance by any Borrower or any other Obligated Party
of any of the covenants or agreements contained in any Financing Document other
than this Agreement, and such default continues unremedied beyond the expiration
of any applicable grace period which may be expressly allowed under such
Financing Document.
Section 8.5 REPRESENTATIONS. Any representation, warranty or statement
made or deemed to be made by any Borrower or any other Obligated Party or any of
any Borrower's or any other Obligated Party's officers herein or in any other
Financing Document, or in any certificate, request or other document furnished
pursuant to or under this Agreement or any other Financing Document, shall have
been incorrect in any material respect as of the date when made or deemed to be
made.
Section 8.6 NON-PAYMENTS OF OTHER INDEBTEDNESS. Any Credit Party shall
fail to make any payment or payments of principal of or interest on any
Indebtedness of such Credit Party which Indebtedness is in an aggregate amount
of $1,000,000 or greater after giving effect to any applicable grace period.
Section 8.7 DEFAULTS UNDER OTHER AGREEMENTS. Any Credit Party shall
fail to observe or perform any covenant or agreement contained in any
agreement(s) or instrument(s) relating to Indebtedness of any Credit Party of
$1,000,000 or more in the aggregate within any applicable grace period, or any
other event shall occur, if the effect of such failure or other event is to
accelerate, or to permit the holder of such Indebtedness or any other Person to
accelerate, the maturity of $1,000,000 or more in the aggregate of such
Indebtedness; or $1,000,000 or more in the aggregate of any such Indebtedness
shall be, or if as a result of such failure or other event may be, required to
be prepaid (other than prepayments resulting from excess cash flow) in whole or
in part prior to its stated maturity.
Section 8.8 BANKRUPTCY UNDER US LAW. Any Obligated Party (which for the
purposes of this Section 8.8 shall not include any Canadian Borrower) shall
commence a voluntary case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy" as now or hereafter in effect, or any successor
thereto (the "BANKRUPTCY Code"); or an involuntary case is commenced against any
Obligated Party shall commence and the petition is not controverted within ten
days, or is not stayed or dismissed within 60 days, after commencement of the
case; or a custodian (as defined in the Bankruptcy Code) is appointed for, or
takes charge of, all or any substantial part of the property of any Obligated
Party; or any Obligated Party commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to any Obligated Party or there is commenced
against any Obligated Party any such proceeding which remains unstayed or
undismissed for a period of 60 days; or any Obligated Party is adjudicated
insolvent or bankrupt; or any order of relief or other order approving any such
case or proceeding is entered; or any Obligated Party suffers any appointment of
any custodian or the like for it or any substantial part of its Property to
continue undischarged or unstayed for a period
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of 60 days; or any Obligated Party makes a general assignment for the benefit of
creditors; or any Obligated Party shall fail to pay, or shall state in writing
that it is unable to pay, or shall be unable to pay, its debts generally as they
become due; or any Obligated Party shall by any act or failure to act indicate
its consent to, approval of or acquiescence in any of the foregoing; or any
corporate action is taken by any Obligated Party for the purpose of effecting
any of the foregoing.
Section 8.9 BANKRUPTCY UNDER CANADIAN LAW.
(a) Any Canadian Borrower (1) becomes insolvent, or generally
does not or becomes unable to pay its debts or meet its liabilities as the same
become due, or admits in writing its inability to pay its debts generally, or
declares any general moratorium on its indebtedness, or proposes a compromise or
arrangement between it and any class of its creditors; (2) commits an act of
bankruptcy under the Bankruptcy and Insolvency Act (Canada), or makes an
assignment of its property for the general benefit of its creditors under such
Act, or makes a proposal (or files a notice of its intention to do so) under
such Act; (3) institutes any proceeding seeking to adjudicate it an insolvent,
or seeking liquidation, dissolution, winding-up, reorganization, compromise,
arrangement, adjustment, protection, moratorium, relief, stay of proceedings of
creditors generally (or any class of creditors), or composition of it or its
debts or any other relief, under any federal, provincial or foreign Law now or
hereafter in effect relating to bankruptcy, winding-up, insolvency,
reorganization, receivership, plans of arrangement or relief or protection of
debtors (including the Bankruptcy and Insolvency Act (Canada), the Companies'
Creditors Arrangement Act (Canada) and any applicable corporations legislation)
or at common law or in equity, or files an answer admitting the material
allegations of a petition filed against it in any such proceeding; (4) applies
for the appointment of, or the taking of possession by, a receiver, interim
receiver, receiver/manager, sequestrator, conservator, custodian, administrator,
trustee, liquidator or other similar official for it or any substantial part of
its property; or (5) threatens to do any of the foregoing, or takes any action,
corporate or otherwise, to approve, effect, consent to or authorize any of the
actions described in this Section 8.9, or otherwise acts in furtherance thereof
or fails to act in a timely and appropriate manner in defense thereof.
(b) Any petition is filed, application made or other
proceeding instituted against or in respect of any Canadian Borrower: (1)
seeking to adjudicate it an insolvent; (2) seeking a receiving order against it
under the Bankruptcy and Insolvency Act (Canada); (3) seeking liquidation,
dissolution, winding-up, reorganization, compromise, arrangement, adjustment,
protection, moratorium, relief, stay of proceedings of creditors generally (or
any class of creditors), or composition of it or its debts or any other relief
under any federal, provincial or foreign Law now or hereafter in effect relating
to bankruptcy, winding-up, insolvency, reorganization, receivership, plans of
arrangement or relief or protection of debtors (including the Bankruptcy and
Insolvency Act (Canada), the Companies' Creditors Arrangement Act (Canada) and
any applicable corporations legislation) or at common law or in equity; or (4)
seeking the entry of an order for relief or the appointment of, or the taking of
possession by, a receiver, interim receiver, receiver/manager, sequestrator,
conservator, custodian, administrator, trustee, liquidator or other similar
official for it or any substantial part of its property; and in any case
describe in clause (b)(1) through (4) such petition, application or proceeding
continues undismissed, or unstayed and in effect, for a period of 60 days after
the institution thereof, provided that if an order, decree or judgment is
granted or entered (whether or not entered or subject to appeal) against any
Canadian Borrower thereunder in the interim, such 60-day period will cease to
apply, and provided further that if the Canadian Borrower files an answer
admitting the material allegations of a petition filed against it in any such
proceeding, such 60-day period will cease to apply.
Section 8.10 MONEY JUDGMENT. Judgments or orders for the payment of
money involving in the aggregate at any time a liability (net of any insurance
proceeds or indemnity payments actually received in respect thereof prior to or
within 30 days from the entry thereof, or to be received in respect
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thereof in the event any appeal thereof shall be unsuccessful) of more than
$1,000,000, (or the Dollar Equivalent thereof) or that would otherwise have a
Material Adverse Effect shall be rendered against any Obligated Party and such
judgment or order shall continue unsatisfied in accordance with the terms of
such judgment or order (in the case of a money judgment) and in effect for a
period of 30 days during which execution shall not be effectively stayed or
deferred (whether by action of a court, by agreement or otherwise).
Section 8.11 DISCONTINUANCE OF BUSINESS. Except as permitted by Section
7.4, any Credit Party shall cease to be principally engaged in the businesses
and operations in which such Credit Party was principally engaged on the Closing
Date.
Section 8.12 FINANCING DOCUMENTS. Any Material Provision of any of the
Financing Documents after delivery thereof shall for any reason, except to the
extent permitted by the terms thereof, cease to be in full force and effect and
valid, binding and enforceable (except as enforceability may be limited as
stated in Section 5.3) in accordance with its terms, or, in the case of any of
the Security Instruments, cease to create a valid and perfected Lien of the
priority contemplated thereby on any of the collateral purported to be covered
thereby, or any Obligated Party shall so state in writing. As used in this
Section 8.12, "MATERIAL PROVISION" shall mean (a) with respect to this
Agreement, or the Notes, any material term, covenant, or agreement set forth
therein, and (b) with respect to any other Financing Document, any provision if
the validity and enforceability thereof is necessary for such Financing Document
to accomplish its stated, or clearly intended, purpose or otherwise necessary in
order for any Lender to enforce any material right or remedy under any Financing
Document.
Section 8.13 CHANGE OF CONTROL. The occurrence of a Change of Control.
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, Administrative Agent, upon the written or telex
request of the Required Lenders, shall, by written notice to the Borrowers, take
any or all of the following actions, without prejudice to the rights of
Administrative Agent, the Canadian Administrative Agent any Lender or the holder
of any Note, to enforce its claims against any Credit Party: (a) declare the
Revolving Credit Commitment, the US Swingline Commitment, and other lending
obligations, if any, terminated, whereupon the Revolving Credit Commitment and
other lending obligations, if any, of each Lender shall terminate immediately;
or (b) declare the entire principal amount of and all accrued interest on all
Lender Indebtedness then outstanding to be, whereupon the same shall become,
forthwith due and payable without presentment, demand, protest, notice of
protest or dishonor, notice of acceleration, notice of intent to accelerate or
other notice of any kind, all of which are hereby expressly waived by each
Credit Party, and thereupon take such action as it may deem desirable under and
pursuant to the Financing Documents; provided, that, if an Event of Default
specified in Section 8.8 or Section 8.9 shall occur, the result which would
occur upon the giving of written notice by Administrative Agent to the
Borrowers, as specified in clauses (a) and (b) above, shall occur automatically
without the giving of any such notice; or (c) if any US Letter of Credit shall
then be outstanding, demand L/C Cover which the US Borrowers shall immediately
pay to the Administrative Agent for deposit in a cash collateral account
maintained by the Administrative Agent; (d) if any Canadian Letter of Credit
shall then be outstanding, demand L/C Cover which the Canadian Borrowers shall
immediately jointly and severally pay to the Canadian Administrative Agent for
deposit in a cash collateral account maintained by the Canadian Administrative
Agent, or (e) if any B/A shall be outstanding, demand B/A Cover which Canadian
Borrowers shall immediately jointly and severally pay to the Canadian
Administrative Agent for deposit in a cash collateral account maintained by the
Canadian Administrative Agent.
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ARTICLE 9
AGENTS
Section 9.1 APPOINTMENT OF AGENTS. Each Lender (and each Secured
Affiliate by and through its affiliated Lender) and each Issuing Bank hereby
designates JPMorgan Chase Bank as Administrative Agent, CIT Business Credit
Canada Inc. as Canadian Administrative Agent and General Electric Capital
Corporation as Documentation Agent as herein specified and as specified in the
other Financing Documents. Each Lender (and each Secured Affiliate and Cash
Management Affiliate by and through its affiliated Lender) and each Issuing Bank
hereby irrevocably authorizes each such Agent to take such action on its behalf
under the provisions of this Agreement, the Notes, and the other Financing
Documents and to exercise such powers and to perform such duties hereunder and
thereunder as are specifically delegated to or required of such Agent by the
terms hereof and thereof and such other powers as are reasonably incidental
thereto. Such Agent may perform any of its duties hereunder by or through its
agents or employees.
Section 9.2 LIMITATION OF DUTIES OF AGENTS. No Agent shall have any
duties or responsibilities except those expressly set forth in this Agreement
and as specified in the other Financing Documents. Neither any Agent nor any of
their respective officers, directors, employees or agents shall be liable for
any action taken or omitted by it as such hereunder or in connection herewith,
unless caused by its or their gross negligence or willful misconduct. The duties
of each Agent shall be mechanical and administrative in nature; no Agent shall
have by reason of this Agreement a fiduciary relationship in respect of any
Lender; and nothing in this Agreement, expressed or implied, is intended to or
shall be so construed as to impose upon any Agent any obligations in respect of
this Agreement except as expressly set forth herein.
Section 9.3 LACK OF RELIANCE ON THE AGENTS.
(a) INDEPENDENT INVESTIGATION. Independently and without
reliance upon any Agent, each Lender, to the extent it deems appropriate, has
made and shall continue to make (1) its own independent investigation of the
financial condition and affairs of the Credit Parties in connection with the
taking or not taking of any action in connection herewith, and (2) its own
appraisal of the creditworthiness of the Credit Parties, and, except as
expressly provided in this Agreement, and the other Financing Documents, no
Agent shall have any responsibility, either initially or on a continuing basis,
to provide any Lender with any credit or other information with respect thereto,
whether coming into its possession before the consummation of the transactions
contemplated herein or at any time or times thereafter.
(b) AGENTS NOT RESPONSIBLE. No Agent shall be responsible to
any Lender or any Issuing Bank for any recitals, statements, information,
representations or warranties herein or in any document, certificate or other
writing delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, collectability, priority or sufficiency
of this Agreement, the Notes, the Letters of Credit or the other Financing
Documents or the financial condition of any Obligated Party or be required to
make any inquiry concerning either the performance or observance of any of the
terms, provisions or conditions of this Agreement, the Notes or the other
Financing Documents, or the financial condition of any Obligated Party, or the
existence or possible existence of any Default or Event of Default.
Section 9.4 CERTAIN RIGHTS OF THE AGENTS. If any Agent shall request
instructions from the Required Lenders with respect to any act or action
(including the failure to act) in connection with this Agreement, the Notes and
the other Financing Documents, such Agent shall be entitled to refrain from such
act or taking such action unless and until such Agent shall have received
instructions from the Required Lenders; and no Agent shall incur such liability
to any Person by reason of so refraining.
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Without limiting the foregoing, no Lender shall have any right of action
whatsoever against any Agent as a result of such Agent acting or refraining from
acting under this Agreement, the Notes and the other Financing Documents in
accordance with the instructions of the Required Lenders, or to the extent
required by Section 10.2, all of the Lenders.
Section 9.5 RELIANCE BY AGENTS. Each Agent shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing, resolution,
notice, statement, certificate, telex, teletype or telecopier message,
cablegram, radiogram, order or other documentary teletransmission or telephone
message believed by it to be genuine and correct and to have been signed, sent
or made by the proper Person. Each Agent may consult with legal counsel
(including counsel for any Borrower), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken by it in good faith in accordance with the advice of such counsel,
accountants or experts.
Section 9.6 INDEMNIFICATION OF AGENTS. To the extent any Agent is not
reimbursed and indemnified by the Borrowers, each Lender will reimburse and
indemnify each Agent in accordance with its Credit Percentage for and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including reasonable counsel fees and
disbursements) or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against such Agent in performing its duties
hereunder, in any way relating to or arising out of this Agreement and by reason
of the ordinary negligence of such Agent; provided that no Lender shall be
liable to such Agent for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from, as to such Agent, such Agent's gross negligence or willful
misconduct.
Section 9.7 AGENTS IN THEIR INDIVIDUAL CAPACITY. With respect to its
obligations under this Agreement, the Loans made by it and the Notes issued to
it, each Agent shall have the same rights and powers hereunder as any other
Lender or holder of a Note and may exercise the same as though it were not
performing the duties, if any, specified herein; and the terms "Lenders",
"Required Revolving Lenders", "Required Term Lenders", "Required Lenders,"
"holders of Notes" or any similar terms shall, unless the context clearly
otherwise indicates, include each Agent in its individual capacity. Each Agent
may accept deposits from, lend money to, and generally engage in any kind of
banking, trust, financial advisory or other business with any Credit Party or
any Affiliate of any Credit Party as if it were not performing the duties, if
any, specified herein, and may accept fees and other consideration from any
Credit Party for services in connection with this Agreement and otherwise
without having to account for the same to the Lenders.
Section 9.8 MAY TREAT LENDER AS OWNER. Each Borrower, each Agent and
each Issuing Bank may deem and treat each Lender as the owner of such Lender's
Notes for all purposes hereof unless and until a written notice of the
assignment or transfer thereof shall have been filed with the Administrative
Agent. Any request, authority or consent of any Person who at the time of making
such request or giving such authority or consent is the owner of a Note shall be
conclusive and binding on any subsequent owner, transferee or assignee of such
Note or any promissory note or notes issued in exchange therefor.
Section 9.9 SUCCESSOR AGENT.
(a) RESIGNATION. Each Agent may resign at any time by giving
written notice thereof to the Lenders, the Issuing Banks and the Borrowers and
may be removed at any time with or without cause by the Required Lenders. Upon
any such resignation or removal, the Required Lenders shall have the right, upon
five days' notice to the Borrowers, to appoint a successor Agent (to act in the
same capacity as the resigning or removed Agent), subject to the prior written
approval of the Borrowers, such approval not to be unreasonably withheld and not
to be required during the existence of a Default or Event of Default.
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If no successor Agent shall have been so appointed by the Required Lenders, and
shall have accepted such appointment, within 30 days after the retiring Agent's
giving of notice of resignation or the Required Lenders' removal of the retiring
Agent, then, upon five days' notice to the Borrowers, the retiring Agent may, on
behalf of the Lenders, appoint a successor Agent (subject to approval of the
Borrowers, such approval not to be unreasonably withheld and not to be required
during the existence of a Default or Event of Default), which (1) if the
resigning or removed Agent was the Administrative Agent shall be a bank which
maintains an office in the United States, or a commercial bank organized under
the laws of the United States of America or of any State thereof, or any
Affiliate of such bank, having a combined capital and surplus of at least
$250,000,000, and (2) the resigning or removed Agent was the Canadian
Administrative Agent, shall be an entity that is not a non-resident of Canada
for purposes of the Income Tax Act (Canada).
(b) RIGHTS, POWERS, ETC. Upon the acceptance of any
appointment as an Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations under this Agreement. After any
retiring Agent's resignation or removal hereunder as Agent, the provisions of
this Article 9 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was the Agent under this Agreement.
Section 9.10 DOCUMENTATION AGENT. Notwithstanding anything contained in
this Article 9 or any other Financing Document to the contrary, the
Documentation Agent shall have no right, power, obligation, liability,
responsibility or duty under this Agreement or any other Financing Document
other than those applicable to all Lenders as such.
ARTICLE 10
MISCELLANEOUS
Section 10.1 NOTICES. All notices, requests and other communications to
any party hereunder shall be in writing (including, telecopy or similar
teletransmission or writing) and shall be given to such party at its address or
telecopy number set forth on the signature pages hereof or such other address or
telecopy number as such party may hereafter specify by notice to the Canadian
Administrative Agent, Administrative Agent and the Company. Each such notice,
request or other communication shall be effective (a) if given by mail, 72 hours
after such communication is deposited in the mails with first class postage
prepaid, addressed as aforesaid, or (b) if given by any other means (including,
but not limited to, by air courier), when delivered at the address specified on
the signature pages hereto; provided that notices to the Administrative Agent or
Canadian Administrative Agent shall not be effective until actually and
physically received. Any notice to be given to any Borrower or to all Borrowers
pursuant to this Agreement or any of the other Financing Documents may be given
to the Company or to any other Borrower, and if given to the Company or to any
Borrower in the manner set forth in this Section 10.1, such notice shall be
deemed to be effective notice to all Borrowers for purposes of this Agreement.
Section 10.2 AMENDMENTS AND WAIVERS. Neither this Agreement nor any
other Financing Document, nor any terms hereof or thereof, may be amended,
supplemented or modified except in accordance with the provisions of this
Section 10.2. The Required Lenders may, or, with the written consent of the
Required Lenders, the Administrative Agent, shall, from time to time, (x) enter
into with the Borrowers, written amendments, supplements or modifications hereto
and to the other Financing Documents for the purpose of adding any provisions to
this Agreement or to the other Financing Documents or changing in any manner the
rights or obligations of the Lenders or the Borrowers hereunder or thereunder or
(y) waive at the Borrowers' request, on such terms and conditions as the
Required Lenders or the Administrative Agent, as the case may be, may specify in
such instrument, any of the requirements of this Agreement or the other
Financing Documents or any Default and its
102
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall:
(a) reduce the amount or extend the scheduled date of maturity
of any Loan or any Reimbursement Obligation or of any scheduled installment
thereof or reduce the stated rate of any interest or fee payable hereunder or
extend the date of any payment thereof or modify any provision that provides for
the ratable sharing by the Lenders (or any sub-set of Lenders) of any payment or
prepayment of Lender Indebtedness to provide for a non-ratable sharing thereof
or increase the amount or extend the expiration date of any Lender's Revolving
Credit Commitment or Term Commitment or amend, modify or waive any provision of
Section 2.11(f), (g), (h) or (i) or Section 2.20, in each case without the prior
written consent of each Lender directly affected thereby;
(b) (i) change the currency in which any Loan or Reimbursement
Obligation is payable or amend, modify or waive any provision of this Section
10.2 or reduce the percentage specified in the definition of Required Lenders,
in each case without the written consent of all of the Lenders, (ii) reduce the
percentage specified in the definition of Required Revolving Lenders without the
written consent of all Revolving Lenders, or (iii) reduce the percentage
specified in the definition of Required Term Lenders without the written consent
of all Term Lenders;
(c) release any part of the Collateral, without the written
consent of all of the Lenders, except as expressly permitted hereby, provided
that the Administrative Agent or the Canadian Administrative Agent, as
applicable, shall release (without consent from the Lenders) any Collateral
sold, transferred or otherwise disposed of as permitted by Section 7.4;
(d) amend, modify or waive any provision of Article 9 without
the written consent of the Agent directly affected thereby;
(e) amend, modify or waive (1) any Letter of Credit Liability
without the written consent of the applicable Issuing Bank or (2) any Letter of
Credit without the consent of each Lender if such Letter of Credit, after giving
effect to such amendment, modification or waiver, would no longer satisfy the
requirements hereof if such Letter of Credit was being issued ab initio at such
time, provided that in all cases other than clauses (1) or (2), only the consent
of the applicable Issuing Bank shall be required to amend, modify or waive any
Letter of Credit;
(f) amend the definitions of US Borrowing Base, Eligible
Account Advance Percentage, Eligible Account, Eligible Inventory, Eligible
Inventory Advance Percentage, Eligible Included-In-Transit Inventory, Eligible
Bailee Inventory, US Equipment Component, US Excess Cash Flow Amount, Excess
Cash Flow, Eligible ▇▇▇▇ and Hold Accounts, Inventory Limit, WIP Limit,
Included-in-Transit Limit and the advance rates specified in the definition of
US Borrowing Base or the other definitions set forth in this Section 10.2(f)
(other than to the extent already permitted to be reduced at the discretion of
the Administrative Agent) without the written consent of the Administrative
Agent and all of the US Revolving Lenders;
(g) amend the definitions of Canadian Borrowing Base, Eligible
Account Advance Percentage, Eligible Account, Eligible Inventory, Eligible
Inventory Advance Percentage, Eligible Included-In-Transit Inventory, Eligible
Bailee Inventory, Canadian Equipment Component, Canadian Excess Cash Flow
Amount, Excess Cash Flow, Inventory Limit, WIP Limit, Included-in-Transit Limit
and the advance rates specified in the definition of Canadian Borrowing Base or
the other definitions set forth in this Section 10.2(g) (other than to the
extent already permitted to be reduced at the discretion of the Administrative
Agent) without the written consent of all of the Administrative Agent, the
Canadian Administrative Agent and all Canadian Lenders; or
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(h) amend Section 2.26 without the consent of the US Swingline
Lender.
(i) neither Administrative Agent nor Canadian Administrative
Agent will foreclose upon, acquire via deed in lieu of foreclosure take
possession or operate, (a) the Borrowers' Real Property located in Calgary,
Alberta or Conroe, Texas unless and until the Phase II environmental site
assessments required by Schedule 3.3 hereof have been completed and reports have
been issued thereon and all Lenders have confirmed in writing that no
remediation is required by such Lender or that any remediation has been
completed to the satisfaction of all Lenders, or (b) the Borrowers' Real
Property located in ▇▇▇▇▇▇ County, Texas or Mississippi County, Arkansas unless
Administrative Agent has obtained a Phase II environmental site assessment
thereon and reports have been issued thereon and all Lenders have confirmed in
writing that no remediation is required or that any remediation, has been
completed to the satisfaction of all Lenders.
Any waiver and any amendment, supplement or modification
pursuant to this Section 10.2 shall apply to each of the Lenders and shall be
binding upon each Borrower, the Lenders, the Administrative Agent and all future
holders of the Loans. In the case of any waiver, the Borrowers, the Lenders and
the Administrative Agent shall be restored to their former position and rights
hereunder and under the other Financing Documents, and any Default waived shall
be deemed to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Default, or impair any right consequent thereon.
Section 10.3 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the
part of any Borrower, any Agent, any Issuing Bank or any Lender or any holder of
any Note in exercising any right or remedy under this Agreement or any other
Financing Document and no course of dealing between any Borrower and any Agent,
any Issuing Bank or any Lender or any holder of any Note shall operate as a
waiver thereof, nor shall any single or partial exercise of any right or remedy
under the Notes, this Agreement or any other Financing Document preclude any
other or further exercise thereof or the exercise of any other right or remedy
under the Notes, this Agreement or any other Financing Document. The rights and
remedies herein expressly provided are cumulative and not exclusive of any
rights or remedies which any Borrower, any Agent, any Issuing Bank or any Lender
would otherwise have. No notice to or demand on any Borrower not required under
the Notes, this Agreement or any other Financing Document in any case shall
entitle any Borrower to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the rights of any Agent, any
Issuing Bank or the Lenders to any other or further action in any circumstances
without notice or demand.
Section 10.4 PAYMENT OF EXPENSES, INDEMNITIES, ETC. Subject to Section
10.22 herein, each Borrower agrees to (and shall be jointly and severally liable
for):
(a) EXPENSES. Whether or not the transactions hereby
contemplated are consummated, pay all reasonable out-of-pocket costs and
expenses of each Agent, and each Issuing Bank in the administration (both before
and after the execution hereof and including advice of counsel for each Agent as
to the rights and duties of such Agent and the Lenders with respect thereto) of,
and in connection with the preparation, execution and delivery of, recording or
filing of, preservation of rights under, enforcement of, interpretation of, and,
after a Default, refinancing, renegotiation or restructuring of, this Agreement,
the Notes, and the other Financing Documents and any amendment, waiver or
consent relating thereto (including, but not limited to, the reasonable fees and
disbursements, for such purposes, of counsel for each Agent and, after Default,
for any of the Lenders) and promptly reimburse such Agent for all amounts
expended, advanced, or incurred by such Agent or the Lenders to satisfy any
obligation of any Borrower under this Agreement or any other Financing Document;
(b) INDEMNIFICATION. INDEMNIFY EACH AGENT, EACH ISSUING BANK
AND EACH LENDER, EACH OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,
REPRESENTATIVES, AGENTS AND AFFILIATES FROM, HOLD EACH OF THEM HARMLESS AGAINST,
AND PROMPTLY UPON DEMAND PAY OR REIMBURSE EACH OF THEM FOR, ANY AND ALL ACTIONS,
SUITS, PROCEEDINGS (INCLUDING ANY INVESTIGATIONS, LITIGATION OR INQUIRIES),
CLAIMS, COSTS, LOSSES, LIABILITIES, DAMAGES OR EXPENSES OF ANY KIND OR NATURE
WHATSOEVER WHICH MAY BE INCURRED BY OR ASSERTED AGAINST OR INVOLVE ANY OF THEM
(WHETHER OR NOT ANY OF THEM IS DESIGNATED A PARTY THERETO) AS A RESULT OF,
ARISING OUT OF OR IN ANY WAY RELATED TO (1) ANY ACTUAL OR PROPOSED USE BY ANY
BORROWER OF THE PROCEEDS OF ANY OF THE LOANS; OR (2) ANY OTHER ASPECT OF THIS
AGREEMENT, THE NOTES, AND THE FINANCING DOCUMENTS, INCLUDING
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BUT NOT LIMITED TO THE REASONABLE FEES AND DISBURSEMENTS OF COUNSEL (INCLUDING
ALLOCATED COSTS OF INTERNAL COUNSEL) AND ALL OTHER EXPENSES INCURRED IN
CONNECTION WITH INVESTIGATING, DEFENDING OR PREPARING TO DEFEND ANY SUCH ACTION,
SUIT, PROCEEDING (INCLUDING ANY INVESTIGATIONS, LITIGATION OR INQUIRIES) OR
CLAIM, AND INCLUDING ALL ACTIONS, SUITS, PROCEEDINGS (INCLUDING ANY
INVESTIGATIONS, LITIGATION OR INQUIRIES), CLAIMS, COSTS, LOSSES, LIABILITIES,
DAMAGES OR EXPENSES ARISING BY REASON OF ORDINARY NEGLIGENCE OF EACH AGENT, EACH
ISSUING BANK AND EACH LENDER, EACH OF THEIR RESPECTIVE OFFICERS, DIRECTORS,
EMPLOYEES, REPRESENTATIVES, AGENTS AND AFFILIATES; PROVIDED, HOWEVER, THE
PROVISIONS OF THIS SECTION 10.4(B) SHALL NOT APPLY TO ANY ACTION, SUITS,
PROCEEDINGS, CLAIMS, COSTS, LOSSES, LIABILITIES, DAMAGES, OR EXPENSES TO THE
EXTENT, BUT ONLY TO THE EXTENT, CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF THE PARTY SEEKING INDEMNIFICATION;
(c) ENVIRONMENTAL INDEMNIFICATION. INDEMNIFY AND HOLD HARMLESS
FROM TIME TO TIME EACH AGENT, THE ISSUING BANKS AND THE LENDERS, EACH PERSON
CLAIMING BY, THROUGH, UNDER OR ON ACCOUNT OF ANY OF THE FOREGOING AND THE
RESPECTIVE DIRECTORS, OFFICERS, COUNSEL, EMPLOYEES, AGENTS, AFFILIATES,
SUCCESSORS AND ASSIGNS OF EACH OF THE FOREGOING FROM AND AGAINST ANY AND ALL
LOSSES, CLAIMS, COST RECOVERY ACTIONS, ADMINISTRATIVE ORDERS OR PROCEEDINGS,
DAMAGES AND LIABILITIES (WHICH RELATE TO OR ARISE AS A RESULT OF THE LOANS, THE
LETTERS OF CREDIT OR ANY FINANCING DOCUMENT) TO WHICH ANY SUCH PERSON MAY BECOME
SUBJECT AND INCLUDING ANY AND ALL LOSSES, CLAIMS, COST RECOVERY ACTIONS,
ADMINISTRATIVE ORDERS OR PROCEEDINGS, DAMAGES AND LIABILITIES (WHICH RELATE TO
OR ARISE AS A RESULT OF THE LOANS, THE LETTERS OF CREDIT OR ANY FINANCING
DOCUMENT) ARISING BY REASON OF THE ORDINARY NEGLIGENCE OF EACH AGENT, THE
ISSUING BANKS AND THE LENDERS, EACH PERSON CLAIMING BY, THROUGH, UNDER OR ON
ACCOUNT OF ANY OF THE FOREGOING AND THE RESPECTIVE DIRECTORS, OFFICERS, COUNSEL,
EMPLOYEES, AGENTS, AFFILIATES, SUCCESSORS AND ASSIGNS OF EACH OF THE FOREGOING
(1) UNDER ANY ENVIRONMENTAL LAW APPLICABLE TO ANY BORROWER OR ANY OF THEIR
RESPECTIVE PROPERTIES, INCLUDING WITHOUT LIMITATION, THE TREATMENT OR DISPOSAL
OF HAZARDOUS SUBSTANCES ON ANY OF THEIR RESPECTIVE PROPERTIES, (2) AS A RESULT
OF THE BREACH OR NON-COMPLIANCE BY ANY CREDIT PARTY WITH ANY ENVIRONMENTAL LAW
APPLICABLE TO ANY CREDIT PARTY, (3) DUE TO PAST OWNERSHIP BY ANY CREDIT PARTY OF
ANY OF THEIR RESPECTIVE PROPERTIES OR PAST ACTIVITY ON ANY OF THEIR RESPECTIVE
PROPERTIES OR PAST ACTIVITY ON ANY OF THEIR RESPECTIVE PROPERTIES WHICH, THOUGH
LAWFUL AND FULLY PERMISSIBLE AT THE TIME, COULD RESULT IN PRESENT LIABILITY, (4)
THE PRESENCE, USE, RELEASE, STORAGE, TREATMENT OR DISPOSAL OF HAZARDOUS
SUBSTANCES ON OR AT ANY OF THE PROPERTIES OWNED OR OPERATED BY ANY CREDIT PARTY,
OR (5) ANY OTHER ENVIRONMENTAL, HEALTH OR SAFETY CONDITION IN CONNECTION WITH
THIS AGREEMENT, THE NOTES OR ANY OTHER FINANCING DOCUMENT; PROVIDED, HOWEVER, NO
INDEMNITY SHALL BE AFFORDED UNDER THIS SECTION 10.4(C) IN RESPECT OF ANY
PROPERTY FOR ANY OCCURRENCE ARISING PRIMARILY FROM THE ACTS OR OMISSIONS OF AN
AGENT OR ANY LENDER DURING THE PERIOD AFTER WHICH SUCH PERSON, ITS SUCCESSORS OR
ASSIGNS SHALL HAVE OBTAINED ACTUAL PHYSICAL POSSESSION OF SUCH PROPERTY (WHETHER
BY FORECLOSURE
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OR DEED IN LIEU OF FORECLOSURE, AS MORTGAGEE-IN-POSSESSION OR OTHERWISE); AND
(d) ENVIRONMENTAL WAIVER. WITHOUT LIMITING THE FOREGOING
PROVISIONS, EACH BORROWER HEREBY DOES WAIVE, RELEASE AND COVENANT NOT TO BRING
AGAINST ANY OF THE PERSONS INDEMNIFIED IN THIS SECTION 10.4 ANY DEMAND, CLAIM,
COST RECOVERY ACTION OR LAWSUIT THEY MAY NOW OR HEREAFTER HAVE OR ACCRUE (WHICH
RELATE TO OR ARISE AS A RESULT OF THE LOANS, THE LETTERS OF CREDIT OR ANY
FINANCING DOCUMENT) ARISING FROM (1) ANY ENVIRONMENTAL LAW NOW OR HEREAFTER
ENACTED (INCLUDING THOSE APPLICABLE TO ANY BORROWER UNLESS THE ACTS OR OMISSIONS
OF ANY SUCH PERSON OR THEIR RESPECTIVE SUCCESSORS AND ASSIGNS ARE THE PRIMARY
CAUSE OF THE CIRCUMSTANCES GIVING RISE TO SUCH DEMAND, COST RECOVERY ACTION OR
LAWSUIT, (2) THE PRESENCE, USE, RELEASE, STORAGE, TREATMENT OR DISPOSAL OF
HAZARDOUS SUBSTANCES ON OR AT ANY OF THE PROPERTIES OWNED OR OPERATED BY ANY
CREDIT PARTY, OR (3) THE BREACH OR NON-COMPLIANCE BY ANY CREDIT PARTY WITH ANY
ENVIRONMENTAL LAW OR ENVIRONMENTAL COVENANT APPLICABLE TO ANY BORROWER, UNLESS
THE ACTS OR OMISSIONS OF SUCH PERSON, ITS SUCCESSORS AND ASSIGNS ARE THE PRIMARY
CAUSE OF THE CIRCUMSTANCES GIVING RISE TO SUCH DEMAND, CLAIM, COST RECOVERY
ACTION OR LAWSUIT.
If and to the extent that the obligations of the Borrowers under this Section
10.4 are unenforceable for any reason, each Borrower hereby agrees to make the
maximum contribution to the payment and satisfaction of such obligations which
is permissible under applicable law. Each Borrower's obligations under this
Section 10.4 shall survive any termination of this Agreement and the payment of
the Notes. Notwithstanding the foregoing, in no event shall any Canadian
Borrower be required to pay any costs and expenses or indemnify any Person
pursuant to this Section 10.4 other than Canadian Administrative Agent, any
Issuing Bank with respect to Canadian Letters of Credit or Canadian Lenders each
acting in its capacity as such (and the officers, directors, employees,
representatives, agents and affiliates of such Persons acting in such
capacities).
Section 10.5 RIGHT OF SETOFF. In addition to and not in limitation of
all rights of offset that any Lender or any Issuing Bank may have under
applicable law, each Lender or other holder of a Note, or any other Lender
Indebtedness shall, upon the occurrence of any Event of Default and at any time
during the continuance thereof and whether or not such Lender, such Issuing Bank
or such holder has made any demand or Borrower's obligations are matured, have
the right at any time and from time to time, without notice to any Borrower (any
such notice being expressly waived by each Borrower) to set-off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by any Lender or any
Issuing Bank to or for the credit or the account of the applicable Borrower
against any and all of the Lender Indebtedness owing to such Lender or such
Issuing Bank by such Borrower then outstanding, subject to the provisions of
Section 2.11(f), (g), (h) and (i); provided, that no Lender shall exercise any
right of offset with respect to any deposit of any Canadian Borrower to satisfy
any Lender Indebtedness which is not Canadian Lender Indebtedness.
Section 10.6 BENEFIT OF AGREEMENT. The Notes, this Agreement and the
other Financing Documents shall be binding upon and inure to the benefit of and
be enforceable by the respective successors and assigns of the parties hereto,
provided that no Borrower may assign or transfer any of its interest hereunder
or thereunder without the prior written consent of each Lender.
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Section 10.7 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS.
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby (including any Affiliate of any Issuing Bank that
issues any Letter of Credit), except that no Borrower may assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of each Lender (and any attempted assignment or transfer by any Borrower
without such consent shall be null and void). Except as otherwise expressly
provided herein, nothing in this Agreement shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby any legal or equitable right, remedy or claim under or by
reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitments and the Loans at the time owing to it) by executing,
and causing the assignee thereof to execute, an assignment and acceptance in the
form attached hereto as Exhibit R ("ASSIGNMENT AND ACCEPTANCE"); provided that
(1) except in the case of an assignment to a Lender or an Affiliate of a Lender
(other than an assignment by a Canadian Lender to a Lender or an Affiliate which
is not a resident of Canada for purposes of the Income Tax Act (Canada)), each
of the Borrowers and the Administrative Agent (and, in the case of an assignment
of all or a portion of a Revolving Commitment or any Lender's obligations in
respect of its Revolving Credit Exposure, any Issuing Bank which has outstanding
a Letter of Credit) must give their prior written consent to such assignment
(which consent shall not be unreasonably withheld), (2) except in the case of an
assignment of the entire remaining amount of an assigning Revolving Lender's and
its Related Affiliate's Revolving Commitments, the aggregate amount of the
Revolving Commitments assigned to an assignee and its Related Affiliates, and
the aggregate amount of the Revolving Commitments retained by the assignor and
its Related Affiliates after giving effect to such assignment, shall be not less
than $5,000,000 (provided that if the Revolving Commitments have expired or
terminated, such limits shall apply to the amount of Revolving Credit Exposure
assigned and retained), (3) except in the case of an assignment of the entire
interest of a Term Lender in the Term Loans held by it, the aggregate principal
amount of Term Loans assigned by such Term Lender and the aggregate principal
amount of Term Loans retained by such Term Lender after giving affect to such
assignment, shall not be less than $5,000,000, (4) no US Revolving Lender shall
assign all or any part of its US Revolving Commitment or US Revolving Loans
unless such Lender (and its Related Affiliate if applicable) assigns the same
percentage of its Canadian Revolving Commitment and Canadian Revolving Loans to
the same assignee (or Related Affiliate of the same assignee), (5) no Canadian
Lender shall assign all or any part of its Canadian Revolving Commitment or
Canadian Revolving Loans unless such Lender (and its Related Affiliate if
applicable) assigns the same percentage of its US Revolving Commitment and US
Revolving Loans to the same assignee (or Related Affiliate of the same
assignee), (6) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance, together with a processing
and recordation fee of $3,500, (7) the assignee, if it shall not be a Lender,
shall deliver to the Administrative Agent an Administrative Questionnaire; and
provided further that any consent of the Borrowers otherwise required under this
paragraph shall not be required if an Event of Default has occurred and is
continuing, and (8) so long as JPMorgan Chase Bank shall remain Administrative
Agent hereunder, it and its Related Affiliates shall hold aggregate Revolving
Credit Commitments (prior to the termination thereof and aggregate Revolving
Credit Exposure after giving effect to such termination) which is not less than
the aggregate Revolving Credit Commitments (or aggregate Revolving Credit
Exposure as applicable) held by General Electric Capital Corporation and its
Affiliates (without giving effect to any increase in any such commitments or
exposure by General Electric Capital Corporation and its Affiliates after the
Closing Date). Subject to acceptance and recording thereof pursuant to Section
10.7(d), from and after the effective date specified in each Assignment and
Acceptance the assignee thereunder shall be a party hereto and, to the extent of
107
the interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of the assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Section 2.17,
Section 2.19, Section 2.21 and Section 10.4). Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with this
Section 10.7(b). Notwithstanding the foregoing, the US Swingline Lender shall
not be permitted to make a partial assignment of the US Swingline Commitment.
Notwithstanding anything contained in this Agreement to the contrary, no
assignee of a Canadian Lender shall be permitted to seek any indemnification
for, or the payment of, any Indemnified Taxes or Other Taxes described in
Section 2.21 hereof or any penalties, interest and reasonable expenses arising
therefrom or with respect thereto from any Canadian Borrower, unless amounts
payable to the Lender from which the assignee received its assignment (the
"assignor") would have also been subject to, or such assignor would have also
been required to pay, such Indemnified Taxes or Other Taxes; provided, however,
the limitation contained in this sentence shall not apply to any assignees who
are assigned their interests hereunder during the existence of a Default or
Event of Default.
(c) The Administrative Agent, acting for this purpose as an
agent of the Borrowers, shall maintain at one of its offices in New York, New
York a copy of each Assignment and Acceptance delivered to it and a register for
the recordation of the names and addresses of the Lenders, and the Commitment
of, and principal amount of the Loans and Reimbursement Obligations owing to,
each Lender pursuant to the terms hereof from time to time (the "REGISTER"). The
entries in the Register shall be conclusive, and the Borrowers, the
Administrative Agent, the Issuing Banks and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by each Borrower, any
Issuing Bank and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in Section
10.7(b) and any written consent to such assignment required by Section 10.7(b),
the Administrative Agent shall accept such Assignment and Acceptance and record
the information contained therein in the Register. No assignment shall be
effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this paragraph.
(e) Any Lender may, without the consent of any Borrower, the
Administrative Agent or any Issuing Bank, sell participations to one or more
banks or other entities (a "PARTICIPANT") in all or a portion of such Lender's
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans and Reimbursement Obligations owing to it); provided
that (1) such Lender's obligations under this Agreement shall remain unchanged,
(2) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, (3) each Borrower, Administrative Agent,
the Canadian Administrative Agent, the Issuing Banks and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and (4) any Canadian Lender
that intends to sell a participation to a Person which is not a resident of
Canada for purposes of the Income Tax Act (Canada) shall give prior written
notice thereof to the Canadian Borrowers. Any agreement or instrument pursuant
to which a Lender sells such a participation shall provide that such Lender
shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided
that such agreement or instrument may provide that such Lender will not, without
the consent of the Participant, agree to any amendment, modification or waiver
described in Section 10.2(a) or Section 10.2(b) that
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affects such Participant, no US Revolving Lender shall sell any participation in
its US Revolving Credit Commitments or US Revolving Loans unless such Lender (or
its Related Affiliate) sells a participation interest of an equal percentage of
its Canadian Revolving Commitment and Canadian Revolving Loans to the same
Participant or a Related Affiliate of such Participant, and no Canadian Lender
shall sell any participation in its Canadian Revolving Credit Commitments or
Canadian Revolving Loans unless such Lender (or its Related Affiliate) sells an
equal percentage of its US Revolving Commitment and US Revolving Loans to the
same Participant or a Related Affiliate of such Participant. Subject to this
Section 10.7(e), each Borrower agrees that each Participant shall be entitled to
the benefits of Section 2.17, Section 2.19 and Section 2.21 to the same extent
as, but not to any greater extent than the Lender from which it acquired the
participation. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 10.5 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.20 as though it were a
Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.19 or Section 2.21 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Borrowers' prior written consent. A Participant that would be a Foreign
Lender if it were a Lender shall not be entitled to the benefits of Section 2.21
unless the Borrowers are notified of the participation sold to such Participant
and such Participant agrees, for the benefit of each Borrower, to comply with
Section 2.21(f) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section 10.7 shall not apply to
any such pledge or assignment of a security interest; provided that no such
pledge or assignment of a security interest shall release a Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.
(h) Each Borrower authorizes each Lender to disclose to any
participant or Assignee (each, a "TRANSFEREE") and any prospective Transferee
any and all information in such Lender's possession concerning the Borrowers and
their Affiliates which has been delivered to such Lender by or on behalf of any
Borrower pursuant to this Agreement or which has been delivered to such Lender
by or on behalf of any Borrower in connection with such Lender's credit
evaluation of the Borrowers and their Affiliates prior to becoming a party to
this Agreement. No assignment or participation made or purported to be made to
any Transferee shall be effective without the prior written consent of the
Borrowers if it would require it to make any filing with any Governmental
Authority or qualify any Loan or Note under the laws of any jurisdiction, and
the Company shall be entitled to request and receive such information and
assurances as it may reasonably request from any Lender or any Transferee to
determine whether any such filing or qualification is required or whether any
assignment or participation is otherwise in accordance with applicable law.
Section 10.8 GOVERNING LAW; SUBMISSION TO JURISDICTION; ETC.
(a) GOVERNING LAW. This Agreement and the rights and
obligations of the parties hereunder and under the Notes shall be construed in
accordance with and be governed by the laws of the State of New York and, to the
extent controlling, laws of the United States of America.
(b) SUBMISSION TO JURISDICTION. Any legal action or proceeding
with respect to this Agreement, the Notes or the other Financing Documents may
be brought in the courts of the State of New York or of the United States of
America for the Southern District of New York, and, by execution and delivery of
this Agreement, each Borrower hereby accepts for itself and in respect of its
Property,
109
generally and unconditionally, the jurisdiction of the aforesaid courts. Each
Borrower hereby irrevocably waives any objection, including, but not limited to,
any objection to the laying of venue or based on the grounds of Forum Non
Conveniens, which it may now or hereafter have to the bringing of any such
action or proceeding in such respective jurisdictions.
(c) WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT ALLOWED BY
APPLICABLE LAW, EACH OF THE BORROWERS, THE AGENTS, THE ISSUING BANKS AND THE
LENDERS (i) IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO ANY FINANCING DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN; (ii) IRREVOCABLY WAIVE ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY
SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR
DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (iii) CERTIFY THAT NO
PARTY HERETO NOR ANY REPRESENTATIVE OR COUNSEL FOR ANY PARTY HERETO HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS; AND (iv)
ACKNOWLEDGE THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER
FINANCING DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BASED
UPON, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN
THIS SECTION.
(d) WAIVER OF CONSEQUENTIAL DAMAGES. To the maximum extent
allowed by applicable law, each Borrower, each Agent, the Issuing Banks and the
Lenders (1) irrevocably waive any right each may have to claim or recover in any
such litigation any special, exemplary, punitive or consequential damages, or
damages other than, or in addition to, actual damages; (2) certifies that no
party hereto nor any representative or counsel for any party hereto has
represented, expressly or otherwise, or implied that such party would not, in
the event of litigation, seek to enforce the foregoing waiver; and (3)
acknowledges that it has been induced to enter into this Agreement, the other
Financing Documents and the transactions contemplated hereby and thereby based
upon, among other things, the mutual waivers and certifications contained in
this Section 10.8.
(e) DESIGNATION OF PROCESS AGENT. Each Borrower hereby
irrevocably designates CT Corporation System, with an office on the date hereof
at ▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, as the designee, appointee
and process agent of such Borrower to receive, for and on behalf of such
Borrower, service of process in such respective jurisdictions in any legal
action or proceeding with respect to this Agreement, the Notes, or the other
Financing Documents. It is understood that a copy of such process served on such
Agent will be promptly forwarded by mail to such Borrower at its address set
forth opposite its signature below, but the failure of any Borrower to receive
such copy shall not affect in any way the service of such process. Each Borrower
further irrevocably consents to the service of process of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to the Company at its
said address, such service to become effective 30 days after such mailing.
(f) SERVICE OF PROCESS. Nothing herein shall affect the right
of Administrative Agent or any Lender or any holder of a Note to serve process
in any other manner permitted by law or to commence legal proceedings or
otherwise proceed against any Borrower in any other jurisdiction.
(g) "JUDGMENT CURRENCY".
(i) If, for the purpose of obtaining or enforcing any
judgment against any Borrowers or any Credit Party in any court in any
jurisdiction, it becomes necessary to convert
110
into any other currency (such other currency being hereinafter in this
Section 10.8(g) referred to as the "Judgment Currency") an amount due
under any Financing Document in any currency (the "Obligation
Currency") other than the Judgment Currency, the conversion shall be
made at the rate of exchange prevailing on the Business Day immediately
preceding (i) the date of actual payment of the amount due, in the case
of any proceeding in the courts of any jurisdiction that will give
effect to such conversion being made on such date, or (ii) the date on
which the judgment is given, in the case of any proceeding in the
courts of any other jurisdiction (the applicable date as of which such
conversion is made pursuant to this Section 10.8(g) being hereinafter
in this Section 10.8(g) referred to as the "Judgment Conversion Date").
(ii) If, in the case of any proceeding in the court
of any jurisdiction referred to in Section 10.8(g)(i), there is a
change in the rate of exchange prevailing between the Judgment
Conversion Date and the date of actual receipt for value of the amount
due, the applicable Borrower or Credit Party shall pay such additional
amount (if any, but in any event not lesser amount) as may be necessary
to ensure that the amount actually received in the Judgment Currency,
when converted at the rate of exchange prevailing on the date of
payment, will produce the amount of the Obligation Currency which could
have been purchased with the amount of the Judgment Currency stipulated
in the judgment or judicial order at the rate of exchange prevailing on
the Judgment Conversion Date. Any amount due from a Borrower or Credit
Party under Section 10.8(g)(ii) shall be due as a separate debt and
shall not be affected by judgment being obtained for any other amounts
due under or in respect of any of the Loan Documents.
(iii) The term "rate of exchange" in this Section
10.8(g) means the rate of exchange at which the Administrative Agent
would, on the relevant date at or about 12:00 noon (New York time), be
prepared to sell the Obligation Currency against the Judgment Currency.
Section 10.9 INDEPENDENT NATURE OF LENDERS' RIGHTS. The amounts payable
at any time hereunder to each Lender shall be a separate and independent debt,
and each Lender shall be entitled to protect and enforce its rights arising out
of this Agreement, and it shall not be necessary for any other Lender to be
joined as an additional party in any proceeding for such purpose.
Section 10.10 INVALIDITY. In the event that any one or more of the
provisions contained in the Notes, this Agreement or in any other Financing
Document shall, for any reason, be held invalid, illegal or unenforceable in any
respect, (a) each Borrower agrees that such invalidity, illegality or
unenforceability shall not affect any other provision of the Notes, this
Agreement or any other Financing Document and (b) each Borrower and
Administrative Agent (acting on behalf and at the direction of the Lenders) and
Canadian Administrative Agent (acting on behalf and at the direction of the
Canadian Lenders) will negotiate in good faith to amend such provision so as to
be legal, valid, and enforceable.
Section 10.11 RENEWAL, EXTENSION OR REARRANGEMENT. All provisions of
this Agreement and of any other Financing Documents relating to the Notes or
other Lender Indebtedness shall apply with equal force and effect to each and
all promissory notes hereafter executed which in whole or in part represent a
renewal, extension for any period, increase or rearrangement of any part of the
Lender Indebtedness originally represented by the Notes, or of any part of such
other Lender Indebtedness.
Section 10.12 CONFIDENTIALITY. Administrative Agent, the Canadian
Administrative Agent, the Issuing Banks and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates' directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any
111
regulatory authority, (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party
to this Agreement, (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or the enforcement
of rights hereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section 10.12, to any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement, (g) with the consent of the
Borrowers or (h) to the extent such Information (1) becomes publicly available
other than as a result of a breach of this Section 10.12 or (2) becomes
available to the Administrative Agent, the Canadian Administrative Agent, any
Issuing Bank or any Lender on a non-confidential basis from a source other than
a Borrower. For the purposes of this Section 10.12, "INFORMATION" means all
information received from any Borrower relating to a Borrower or its business,
other than any such information that is available to the Administrative Agent,
the Canadian Administrative Agent, any Issuing Bank or any Lender on a
non-confidential basis prior to disclosure by a Borrower. Any Person required to
maintain the confidentiality of Information as provided in this Section 10.12
shall be considered to have complied with its obligation to do so if such Person
has exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
Each Borrower acknowledges that the Administrative Agent or Canadian
Administrative Agent may be providing debt financing, equity capital or other
services (including financial advisory services) to other companies in respect
of which a Credit Party may have conflicting interests regarding the
transactions contemplated by this Agreement or the other Financing Documents.
The Administrative Agent and Canadian Administrative Agent will not use
confidential information obtained from any Credit Party by virtue of the
transaction contemplated by this Agreement or the other Financing Documents or
their other relationships with the Borrower in connection with the performance
by the Administrative Agent and Canadian Administrative Agent of services for
other companies, and the Administrative Agent and Canadian Administrative Agent
will not furnish any such information to other companies. Each Borrower also
acknowledges that the Administrative Agent and Canadian Administrative Agent has
no obligation to use in connection with the transactions contemplated by this
Agreement or the other Financing Documents, or to furnish to any Credit Party,
confidential information obtained from other companies.
Section 10.13 INTEREST. It is the intention of the parties hereto to
conform strictly to usury laws applicable to each Agent, the Issuing Banks and
the Lenders (collectively, the "FINANCING PARTIES") and the Transactions.
Accordingly, if the Transactions would be usurious as to any Financing Party
under laws applicable to it, then, notwithstanding anything to the contrary in
the Notes, this Agreement or in any other Financing Document or agreement
entered into in connection with the Transactions or as security for the Notes,
it is agreed as follows: (a) the aggregate of all consideration which
constitutes interest under law applicable to any Financing Party that is
contracted for, taken, reserved, charged or received by such Financing Party
under the Notes, this Agreement or under any of such other Financing Documents
or agreements or otherwise in connection with the Transactions shall under no
circumstances exceed the maximum amount allowed by such applicable law, (b) in
the event that the maturity of the Notes is accelerated for any reason, or in
the event of any required or permitted prepayment, then such consideration that
constitutes interest under law applicable to any Financing Party may never
include more than the maximum amount allowed by such applicable law, and (c)
excess interest, if any, provided for in this Agreement or otherwise in
connection with the Transactions shall be canceled automatically by such
Financing Party and, if theretofore paid, shall be credited by such Financing
Party on the principal amount of the Borrower's Indebtedness to such Financing
Party (or, to the extent that the principal amount of the Borrower's
Indebtedness to such Financing Party shall have been or would thereby be paid in
full, refunded by such Financing Party to the Borrowers). The right to
accelerate the maturity of the Notes does not include the right to accelerate
any interest which has not otherwise accrued on the date of such acceleration,
and the Financing Parties do not intend to collect any unearned interest in the
event of acceleration. All sums paid or agreed to be paid to the Financing
Parties for the use, forbearance or detention of sums included in the Lender
Indebtedness shall, to the extent permitted by law applicable to
112
such Financing Party, be amortized, prorated, allocated and spread throughout
the full term of the Notes until payment in full so that the rate or amount of
interest on account of the Lender Indebtedness does not exceed the applicable
usury ceiling, if any. As used in this Section 10.13, the terms "APPLICABLE LAW"
or "LAWS APPLICABLE TO ANY FINANCING PARTY" shall mean the law of any
jurisdiction whose laws may be mandatorily applicable notwithstanding other
provisions of this Agreement, or law of the United States of America or Canada
applicable to any Financing Party and the Transactions which would permit such
Financing Party to contract for, charge, take, reserve or receive a greater
amount of interest than under such jurisdiction's law.
Section 10.14 ENTIRE AGREEMENT. The Notes, this Agreement and the other
Financing Documents embody the entire agreement and understanding between the
Administrative Agent, the Canadian Administrative Agent, the Issuing Banks or
the Lenders and the other respective parties hereto and thereto and supersede
all prior agreements and understandings between such parties relating to the
subject matter hereof and thereof and may not be contradicted by evidence of
prior, contemporaneous agreements of the parties. There are no unwritten oral
agreements between the parties.
Section 10.15 ATTACHMENTS. The exhibits, schedules and annexes attached
to this Agreement are incorporated herein and shall be considered a part of this
Agreement for the purposes stated herein, except that in the event of any
conflict between any of the provisions of such exhibits and the provisions of
this Agreement, the provisions of this Agreement shall prevail.
Section 10.16 COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original
but all of which shall together constitute one and the same instrument.
Section 10.17 SURVIVAL OF INDEMNITIES. Borrowers' obligations under
Section 2.17, Section 2.19, Section 2.21 and Section 10.4 shall survive the
payment in full of the Loans and the Letter of Credit Liabilities.
Section 10.18 HEADINGS DESCRIPTIVE. The headings of the several
sections and subsections of this Agreement, and the table of contents, are
inserted for convenience only and shall not in any way affect the meaning or
construction of any provision of this Agreement.
Section 10.19 SATISFACTION REQUIREMENT. If any agreement, certificate,
instrument or other writing, or any action taken or to be taken, is by the terms
of this Agreement required to be satisfactory to any party, the determination of
such satisfaction shall be made by such party in its sole and exclusive judgment
exercised reasonably and in good faith.
Section 10.20 EXCULPATION PROVISIONS. Each of the parties hereto
specifically agrees that it has a duty to read this Agreement and the other
Financing Documents and agrees that it is charged with notice and knowledge of
the terms of this Agreement and the other Financing Documents; that it has in
fact read this Agreement and is fully informed and has full notice and knowledge
of the terms, conditions and effects of this Agreement; that it has been
represented by legal counsel of its choice throughout the negotiations preceding
its execution of this Agreement and the other Financing Documents; and has
received the advice of its attorneys in entering into this Agreement and the
other Financing Documents; and that it recognizes that certain of the terms of
this Agreement and the other Financing Documents result in one party assuming
the liability inherent in some aspects of the transaction and relieving the
other party of its responsibility for such liability. Each party hereto agrees
and covenants that it will not contest the validity or enforceability of any
exculpatory provision of this Agreement and the other Financing Documents on the
basis that the party had no notice or knowledge of such provision or that the
provision is not "conspicuous."
113
Section 10.21 SECURED AFFILIATE; CASH MANAGEMENT AFFILIATE. For
purposes of this Agreement and all other Financing Documents (other than
applicable Swap Agreements and Cash Management Agreements), if a Secured
Affiliate or Cash Management Affiliate of a Lender has entered into one or more
Swap Agreements or Cash Management Agreements with any Credit Party, then to the
extent that such Secured Affiliate or Cash Management Affiliate has rights
against or is owed obligations by (or if the affiliated Lender, rather than the
Secured Affiliate or Cash Management Affiliate, were the counter-party to the
applicable Swap Agreement or the other party to the applicable Cash Management
Agreement, such rights or obligations that such Lender has) the Borrowers
hereunder or under any other Financing Document (other than applicable Swap
Agreements and Cash Management Agreements), such affiliated Lender shall be the
agent and attorney-in-fact for such Secured Affiliate or Cash Management
Affiliate with regard to any such rights and obligations, or deemed rights and
obligations, as if such Lender were the counter-party to the applicable Swap
Agreement or the other party to the applicable Cash Management Agreement
including, but not limited to, the following: (a) all distributions or payments
in respect of Collateral owing to such Secured Affiliate or Cash Management
Affiliate shall be distributed or paid to such Lender, (b) all representations,
statements or disclaimers made herein or in any Financing Document by or to such
Lender shall be deemed to have been made by or to such Secured Affiliate or Cash
Management Affiliate, (c) all obligations incurred by such Lender that would
have been incurred by the Secured Affiliate or Cash Management Affiliate if it
were a party hereto (including, but not limited to, obligations under Section
9.6) shall be the obligations of such Lender, and such Lender, as the agent and
attorney-in-fact of its Secured Affiliate or Cash Management Affiliate, will
make any and all payments owing to the Administrative Agent with respect to such
obligations or deemed obligations of its Secured Affiliate or Cash Management
Affiliate. Each such Lender represents, warrants and covenants to and with the
Administrative Agent and the Canadian Administrative Agent that such Lender has,
or at all applicable times will have, full power and authority to act as Agent
and attorney-in-fact for its Secured Affiliates or Cash Management Affiliates.
Under no circumstance shall any Secured Affiliate or Cash Management Affiliate
have any voting rights hereunder and the voting rights of any affiliated Lender
shall not be increased by virtue of the obligations owing to any such Secured
Affiliate or Cash Management Affiliate.
Section 10.22 NO FINANCIAL ASSISTANCE BY CANADIAN CREDIT PARTIES.
Notwithstanding any provision of this Agreement or any of the other Financing
Documents to the contrary (including, without limitation, Section 10.4 and
Section 10.21 of this Agreement) no Canadian Credit Party will have any
liability hereunder or thereunder for, nor shall any of the assets of any such
Canadian Credit Party (including proceeds of any Collateral owned by any such
Canadian Credit Party) be applied against or issued to satisfy or offset, any
indebtedness, obligations or liabilities (actual or contingent) of any Person
which is not indebtedness, an obligation, or a liability of a Canadian Borrower;
provided, that, nothing contained herein shall limit or impair the rights of any
Agent, any Lender or any Secured Affiliate or the liability or obligation of any
Canadian Credit Party with respect to the Canadian Lender Indebtedness,
including, without limitation, any Swap Agreements or Cash Management Agreements
entered into with any Canadian Credit Party.
Section 10.23 MISSOURI LAW PROVISION. ORAL AGREEMENT OR COMMITMENTS TO
LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT
INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE. TO PROTECT
THE BORROWERS AND THE LENDERS FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY
AGREEMENTS WE REACH COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH
IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS
WE MAY LATER AGREE IN WRITING TO MODIFY IT.
114
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed as of the date first above written.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
115
SIGNATURE PAGE
TO
CREDIT AGREEMENT
DATED MARCH ___, 2002
BY AND AMONG
MAVERICK TUBE CORPORATION AND CERTAIN OF ITS SUBSIDIARIES, AS BORROWERS,
JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT,
CIT BUSINESS CREDIT CANADA INC., AS CANADIAN ADMINISTRATIVE AGENT,
GENERAL ELECTRIC CAPITAL CORPORATION, AS DOCUMENTATION AGENT,
AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS LENDERS
US BORROWERS: MAVERICK TUBE CORPORATION
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
MAVERICK INVESTMENT CORPORATION
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
MAVERICK TUBE L.P.
By: Maverick G.P., Inc., its
General Partner
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
PRECISION TUBE HOLDING CORPORATION
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
MAVERICK GP, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Signature Page
PRECISION GP, LLC
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
PRECISION TUBE TECHNOLOGY, L.P.
By: Precision GP, LLC, general partner
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
Signature Page
CANADIAN BORROWERS: PRUDENTIAL STEEL LTD.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
MAVERICK TUBE (CANADA) INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
MAVERICK EXCHANGECO (NOVA SCOTIA) ULC
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
PRECISION TUBE CANADA LIMITED
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address for notice for all Borrowers:
Maverick Tube Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn:
-----------------------------------
Fax:
------------------------------------
Phone:
----------------------------------
Signature Page
SIGNATURE PAGE
TO
CREDIT AGREEMENT
DATED MARCH ___, 2002
BY AND AMONG
MAVERICK TUBE CORPORATION AND CERTAIN OF ITS SUBSIDIARIES, AS BORROWERS,
JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT,
CIT BUSINESS CREDIT CANADA INC., AS CANADIAN ADMINISTRATIVE AGENT,
GENERAL ELECTRIC CAPITAL CORPORATION AS DOCUMENTATION AGENT,
AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS LENDERS
JPMORGAN CHASE BANK, individually, as an
Issuing Bank, as Administrative Agent,
as US Swingline Lender and a US
Revolving Lender
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Signature Page
SIGNATURE PAGE
TO
CREDIT AGREEMENT
DATED MARCH ___, 2002
BY AND AMONG
MAVERICK TUBE CORPORATION AND CERTAIN OF ITS SUBSIDIARIES, AS BORROWERS,
JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT,
CIT BUSINESS CREDIT CANADA INC., AS CANADIAN ADMINISTRATIVE AGENT,
GENERAL ELECTRIC CAPITAL CORPORATION AS DOCUMENTATION AGENT,
AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS LENDERS
JPMORGAN CHASE BANK, TORONTO
BRANCH, as Canadian Lender
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
Address:
Attention:
Telephone:
Telecopy:
Signature Page
SIGNATURE PAGE
TO
CREDIT AGREEMENT
DATED MARCH ___, 2002
BY AND AMONG
MAVERICK TUBE CORPORATION AND CERTAIN OF ITS SUBSIDIARIES, AS BORROWERS,
JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT,
CIT BUSINESS CREDIT CANADA INC., AS CANADIAN ADMINISTRATIVE AGENT,
GENERAL ELECTRIC CAPITAL CORPORATION AS DOCUMENTATION AGENT,
AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS LENDERS
CIT BUSINESS CREDIT CANADA INC.,
individually, as Canadian Administrative
Agent, Issuing Bank and as a Canadian
Lender
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Signature Page
SIGNATURE PAGE
TO
CREDIT AGREEMENT
DATED MARCH ___, 2002
BY AND AMONG
MAVERICK TUBE CORPORATION AND CERTAIN OF ITS SUBSIDIARIES, AS BORROWERS,
JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT,
CIT BUSINESS CREDIT CANADA INC., AS CANADIAN ADMINISTRATIVE AGENT,
GENERAL ELECTRIC CAPITAL CORPORATION AS DOCUMENTATION AGENT,
AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS LENDERS
GENERAL ELECTRIC CAPITAL CORPORATION, as
Documentation Agent and as US Revolving
Lender
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address: ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Address: General Electric Capital Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Region Counsel - Commercial Finance
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Signature Page
SIGNATURE PAGE
TO
CREDIT AGREEMENT
DATED MARCH ___, 2002
BY AND AMONG
MAVERICK TUBE CORPORATION AND CERTAIN OF ITS SUBSIDIARIES, AS BORROWERS,
JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT,
CIT BUSINESS CREDIT CANADA INC., AS CANADIAN ADMINISTRATIVE AGENT,
GENERAL ELECTRIC CAPITAL CORPORATION AS DOCUMENTATION AGENT,
AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS LENDERS
GENERAL ELECTRIC CAPITAL CANADA INC.,
as Canadian Lender
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Address: GE Capital Commercial Finance, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Address: GE Capital Commercial Finance, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Region Counsel - Commercial Finance
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Signature Page
SIGNATURE PAGE
TO
CREDIT AGREEMENT
DATED MARCH __, 2002
BY AND AMONG
MAVERICK TUBE CORPORATION AND CERTAIN OF ITS SUBSIDIARIES, AS BORROWERS,
JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT,
CIT BUSINESS CREDIT CANADA INC., AS CANADIAN ADMINISTRATIVE AGENT,
GENERAL ELECTRIC CAPITAL CORPORATION AS DOCUMENTATION AGENT,
AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS LENDERS
THE CIT GROUP/BUSINESS CREDIT, INC., as US
Revolving Lender
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Address:
Attention:
Telephone:
Telecopy:
Signature Page
SIGNATURE PAGE
TO
CREDIT AGREEMENT
DATED MARCH ___, 2002
BY AND AMONG
MAVERICK TUBE CORPORATION AND CERTAIN OF ITS SUBSIDIARIES, AS BORROWERS,
JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT,
CIT BUSINESS CREDIT CANADA INC., AS CANADIAN ADMINISTRATIVE AGENT,
GENERAL ELECTRIC CAPITAL CORPORATION AS DOCUMENTATION AGENT,
AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS LENDERS
U.S. BANK NATIONAL ASSOCIATION, as US
Revolving Lender
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Address: ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: 314-418-8555
Signature Page
SIGNATURE PAGE
TO
CREDIT AGREEMENT
DATED MARCH ___, 2002
BY AND AMONG
MAVERICK TUBE CORPORATION AND CERTAIN OF ITS SUBSIDIARIES, AS BORROWERS,
JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT,
CIT BUSINESS CREDIT CANADA INC., AS CANADIAN ADMINISTRATIVE AGENT,
GENERAL ELECTRIC CAPITAL CORPORATION AS DOCUMENTATION AGENT,
AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS LENDERS
FLEET CAPITAL CANADA CORPORATION, as
Canadian Lender
By:
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Name:
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Title:
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Address: ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
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Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Signature Page
SIGNATURE PAGE
TO
CREDIT AGREEMENT
DATED MARCH ___, 2002
BY AND AMONG
MAVERICK TUBE CORPORATION AND CERTAIN OF ITS SUBSIDIARIES, AS BORROWERS,
JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT,
CIT BUSINESS CREDIT CANADA INC., AS CANADIAN ADMINISTRATIVE AGENT,
GENERAL ELECTRIC CAPITAL CORPORATION AS DOCUMENTATION AGENT,
AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS LENDERS
FLEET CAPITAL CORPORATION, as US
Revolving Lender
By:
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Name:
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Title:
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Address: ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Signature Page
SIGNATURE PAGE
TO
CREDIT AGREEMENT
DATED MARCH ___, 2002
BY AND AMONG
MAVERICK TUBE CORPORATION AND CERTAIN OF ITS SUBSIDIARIES, AS BORROWERS,
JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT,
CIT BUSINESS CREDIT CANADA INC., AS CANADIAN ADMINISTRATIVE AGENT,
GENERAL ELECTRIC CAPITAL CORPORATION AS DOCUMENTATION AGENT,
AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS LENDERS
RBC CENTURA BANK, as US Revolving Lender
By:
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Name:
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Title:
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Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: E. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Signature Page
SIGNATURE PAGE
TO
CREDIT AGREEMENT
DATED MARCH ___, 2002
BY AND AMONG
MAVERICK TUBE CORPORATION AND CERTAIN OF ITS SUBSIDIARIES, AS BORROWERS,
JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT,
CIT BUSINESS CREDIT CANADA INC., AS CANADIAN ADMINISTRATIVE AGENT,
GENERAL ELECTRIC CAPITAL CORPORATION AS DOCUMENTATION AGENT,
AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS LENDERS
ROYAL BANK OF CANADA, as Canadian Lender
By:
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Name:
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Title:
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Address: ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Signature Page
SIGNATURE PAGE
TO
CREDIT AGREEMENT
DATED MARCH ___, 2002
BY AND AMONG
MAVERICK TUBE CORPORATION AND CERTAIN OF ITS SUBSIDIARIES, AS BORROWERS,
JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT,
CIT BUSINESS CREDIT CANADA INC., AS CANADIAN ADMINISTRATIVE AGENT,
GENERAL ELECTRIC CAPITAL CORPORATION AS DOCUMENTATION AGENT,
AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS LENDERS
CITIZENS BUSINESS CREDIT, a division of
Citizens Leasing Corporation, as US Revolving Lender
By:
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Name:
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Title:
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Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Signature Page
ANNEX I
LENDER US REVOLVING CANADIAN US SWINGLINE LOAN
CREDIT REVOLVING CREDIT COMMITMENT
COMMITMENT COMMITMENT
JPMorgan Chase Bank $ 7,733,640.00 0 $10,000,000.00
JPMorgan Chase Bank, 0 $21,266,360.00 0
Toronto Branch
General Electric Capital $ 17,733,240.00 0 0
Corporation
General Electric Capital Canada 0 $10,266,760.00 0
Inc.
The CIT Group/Business Credit, $ 17,733,240.00 0 0
Inc.
CIT Business Credit Canada Inc. 0 $10,266,760.00 0
US Bank National Association $ 14,500,000.00 0 0
Fleet Capital Corporation $ 11,399,940.00 0 0
Fleet Capital Canada Corp. 0 $6,600,060.00 0
RBC Centura Bank $ 11,399,940.00 0 0
Royal Bank of Canada 0 $6,600,060.00 0
Citizens Business Credit, a $ 14,500,000.00 0 0
division of Citizens Leasing
Corporation
Total $ 95,000,000.00 $55,000,000.00 $10,000,000.00
Annex Page-1
Description of Schedules and
Similar Attachments in Accordance
of the Credit Agreement
with Item 601(b)(2) of
Regulation S-K
SCHEDULES
Schedule 1.3 Projections
Schedule 3.3 Post-Closing Matters
Schedule 5.7 Litigation
Schedule 5.15 Compliance with Laws
Schedule 5.19 Capital Structure
Schedule 5.20 Insurance
Schedule 5.21 Environmental Matters
Schedule 5.23 Employee Matters
Schedule 5.24 Real Property Locations
Schedule 5.26 Indebtedness
Schedule 7.2 Permitted Indebtedness
Schedule 7.3 Permitted Liens
Schedule 7.6 Permitted Investments
Schedule 7.8 Nature of Business
EXHIBITS
Exhibit A-1 Form of US Borrowing Base Report
Exhibit A-2 Form of Canadian Borrowing Base Report
Exhibit B-1 Form of Borrowing Request (US Revolving Credit Loan)
Exhibit B-2 Form of Borrowing Request (Canadian Revolving Credit Loans)
Exhibit B-3 Form of Borrowing Request (US Letters of Credit)
Exhibit B-4 Form of Borrowing Request (Canadian Letters of Credit)
Exhibit B-5 Form of Borrowing Request (US Swingline Loans)
Exhibit C-1 Form of Mortgage
Exhibit C-2 Form of Assignment of Rents
Exhibit D Form of Canadian Revolving Credit Note
Exhibit E Form of Canadian Security Agreement
Exhibit F Form of Guaranty and Security Agreement
Exhibit G Form of Perfection Certificate Update
Exhibit H Form of Term Lender Joinder Agreement
Exhibit I Form of Term Note
Exhibit J Form of US Real Estate Mortgage
Exhibit K Form of US Revolving Credit Note
Exhibit L Form of US Swingline Note
Exhibit M Form of B/A Equivalent Note
Exhibit N Form of Borrower Joinder Agreement
Exhibit O Form of Compliance Certificate
Exhibit P Form of Weekly Collateral Report
Exhibit Q Form of Inventory Designation Report
Exhibit R Form of Assignment and Acceptance
Exhibit S Form of Restricted Account Agreement