1
EXHIBIT 10.17
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AMENDED AND RESTATED
CREDIT AGREEMENT
DATED AS OF NOVEMBER 13,1996
AMONG
STUART ENTERTAINMENT, INC.,
AND
BINGO PRESS & SPECIALTY LIMITED,
AND
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
AS ▇.▇. ▇▇▇▇▇,
▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
AS CANADIAN AGENT,
AND
THE CHASE MANHATTAN BANK,
AS CO-AGENT,
AND
THE CHASE MANHATTAN BANK OF CANADA
AS CO-AGENT,
AND
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS
1.01. Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02. Other Interpretive Provisions . . . . . . . . . . . . . . . . . 30
(a) Defined Terms . . . . . . . . . . . . . . . . . . . . . . . 30
(b) The Agreement . . . . . . . . . . . . . . . . . . . . . . . 30
(c) Certain Common Terms. . . . . . . . . . . . . . . . . . . . 30
(d) Performance; Time . . . . . . . . . . . . . . . . . . . . . 30
(e) Contracts . . . . . . . . . . . . . . . . . . . . . . . . . 31
(f) Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
(g) Captions. . . . . . . . . . . . . . . . . . . . . . . . . . 31
(h) Independence of Provisions . . . . . . . . . . . . . . . . 31
(i) Interpretation I . . . . . . . . . . . . . . . . . . . . . 31
(j) Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . 31
1.03. Accounting Principles. . . . . . . . . . . . . . . . . . . . . . 32
1.04. Principle of Deemed Reinvestment . . . . . . . . . . . . . . . . 32
1.05. Effect of Amendment and Restatement. . . . . . . . . . . . . . . 32
ARTICLE II THE CREDITS . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.01. Amounts and Terms of Commitments . . . . . . . . . . . . . . . . 33
(a) Intentionally Omitted . . . . . . . . . . . . . . . . . . . 33
(b) The Revolving Credit . . . . . . . . . . . . . . . . . . . 33
2.02. Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.03. Procedure for Borrowing and Issuance of Letters of Credit. . . . 34
2.04. Conversion and Continuation Elections. . . . . . . . . . . . . . 36
2.05. Voluntary Termination or Reduction of Commitments . . . . . . . 38
2.06. Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . 39
2.07. Mandatory Prepayments of Loans; Mandatory Commitment Reductions. 39
(a) Revolving Loans in Excess of the Aggregate Revolving
Commitment or Borrowing Base . . . . . . . . . . . . . . 39
(b) General . . . . . . . . . . . . . . . . . . . . . . . . . . 40
2.08. Repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
(a) Intentionally Omitted . . . . . . . . . . . . . . . . . . . 40
(b) The Revolving Credit. . . . . . . . . . . . . . . . . . . . 40
2.09. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
2.10. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
(a) Underwriting Fee. . . . . . . . . . . . . . . . . . . . . . 41
(b) Non-Use Fees. . . . . . . . . . . . . . . . . . . . . . . . 41
(c) Agency Fee. . . . . . . . . . . . . . . . . . . . . . . . . ▇▇
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(▇) Letters of Credit Fees. . . . . . . . . . . . . . . . . . . 42
(e) Audit Fees . . . . . . . . . . . . . . . . . . . . . . . . 42
2.11. Computation of Fees and Interest . . . . . . . . . . . . . . . . 42
2.12. Payments by the Companies. . . . . . . . . . . . . . . . . . . . 43
2.13. Payments by the Lenders to the Agents. . . . . . . . . . . . . . 44
2.14. Sharing of Payments, Etc. . . . . . . . . . . . . . . . . . . . 45
2.15. Certain Letter of Credit Provisions. . . . . . . . . . . . . . . 45
2.16. Currency of Payment. . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY . . . . . . . . . . . . . 49
3.01. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
3.02. Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
3.03. Increased Costs and Reduction of Return. . . . . . . . . . . . . 54
3.04. Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . 55
3.05. Inability to Determine Rates . . . . . . . . . . . . . . . . . . 56
3.06. Certificates of Lenders . . . . . . . . . . . . . . . . . . . . 56
3.07. Substitution or Termination of Lender. . . . . . . . . . . . . . 56
3.08. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE IV CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . 57
4.01. Conditions of Initial Loans. . . . . . . . . . . . . . . . . . . 57
(a) Credit Agreement and Notes. . . . . . . . . . . . . . . . . 57
(b) Resolutions; Incumbency . . . . . . . . . . . . . . . . . . 57
(c) Articles of Incorporation; By-laws and Good Standing. . . . 58
(d) Collateral Documents. . . . . . . . . . . . . . . . . . . . 58
(e) Legal Opinions. . . . . . . . . . . . . . . . . . . . . . . 59
(f) Payment of Fees . . . . . . . . . . . . . . . . . . . . . . 60
(g) UCC-3 Termination Statements. . . . . . . . . . . . . . . . 60
(h) Certificate . . . . . . . . . . . . . . . . . . . . . . . . 60
(i) Financial Statements. . . . . . . . . . . . . . . . . . . . 60
(j) Borrowing Base Certificate. . . . . . . . . . . . . . . . . 60
(k) Insurance Policies. . . . . . . . . . . . . . . . . . . . . 61
(l) Subordinated Debt Investment in U.S. Company. . . . . . . . 61
(m) Acquisition . . . . . . . . . . . . . . . . . . . . . . . . 61
(n) Repayment of Existing Debt. . . . . . . . . . . . . . . . . 61
(o) Other Documents . . . . . . . . . . . . . . . . . . . . . . 61
4.02. Conditions to All Borrowings and Issuance of Letters of
Credit . . . . . . . . . . . . . . . . . . . . . . . . . . 61
(a) Notice of Borrowing . . . . . . . . . . . . . . . . . . . . 61
(b) Representations and Warranties. . . . . . . . . . . . . . . 61
(c) No Existing Default . . . . . . . . . . . . . . . . . . . . 62
(d) No Change in Condition . . . . . . . . . . . . . . . . . . 62
ARTICLE V REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . 62
5.01. Corporate Existence and Power. . . . . . . . . . . . . . . . . . 62
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5.02. Corporate Authorization; No Contravention . . . . . . . . . . . 63
5.03. Governmental Authorization . . . . . . . . . . . . . . . . . . . 63
5.04. Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . 63
5.05. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
5.06. No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
5.07. ERISA Compliance . . . . . . . . . . . . . . . . . . . . . . . . 64
5.08. Use of Proceeds; Margin Regulations. . . . . . . . . . . . . . . 65
5.09. Title to Properties. . . . . . . . . . . . . . . . . . . . . . . 65
5.10. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
5.11. Financial Condition. . . . . . . . . . . . . . . . . . . . . . . 66
5.12. Environmental Matters . . . . . . . . . . . . . . . . . . . . . 66
5.13. Regulated Entities . . . . . . . . . . . . . . . . . . . . . . . 67
5.14. No Burdensome Restrictions . . . . . . . . . . . . . . . . . . . 67
5.15. Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
5.16. Labor Relations. . . . . . . . . . . . . . . . . . . . . . . . . 67
5.17. Copyrights, Patents, Trademarks and Licenses, Etc. . . . . . . . 67
5.18. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . 68
5.19. Broker's Transaction Fees. . . . . . . . . . . . . . . . . . . . 68
5.20. Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
5.21. Full Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . 68
5.22. Eligibility of Collateral. . . . . . . . . . . . . . . . . . . . 68
5.23. Acquisition. . . . . . . . . . . . . . . . . . . . . . . . . . . 69
5.24. Subordinated Notes . . . . . . . . . . . . . . . . . . . . . . . 69
ARTICLE VI AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . . 69
6.01. Financial Statements . . . . . . . . . . . . . . . . . . . . . . 69
6.02. Certificates; Other Information . . . . . . . . . . . . . . . . 71
6.03. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
6.04. Preservation of Corporate Existence, Etc. . . . . . . . . . . . 73
6.05. Maintenance of Property . . . . . . . . . . . . . . . . . . . . 73
6.06. Insurance; Condemnation. . . . . . . . . . . . . . . . . . . . . 73
6.07. Payment of Obligations . . . . . . . . . . . . . . . . . . . . . 76
6.08. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . 77
6.09. Inspection of Property and Books and Records . . . . . . . . . . 77
6.10. Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . 77
6.11. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . 78
6.12. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . 78
6.13. Inventory Reports. . . . . . . . . . . . . . . . . . . . . . . . 78
6.14. Excess Availability. . . . . . . . . . . . . . . . . . . . . . . 78
6.15. Collateral Audit . . . . . . . . . . . . . . . . . . . . . . . . 79
6.16. Significant Subsidiaries . . . . . . . . . . . . . . . . . . . . 79
ARTICLE VII NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . 79
7.01. Limitation on Liens. . . . . . . . . . . . . . . . . . . . . . . 79
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7.02. Disposition of Assets. . . . . . . . . . . . . . . . . . . . . . 81
7.03. Consolidations and Mergers. . . . . . . . . . . . . . . . . . . 81
7.04. Loans and Investments . . . . . . . . . . . . . . . . . . . . . 82
7.05. Limitation on Indebtedness . . . . . . . . . . . . . . . . . . . 82
7.06. Transactions with Affiliates . . . . . . . . . . . . . . . . . . 83
7.07. Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . 83
7.08. Contingent Obligations . . . . . . . . . . . . . . . . . . . . . 83
7.09. Joint Ventures . . . . . . . . . . . . . . . . . . . . . . . . . 84
7.10. Compliance with ERISA. . . . . . . . . . . . . . . . . . . . . . 84
7.11. Lease Obligations. . . . . . . . . . . . . . . . . . . . . . . . 84
7,12. Restricted Payments. . . . . . . . . . . . . . . . . . . . . . . 85
7.13. Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . 85
7.14. Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
7.15. Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . 86
7.16, Fixed Charge Ratio. . . . . . . . . . . . . . . . . . . . . . . 86
7.17. Interest Coverage Ratio . . . . . . . . . . . . . . . . . . . . 87
7.18. Change in Business . . . . . . . . . . . . . . . . . . . . . . . 87
7.19. Change in Structure. . . . . . . . . . . . . . . . . . . . . . . 87
7.20. Accounting Changes . . . . . . . . . . . . . . . . . . . . . . . 88
7.21. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . 88
7.22. Amendments to Acquisition Documents and Subordinated Debt
Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
ARTICLE VIII EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . 88
8.01. Event of Default . . . . . . . . . . . . . . . . . . . . . . . 88
(a) Non-Payment . . . . . . . . . . . . . . . . . . . . . . . 88
(b) Representation or Warranty . . . . . . . . . . . . . . . . 88
(c) Specific Defaults . . . . . . . . . . . . . . . . . . . . 89
(d) Other Defaults . . . . . . . . . . . . . . . . . . . . . . 89
(e) Cross-Default . . . . . . . . . . . . . . . . . . . . . . 99
(f) Insolvency; Voluntary Proceedings . . . . . . . . . . . . . 90
(g) Involuntary Proceedings . . . . . . . . . . . . . . . . . . 90
(h) Monetary Judgments. . . . . . . . . . . . . . . . . . . . . 90
(i) Non-Monetary Judgments. . . . . . . . . . . . . . . . . . . 90
(j) Collateral. . . . . . . . . . . . . . . . . . . . . . . . . 91
(k) Ownership . . . . . . . . . . . . . . . . . . . . . . . . 91
(l) Loss of Licenses. . . . . . . . . . . . . . . . . . . . . . 91
(m) Guarantor Defaults . . . . . . . . . . . . . . . . . . . . 91
(n) Material Adverse Change . . . . . . . . . . . . . . . . . . 92
(o) Non-Compliance with Subordinated Debt Documents . . . . . . 92
8.02. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
8.03. Rights Not Exclusive . . . . . . . . . . . . . . . . . . . . . . 92
ARTICLE IX THE AGENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
9.01. Appointment and Authorization . . . . . . . . . . . . . . . . . 93
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9.02. Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . 93
9.03. Liability of Agent . . . . . . . . . . . . . . . . . . . . . . . 93
9.04. Reliance by Agent. . . . . . . . . . . . . . . . . . . . . . . . 94
9.05. Notice of Default. . . . . . . . . . . . . . . . . . . . . . . . 94
9.06. Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . 94
9.07. Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . 95
9.08. Agent in Individual Capacity . . . . . . . . . . . . . . . . . . 96
9.09. Successor Agent. . . . . . . . . . . . . . . . . . . . . . . . . 96
9.10. Collateral Matters . . . . . . . . . . . . . . . . . . . . . . . 96
9.11. Co-Agents. . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
ARTICLE X MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
10.01. Amendments and Waivers. . . . . . . . . . . . . . . . . . . . . 97
10.02. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
10.03. No Waiver; Cumulative Remedies. . . . . . . . . . . . . . . . . 99
10.04. Costs and Expenses. . . . . . . . . . . . . . . . . . . . . . . 99
10.05. Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . 100
(a) General Indemnity . . . . . . . . . . . . . . . . . . . . 100
(b) Environmental Indemnity . . . . . . . . . . . . . . . . . 100
(c) Survival; Defense . . . . . . . . . . . . . . . . . . . . 101
10.06. Marshaling; Payments Set Aside. . . . . . . . . . . . . . . . 101
10.07. Successors and Assigns. . . . . . . . . . . . . . . . . . . . 101
10.08. Assignments, Participations, Etc. . . . . . . . . . . . . . 102
10.09. Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
10.10. Collateral Account . . . . . . . . . . . . . . . . . . . . . 105
10.11. Intentionally Omitted . . . . . . . . . . . . . . . . . . . . 106
10.12. Currency of Judgment . . . . . . . . . . . . . . . . . . . . 106
10.13. Notification of Addresses, Lending Offices, Etc . . . . . . . 106
10.14. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 106
10.15. Severability . . . . . . . . . . . . . . . . . . . . . . . . 106
10.16. No Third Parties Benefited . . . . . . . . . . . . . . . . . 107
10.17. Governing Law and Jurisdiction. . . . . . . . . . . . . . . . 107
10.18. Waiver of Jury Trial. . . . . . . . . . . . . . . . . . . . . 107
10.19. Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . 108
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AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of
November 13, 1996, among STUART ENTERTAINMENT, INC., a Delaware corporation (the
"U.S. Company"), BINGO PRESS & SPECIALTY LIMITED, an Ontario corporation (the
"Canadian Company"), the financial institutions from time to time party to this
Agreement (collectively, the "Lenders"; individually, a "Lender"), BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as U.S. Agent as provided
herein, BANK OF AMERICA CANADA, as Canadian Agent as provided herein, and THE
CHASE MANHATTAN BANK, and THE CHASE MANHATTAN BANK OF CANADA, as Co-Agents
(collectively the "Co-Agents").
RECITALS
WHEREAS, the U.S. Company, the Canadian Company, the Lenders, the
U.S Agent and the Canadian Agent are parties to that certain Credit Agreement
dated as of December 13, 1994 (as amended from time to time, the "Original
Credit Agreement");
WHEREAS, the U.S. Company, intends to raise approximately One
Hundred Million U.S. Dollars (U.S.$100,000,000) of subordinated debt, which
funds shall be used by the U.S. Company to (i) purchase substantially all of
the assets of Trade Products, Inc. and (ii) repay certain existing indebtedness
of the U.S. Company and the Canadian Company.
WHEREAS, in connection with the foregoing transactions and to
amend the Original Credit Agreement in certain other respects, the U.S.
Company, the Canadian Company, the Lenders, the U.S. Agent and the Canadian
Agent have agreed to amend, restate and replace the Original Credit Agreement
with this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.01. Defined Terms,
In addition to the terms defined elsewhere in this Agreement, the
following terms have the following meanings:
"Account Debtor" means any Person who is or who may become
obligated to a Company under, with respect to, or on account of an Account
Receivable.
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"Account Receivable" means any account of a Company or any
Significant Subsidiary domiciled and organized in the jurisdiction in which
such Company is domiciled and organized and any other right of a Company or any
Significant Subsidiary domiciled and organized in the jurisdiction in which
such Company is domiciled and organized to payment for goods sold or leased or
for services rendered, whether or not evidenced by an instrument or chattel
paper and whether or not yet earned by performance.
"Acquisition" means the acquisition by the U.S. Company of
substantially all of the assets of Seller pursuant to the terms of the
Acquisition Documents.
"Acquisition Documents" means the Asset Purchase Agreement dated
as of August 6, 1996 among the U.S. Company, Seller and the shareholders of
Seller, as amended by a First Amendment to Asset Purchase Agreement dated as of
October 10, 1996, and the agreements, instruments and documents executed in
connection therewith.
"Affiliate" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. A Person shall be deemed to control another Person
if the controlling Person possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of the other
Person, whether through the ownership of voting securities, by contract or
otherwise. Without limitation, any director, executive officer or beneficial
owner of 5% or more of the equity of a Person shall for the purposes of this
Agreement, be deemed to control the other Person. Notwithstanding the
foregoing, no Lender shall be deemed an "Affiliate" of a Company or of any
Subsidiary of a Company.
"Agent" means the Canadian Agent or the U.S. Agent.
"Agent-Related Persons" means BofA (Canada) and any successor
agent, and BofA (U.S.) and any successor agent, together with their respective
Affiliates, and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and Affiliates.
"Aggregate Revolving Commitment" means the combined Revolving,
Commitments of the Lenders (with the amounts of the Commitments of the Canadian
Lenders expressed in U.S. Dollars at the Current Exchange Rate), which equals
the sum of Thirty Million U.S Dollars (U.S.$30,000,000), as such sum may be
reduced from time to time pursuant to this Agreement.
"Aggregate Revolving Loan Availability" means the sum of Canadian
Revolving Loan Availability plus U.S. Revolving Loan Availability (with the
amount of the Revolving Loan Availability of the Canadian Company expressed in
U.S. Dollars at the Current Exchange Rate).
"Agreement" means this Amended and Restated Credit Agreement, as
amended from time to time in accordance with the terms hereof.
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"Applicable Accounting Principles" means U.S. GAAP.
The Applicable Accounting Principles applied to the consolidated financial
statements of the U.S. Company and its Subsidiaries shall be U.S. GAAP.
"Applicable Agent" means, with respect to the Canadian Company,
the Canadian Agent, and with respect to the U.S. Company, the U.S. Agent.
"Applicable Currency" means, with respect to the Canadian
Company, Canadian Dollars, and with respect to the U.S. Company, U.S. Dollars.
"Applicable Federal Funds Rate" means, with respect to the
Canadian Company, the Canadian Federal Funds Rate, and with respect to the U.S.
Company, the U.S. Federal Funds Rate.
"Applicable Issuer" means, with respect to the Canadian Company,
the Canadian Issuer, and with respect to the U.S. Company, the U.S. Issuer.
"Applicable Lenders" means, with respect to the Canadian Company,
the Canadian Lenders, and with respect to the U.S. Company, the U.S. Lenders.
"Applicable Margin" means, at any time, (a) with respect to the
unpaid principal amount of each Offshore Rate Loan, the applicable percentage
set forth below in the column entitled "Applicable Margin for Offshore Rate
Loans" opposite the Leverage Ratio in effect at such time; (b) with respect to
the unpaid principal amount of each Base Rate Loan and Canadian Base Rate Loan,
the applicable percentage set forth below in the column entitled "Applicable
Margin for Base Rate/Canadian Base Rate Loans" opposite the Leverage Ratio in
effect at such time; (c) with respect to the unpaid principal amount of each BA
Rate Loan, the applicable percentage set forth below in the column entitled
"Applicable Margin for BA Rate Loans" opposite the Leverage Ratio in effect at
such time; (d) with respect to the Letters of Credit fee described in
subsection 2.10(d), the applicable percentage set forth below in the column
entitled "Applicable Margin for Letters of Credit Fee" opposite the Leverage
Ratio in effect at such time; and (e) with respect to the non-use fee described
in subsection 2.10(b), the applicable percentage set forth below in the column
entitled "Applicable Margin for Non-Use Fee" opposite the Leverage Ratio in
effect at such time.
Applicable
Margin For
Applicable Base Rate/ Applicable Applicable Applicable
Margin For Canadian Margin For Margin For Margin For
Offshore Base Rate BA Rate Letter of Non-Use
Leverage Ratio Rate Loans Loans Loans Credit Fee Fee
Less than 2.50:1.0 1.250% .250% 1.250% 1.125% 0.300%
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10
Applicable
Margin For
Applicable Base Rate/ Applicable Applicable Applicable
Margin For Canadian Margin For Margin For Margin For
Offshore Base Rate BA Rate Letter of Non-Use
Leverage Ratio Rate Loans Loans Loans Credit Fee Fee
Greater than or equal 1.500% 0.500% 1.500% 1.375% 0.375%
to 2.50:1.0 but less
than 3.25:1.0
Greater than or equal 1.750% 0.750% 1.750% 1.625% 0.375%
to 3.25:1.0 but less
than 4.00:1.0
Greater than or equal 2.000% 1.000% 2.000% 1.875% 0.375%
to 4.00:1.0 but less
than 4.75:1.0
Greater than or equal 2.750% 1.750% 2.750% 2.625% 0.500%
to 4.75:1.0
The initial Applicable Margin for Offshore Rate Loans shall be
2.000%, the initial Applicable Margin for Base Rate Loans and Canadian Base
Rate Loans shall be 1.000%, the initial Applicable Margin for BA Rate Loans
shall be 2.000%, the initial Applicable Margin for the Letters of Credit fee
shall be 1.875% and the initial Applicable Margin for the non-use fee shall be
0.375%, and each initial Applicable Margin shall remain in effect until the
delivery of a Compliance Certificate with respect to the fiscal year ending
December 31, 1996. Thereafter, the Applicable Margin shall be based on the
Leverage Ratio in effect as set forth in the Compliance Certificate most
recently delivered by the U.S. Company to the Agents. Changes in the
Applicable Margin resulting from a change in the Leverage Ratio shall become
effective upon delivery by the U.S. Company to the Agents of a new Compliance
Certificate pursuant to subsection 6.02(b). If the U.S. Company shall fail to
deliver a Compliance Certificate within 50 days (or, in the case of the fourth
fiscal quarter of any fiscal year, 95 days) after the end of any fiscal quarter
as required pursuant to subsection 6.02(b), the Applicable Margin from and
including the 51st or 96th day, as the case may be, after the end of such
fiscal quarter to but not including the date the U.S. Company delivers to the
Agents a Compliance Certificate shall conclusively be presumed to equal the
highest Applicable Margin specified in the above chart for the type of loan or
fee. Whenever a change in the Leverage Ratio results in an adjustment to the
Applicable Margin, the U.S. Company shall deliver to the Agents, together with
the required Compliance Certificate, a Pricing Change Certificate.
"Assignee" has the meaning specified in subsection 10.08(a).
"Assignment and Acceptance" has the meaning specified in
subsection 10.08(a).
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11
"Attorney Costs" means and includes all fees and disbursements of
any law firm or other external counsel, the allocated cost of internal legal
services and all disbursements of internal counsel.
"BA Rate" means, for each Interest Period in respect of BA Rate
Loans comprising part of the same Borrowing, an interest rate per annum
(rounded upward to the nearest 1/100th of 1%) equal to the market bid rate
determined by the Reference Bank for banker's acceptances (with a tenor
comparable to such Interest Period and in an amount comparable to such BA Rate
Loans) accepted by the Reference Bank on the first day of such Interest Period.
"BA Rate Loan" means a Loan that bears interest based on the BA
Rate.
"BAI" means Bank of America Illinois, an Illinois banking
corporation.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978,
as amended (11 U.S.C. Section 101, et seq.).
"Base Net Worth" means (1) the greater of (i) 90% of Net Worth on
the last day of the month in which the Closing Date occurs, and (ii) Twenty
Nine Million Seven Hundred Fifty Thousand U.S. Dollars (U.S.$29,750,000), plus
(2) 90% of any Net Issuance Proceeds, minus (3) the after tax effect of a
non-cash write up of the inventory acquired from Seller, to the extent such
affected inventory was not sold prior to the first day of the month following
the Closing Date, with a pre-tax limit to such write-up of Two Million Six
Hundred Thousand U.S. Dollars (U.S.$2,600,000), minus (4) the after tax effect
of a severance charge between the Closing Date and December 31, 1996, to the
extent such severance charge was not booked prior to the first day of the month
following the Closing Date, not to exceed Five Hundred Thousand U.S. Dollars
(U.S.$500,000) on a pre-tax basis.
"Base Rate" means, for any day, the higher of:
(a) the rate of interest in effect for such day as publicly
announced from time to time by BofA (U.S.) in San Francisco, California, as its
"reference rate"; such rate being set by BofA (U.S.) based upon various factors
including BofA (U.S.)'s costs and desired return, general economic conditions
and other factors, and used as a reference point for pricing some loans, which
may be priced at, above, or below such announced rate; and
(b) 50% per annum above the latest U.S. Federal Funds Rate.
Any change in the reference rate announced by BofA (U.S.) shall
take effect at the opening of business on the day specified in the public
announcement of such change.
"Base Rate Loan" means a Loan that bears interest based on the
Base Rate.
"BofA (Canada)" means Bank of America Canada, a bank chartered
under the laws of Canada.
-5-
▇▇
"▇▇▇▇ (▇.▇.)" means Bank of America National Trust and Savings
Association, a national banking association.
"Borrowing" means a borrowing hereunder consisting of Loans made
to a Company on the same day by its Applicable Lenders pursuant to Article II.
"Borrowing Base" means, as of any date of determination, with
respect to a Company, the sum of (a) 80% of the net amount (less such reserves
as the Agents and the Lenders may create from time to time in their reasonable
judgment) of Eligible Accounts Receivable of such Company, plus (b) the lesser
of (i) the sum of, (A) 60% of the net amount (determined on a FIFO basis, at
the lower of cost and market value, after deduction of such reserves as the
Agents and the Lenders may create from time to time in their reasonable
judgment) of Eligible Inventory comprised of raw materials of such Company, (B)
25% of the net amount (determined on a FIFO basis, at the lower of cost and
market value, after deduction of such reserves as the Agents and the Lenders
may create from time to time in their reasonable judgment) of Eligible
Inventory comprised of work-in-process of such Company and (C) 50% of the net
amount (determined on a FIFO basis, at the lower of cost and market value,
after deduction of such reserves as the Agents and the Lenders may create from
time to time in their reasonable judgment) of Eligible Inventory comprised of
finished goods for such Company and (ii) Ten Million U.S. Dollars
(U.S.$10,000,000), less the aggregate amount of Loans outstanding against the
Eligible Inventory of the other Company (with the Loans of the Canadian Company
expressed in U.S. Dollars at the Current Exchange Rate). For purposes of
classifying Inventory as raw materials, work-in-process or finished goods, it
is assumed that until such time as such Company converts to a perpetual
inventory system acceptable to the Agents in their reasonable discretion, the
Inventory reported to the Agents will consist of the percentage of raw
materials, work-in-process or finished goods set forth on the most recent
physical inventory conducted by such Company pursuant to Section 6.13 of the
Credit Agreement. The Eligible Inventory shall exclude (i) freight-out charges,
(ii) freight-in charges in excess of 3% of the total amount of Inventory and
(iii) fully absorbed overhead. The Companies shall report to the Agents any
changes in the classification of Inventory as soon as such information is
available, but in any event, not later than 30 days after completion of a
physical inventory. For purposes hereof, the Loans outstanding shall first be
based on that portion of the Borrowing Base comprised of Eligible Accounts
Receivable and, second, to that portion of the Borrowing Base comprised of
Eligible Inventory. The Borrowing Base with respect to the Canadian Company
shall be calculated in Canadian Dollars and the Borrowing Base with respect to
the U.S. Company shall be calculated in U.S. Dollars.
"Borrowing Base Certificate" means, with respect to a Company,
a certificate duly completed and executed by an authorized officer of such
Company, in form and substance acceptable to the Agents and the Lenders.
"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in Chicago, San Francisco or Toronto are
authorized or required by law to close; provided, that with respect to all
notices, determinations, continuances, conversions, fundings and payments in
connection with Offshore Rate Loans, a Business Day shall not include
-6-
13
any day on which trading by and between banks in U.S. Dollar deposits may not
be carried on in the London interbank market.
"Canadian Agent" means BofA (Canada) in its capacity as agent
hereunder and under the other Loan Documents as provided in Article IX, and
any successor agent.
"Canadian Agent's Payment Office" mews the address for payments
set forth on the signature page hereto in relation to the Canadian Agent or
such other address as the Canadian Agent may from time to time specify in
accordance with Section 10.02.
"Canadian Base Rate" means, for any day, the rate of interest per
annum equal to the greater of (i) the rate which is publicly announced from
time to time by BofA (Canada) in ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, as its "prime rate"; and
which is its reference rate of interest for loans in Canadian Dollars to
Canadian borrowers; and (ii) the average rate for Canadian Dollar bankers'
acceptance having a term of one month that appears on the Reuters Screen CDOR
Page (or such other page as is a replacement page for such bankers'
acceptances) at 10:00 a.m. (Toronto time) plus 75% adjusted automatically with
each quoted, published or displayed change in such rate, all without necessity
of any notice to a Company or any other Person.
"Canadian Base Rate Loan" means a Loan that bears interest based
on the Canadian Base Rate,
"Canadian Company" has the meaning specified in the introductory
clause hereto.
"Canadian Company Security Agreements" means the amended and
restated fixed and floating charge demand debenture executed and delivered by
the Canadian Company to the Canadian Agent on December 13, 1994 as amended by
the amendment executed and delivered by the Canadian Company to the Canadian
Agent on the date hereof, the pledge of debenture and the general assignment of
book debts executed and delivered by the Canadian Company to the Canadian Agent
on December 13, 1994, the general security agreement and the amended and
restated pledge agreement executed and delivered by the Canadian Company to the
Canadian Agent on the date hereof as amended, modified, supplemented or
reaffirmed from time to time in accordance with the terms thereof.
"Canadian Dollars and Cdn$" each mean lawful money of Canada.
"Canadian Federal Funds Rate" means the overnight rate
established by the Canadian Agent based on its customary practice.
"Canadian GAAP" means generally accepted accounting principles
from time to time approved by the Canadian Institute of Chartered Accountants
or any successor institute and, where the Canadian Institute of Chartered
Accountants or any successor institute includes a statement in its Handbook or
any successor thereto of any method or alternative methods of accounting, such
statements shall be regarded as the only generally accepted accounting
principles
-7-
14
applicable to the circumstances that it covers and references herein to
Canadian GAAP shall be interpreted accordingly.
"Canadian Issuer" means BofA (Canada) in its capacity as issuer
of the Letters of Credit for the account of the Canadian Company.
"Canadian Lenders" means a Lender with a Revolving Commitment to
the Canadian Company either as listed on Schedule 2.1(b) or as a result of one
or more assignments pursuant to Section 10.08, and includes the Canadian
Issuer.
"Canadian Revolving Loan Availability" means the lesser of (a)
the Revolving Commitments of the Canadian Lenders minus the aggregate undrawn
face amount of all Letters of Credit issued for the account of the Canadian
Company and (b) the Borrowing Base applicable to the Canadian Company (as
calculated pursuant to the most recent Borrowing Base Certificate delivered by
the Canadian Company pursuant to this Agreement).
"Capital Adequacy Regulation" means any guideline, request or
directive of any central bank or other Governmental Authority, or any other
law, rule or regulation, whether or not having the force of law, in each case,
regarding capital adequacy of any bank or of any corporation controlling a
bank.
"Capital Expenditures" means, for any period and with respect to
any Person, the aggregate of all expenditures by such Person and its
Subsidiaries for the acquisition or leasing of fixed or capital assets or
additions to equipment (including replacements, capitalized repairs and
improvements during such period) which should be capitalized under
Applicable Accounting Principles on a consolidated balance sheet of such
Person and its Subsidiaries.
"Capital Lease" means any leasing or similar arrangement which,
in accordance with Applicable Accounting Principles, is classified as a
capital lease.
"Capital Lease Obligations" means, with respect to a Person, all
monetary obligations of such Person under Capital Leases.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, including
each class of common stock and preferred stock of such Person and (ii) with
respect to any Person that is not a corporation, any and all partnership or
other equity interests of such Person.
"Cash Equivalents" means:
(a) securities issued or fully guaranteed or insured by Canada
or any agency thereof and backed by the full faith and credit of Canada and
securities issued or fully guaranteed or insured by the United States or any
agency thereof and backed by the full faith and credit of the
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15
United States, in each case having maturities of not more than six months from
the date of acquisition.
(b) certificates of deposit, time deposits, Eurodollar time
deposits, repurchase agreements, reverse repurchase agreements, or bankers'
acceptances, having in each case a tenor of not more than six months, issued by
any Canadian bank or any branch or agency of a non-Canadian bank licensed to
conduct business in Canada, or by any U.S. commercial bank or any branch or
agency of a non-U.S. bank licensed to conduct business in the U.S., in each
case having combined capital and surplus of not less than One Hundred Million
U.S. Dollars (U.S.$100,000,000) and whose short term securities are rated at
least A-1 by Standard & Poor's Corporation or P-1 by ▇▇▇▇▇'▇ Investors Service
Inc,; and
(c) commercial paper of an issuer rated at least A-1 by
Standard & Poor's Corporation or P-1 by ▇▇▇▇▇'▇ Investors Service Inc. and in
either case having a tenor of not more than six months.
"CERCLA" has the meaning specified in the definition of
"Environmental Laws."
"Closing Date" means the date on which all conditions precedent
set forth in Section 4.01 are satisfied or waived by all Lenders.
Collateral" means all property and interests in property and
proceeds thereof now owned or hereafter acquired by a Company or any Guarantor
as debtor and in or upon which a Lien now or hereafter exists in favor of any
Lender, or an Agent on behalf of any Lender, whether under this Agreement or
under any other documents executed by any such Persons and delivered to an
Agent or any Lender.
"Collateral Account" has the meaning specified in Section 10.10.
"Collateral Documents" means, collectively, (i) the Canadian
Company Security Agreements, the U.S, Company Security Agreement the U.S.
Company Guaranty and all other security agreements, mortgages, deeds of trust,
patent and trademark assignments, lease assignments, guarantees and other
similar agreements between a Company or any Guarantor and any Lender or an
Agent for the benefit of any Lender now or hereafter delivered to a Lender or
an Agent pursuant to or in connection with the transactions contemplated
hereby, and all financing statements (or comparable documents now or hereafter
filed in accordance with the UCC or comparable law) against a Company or any
Guarantor as debtor in favor of any Lender or an Agent for the benefit of any
Lender as secured party and (ii) any amendments, supplements, modifications,
renewals, replacements, consolidations, substitutions and extensions of any of
the foregoing.
"Commitment Percentage" means, (i) as to any U.S. Lender, the
percentage equivalent of such Lender's Revolving Commitment to the U.S.
Company, divided by the aggregate amount of Revolving Commitments to the U.S.
Company, and (ii) with respect to any Canadian Lender, the percentage
equivalent of such Lender's Revolving Commitment to the
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16
Canadian Company, divided by the aggregate amount of Revolving Commitments to
the Canadian Company.
"Company" means the Canadian Company or the U.S. Company.
"Company EBITDA" means, for any period, for the U.S. Company and
its Subsidiaries on a consolidated basis, determined in accordance with U.S.
GAAP, the sum of (a) the net income (or net loss) for such period, plus (b) all
amounts treated as interest and all depreciation, amortization and other
similar non-cash charges to the extent included in the determination of such
net income (or loss), plus (c) all accrued taxes on or measured by income to
the extent included in the determination of such net income (or loss);
provided, however, that net income (or loss) shall be computed for these
purposes without giving effect to extraordinary losses or extraordinary gains.
"Compliance Certificate" means a certificate duly completed and
executed by a Responsible Officer of the U.S. Company, substantially in the
form of Exhibit A hereto.
"Consolidated Net Interest Expense" means, for any period, gross
consolidated cash interest expense for such period (including all commissions,
discounts, fees and other charges in connection with standby letters of credit
and similar instruments but excluding the amortization of debt issuance costs
and other similar fees and expenses) for the U.S. Company and its Subsidiaries,
plus (a) the portion of the upfront costs and expenses for Rate Contracts (to
the extent not included in gross consolidated cash interest expense) fairly
allocated to such Rate Contracts as expenses for such period, plus (b) fees
payable pursuant to subsections 2.10(b) and 2.10(d) (to the extent not included
in gross consolidated cash interest expense) during such period, plus (c) the
portion of any payments made in respect of Capital Leases allocated to interest
expense (to the extent not included in gross consolidated cash interest
expense) during such period, less (d) interest income for such period and Rate
Contracts payments received; all as determined in accordance with U.S. GAAP.
"Contingent Obligation" means, as to any Person, (a) any Guaranty
Obligation of that Person; and (b) any direct or indirect obligation or
liability, contingent or otherwise, of that Person, (i) in respect of any
Surety Instrument issued for the account of that Person or as to which that
Person is otherwise liable for reimbursement of drawings or payments, (ii) to
purchase any materials, supplies or other Property from, or to obtain the
services of, another Person if the relevant contact or other related document
or obligation requires that payment for such materials, supplies or other
Property, or for such services, shall be made regardless of whether delivery of
such materials, supplies or other Property is ever made or tendered, or such
services are ever performed or tendered, or (iii) in respect of any Rate
Contract that is not entered into in connection with a bona fide hedging
operation that provides offsetting benefits to such Person. The amount of any
Contingent Obligation shall (subject, in the case of Guaranty Obligations, to
the last sentence of the definition of "Guaranty Obligation") be deemed equal
to the maximum reasonably anticipated liability in respect thereof, mid shall,
with respect to item (b)(iii) of this definition, be marked to market on a
current basis.
-10-
17
"Contractual Obligations" means, as to any Person, any provision
of any security issued by such Person or of any agreement, undertaking,
contract, indenture, mortgage, deed of trust or other instrument, document or
agreement to which such Person is a party or by which it or any of its property
is bound,
"Controlled Group" means the U.S. Company and all Persons
(whether or not incorporated) under common control or treated as a single
employer with the U.S. Company pursuant to Section 414(b), (c), (m) or (o) of
the U.S. Code.
"Conversion Date" means, with respect to the Canadian Company,
any date on which the Canadian Company converts a Canadian Base Rate Loan to a
BA Rate Loan or a BA Rate Loan to a Canadian Base Rate Loan, and with respect
to the U.S. Company, any date on which the U.S. Company converts a Base Rate
Loan to an Offshore Rate Loan or an Offshore Rate Loan to a Base Rate Loan.
"Current Exchange Rate" means, on any date when an amount
expressed in the Applicable Currency of a Company (the "Initial Currency") is
to be converted into the Applicable Currency of the other Company (the
"Converted Currency"), the nominal rate of exchange of BofA (U.S.) in the New
York foreign exchange market for the purchase by BofA (U.S.) of such Converted
Currency in exchange for the Initial Currency at 12:00 noon (New York time) one
Business Day prior to such date (or otherwise in accordance with the normal
practice of BofA (U.S.)), expressed as a number of units of such Converted
Currency per one unit of such Initial Currency (such one unit being One U.S.
Dollar or One Canadian Dollar, as the case may be).
"Default" means any event or circumstance which, with the giving
of notice, the lapse of time, or both, would (if not cured or otherwise
remedied during such time) constitute an Event of Default.
"Disbursement Date" has the meaning specified in Section 2.15.
"Disposition" means (i) the sale, lease, conveyance or other
disposition of Property, other than sales or other dispositions expressly
permitted under subsection 7.02(a) or 7.02(b), and (ii) the sale or transfer by
a Company or any Subsidiary of a Company of any equity securities issued by any
Subsidiary of a Company to any Person other than a Company or any Subsidiary of
a Company.
"Domestic Lending Office" means, with respect to each Lender, the
office of that Lender designated as such in the signature pages hereto or such
other office of such Lender as it may from time to time specify to the
Companies and the Agents.
"EBITDA" means, for any period, the sum of Company EBITDA and
Seller EBITDA, plus to the extent such charges are included in the
determination of EBITDA (i) the non-cash cost, on a pre-tax basis, of writing
up the inventory acquired from Seller up to Two Million Six Hundred Thousand
U.S. Dollars (U.S.$2,600,000) in the first six months after the
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18
Closing Date and (ii) severance costs booked between the Closing Date and
December 31, 1996 up to Five Hundred Thousand U.S. Dollars (U.S.$500,000).
"Eligible Account Receivable" means, with respect to a Company,
an Account Receivable owing to such Company or any Significant Subsidiary
domiciled and organized in the jurisdiction in which such Company is domiciled
and organized which meets the following requirements:
(a) it is genuine and in all respects what it purports to be;
(b) it arises from either (i) the performance of services by
such Company or Subsidiary, which services have been fully performed and
acknowledged and/or accepted by the Account Debtor with respect thereto or (ii)
the sale or lease of goods by such Company or Subsidiary; and if it arises from
the sale or lease of goods, (A) such goods comply with such Account Debtor's
specifications (if any) and have been shipped to, or delivered to and accepted
by, such Account Debtor and such Company or Subsidiary does not have knowledge
that the Account Debtor has failed to accept delivery of all or a portion of
such goods, (B) such Company or Subsidiary has possession of shipping and
delivery receipts evidencing such shipment, delivery and acceptance and (C) such
sale or lease was made in compliance with all applicable laws;
(c) it is evidenced by an invoice rendered to the Account
Debtor with respect thereto which (i) is dated not earlier than the date of
shipment or performance, (ii) in the case of accounts owing to the U.S. Company
or any Significant Subsidiary domiciled and organized in the jurisdiction in
which such Company is domiciled and organized, is not unpaid more than 60 days
after its due date and (iii) in the case of accounts owing to the Canadian
Company or any Significant Subsidiary domiciled and organized in the
jurisdiction in which such Company is domiciled and organized, is not unpaid
more than 90 days after its due date;
(d) it is not owing by an Account Debtor with respect to which
10% or more of the aggregate Accounts Receivable owing by such Account Debtor
to such Company or Subsidiary are past due;
(e) it is subject to the Lien of the Applicable Agent and is
not subject to any other assignment claim or Lien, other than a lien permitted
under this Agreement;
(f) it is a valid, legally enforceable and unconditional
obligation of the Account Debtor with respect thereto, and is not subject to
setoff, counterclaim, contra, credit or allowance (except any credit or
allowance which has been deducted in computing the net amount of the applicable
invoice as shown in the original schedule or Borrowing Base Certificate
furnished to the Agents identifying or including such Account Receivable) or
adjustment by the Account Debtor with respect thereto, or to any claim by such
Account Debtor denying liability thereunder in whole or in part, and such
Account Debtor has not refused to accept any of the goods or services which are
the subject of such Account Receivable or offered or attempted to return any of
such goods;
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19
(g) there are no proceedings or actions which are then
threatened or pending against the Account Debtor with respect thereto or to
which such Account Debtor is a party which are reasonably likely to result in
any material adverse change in such Account Debtor's financial condition or in
its ability to pay any Account Receivable in full when due;
(h) it does not arise out of a contract which, by its terms,
forbids, restricts or makes void or unenforceable the assignment by such
Company or Subsidiary to the Agents of the Account Receivable arising with
respect thereto;
(i) the Account Debtor with respect thereto is not an
Affiliate of a Company;
(j) the Account Debtor with respect thereto is a resident or
citizen of, and is located within, the United States of America or Canada,
unless the sale of goods giving rise to the Account Receivable is on letter of
credit, banker's acceptance or other credit support terms reasonably
satisfactory to the Agents;
(k) it is not an Account Receivable arising from a "sale on
approval," "sale or return" or "consignment" or subject to any other repurchase
or return agreement;
(l) it is not an Account Receivable with respect to which
possession and/or control of the goods sold giving rise thereto is held,
maintained or retained by such Company or any Affiliate of such Company for the
account of or subject to further and/or future direction from the Account
Debtor thereof;
(m) it is not an Account Receivable which in any way fails to
meet or violates any warranty, representation or covenant in any material
respect contained in this Agreement or any other Loan Document relating
directly or indirectly to Accounts Receivable;
(n) it arises in the ordinary course of such Company's or
Subsidiary's business;
(o) if the Account Debtor is the United States of America, or
any department, agency or instrumentality thereof, such Company or Subsidiary
has assigned its rights to payment of such Account Receivable to the Agents,
pursuant to the Assignment of Claims Act of 1940, as amended;
(p) if the Account Debtor is the Government of Canada, the
Province of Ontario or any other province, or any department, agency public
corporation or other instrumentality thereof, all requirements of the Financial
Administration Act of Canada, Financial Administration Act of Ontario, or any
similar law, as applicable, and any other steps necessary to perfect the Lien
of the Agents therein, shall have been complied with, to the satisfaction of
the Agents, or the Agents' are satisfied that compliance is not required by the
terms of the Financial Administration Act of Canada, the Financial
Administration Act of Ontario or similar laws, as applicable;
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20
(q) if the Account Receivable is evidenced by chattel paper or
an instrument, (i) the Agents shall have specifically agreed in writing to
include such Account Receivable as an Eligible Account Receivable, (ii) only
payments then due and payable under such chattel paper or instrument shall be
included as an Eligible Account Receivable and (iii) the originals of such
chattel paper or instruments have been endorsed and/or assigned and delivered
to the Agents in a manner reasonable satisfactory to the Agents;
(r) it is not an Account Receivable with C.O.D. payment terms;
(s) it is not an Account Receivable which is subject to a
debit memo; and
(t) the amount thereof does not consist of finance charges;
(u) the amount thereof does not consist of credit balances
more than 60 days from due date in the case of Accounts Receivable owing to the
U.S. Company or any Significant Subsidiary domiciled and organized in the
jurisdiction in which such Company is domiciled and organized, or more than 90
days from due date in the case of the Canadian Company; and
(v) the Agents have not, in their reasonable discretion,
deemed the Account Receivable or the Account Debtor uncreditworthy,
"Eligible Assignee" means (i) a commercial bank organized under
the laws of Canada, or any province thereof, or the United States, or any state
thereof, and in each case having a combined capital and surplus of at least One
Hundred Million U.S. Dollars (U.S.$100,000,000); (ii) a commercial bank
organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development (the "OECD"), or a
political subdivision of any such country, and having a combined capital and
surplus of at least One Hundred Million U.S. Dollars (U.S.$100,000,000),
provided that such bank is acting through a branch or agency located in Canada
or the United States; and (iii) a Person that is primarily engaged in the
business of commercial banking and that is (A) a Subsidiary of a Lender, (B) a
Subsidiary of a Person of which a Lender is a Subsidiary, or (C) a Person of
which a Lender is a Subsidiary.
"Eligible Inventory" means, with respect to a Company, Inventory
of such Company or any Significant Subsidiary domiciled and organized in the
jurisdiction in which such Company is domiciled and organized, which meets the
following requirements:
(a) it is owned by such Company or Subsidiary and is subject
to the Lien of the Applicable Agent and is not subject to any prior assignment
claim or Lien, other than a Lien permitted under this Agreement;
(b) the purchase order, invoice or any other document in
connection therewith does not indicate that any other Person (other than the
applicable Company) has an interest therein;
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(c) if held for sale or lease or furnishing under contracts of
service, it is (except as the Agents may otherwise consent in writing) new and
unused;
(d) except as the Agents may otherwise consent, it is in the
possession and control of such Company or Subsidiary or their agents;
(e) if it is in the possession or control of a bailee,
warehouseman, processor, consignee or other Person other than such Company or
Subsidiary, Agents are in possession of such agreements, instruments and
documents as the Agents may reasonably require (each in form and content
acceptable to the Agents and duly executed, as appropriate, by the bailee,
warehouseman, processor, consignee or other Person in possession or control of
such Inventory, as applicable), including but not limited to warehouse receipts
in either Agent's name, covering such Inventory;
(f) it is not Inventory which has been delivered to a third
party pursuant to a consignment arrangement;
(g) it is not Inventory produced in violation of the Fair
Labor Standards Act and subject to the "hot goods" provisions contained in
Title 29 U.S.C. Section 215 or any successor statute or section;
(h) it is not (i) packaging or shipping materials, (ii) goods
used in connection with maintenance or repair of such Company's or Subsidiary's
properties or assets or (iii) general supplies;
(i) it is not Inventory which in any way fails to meet or
violates any warranty, representation or covenant in any material respect
contained in this Agreement or any other Loan Document relating directly or
indirectly to Inventory;
(j) it is Inventory located within the United States or
Canada;
(k) the Agents have not determined in their reasonable
discretion that it is unacceptable due to age, type, category, quality and/or
quantity or otherwise obsolete; and
(l) it is not Inventory the use of which by such Company or
Subsidiary or the manufacture or sale thereof by such Company or Subsidiary, is
subject to any licensing, patent, royalty, trademark, tradename or copyright
agreement of any other Person.
"Environmental Claims" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for release of
Hazardous Materials or injury to the environment or threat to public health,
personal injury (including sickness, disease or death), property damage or
natural resources damage relating to a release of Hazardous Materials or injury
to the environment, or otherwise alleging liability or responsibility for
damages (punitive or otherwise), cleanup, removal, remedial or response costs,
restitution, civil or criminal penalties, injunctive relief, or other type of
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relief, resulting from or based upon the presence, placement, discharge,
emission or release (including intentional and unintentional, negligent and
non-negligent, sudden or non-sudden, accidental or non-accidental, placement,
spills, leaks, discharges, emissions or releases) of any Hazardous Material at,
in, or from Property, whether or not owned by a Company.
"Environmental Laws" means all Canadian and U.S. federal,
provincial, state or local laws, statutes, common law duties, rules,
regulations, ordinances and codes, together with all administrative orders,
licenses, authorizations and permits of, and agreements with, any Governmental
Authorities, in each case relating to environmental, health, safety and land
use matters; including the Canada Water Act, Ontario Environmental Protection
Act, Fisheries Act, Transportation of Dangerous Goods Act, Comprehensive
Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), the
Clean Air Act, the Federal Water Pollution Control Act of 1972, the Solid Waste
Disposal Act, the Federal Resource Conservation and Recovery Act, the Toxic
Substances Control Act and the Emergency Planning and Community Right-to-Know
Act.
"ERISA" means the Employee Retirement Income Security Act of 1974
and regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the U.S. Company within the meaning of
Section 414(b), 414(c) or 414(m) of the Code.
"ERISA Event" means (a) a Reportable Event with respect to a
Qualified Plan or a Multiemployer Plan; (b) a withdrawal by the U.S. Company or
any ERISA Affiliate from a Qualified Plan subject to Section 4063 of ERISA
during a plan year in which it was a substantial employer (as defined in
Section 4001(a)(2) of ERISA); (c) a complete or partial withdrawal by the U.S.
Company or any ERISA Affiliate from a Multiemployer Plan; (d) the filing of a
notice of intent to terminate, the treatment of a plan amendment as a
termination under Section 4041 or 4041A of ERISA or the commencement of
proceedings by the PBGC to terminate a Qualified Plan or Multiemployer Plan
subject to Title IV of ERISA; (e) a failure by the U.S. Company or any member
of the Controlled Group to make required contributions to a Qualified Plan or
Multiemployer Plan; (f) the imposition of any liability under Title IV of
ERISA, other than PBGC premiums due but not delinquent under Section 4007 of
ERISA, upon the U.S. Company or any ERISA Affiliate; (g) an application for a
funding waiver or an extension of any amortization period pursuant to Section
412 of the Code with respect to any Plan; (h) a non-exempt prohibited
transaction occurs with respect to any Plan for which the U.S. Company or any
Subsidiary of the U.S. Company may be directly or indirectly liable; or (i) a
violation of the applicable requirements of Section 404 or 405 of ERISA or the
exclusive benefit rule under Section 401(a) of the U.S. Code by any fiduciary
or disqualified person with respect to any Plan for which the U.S. Company or
any member of the Controlled Group may be directly or indirectly liable.
"Eurodollar Reserve Percentage" means for any day for any
Interest Period, the maximum reserve percentage (expressed as a decimal,
rounded upward to the nearest 1/100th of
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1%) in effect on such day (whether or not applicable to any Lender) as
specified under regulations issued from time to time by the Federal Reserve
Board for determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to
Eurocurrency funding (currently referred to as "Eurocurrency Liabilities" under
Regulation D of the Federal Reserve Board) having a term approximately equal or
comparable to such Interest Period.
Event of Default" means any of the events or circumstances
specified in Section 8.01.
"Event of Loss" means, with respect to any Property, any of the
following: (a) any loss, destruction or damage of such Property; or (b) any
actual condemnation, seizure or taking, by exercise of the power of eminent
domain or otherwise, of such Property, or confiscation of such Property or the
requisition of the use of such Property.
"Excess Availability" means, as of any date, Aggregate Revolving
Loan Availability as of such date, minus all then outstanding unpaid Revolving
Loans as of such date (with the amount of the Revolving Loans owing by the
Canadian Company expressed in U.S. Dollars at the Current Exchange Rate).
"Exchange Act" means the Securities Exchange Act of 1934, and
regulations promulgated thereunder.
"Exchange Rate Letter" has the meaning specified in subsection
4.01(f).
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System, or any entity succeeding to any of its principal
functions.
"Fixed Charge Ratio" means, for any period the ratio of (a) the
difference of (i) EBITDA for such period, less (ii) the consolidated Capital
Expenditures of the U.S. Company for such period; to (b) the sum of (i)
Consolidated Net Interest Expense for such period, plus (ii) taxes paid in cash
by the U.S. Company and its Subsidiaries during such period, plus (iii)
scheduled principal payments of the consolidated Indebtedness of the U.S.
Company during such period (including scheduled payments of Capital Lease
Obligations of the U.S. Company and its Subsidiaries).
"Form 1001" has the meaning specified in subsection 3.01(f).
"Form 4224" has the meaning specified in subsection 3.01(f),
"Governmental Authority" means any nation or government, any
state, province or other political subdivision thereof, any central bank (or
similar monetary or regulatory authority) thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.
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"Guaranties" means the U.S. Company Guaranty and any Subsidiary
Guaranty and "Guaranty" means any of the foregoing.
"Guarantor" means any Significant Subsidiary.
"Guaranty Obligation" means, as applied to any Person, any direct
or indirect liability of that Person with respect to any Indebtedness, lease,
dividend, Surety Instrument or other obligation (the "primary obligations") of
another Person (the "primary obligor"), including any obligation of that
Person, whether or not contingent, (a) to purchase, repurchase or otherwise
acquire such primary obligations or any property constituting direct or
indirect security therefor, or (b) to advance or provide funds (i) for the
payment or discharge of any such primary obligation, or (ii) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency or any balance sheet item, level of income
or financial condition of the primary obligor, or (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment
of such primary obligation, or (d) otherwise to assure or hold harmless the
holder of any such primary obligation against loss in respect thereof; in each
case (a), (b), (c) or (d), including arrangements wherein the rights and
remedies of the holder of the primary obligation are limited to repossession or
sale of certain property of such Person. The amount of any Guaranty Obligation
shall be deemed equal to the stated or determinable amount of the primary
obligation in respect of which such Guaranty Obligation is made or, if not
stated or if indeterminable, the maximum reasonably anticipated liability in
respect thereof.
"Hazardous Materials" means all toxic, radioactive, corrosive or
otherwise hazardous substances which are regulated by, or which may form the
basis for liability under, any Environmental Law, including all substances
identified under any Environmental Law as a pollutant, contaminant, hazardous
waste, hazardous constituent, special waste, hazardous substance, hazardous
material, or toxic substance, or petroleum or petroleum derived substance or
waste.
"Impermissible Qualification" means, with respect to the opinion
or certification of any independent public accountant as to any financial
statement of the U.S. Company, any qualification or exception to such opinion
or certification (a) which is of a "going concern" or similar nature; (b) which
relates to the limited scope of examination of matters materially relevant to
such financial statement; or (c) which relates to the treatment or
classification of any item in such financial statement and which, as a
condition to its removal, would require an adjustment to such item the effect
of which would be to cause the U.S. Company to be in default of any of the
financial covenants set forth in Article VII.
"Indebtedness" of any Person means, without duplication, (a) all
indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services (other than
trade payables entered into in the ordinary course of business pursuant to
ordinary terms); (c) all non-contingent reimbursement or payment obligations
with respect to Surety Instruments; (d) all obligations evidenced by notes,
bonds, debentures or similar
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instruments, including obligations so evidenced incurred in connection with the
acquisition of property, assets or businesses; (e) all indebtedness created or
arising under any conditional sale or other title retention agreement, or
incurred as financing, in either case with respect to Property acquired by the
Person (even though the rights and remedies of the seller or bank under such
agreement in the event of default are limited to repossession or sale of such
property); (f) all Capital Lease Obligations; (g) all net obligations with
respect to Rate Contracts; (h) all indebtedness referred to in clauses (a)
through (g) above secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any Lien upon or
in Property (including accounts and contracts rights) owned by such Person,
even though such Person has not assumed or become liable for the payment of
such Indebtedness; and (i) all Guaranty Obligations in respect of indebtedness
or obligations of others of the kinds referred to in clauses (a) through (g)
above.
"Indemnified Liabilities" has the meaning specified in subsection
10.05(a).
"Indemnified Person" has the meaning specified in subsection
10.05(a).
"Insolvency Proceeding" means (a) any case, action or proceeding
before any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-up
or relief of debtors, or (b) any proceedings under any reorganization,
arrangement readjustment of debt, dissolution, corporation or liquidation law
or any general assignment for the benefit of creditors, composition,
marshalling of assets for creditors, or other, similar arrangement in respect
of its creditors generally or any substantial portion of its creditors; in
each case undertaken under U.S. Federal, State, Canadian or other foreign law,
including without limitation, the Bankruptcy Code, the Bankruptcy and
Insolvency Act of Canada, the Companies' Creditors Arrangement Act of Canada
and the Winding Up Act of Canada, all as amended from time to time.
"Interest Coverage Ratio" means, for any period, the ratio of (a)
EBITDA for such period, to (b) Consolidated Net Interest Expense for such
period.
"Interest Payment Date" means, with respect to any BA Rate Loan
or Offshore Rate Loan, the last day of each interest Period applicable to such
Loan and, with respect to any Base Rate Loan or Canadian Base Rate Loan, the
last Business Day of each calendar quarter and each date a Base Rate Loan is
converted into an Offshore Rate Loan or each date a Canadian Base Rate Loan is
converted into a BA Rate Loan, as the case may be, word provided, however,
that if any Interest Period for a BA Rate Loan or Offshore Rate Loan exceeds 90
days or three months, respectively, the date which falls 90 days or three
months (as the case may be) after the beginning of such Interest Period shall
also be an Interest Payment Date.
"Interest Period" means, (a) with respect to any Offshore Rate
Loan, the period commencing on the Business Day the Loan is disbursed or
continued or on the Conversion Date on which the Loan is converted to an
Offshore Rate Loan and ending on the date one, two, three or six months
thereafter, as selected by the U.S. Company in its Notice of Borrowing or
Notice of Conversion/Continuation; and (b) with respect to any BA Rate Loan,
the period commencing on
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the Business Day the BA Rate Loan is disbursed or continued and ending 30, 60,
90 or 180 days thereafter, as selected by the Canadian Company in its Notice of
Borrowing or Notice of Conversion/Continuation;
provided, that:
(i) if any Interest Period pertaining to an Offshore Rate Loan or
BA Rate Loan would otherwise end on a day which is not a Business Day,
that Interest Period shall be extended to the next succeeding Business
Day unless, in the case of an Offshore Rate Loan, the result of such
extension would be to carry such Interest Period into another calendar
month, in which event such Interest Period shall end on the immediately
preceding Business Day.
(ii) any Interest Period pertaining to an Offshore Rate Loan that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last Business Day of
the calendar month at the end of such Interest Period, and
(iii) no Interest Period shall extend beyond November 13, 2001.
"Inventory" means any and all of the goods of a Company or any
Significant Subsidiary domiciled and organized in the jurisdiction in which
such Company is domiciled and organized, (including without limitation, goods
in transit) wheresoever located, which are or may at any time be leased by a
Company or any Significant Subsidiary domiciled and organized in the
jurisdiction in which such Company is domiciled and organized to a lessee, held
for sale or lease, furnished under any contract or service, or held as raw
materials, work-in-process, or supplies or materials used or consumed in the
business of a Company or any Significant Subsidiary domiciled and organized in
the jurisdiction in which such Company is domiciled and organized, or which are
held for use in connection with the manufacture, packing, shipping,
advertising, selling or finishing of such goods, and all goods the sale or their
disposition of which has given rise to an Account Receivable which are returned
to an/or repossessed and/or stopped in transit by a Company, any Significant
Subsidiary domiciled and organized in the jurisdiction in which such Company is
domiciled and organized or any Lender or any agent or bailee of any of them,
and all documents of title or other documents representing the same.
"Issuer" means the Canadian Issuer or the U.S. Issuer.
"Joint Venture" means a single-purpose corporation, partnership,
joint venture or other legal arrangement (whether created pursuant to contract
or conducted through a separate legal entity) now or hereafter formed by a
Company or any of its Subsidiaries with another Person in order to conduct a
common venture or enterprise with such Person.
"Lender" has the meaning specified in the introductory clause
hereto.
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"Lending Office" means, with respect to any Lender, the office or
offices of such Lender specified as its "Lending Office" or "Domestic Lending
Office" or "Offshore Lending Office", as the case may be, opposite its name on
the applicable signature page hereto, or such other office or offices of such
Lender as it may from time to time notify the Companies and the Agents.
"Letters of Credit" means letters of credit issued by an Issuer
for the account of a Company and includes any letters of credit issued by an
Issuer for the account of a Company under the Original Credit Agreement.
"Leverage Ratio" means, for any twelve month period, the ratio of
(a) total consolidated Indebtedness of the U.S. Company outstanding on the last
day of such period (excluding the Indebtedness described in clause (c) of the
definition of "Indebtedness," to the extent of the undrawn face amount of
letters of credit clause (g) of the definition of "Indebtedness," clause (h) of
the definition of "Indebtedness," to the extent it applies to Indebtedness of
another Person and clause (i) of the definition of "Indebtedness," to the
extent it applies to Contingent Obligations permitted under Section 7.08(e) but
only with respect to those obligations in connection with the leasing and
similar arrangements described in Section 7.08(e) that are no more than 30
days past due); provided, that if the outstanding principal balance of all
Revolving Loans is zero on such day, such amount shall be reduced by the Cash
Equivalents of the Companies in excess of Five Million U.S. Dollars
(U.S.$5,000,000) on such day; to (b) EBITDA for such period.
"LIBOR" means the rate of interest per annum determined by the
U.S. Agent to be the rate of interest per annum notified to the U.S. Agent by
the Reference Bank as the rate of interest at which U.S. Dollar deposits in the
approximate amount of the amount of the Loan to be made or continued as, or
converted into, an Offshore Rate Loan by such Reference Bank and having a
maturity comparable to such Interest Period would be offered to major banks in
the London interbank market at their request at or about 11:00 a.m. (London
time) on the second Business Day prior to the commencement of such Interest
Period.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment charge or deposit arrangement encumbrance, lien (statutory or other)
or other security interest or preferential arrangement of any kind or nature
whatsoever (including those created by, arising under or evidenced by any
conditional sale or other title retention agreement, the interest of a lessor
under a Capital Lease Obligation or any financing lease having substantially
the same economic effect as any of the foregoing) and any contingent or other
agreement to provide any of the foregoing, but not including the interest of a
lessor under an Operating Lease.
"Loan" or "Revolving Loan" means an extension of credit by a
Lender to a Company pursuant to Article II, and, subject to subsection
2.03(d), may be a Base Rate Loan, a Canadian Base Rate Loan, an Offshore Rate
Loan or a BA Rate Loan.
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"Loan Documents" means this Agreement, the Notes, the Collateral
Documents and all documents delivered to an Agent, or any Lender in connection
therewith and all Rate Contracts between a Company and any of the Lenders.
"Majority Lenders" means, at any time, the Lenders then holding
at least 60% of the sum of (i) the then aggregate unpaid principal amount of
the Loans and participations in outstanding Letters of Credit and (ii) the then
aggregate unused Commitments.
"Margin Stock" means "margin stock" as such term is defined in
Regulation G, T, U or X of the Federal Reserve Board.
"Material Adverse Change" means a material adverse change in the
condition (financial or otherwise), operations, performance, prospects,
properties or affairs of the U.S. Company and its Non-Canadian Subsidiaries
taken as a whole or the Canadian Company and its Subsidiaries taken as a whole.
"Material Adverse Effect" means (a) a material adverse change in,
or a material adverse effect upon, the business, results of operations or
financial condition of the U.S. Company and its Non-Canadian Subsidiaries taken
as a whole or the Canadian Company and its Subsidiaries taken as a whole; (b) a
material impairment of the ability of a Company or the Guarantor to perform
under any Loan Document; or (c) a material adverse effect upon (i) the legality,
validity, binding effect or enforceability of any Loan Document, or (ii) the
perfection or priority of any Lien on any material amount of Collateral granted
to any Lender or to an Agent for the benefit of any Lender under any of the
Collateral Documents,
"Multiemployer Plan" means a "multiemployer plan" (within the
meaning of Section 4001(a)(3) of ERISA) and to which any member of the
Controlled Group makes, is making, or is obligated to make contributions or,
during the preceding three calendar years, has made, or been obligated to make,
contributions.
"Net Issuance Proceeds" means, in respect of any issuance of
Capital Stock of the U.S. Company, other than Capital Stock of the U.S.
Company that, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the sole option of the holder
thereof on or prior to the Revolving Termination Date, cash proceeds and
non-cash proceeds received or receivable in connection therewith, net of
reasonable out-of-pocket expenses paid or incurred in connection therewith.
"Net Worth" means consolidated shareholders' equity of the U.S.
Company as determined in accordance with U.S. GAAP.
"Non-Canadian Subsidiaries" means the Subsidiaries of the U.S.
Company other than the Subsidiaries of the U.S. Company organized under the
laws of Canada or any province thereof.
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"Note" means a Revolving Note, and "Notes" means the Revolving
Notes,
"Notice of Borrowing" means, with respect to the Canadian
Company, a notice given by such Company to its Applicable Agent pursuant to
Section 2.03, in substantially the form of Exhibit B-1, and with respect to the
U.S. Company, a notice given by such Company to its Applicable Agent pursuant to
Section 2.03, in substantially the form of Exhibit B-2.
"Notice of Conversion/Continuation" means, with respect to the
Canadian Company, a notice given by such Company to its Applicable Agent
pursuant to Section 2.04, in substantially the form of Exhibit C-1, and with
respect to the U.S. Company, a notice given by such Company to its Applicable
Agent pursuant to Section 2.04, in substantially the form of Exhibit C-2.
"Notice of Lien" means any "notice of lien" or similar document
intended to be filed or recorded with any court, registry, recorder's office,
central filing office or other Governmental Authority for the purpose of
evidencing, creating, perfecting or preserving the priority of a Lien securing
obligations owing to a Governmental Authority.
"Obligations" means all Loans, and other Indebtedness, advances,
debts, liabilities, obligations, covenants and duties owing by the Companies,
or either of them, to any Lender (including an Issuer), either Agent or any
other Person required to be indemnified, that arise under any Loan Document,
whether or not for the payment of money, whether arising by reason of an
extension of credit, loan, guaranty, reimbursement obligations with respect to
Letters of Credit, indemnification or in any other manner, whether direct or
indirect (including those acquired by assignment), absolute or contingent, due
or to become due, now existing or hereafter arising and however acquired.
"Offshore Lending Office" means with respect to each Lender, the
office of such Lender designated as such in the signature pages hereto or such
other office of such Lender as such Lender may from time to time specify to the
Companies and the Agents.
"Offshore Rate" means, for each Interest Period in respect of
Offshore Rate Loans comprising part of the same Borrowing, an interest rate per
annum (rounded upward to the nearest 1/16th of 1%) determined pursuant to the
following formula:
LIBOR
Offshore Rate = ---------------------------------------
1.00 - Eurodollar Reserve Percentage
The Offshore Rate shall be adjusted automatically as of the
effective date of any change in the Eurodollar Reserve Percentage.
"Offshore Rate Loan" means a Loan that bears interest based on
the Offshore Rate.
"Operating Lease" means, as applied to any Person, any lease of
Property which is not a Capital Lease.
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"Ordinary Course of Business" means, in respect of any
transaction involving a Company or any Subsidiary of a Company, the ordinary
course of such Person's business, as conducted by any such Person in accordance
with past practice and undertaken by such Person in good faith.
"Organization Documents" means, for any corporation, the
certificate or articles of incorporation, the bylaws, any certificate of
determination or instrument relating to the rights of preferred shareholders of
such corporation, any shareholder rights agreement, and all applicable
resolutions of the board of directors (or any committee thereof) of such
corporation.
"Other Taxes" has the meaning specified in subsection 3.01(b).
"Participant" has the meaning specified in subsection 10.08(d).
"Payment Office" means the Canadian Agent's Payment Office or the
U.S. Agent's Payment Office.
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any of its principal functions under ERISA.
"Permitted Acquisition" means any acquisition by a Company of all
or substantially all of the assets of any Person that is a going concern or any
investment by a Company in a Joint Venture, and in each case, that is in
substantially the same line of business as such Company, that satisfies the
following conditions:
(a) no Event of Default is in existence at the time of such
acquisition or investment or would be caused thereby after giving effect
thereto;
(b) total consideration, other than consideration comprised of
the capital stock of a Company, for all such acquisitions or investments in any
fiscal year (including without limitation cash purchase price, Indebtedness
assumed, deferred or financed purchase price and purchase price characterized
as consulting agreements, noncompetition payments and the like), does not
exceed Ten Million U.S. Dollars (U.S.$10,000,000) and total consideration for
all such acquisitions or investments in any fiscal year (including without
limitation consideration comprised of the capital stock of a Company, the cash
purchase price, Indebtedness assumed, deferred or financed purchase price and
purchase price characterized as consulting agreements, noncompetition payments
and the like), does not exceed Twenty Million U.S. Dollars (U.S.$20,000,000);
provided, that such consideration for all investments by any Company in a Joint
Venture shall not exceed Five Million Dollars (U.S.$5,000,000) during the term
of this Agreement;
(c) the Agents have received at least ten days' prior written
notice thereof and, as soon as available, copies of all agreements delivered in
connection therewith; and
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(d) the Agents have received a certificate from such Company's
chief financial officer certifying that all of the applicable conditions
contained herein to treating such acquisition or investment as a Permitted
Acquisition have been satisfied.
"Permitted Liens" has the meaning specified in Section 7.01.
"Person" means an individual, partnership, corporation, business
trust, limited liability company, joint stock company, trust, unincorporated
association, joint venture or Governmental Authority.
"Plan" means an employee benefit plan (as defined in Section 3(3)
of ERISA) which the U.S. Company or any member of the Controlled Group sponsors
or maintains or to which the U.S. Company or any member of the Controlled Group
makes, is making or is obligated to make contributions, and includes any
Multiemployer Plan or Qualified Plan.
"Pre-Transfer Period" means, with respect to any twelve month
period ending on or before September 30, 1997, the period commencing on the
first day of such twelve month period and ending on the Closing Date.
"Pricing Change Certificate" means a certificate duly completed
and executed by a Responsible Officer of the U.S. Company, substantially the
form of Exhibit D hereto.
"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, and whether tangible or intangible.
Public Offering" means a public registration and sale of any
equity securities of the U.S. Company, by the U.S. Company or any Affiliate of
the U.S. Company holding equity securities of the U.S. Company.
"Qualified Plan" means a defined benefit pension plan (as defined
in Sections 3(2) and 3(35) of ERISA) intended to be tax-qualified under
Section 401(a) of the Code and which any member of the Controlled Group
sponsors, maintains, or to which it makes, is making or is obligated to make
contributions, or in the case of a multiple employer plan (as described in
Section 4064(a) of ERISA) has made contributions at any time during the
immediately preceding period covering at least five plan years, but excluding
any Multiemployer Plan.
"Rate Contracts" means swap agreements (as such term is defined
in Section 101 of the Bankruptcy Code), commodity options, equity or equity
index swaps or options, bond options or swaptions, and any other agreements or
arrangements designed to provide protection against fluctuations in interest or
currency exchange rates.
"Reference Bank" means, with respect to the determination of the
BA Rate, BofA (Canada), and with respect to the determination of the Offshore
Rate, BofA (U.S.).
"Reportable Event" means, as to any Plan, (a) any of the
events set forth in Section 4043(b) of ERISA or the regulations thereunder,
other than any such event for which the 30-day
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notice requirement under ERISA has been waived in regulations issued by the
PBGC, (b) a withdrawal from a Plan described in Section 4063 of ERISA, or (c) a
cessation of operations described in Section 4062(e) of ERISA.
"Requirement of Law" means, as to any Person, any law (statutory
or common), treaty, rule or regulation or determination of an arbitrator or of
a Governmental Authority, in each case applicable to or binding upon the Person
or any of its property or to which the Person or any of its property is
subject.
"Responsible Officer" means, with respect to a Company, the chief
executive officer, the president, the chief financial officer or the treasurer
of such Company, or any other officer having substantially the same authority
and responsibility; or, with respect to compliance with financial covenants,
the chief financial officer or the treasurer of the U.S. Company, or any other
officer having substantially the same authority and responsibility.
"Revolving Commitment" or "Commitment" means, (i) with respect to
a U.S. Lender, the amount set forth as such Lender's Revolving Commitment on
Schedule 2.1(b) or in an Assignment and Acceptance executed by such U.S.
Lender as such amount may be reduced pursuant to Section 2.05 or as a result of
additional assignments pursuant to Section 10.08, and (ii) with respect to a
Canadian Lender, the amount set forth as such Lender's Revolving Commitment on
Schedule 2.1(b) or in an Assignment and Acceptance executed by such Canadian
Lender as such amount may be reduced pursuant to Section 2.05 or as a result of
additional assignments pursuant to Section 10.08.
"Revolving Loan" has the meaning specified in subsection 2.01(b).
"Revolving Note" means, with respect to the Canadian Company, a
promissory note of such Company payable to the order of a Lender in
substantially the form of Exhibit E-1, and with respect to the U.S. Company, a
promissory note of such Company payable to the order of a Lender in
substantially the form of Exhibit E-2, in each case, evidencing the aggregate
indebtedness of such Company to such Lender resulting from Revolving Loans made
by such Lender.
"Revolving Termination Date" means the earlier to occur of;
(a) November 13, 2001; and
(b) with respect to the Canadian Company, the date on which
the Revolving Commitments of the Canadian Lenders shall terminate in accordance
with the provisions of this Agreement, and with respect to the U.S. Company,
the date on which the Revolving Commitments of the U.S. Lenders shall terminate
in accordance with the provisions of this Agreement.
"S.E. Michigan" means S.E. Michigan Inc., a Michigan corporation.
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"SEC" means the Securities and Exchange Commission, or any entity
succeeding to any of its principal functions.
"Seller" means Trade Products, Inc., a Washington corporation.
"Seller EBITDA" means, (a) for any period ending on or before
September 30, 1997 the sum (determined in accordance with U.S. GAAP) of (i)
the net income (or net loss) of Seller for the applicable Pre-Transfer Period,
plus (ii) all amounts treated as interest and all depreciation, amortization
and other similar non-cash charges to the extent included in the determination
of such net income (or loss), plus (iii) all accrued taxes on or measured by
income to the extent included in the determination of such net income (or
loss), provided, however, that net income (or loss) shall be computed for
these purposes without giving effect to extraordinary losses or extraordinary
gains, and (b) for any period ending after September 30, 1997, an amount equal
to zero.
"Significant Subsidiary" means, at any time, any Subsidiary other
than Subsidiaries of the U.S. Company (a) whose total assets are less than 10%
of the assets of the U.S. Company and its Subsidiaries on a consolidated basis,
(b) whose EBITDA is less than 20% of EBITDA of the U.S. Company and its
Subsidiaries on a consolidated basis if at any time the aggregate outstanding
principal balance of the Loans is less than or equal to Ten Million U.S.
Dollars (U.S.$10,000,000), or whose EBITDA is less than 15% of EBITDA of the
U.S. Company and its Subsidiaries on a consolidated basis if at any time the
aggregate outstanding principal balance of the Loans is greater than Ten
Million U.S. Dollars (U.S.$10,000,000), or (c) in which the U.S. Company and
its Subsidiaries have aggregate investments in and advances to which are less
than 10% of the assets of the U.S. Company and its Subsidiaries on a
consolidated basis.
"Solvent" means, as to any Person at any time, that (a) the fair
value of the Property of such Person is greater than the amount of such
Person's liabilities (including disputed, contingent and unliquidated
liabilities) as such value is established and liabilities evaluated for
purposes of Section 101(32) of the Bankruptcy Code and, in the alternative, for
purposes of any applicable state fraudulent transfer law or any applicable
Canadian federal or provincial laws; (b) the present fair saleable value of the
Property of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become absolute
and matured, (c) such Person is able to pay its debts and other liabilities
(including disputed, contingent and unliquidated liabilities) as they mature in
the normal course of business; (d) 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 (e) 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 has or would have unreasonably small
capital.
"Subordinated Debt Documents" means the Indenture dated as of
November 13, 1996 between U.S. Company and The Trust Company of Washington, as
the same may be amended, modified or supplemented from time to time.
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"Subordinated Notes" means U.S. Company's 12 1/2% Senior
Subordinated Notes due 2004 and U.S. Company's Series B 12 1/2% Senior
Subordinated Notes due 2004, in the aggregate principal amount of up to One
Hundred Million U.S. Dollars (U.S.$100,000,000), issued or to be issued in
connection with the Acquisition and repayment of the existing subordinated debt
as the same may be amended, modified, supplemented, renewed or refinanced from
time to time.
"Subsidiary" of a Person means any corporation, association,
partnership, joint venture or other business entity of which more than 50% of
the voting stock or other equity interests (in the case of Persons other than
corporations), is owned or controlled directly or indirectly by the Person, or
one or more of the Subsidiaries of the Person, or a combination thereof.
"Subsidiary Guaranty" means any Guaranty with respect to the
Obligations, in form and substance acceptable to the Agents, executed and
delivered by a Significant Subsidiary to the Agents, as amended, modified,
supplemented or reaffirmed from time to time in accordance with the terms
thereof.
"Surety Instruments" means all letters of credit (including
standby and commercial), banker's acceptances, bank guaranties, shipside bonds,
surety bonds and similar instruments.
"Taxes" has the meaning specified in subsection 3.01(a).
"Transferee" has the meaning specified in subsection 10.08(e).
"UCC" means the Uniform Commercial Code as in effect in the
State of Illinois.
"Unfunded Pension Liabilities" means the excess of a Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the current value
of that Plan's assets, determined in accordance with the assumptions used by
the Plan's actuaries for funding the Plan pursuant to Section 412 for the
applicable plan year.
"United States" and "U.S." each means the United States of
America.
"U.S. Agent" means BofA (U.S.) in its capacity as agent
hereunder and under the other Loan Documents as provided in Article IX, and any
successor agent.
"U.S. Agent's Payment Office" means the address for payments
set forth on the signature page hereto in relation to the U.S. Agent or such
other address as the U.S. Agent may from time to time specify in accordance
with Section 10.02.
"U.S. Code" means the Internal Revenue Code of 1986, and
regulations promulgated thereunder.
"U.S. Company" has the meaning specified in the introductory
clause hereto.
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"U.S. Company Guaranty" means the Guaranty executed and
delivered by the U.S. Company to the U.S. Agent on December 13, 1994, as
amended, modified, supplemented or reaffirmed from time to time in accordance
with the terms thereof.
"U.S. Company Security Agreement" means the Security Agreement
to be executed and delivered by the U.S. Company to the U.S. Agent on December
13, 1994, as amended, modified, supplemented or reaffirmed from time to time in
accordance with the terms thereof.
"U.S. Dollars", "U.S. dollars" and "U.S.$" each mean lawful
money of the United States.
"U.S. Federal Funds Rate" means, for any day, the rate per
annum set forth in the weekly statistical release designated as H.15(519), or
any successor publication, published by the Federal Reserve Board (including
any such successor, "H.15(519)") for such day (or, if such day is not a
Business Day, for the Business Day preceding such day) opposite the caption
"Federal Funds (Effective)". If on any day upon which the Federal Funds Rate is
to be determined the rate for such day (or, if such day is not a Business Day,
for the Business Day preceding such day) is not yet published in H.15(519),
the rate for such day for purposes of such determination will be the rate set
forth in the daily statistical release designated as the Composite 3:30 p.m.
Quotations for U.S. Government Securities, or any successor publication,
published by the Federal Reserve Bank of New York (including any such
successor, the "Composite 3:30 p.m. Quotation") for such day (or, if such day
is not a Business Day, for the Business Day preceding such day) under the
caption "Federal Funds Effective Rate". If on any day upon which the Federal
Funds Rate is to be determined the rate for such day (or, if such day is not a
Business Day, for the Business Day preceding such day) is not yet published in
either H.15(519) or the Composite 3:30 p.m. Quotations, the rate for such day
for purposes of such determination will be the arithmetic mean as determined by
the U.S. Agent of the rates for the last transaction in overnight Federal funds
arranged prior to 9:00 a.m. (New York time) on that day (or, if such day is not
a Business Day, on the Business Day preceding such day) by each of three
leading brokers of Federal funds transactions in New York City selected by the
U.S. Agent.
"U.S. GAAP" means generally accepted accounting principles set
forth from time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board (or
agencies with similar functions of comparable stature and authority within the
accounting profession), or in such other statements by such other entity as may
be in general use by significant segments of the U.S. accounting profession,
which are applicable to the circumstances as of the date of determination.
"U.S. Issuer" means BAI in its capacity as issuer of the
Letters of Credit for the account of the U.S. Company (or any other Person to
whom BAI may assign its obligations pursuant to subsection 10.08(g)).
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"U.S. Lender" means a Lender with a Revolving Commitment to
the U.S. Company either as listed on Schedule 2.1(b) or as a result of one or
more assignments pursuant to Section 10.08, and includes the U.S. Issuer.
"U.S. Revolving Loan Availability" means the lesser of (a) the
Revolving Commitments of the U.S. Lenders minus the aggregate undrawn face
amount of all Letters of Credit issued for the account of the U.S. Company and
(b) the Borrowing Base applicable to the U.S. Company (as calculated pursuant
to the most recent Borrowing Base Certificate delivered by the U.S. Company
pursuant to this Agreement).
"Wholly-Owned Subsidiary" means, with respect to a Company,
any corporation in which (other than directors' qualifying shares required by
law) 100% of the capital stock of each class having ordinary voting power,
and 100% of the capital stock of every other class, in each case, at the time
as of which any determination is being made, is owned, beneficially and of
record, by such Company, or by one or more of the other Wholly-Owned
Subsidiaries, or both.
1.02. Other Interpretive Provisions.
(a) Defined Terms.
Unless otherwise specified herein or therein, all terms
defined in this Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto. The meaning of
defined terms shall be equally applicable to the singular and plural forms of
the defined terms.
(b) The Agreement.
The words "hereof", "herein", "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 subsection, section,
schedule and exhibit references are to this Agreement unless otherwise
specified.
(c) Certain Common Terms.
(i) The term "documents" includes any and all
instruments, documents, agreements, certificates, indentures, notices
and other writings, however evidenced.
(ii) The term "including" means "including without
limitation" and the parties hereto agree that the rule of ejusdem
generis shall not be applicable to limit a general statememt, which is
followed by an enumeration of specific matters, to matters similar to
the matters specifically mentioned.
(d) Performance; Time.
Whenever any performance obligation hereunder shall be stated
to be due or required to be satisfied on a day other than a Business Day, such
performance shall, unless
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otherwise specified herein, be made or satisfied on the next succeeding
Business Day. In the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including", the words
"to" and "until" each mean "to but excluding", and the word "through" means "to
and including." If any provision of this Agreement refers to any action taken
or to be taken by any Person, or which such Person is prohibited from taking,
such provision shall be interpreted to encompass any and all means, direct or
indirect, of taking, or not taking, such action.
(e) Contracts.
Unless otherwise expressly provided herein, references to
agreements and other contractual instruments shall be deemed to include all
subsequent amendments and other modifications thereto, but only to the extent
such amendments and other modifications are not prohibited by the terms of any
Loan Document.
(f) Laws.
References to any statute or regulation are to be construed
as including all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting the statute or regulation.
(g) Captions.
The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
(h) Independence of Provisions.
The parties acknowledge that this Agreement and other Loan
Documents may use several different limitations, tests or measurements to
regulate the same or similar matters, and that such limitations, tests and
measurements are cumulative and must each be performed, except as expressly
stated to the contrary in this Agreement.
(i) Interpretation.
This Agreement is the result of negotiations among and has
been reviewed by counsel to the Agents, the Companies and other parties, and is
the product of all parties hereto. Accordingly, this Agreement and the other
Loan Documents shall not be construed against the Lenders or the Agents merely
because of the Agents' or Lenders' involvement in the preparation of such
documents and agreements.
(j) Subsidiaries.
If a Person is a Subsidiary of both the Canadian Company and
the U.S. Company and is subject to a limitation or amount expressed in both
Canadian Dollars and U.S. Dollars herein, such Person shall be deemed to be
subject to the U.S. Dollar limitation or amount.
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1.03. Accounting Principles.
(a) Unless the context otherwise clearly requires, all
accounting terms not expressly defined herein shall be construed, and all
financial computations required under this Agreement shall be made, in
accordance with U.S. GAAP, consistently applied. If any changes in accounting
principles from those used in the preparation of the financial statements
referred to in Section 5.11 hereafter occur as a result of the promulgation of
rules, regulations, pronouncements, or opinions by the Financial Accounting
Standards Board or the American Institute of Certified Public Accountants (or
successors thereto or agencies with similar functions) and result in a change
in the method of calculation of financial covenants, standards, or terms found
in this Agreement, upon the request of the U.S. Company or the Majority
Lenders, the Companies, the Agents and the Majority Lenders agree to enter into
negotiations to amend such financial covenants, standards or terms so as to
equitably reflect such changes with the desired result that the evaluations of
the financial condition of the Companies shall be the same after such changes
as if such changes had not been made; providing, however, that until the parties
hereto have reached a definitive agreement on such amendments, the financial
condition of the Companies shall continue to be evaluated on the same
principles as those used in the preparation of the financial statements
referred to in Section 5.11 prior to such change in accounting principles.
(b) References herein to "fiscal year" and "fiscal
quarter" refer to such fiscal periods of the U.S. Company.
1.04. Principle of Deemed Reinvestment.
Except to the extent permitted under applicable law, all
calculations of interest and fees hereunder are to be made on the basis of the
nominal interest rate set forth herein and not using the effective rate method
of calculation or on any basis which gives effect to the principle of deemed
reinvestment. For the purposes of disclosure under the Interest Act (Canada),
if and to the extent applicable, whenever interest is to be paid hereunder and
such interest is to be calculated on the basis of a period of less than a
calendar year, the yearly rate of interest to which the rate determined
pursuant to such calculation is equivalent is the rate so determined multiplied
by the actual number of days in the calendar year in which the same is to be
ascertained and divided by the number of days in such period.
1.05. Effect of Amendment and Restatement.
Upon the Closing Date, the Original Credit Agreement (and,
except as otherwise set forth in the following proviso, all obligations and
rights of any party thereunder) shall be amended and restated by this Agreement;
provided, however, that the obligations to repay the loans and advances arising
under the Original Credit Agreement shall continue in full force and effect and
the liens and security interests securing payment thereof shall be continuing
but shall now be governed by the terms of this Agreement and the Loan
Documents.
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ARTICLE II
THE CREDITS
2.01. Amounts and Terms of Commitments.
(a) Intentionally Omitted.
(b) The Revolving Credit.
Subject to the terms and conditions hereinafter set forth,
Loans (each such Loan, a "Revolving Loan") will be made to each Company by each
of its Applicable Lenders and Letters of Credit will be issued for the account
of each Company by its Applicable Issuer (in which Letters of Credit each of
such Company's Applicable Lenders will participate pursuant to Section 2.15)
from time to time on any Business Day during the period from the Closing Date
to the Revolving Termination Date, in an aggregate amount of such Loans and
participations not to exceed at any time outstanding such Applicable Lender's
Revolving Commitment; provided, that (i) at no time shall the aggregate
principal amount of all outstanding Revolving Loans and the aggregate undrawn
face amount of all Letters of Credit for the account of the Canadian Company
exceed Canadian Revolving Loan Availability, (ii) at no time shall the
aggregate principal amount of all outstanding Revolving Loans and the aggregate
undrawn face amount of all Letters of Credit for the account of the Canadian
Company (with the amounts of such Revolving Loans and Letters of Credit
expressed in U.S. Dollars at the Current Exchange Rate) exceed Ten Million
U.S. Dollars (U.S.$10,000,000), and (iii) at no time shall the aggregate
principal amount of all outstanding Revolving Loans and the aggregate undrawn
face amount of all Letters of Credit for the account of the U.S. Company exceed
U.S. Revolving Loan Availability. On the Closing Date, the Revolving
Commitments of the Canadian Lenders, which are expressed in U.S. Dollars in
Schedule 2.1(b), shall be converted to Canadian Dollars at the Current Exchange
Rate. Each Company may borrow under this subsection 2.01(b), prepay pursuant to
Section 2.06 and reborrow pursuant to this subsection 2.01(b), within the
limits of the Canadian Revolving Loan Availability, U.S. Revolving Loan
Availability and Revolving Commitments of such Company's Applicable Lenders and
subject to the other terms and conditions hereof. The obligations of each
Lender under this subsection 2.01(b) are several and not joint and the failure
of any Lender to fulfill its obligations hereunder shall not result in any
liability to any other Lenders. The Revolving Loans to the Canadian Company
will be made, and the Letters of Credit for the account of the Canadian Company
will be issued, in Canadian Dollars, and the Revolving Loans to the U.S.
Company will be made, and the Letters of Credit for the account of the U.S.
Company will be issued, in U.S. Dollars.
2.02. Notes.
(a) The Revolving Loans made by each Lender shall be evidenced
by a Revolving Note payable to the order of that Lender in an amount equal to
its Revolving Commitment.
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(b) Each Lender may endorse on the schedules annexed to
its Notes, the date, amount and maturity of each Loan made by it and the amount
of each payment of principal made with respect thereto. Each Company
irrovocably authorizes each Applicable Lender of such Company to endorse its
Notes and each such Applicable Lender's record shall be conclusive absent
manifest error; provided, however, that the obligations of each Company
hereunder or under any Note shall not be limited or otherwise affected by the
failure of any of its Applicable Lenders to make, or an error in making, a
notation on any such Note. The Loans made by each Lender may also be evidenced
by one or more loan accounts maintained by such Lender in the ordinary course
of business. The loan accounts or records pertaining to a Company maintained by
the Applicable Agent of such Company and each Applicable Lender of such Company
shall be conclusive absent manifest error of the amount of the Loans made by
such Applicable Lenders to such Company and the interest and payments thereon.
Any failure so to record or any error in doing so shall not, however, limit or
otherwise affect the obligation of the Companies hereunder (or under any Note)
to pay any amount owing with respect to the Obligations. In the event of a
conflict between a notation on a Note and the amount in a loan account, the
amount in the loan account shall govern and in the event of a conflict between
the amount in the loan account maintained by a Lender and the amount in the
loan account maintained by the Applicable Agent, the amount in the loan account
maintained by the Lender shall govern.
2.03. Procedure for Borrowing and Issuance of Letters of
Credit.
(a) Each Borrowing and request for the issuance of a
Letter of Credit shall (except as provided in clause (ii) of the proviso of
this sentence) be made upon a Company's irrevocable written notice delivered to
its Applicable Agent in accordance with Section 10.02 in the form of a Notice
of Borrowing (which notice must be received by such Company's Applicable Agent
prior to 10:00 a.m. (Chicago time) (i) three Business Days prior to the
requested Borrowing date, in the case of Offshore Rate Loans; (ii) two Business
Days prior to the requested Borrowing date, in the case of BA Rate Loans, (iii)
on the requested Borrowing date, in the case of Base Rate Loans or Canadian
Base Rate Loans, and (iv) five Business Days prior to the requested issuance
date, in the case of Letters of Credit), specifying:
(A) the amount of the Borrowing (which shall be in an
aggregate minimum principal amount of (i) Five Hundred Thousand
Canadian Dollars (Cdn$500,000) or any multiple of One Hundred Thousand
Canadian Dollars (Cdn$100,000) in excess thereof or the aggregate
amount of the unused Revolving Commitments of the Canadian Lenders if
the Borrowing is by the Canadian Company, and (ii) Five Hundred
Thousand U.S. Dollars (U.S.$500,000) or any multiple of One Hundred
Thousand U.S. Dollars (U.S.$100,000) in excess thereof or the
aggregate amount of the unused Revolving Commitments of the U.S.
Lenders if the Borrowing is by the U.S. Company), or the amount of
the Letter of Credit (which shall be in a minimum amount of (i) Fifty
Thousand Canadian Dollars (Cdn$50,000) or Fifty Thousand U.S. Dollars
(U.S.$50,000) if the Letter of Credit is issued for the account of
the Candian Company, and (ii) Fifty Thousand
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U.S. Dollars (U.S.$50,000) if the Letter of Credit is issued for the
account of the U.S. Company), as applicable;
(B) the requested Borrowing date or issuance date, as
applicable, which shall be a Business Day;
(C) in the case of a Borrowing by the Canadian Company,
whether such Borrowing is to be comprised of BA Rate Loans or Canadian
Base Rate Loans and in the case of a Borrowing by the U.S. Company,
whether such Borrowing is to be comprised of Offshore Rate Loans or
Base Rate Loans,
(D) in the case of a Borrowing to be comprised of
Offshore Rate Loans or BA Rate Loans, the duration of the Interest
Period applicable to such Loans (provided, that if the Notice of
Borrowing shall fail to specify the duration of the Interest Period
for any Borrowing to be comprised of BA Rate Loans or Offshore Rate
Loans, such Interest Period shall be 90 days or three months,
respectively).
provided, however, that (i) with respect to the Borrowings to be made on the
Closing Date, the Notice of Borrowing of each Company shall be delivered to its
Applicable Agent not later than 10:00 a.m. (Chicago time) on the Closing Date
and such Borrowing will consist of Base Rate Loans only in the case of the U.S.
Company and BA Rate Loans with an Interest Period of 30 days in the case of the
Canadian Company, and (ii) a Company shall be deemed to have timely requested a
Borrowing of Revolving Loans (comprised of Base Rate Loans in the case of the
U.S. Company and Canadian Base Rate Loans in the case of the Canadian Company)
in the event its Applicable Lenders reimburse its Applicable Issuer pursuant to
subsection 2.15(b), in the amount of such reimbursement.
(b) Upon receipt of a Notice of Borrowing from a Company,
(i) its Applicable Agent will promptly notify such Company's Applicable Lenders
thereof and of the amount of such Lender's Commitment Percentage of such
Borrowing or participation in such Letters of Credit, and (ii) in the case of a
Borrowing, each Applicable Lender of such Company will make the amount of its
Commitment Percentage of such Borrowing available to the Applicable Agent of
such Company for the account of such Company at such Applicable Agent's Payment
Office by 12:00 noon (Chicago time) on the Borrowing date requested by such
Company in immediately available funds. The proceeds of all such Loans will
then be made available to such Company by its Applicable Agent by wire transfer
of like funds in accordance with written instructions provided to such
Applicable Agent by such Company as received by such Applicable Agent.
(c) Unless the Majority Lenders shall otherwise agree,
during the existence of an Event of Default, the U.S. Company may not elect to
have a Loan be made as, or converted into or continued as, an Offshore Rate
Loan.
(d) A Borrowing of the U.S. Company may only be comprised
of Base Rate Loans or Offshore Rate Loans and a Borrowing of the Canadian
Company may only be comprised of Canadian Base Rate Loans or BA Rate Loans.
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(e) After giving effect to any Borrowing, no more than
four different Interest Periods shall be in effect for the Loans to the
Canadian Company and no more than four different Interest Periods shall be in
effect for the Offshore Rate Loans to the U.S. Company.
(f) Each Letter of Credit to be issued for the account of
a Company shall be in form and substance acceptable to its Applicable Agent and
its Applicable Issuer, shall by its terms be stated to expire on a date no
later than five Business Days prior to the Revolving Termination Date and shall
not have a tenor longer than one year (but may have automatic annual renewal
provisions acceptable to the Majority Lenders). Each Notice of Borrowing of a
Company requesting the issuance of a Letter of Credit for the account of such
Company shall be accompanied by a letter of credit application, in form and
substance acceptable to its Applicable Agent and its Applicable Issuer, duly
executed by a Responsible Officer of such Company. The aggregate undrawn face
amount of all Letters of Credit outstanding at any time issued for the account
of the U.S. Company shall not exceed Three Million U.S. Dollars
(U.S.$3,000,000). The aggregate undrawn face amount of all Letters of Credit
outstanding at any time issued for the account of the Canadian Company shall
not exceed the Canadian Dollar equivalent of Three Million U.S. Dollars
(U.S.$3,000,000) (with such amount determined at the Current Exchange Rate).
(g) After giving effect to the requested Borrowing by the
Canadian Company, the BA Rate Loans to the Canadian Company and Letters of
Credit issued for the account of the Canadian Company do not exceed 90% of the
sum of the Revolving Commitments of the Canadian Lenders.
2.04. Conversion and Continuation Elections.
(a) The U.S. Company may upon irrevocable written notice
to the U.S. Agent in accordance with subsection 2.04(c):
(i) elect to convert on any Business Day, any Base Rate
Loans (or any part thereof in an amount not less than Five Hundred
Thousand U.S. Dollars (U.S.$500,000), or that is in an integral
multiple of One Hundred Thousand U.S. Dollars (U.S.$100,000) in excess
thereof) into Offshore Rate Loans; or
(ii) elect to convert on the last day of the applicable
Interest Period any Offshore Rate Loans having Interest Periods
maturing on such day (or any part thereof in an amount not less than
Five Hundred Thousand U.S. Dollars (U.S.$500,000), or that is in an
integral multiple of One Hundred Thousand U.S. Dollars (U.S.$100,000)
in excess thereof) into Base Rate Loans; or
(iii) elect to continue on the last day of the applicable
Interest Period any Offshore Rate Loans having Interest Periods
maturing on such day (or any part thereof in an amount not less than
Five Hundred Thousand U.S, Dollars (U.S.$500,000), or that is in an
integral multiple of One Hundred Thousand U.S. Dollars (U.S.$100,000)
in excess thereof);
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provided, that if the aggregate amount of Offshore Rate Loans in respect of any
Borrowing shall have been reduced, by payment, prepayment, or conversion of part
thereof to be less than Five Hundred Thousand U.S. Dollars (U.S.$500,000), such
Offshore Rate Loans shall automatically convert into Base Rate Loans on the
last day of the Interest Period applicable thereto, and on and after such date
the right of the U.S. Company to continue such Loans as, and convert such Loans
into, Offshore Rate Loans shall terminate.
(b) The Canadian Company may upon irrevocable written
notice to the Canadian Agent in accordance with subsection 2.04(c):
(i) elect to convert on any Business Day, any Canadian
Base Rate Loans (or any part thereof in an amount not less than Five
Hundred Thousand Canadian Dollars (Cdn$500,000), or that is an
integral multiple of One Hundred Thousand Canadian Dollars
(Cdn$100,000) in excess thereof) into BA Rate Loans; or
(ii) elect to convert on the last day of the applicable
Interest Period any BA Rate Loans having Interest Periods maturing on
such date (or any part thereof in an amount not less than Five Hundred
Thousand Canadian (Cdn$500,000), or that is an integral multiple of
One Hundred Thousand Canadian Dollars (Cdn$100,000) in excess thereof)
into Canadian Base Rate Loans; or
(iii) elect to continue on the last day of the applicable
Interest Period any BA Rate Loans having Interest Periods maturing on
such day (or any part thereof in an amount not less than Five Hundred
Thousand Canadian Dollars (Cdn$500,000), or that is an integral
multiple of One Hundred Thousand Canadian Dollars (Cdn$100,000) in
excess thereof).
(c) Each Company shall deliver a Notice of
Conversion/Continuation in accordance with Section 10.02 to be received by its
Applicable Agent not later than 10:00 a.m. (Chicago time) at least (i) three
Business Days in advance of the Conversion Date or continuation date, if the
Loans are to be converted into or continued as Offshore Rate Loans; (ii) two
Business Days in advance of the Conversion Date or continuation date, if the
Loans are to be converted into or continued as BA Rate Loans; and (iii) on the
Conversion Date, if the Loans are to be converted into Base Rate Loans or
Canadian Base Rate Loans; specifying:
(A) the proposed Conversion Date or continuation date;
(B) the aggregate amount of Loans to be converted or
continued;
(C) the nature of the proposed conversion or
continuation; and
(D) in the case of Loans to be continued as or converted
into BA Rate Loans or continued as or converted into Offshore Rate
Loans, the duration of the requested Interest Period.
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(d) If upon the expiration of any Interest Period
applicable to Offshore Rate Loans, the U.S. Company has failed to timely
select a new Interest Period to be applicable to such Offshore Rate Loans, or
if any Event of Default shall then exist, the U.S. Company shall be deemed to
have elected to convert such Offshore Rate Loans into Base Rate Loans effective
as of the expiration date of such current Interest Period. If upon the
expiration of any Interest Period applicable to BA Rate Loans, the Canadian
Company has failed to timely select a new Interest Period to be applicable to
such BA Rate Loans, the Canadian Company shall be deemed to have elected to
convert such BA Rate Loans into Canadian Base Rate Loans effective as of the
expiration date of such current Interest Period.
(e) Upon receipt of a Notice of Conversion/Continuation
of a Company, its Applicable Agent will promptly notify such Company's
Applicable Lenders thereof, or, if no timely notice is provided by such
Company, its Applicable Agent will promptly notify each Applicable Lender of
the details of any automatic conversion or continuation. All conversions and
continuations shall be made pro rata according to the respective outstanding
principal amounts of the Loans, with respect to which the notice was given,
held by each Lender.
(f) Unless the Majority Lenders shall otherwise agree,
during the existence of an Event of Default, the U.S. Company may not elect to
have a Loan converted into or continued as an Offshore Rate Loan.
(g) Notwithstanding any other provision contained in this
Agreement, after giving effect to any conversion or continuation of any Loans,
there shall not be more than four different Interest Periods in effect for the
Loans to the Canadian Company and not more than four different Interest Periods
in effect for the Offshore Rate Loans to the U.S. Company.
2.05. Voluntary Termination or Reduction of Commitments.
A Company may, upon not less than two Business Days' prior
notice to its Applicable Agent, terminate the Revolving Commitments of its
Applicable Lenders or permanently reduce the Revolving Commitments of its
Applicable Lenders (pro rata based on such Lenders' Commitment Percentage) by
an aggregate minimum amount of (a) Two Million Five Hundred Thousand Canadian
Dollars (Cdn$2,500,000) or any multiple of Five Hundred Thousand Canadian
Dollars (Cdn$500,000) in excess thereof in the case of the Canadian Company and
(b) Two Million Five Hundred Thousand U.S. Dollars (U.S.$2,500,000) or any
multiple of Five Hundred Thousand U.S. Dollars (U.S.$500,000) in excess thereof
in the case of the U.S. Company; provided, that no such reduction or
termination shall be permitted if, after giving effect thereto and to any
prepayments of the Loans made on the effective date thereof, the then
outstanding principal amount of the Revolving Loans and outstanding Letters of
Credit for the account of such Company would exceed the Revolving Commitments
of its Applicable Lenders then in effect and, provided, further, that once
reduced in accordance with this Section 2.05, such Revolving Commitments may
not be increased. All accrued commitment fees to, but not including the
effective date of any termination of Commitments, shall be paid on the
effective date of such termination.
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2.06. Optional Prepayments.
Subject to Section 3.04, a Company may, at any time or from
time to time, upon at least one Business Days' notice to its Applicable Agent,
ratably prepay Base Rate Loans or Canadian Base Rate Loans in whole or in part
to its Applicable Lenders (pro rata based on such Lender's Commitment
Percentage) and, upon at least three Business Days' notice to its Applicable
Agent, ratably prepay Offshore Rate Loans and BA Rate Loans in whole or in part
to its Applicable Lenders (pro rata based on such Lender's Commitment
Percentage), in each case, in amounts of (a) Five Hundred Thousand Canadian
Dollars (Cdn$500,000) or any multiple of One Hundred Thousand Canadian Dollars
(Cdn$100,000) in excess thereof in the case of the Canadian Company and (b)
Five Hundred Thousand U.S. Dollars (U.S.$500,000) or any multiple of One
Hundred Thousand U.S. Dollars (U.S.$100,000) in excess thereof in the case of
the U.S. Company. Such notice of prepayment shall specify the date and amount
of such prepayment and, in the case of the Canadian Company, whether such
prepayment is of Canadian Base Rate Loans or BA Rate Loans, and in the case of
the U.S. Company, whether such prepayment is of Base Rate Loans or Offshore
Rate Loans, or any combination thereof and, if such prepayment includes a
prepayment of BA Rate Loans or Offshore Rate Loans, the Interest Period or
Periods of the Loans to be prepaid. Such notice shall not thereafter be
revocable by such Company and its Applicable Agent will promptly notify each
Applicable Lender thereof and of such Lender's Commitment Percentage of such
prepayment. If such notice is given by a Company, such Company shall make such
prepayment, and the payment amount specified in such notice shall be due and
payable, on the date specified therein, together with accrued interest to each
such date on the amount prepaid and any amounts required pursuant to Section
3.04. Any prepayments by a Company pursuant to this Section 2.06 shall be
applied to the Revolving Loans owing by such Company and, in the case of the
U.S. Company, first to any Base Rate Loans then outstanding and then to
Offshore Rate Loans with the shortest Interest Periods remaining and, in the
case of the Canadian Company, first to any Canadian Base Rate Loans then
outstanding and then to BA Rate Loans with the shortest Interest Periods
remaining.
2.07. Mandatory Prepayments of Loans; Mandatory Commitment
Reductions.
(a) Revolving Loans in Excess of the Aggregate Revolving
Commitment or Borrowing Base.
If at any time, the aggregate principal amount of all
outstanding Revolving Loans and the aggregate undrawn face amount of all
Letters of Credit for the account of the Canadian Company exceeds Canadian
Revolving Loan Availability, the Canadian Company shall immediately repay such
excess. If at any time, the aggregate principal amount of all outstanding
Revolving Loans and the aggregate undrawn face amount of all Letters of Credit
for the account of the U.S. Company exceeds U.S. Revolving Loan Availability,
the U.S. Company shall immediately repay such excess. If at any time, the
aggregate principal amount of all outstanding Revolving Loans and the undrawn
face amount of all Letters of Credit for the account of the Canadian Company
(with the amounts of such Revolving Loans and Letters of Credit expressed in
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U.S. Dollars at the Current Exchange Rate) exceeds Ten Million U.S. Dollars
(U.S.$10,000,000), the Canadian Company shall immediately repay such excess.
(b) General.
Any prepayments by the U.S. Company pursuant to subsection
2.07(a) shall be applied to the Revolving Loans owing by the U.S. Company. Any
prepayments by the U.S. Company pursuant to this Section 2.07 shall be applied
first to any Base Rate Loans then outstanding and then to Offshore Rate Loans
with the shortest Interest Periods remaining. Any prepayments by the Canadian
Company pursuant to this Section 2.07 shall be applied first to any Canadian
Base Rate Loans then outstanding and then to BA Rate Loans with the shortest
Interest Periods remaining. Each Company shall pay, together with each
prepayment under this Section 2.07, accrued interest on the amount prepaid and
any amounts required pursuant to Section 3.04.
2.08. Repayment.
(a) Intentionally Omitted,
(b) The Revolving Credit.
Each Company shall repay to its Applicable Agent for the
ratable benefit of its Applicable Lenders in full on the Revolving Termination
Date the aggregate principal amount of the Revolving Loans owing by such
Company and reimbursement obligations outstanding with respect to Letters of
Credit issued for the account of such Company.
2.09. Interest.
(a) Subject to the terms and conditions set forth in this
Agreement, each Loan shall bear interest on the outstanding principal amount
thereof from the date when made to the date such Loan is repaid at a rate per
annum equal to (i) for each day during which such Loan is a BA Rate Loan, the
BA Rate for the applicable Interest Period for such Loan for such day, (ii) for
each day during which such Loan is an Offshore Rate Loan, the Offshore Rate for
the applicable Interest Period for such Loan for such day, (iii) for each day
during which such Loan is a Base Rate Loan, the Base Rate for such day, and
(iv) for each day during which such Loan is a Canadian Base Rate Loan, the
Canadian Base Rate; plus, in each case, the Applicable Margin then in effect
(b) Interest on each Loan owing by a Company shall be
paid by such Company in arrears on each Interest Payment Date with respect to
such Loan. Interest shall also be paid on the date of any prepayment of Loans
pursuant to Sections 2.06 and 2.07 for the portion of the Loans so prepaid and
upon payment (including prepayment) in full thereof and, during the existence
of any Event of Default, interest of a Company shall be paid on demand of such
Company's Applicable Agent at the request or with the consent of the Majority
Lenders.
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(c) While any Event of Default exists or after
acceleration, each Company shall, at the request of the Majority Lenders, pay
interest (after as well as before entry of judgment thereon to the extent
permitted by law) on the principal amount of (i) all Loans due and unpaid by
such Company, at a rate per annum which is determined by adding 200 basis
points to the interest rate otherwise applicable to such Loans and (ii) all
reimbursement obligations of such Company under subsection 2.15(b) due and
unpaid, at a rate per annum which is determined by adding 200 basis points to
the interest rate otherwise applicable to Revolving Loans comprised of Base
Rate Loans or Canadian Base Rate Loans, as applicable.
(d) Anything herein to the contrary notwitholding, the
obligations of each Company hereunder shall be subject to the limitation that
payments of interest by such Company shall not be required, for any period for
which interest is computed hereunder, to the extent (but only to the extent)
that contracting for or receiving such payment by the respective Lender would
be contrary to the provisions of any law applicable to such Lender limiting the
highest rate of interest which may be lawfully contracted for, charged or
received by such Lender, and in such event such Company shall pay such Lender
interest at the highest rate permitted by applicable law.
2.10. Fees.
(a) Underwriting Fee.
The U.S. Company shall pay to the U.S. Agent for the account
of the Lenders an underwriting in an amount and at the times set forth in a
letter agreement among the U.S. Company, the U.S. Agent, the Canadian Agent and
BA Securities, Inc, ("BASI") dated October 22, 1996.
(b) Non-Use Fees.
Each Company shall pay to its Applicable Agent for the account
of each of its Applicable Lenders a non-use fee on the average daily unused
portion of such Lender's Revolving Commitment, computed on a quarterly basis in
arrears on the last Business Day of each calendar quarter based upon the daily
utilization for that quarter as calculated by such Applicable Agent, equal to
the Applicable Margin for Non-Use Fees then in effect. Such non-use fee shall
accrue from the Closing Date to the Revolving Termination Date and shall be due
and payable quarterly in arrears on the last Business Day of each calendar
quarter commencing on December 31, 1996 through the Revolving Termination Date,
with the final payment to be made on the Revolving Termination Date; provided,
that, in connection with any termination of Commitments pursuant to Section
2.05, the accrued non-use fee calculated for the period ending on such date
shall also be paid on the date of such termination.
(c) Agency Fee.
The U.S. Company shall pay to the U.S. Agent for the U.S.
Agent's own account an agency fee in the amount and at the times set forth
in a letter agreement between the U.S. Company, the U.S. Agent, the Canadian
Agent and BASI dated October 22, 1996.
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(d) Letters of Credit Fees.
Each Company shall pay to its Applicable Agent for the account
of each of its Applicable Lenders a Letter of Credit fee on the average daily
outstanding Letters of Credit issued for the account of such Company, computed
on a quarterly basis in arrears on the last Business Day of each calendar
quarter based on the daily utilization for that quarter as calculated by such
Applicable Agent, at a rate equal to the Applicable Margin for Letter of Credit
Fees then in effect. Such Letter of Credit fees shall accrue from the date a
Letter of Credit is issued to the date such Letter of Credit is terminated and
shall be due and payable quarterly in arrears on the last Business Day of each
calendar quarter commencing on December 31, 1996. Each Company also agrees to
pay its Applicable Agent for the sole account of its Applicable Issuer, a
fronting fee on the average daily outstanding Letters of Credit issued for the
account of such Company, computed on a quarterly basis in arrears on the last
Business Day each calendar quarter based on the daily utilization for that
quarter as calculated by such Applicable Agent, at a rate equal to 0.125% per
annum. Such fronting fee shall accrue from the date a Letter of Credit is
issued to the date such Letter of Credit is terminated and shall be due and
payable quarterly in arrears on the last Business Day of each calendar quarter
commencing on December 31, 1996. Each Company further agrees to pay to its
Applicable Agent, for the sole account of the Applicable Issuer all customary
charges, fees, costs and expenses of such Issuer (other than those attributable
to credit exposure to an account party) at such times as such Issuer
customarily charges such charges, fees, costs and expenses.
(e) Audit Fees.
Without limiting the Agents' rights under any other provision
in the Loan Documents, each Company shall pay to its Applicable Agent its
standard audit fees in connection with audits of such Company's books and
records and such other matters as the Applicable Agent shall deem appropriate,
plus all out-of-pocket expenses incurred by the Applicable Agent in connection
with such audits.
2.11. Computation of Fees and Interest.
(a) All computations of interest payable in respect of
Base Rate Loans at all times as the Base Rate is determined by BofA (U.S.)'s
"reference rate" shall be made on the basis of a year of 365 or 366 days, as
the case may be, and actual days elapsed. All computations of interest payable
in respect of BA Rate Loans or Canadian Base Rate Loans shall be made on the
basis of a year of 365 days and actual days elapsed. All other computations of
fees and interest under this Agreement shall be made on the basis of a 360-day
year and actual days elapsed, which results in more interest being paid than if
computed on the basis of a 365-day year. Interest and fees shall accrue during
each period during which interest or such fees are computed from the first day
thereof to the last day thereof.
(b) Each Company and its Applicable Lenders will, with
reasonable promptness, be notified by such Company's Applicable Agent of each
determination of an Offshore Rate or of a BA Rate; provided, that any failure to
do so shall not relieve a Company of
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any liability hereunder or provide the basis for any claim against its
Applicable Agent. Any change in the interest rate on a Loan resulting from a
change in the Applicable Margin or Eurodollar Reserve Percentage, shall become
effective as of the opening of business on the day on which such change in the
Applicable Margin or Eurodollar Reserve Percentage becomes effective. Each
Company and its Applicable Lenders will, with reasonable promptness, be
notified by such Company's Applicable Agent of the effective date and the
amount of each such change; provided, that any failure to do so shall not
relieve a Company of any liability hereunder or provide the basis for any claim
against its Applicable Agent.
(c) Each determination of an interest rate applicable to
a Company by its Applicable Agent shall be conclusive and binding on such
Company and its Applicable Lenders in the absence of manifest error. At the
request of a Company or of its Applicable Lenders, such Company's Applicable
Agent will deliver to such Company or such Lenders, as the case may be, a
statement showing the quotations used by such Applicable Agent in determining
any interest rate.
(d) If any Reference Bank's Commitment shall terminate
(otherwise than on termination of all the Commitments), or for any reason
whatsoever any Reference Bank shall cease to be a Lender hereunder, that
Reference Bank shall thereupon cease to be a Reference Bank, and the Offshore
Rate shall be determined on the basis of the average of the rates as notified
by the remaining U.S. Lenders and the BA Rate shall be determined on the basis
of the average of the rates as notified by the remaining Canadian Lenders.
(e) All interest payments by the Canadian Company to be
made hereunder shall be paid at the rates set forth herein without giving
effect to subsection 2.09(c) both before and after maturity and before and
after default and/or judgment, if any, until payment thereof and interest shall
accrue on overdue interests, if any.
2.12. Payments by the Companies.
(a) All payments (including prepayments) to be made by a
Company on account of principal, interest, fees and other amounts required
hereunder shall be made without set-off, recoupment or counterclaim; shall,
except as otherwise expressly provided herein, be made by such Company to its
Applicable Agent for the account of its Applicable Lenders (pro rata based on
such Applicable Lender's Commitment Percentage) at its Applicable Agent's
Payment Office, and shall be made in immediately available funds, no later than
12:00 noon (Chicago time) on the date specified herein. All payments made by a
Company to its Applicable Agent will be promptly distributed by such Applicable
Agent to such Company's Applicable Lenders in accordance with such Applicable
Lender's Commitment Percentage (or other applicable share as expressly provided
in the Loan Documents) of such principal, interest, fees or other amounts, in
like funds as received. Any payment by a Company which is received by its
Applicable Agent later than 12:00 noon (Chicago time) shall be deemed to have
been received on the immediately succeeding Business Day and any applicable
interest or fee shall continue to accrue.
(b) Whenever any payment hereunder shall be stated to be
due on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such
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extension of time shall in such case be included in the computation of interest
or fees, as the case may be; subject to the provisions set forth in the
definition of "Interest Period" herein.
(c) Unless a Company shall have delivered notice to its
Applicable Agent prior to the date on which any payment is due hereunder that
such Company will not make such payment in full as and when required hereunder,
such Applicable Agent may assume that such Company has made such payment in
full on such date in immediately available funds and such Applicable Agent may
(but shall not be so required), in reliance upon such assumption, cause to be
distributed to each Applicable Lender of such Company on such due date an
amount equal to the amount then due such Lender. If and to the extent a Company
shall not have made such payment in full to its Applicable Agent, each
Applicable Lender shall repay to such Agent on demand such amount distributed
to such Lender by such Agent, together with interest thereon for each day from
the date such amount is distributed to such Lender until the date such Lender
repays such amount to such Agent, at the Applicable Federal Funds Rate as in
effect for each such day.
2.13. Payments by the Lenders to the Agents.
(a) With respect to each Borrowing by a Company, unless
such Company's Applicable Agent shall have received notice from an Applicable
Lender of such Company at least one Business Day prior to the date of such
Borrowing that such Lender will not make available to such Agent as and when
required hereunder the amount of that Lender's Commitment Percentage of such
Borrowing, such Agent may assume that each Applicable Lender has made such
amount available to it in immediately available funds on the Borrowing date no
later than 12:00 noon (Chicago time) and it may (but shall not be so required),
in reliance upon such assumption, make available to such Company on such date a
corresponding amount. If and to the extent any Applicable Lender of a Company
shall not have made its full amount available to the Applicable Agent of such
Company in immediately available funds and such Agent in such circumstances has
made available to such Company such amount, that Lender shall on or before
12:00 noon (Chicago time) on the next Business Day following the date of such
Borrowing make such amount available to such Applicable Agent, together with
interest at the Applicable Federal Funds Rate for and determined as of each day
during such period. A notice by such Agent submitted to such Lender with
respect to amounts owing under this subsection 2.13(a) shall be conclusive,
absent manifest error. If such amount is so made available, such payment to
such Agent shall constitute such Lender's Loan on the date of Borrowing for all
purposes of this Agreement. If such amount is not made available to such Agent
on or before 12:00 noon (Chicago time) on the next Business Day following the
date of such Borrowing, such Agent shall notify such Company of such failure to
fund and, upon demand by such Agent, such Company shall pay such amount to such
Agent for such Agent's account together with interest thereon for each day
elapsed from the date of such Borrowing to the date of payment, at a rate per
annum equal to the interest rate applicable at the time to the Loans comprising
such Borrowing.
(b) The failure of any Lender to make any Loan on any
Borrowing date shall not relieve any other Lender of any obligation hereunder
to make a Loan on such Borrowing date,
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but no Lender shall be responsible for the failure of any other Lender to make
the Loan to be made by such other Lender on the date of any Borrowing.
2.14. Sharing of Payments, Etc.
If, other than as expressly provided elsewhere herein, any
Applicable Lender of a Company shall receive on account of the Loans made by it
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off, or otherwise) in excess of its Commitment Percentage of payments on
account of the Loans received by all Applicable Lenders of such Company, such
Lender shall forthwith (a) notify the Applicable Agent of such Company of such
fact, and (b) purchase from the other Applicable Lenders of such Company such
participations in the Loans to such Company held by them as shall be necessary
to cause such purchasing Lender to share the excess payment ratably with each
of them; provided, however, that if all or any portion of such excess payment
is thereafter recovered from the purchasing Lender, such purchase shall to that
extent be rescinded and each other Applicable Lender shall repay to the
purchasing Lender the purchase price paid therefor, together with an amount
equal to such paying Lender's Commitment Percentage (according to the
proportion of (i) the amount of such paying Lender's required repayment, to
(ii) the total amount so recovered from the purchasing Lender) of any interest
or other amount paid or payable by the purchasing Lender in respect of the
total amount so recovered. Each Company agrees that any of its Applicable
Lenders so purchasing a participation from another Applicable Lender of such
Company pursuant to this Section 2.14 may, to the fullest extent permitted by
law, exercise all of its rights of payment (including the right of set-off,
but subject to Section 10.09) with respect to such participation as fully as if
such Lender were the direct creditor of such Company in the amount of such
participation. Each Company's Applicable Agent will keep records (which shall
be conclusive and binding in the absence of manifest error) of participations
purchased pursuant to this Section 2.14 and will in each case notify the
Applicable Lenders following any such purchases or repayments.
2.15. Certain Letter of Credit Provisions.
(a) Immediately upon the issuance of each Letter of
Credit for the account of a Company, each Applicable Lender of such Company
shall be deemed to, and hereby severally agrees to, have irrevocably purchased
from the Applicable Issuer of such Company a participation in such Letter of
Credit and drawings thereunder in an amount equal to such Lender's Commitment
Percentage of the maximum amount which is or at any time may become available
to be drawn thereunder, No Applicable Issuer of a Company shall have any
obligation to issue any Letter of Credit if any Applicable Lender of such
Company has no obligation to participate in such Letter of Credit.
(b) In the event the Applicable Issuer of a Company has
determined to honor a request for drawing under a Letter of Credit issued by it
for the account of such Company, such Issuer shall immediately notify such
Company and the Applicable Agent of such Company, and such Company shall
reimburse such Issuer on or before the Business Day immediately following the
date on which such drawing is honored (such immediately following date, the
"Disbursement
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Date") in same day funds equal to the amount of such drawing; provided, that
anything contained in this Agreement to the contrary notwithstanding, (i)
unless such Company shall have notified its Applicable Agent and its Applicable
Issuer prior to 10:00 a.m. (Chicago time) on the Disbursement Date that such
Company intends to reimburse such Issuer for the amount of such drawing with
funds other than the proceeds of Revolving Loans and such Company does so
reimburse such Issuer, such Company shall be deemed to have given a timely
Notice of Borrowing to its Applicable Agent requesting such Company's
Applicable Lenders to make Revolving Loans for the account of such Company on
the Disbursement Date in an amount equal to the amount of such drawing (which
Revolving Loans shall be Canadian Base Rate Loans in the case of the Canadian
Company, and Base Rate Loans in the case of the U.S. Company) and (ii) subject
to satisfaction or waiver of the conditions specified in Section 4.02, the
Applicable Lenders of such Company shall, on the Disbursement Date, make
Revolving Loans for the account of such Company in the aggregate amount of such
drawing (which Revolving Loans shall be Canadian Base Rate Loans in the case of
the Canadian Company, and Base Rate Loans in the case of the U.S. Company), the
proceeds of which shall be applied directly by the Applicable Agent of such
Company to reimburse the Applicable Issuer of such Company for the amount of
such drawing; and provided, further that if for any reason proceeds of
Revolving Loans are not received by such Applicable Issuer on the Disbursement
Date in an amount equal to the amount of such drawing, such Company shall
reimburse such Applicable Issuer, on demand, in an amount in same day funds
equal to the excess of the amount of such drawing over the aggregate amount of
such Revolving Loans, if any, which are so received, together with interest
thereon at a rate per annum equal to the rate per annum then in effect for
Revolving Loans (comprised of Canadian Base Rate Loans in the case of the
Canadian Company, and Base Rate Loans in the case of the U.S. Company) from the
date of demand to the date of reimbursement. Nothing in this subsection 2.15(b)
shall be deemed to relieve any Lender from its obligation to make Revolving
Loans on the terms and conditions set forth in this Agreement, and each
Company shall retain any and all rights it may have against any Lender
resulting from the failure of such Lender to make such Revolving Loans under
this subsection 2.15(b).
(c) In the event that a Company shall fail for any reason
to reimburse its Applicable Issuer as provided in subsection 2.15(b) on the
Disbursement Date in an amount equal to the amount of any drawing honored by
such Issuer under a Letter of Credit issued by it, such Issuer shall promptly
notify the Applicable Agent of such Company and such Agent shall promptly
notify each Applicable Lender of such Company of the unreimbursed amount of
such drawing and of such Lender's respective participation therein based on
such Lender's Commitment Percentage. In such event, each Applicable Lender of
such Company shall make available to the Applicable Issuer of such Company an
amount equal to its respective participation in same day funds, at the office
of such Issuer specified in such notice, not later than 12:00 noon (Chicago
time) on the first Business Day after the date notified by such Agent. In the
event that any such Lender fails to make available to such Issuer on such
Business Day the amount of such Lender's participation in such Letter of Credit
as provided in this subsection 2.15(c), such Issuer shall be entitled to
recover such amount on demand from such Lender together with interest thereon
at the rate per annum equal to the Applicable Federal Funds Rate for and
determined as of each day during such period. Nothing in this subsection
2.15(c) shall be deemed to relieve a Company from its obligation to reimburse
its
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Applicable Issuer as provided in subsection 2.15(b). In the event the
Applicable Issuer of a Company shall have been reimbursed by such Company's
Applicable Lenders pursuant to this subsection 2.15(c) for all or any portion
of any drawing honored by such Issuer under a Letter of Credit issued by it,
such Issuer shall distribute to each Lender which has paid all amounts payable
by it under this subsection 2.15(c) with respect to such drawing such Lender's
Commitment Percentage of all payments subsequently received by such Issuer from
such Company in reimbursement of such drawing when such payments are received.
Promptly upon receipt by such Issuer of any payment of interest in respect of
such Company's reimbursement obligation pursuant to subsection 2.15(b) with
respect to a drawing, in the event such Issuer shall have been reimbursed by
any Lender pursuant to this subsection 2.15(c) for all or any portion of such
drawing, such Issuer shall distribute to each such Lender which has paid all
amounts payable by it under this subsection 2.15(c) with respect to such
drawing such Lender's Commitment Percentage of any interest received by such
Issuer in respect of that portion of such drawing so reimbursed by such Lender.
(d) The obligation of a Company to reimburse its
Applicable Issuer for drawings made under the Letters of Credit issued by it
for the account of such Company and to repay any Revolving Loans made by its
Applicable Lenders pursuant to subsection 2.15(b) and the obligations of the
Lenders under subsection 2.15(c) shall be unconditional and irrevocable and
shall be paid strictly in accordance with the terms of this Agreement under all
circumstances including, without limitation, the following circumstances:
(i) any lack of validity or enforceability of any Letter
of Credit;
(ii) the existence of any claim, set-off defense or other
right which a Company or any Lender 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), an Issuer or other Lender
or any other Person or, in the case of a Lender, against a Company,
whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction (including any
underlying transaction between a Company or one of its Subsidiaries
and the beneficiary for which any Letter of Credit was procured);
(iii) any draft, demand, certificate or other document
presented under any Letter of Credit proving to be forged, fraudulent
invalid or insufficient in any respect or any statement therein being
untrue or in any respect;
(iv) payment by an Issuer under any Letter of Credit
against presentation of a demand, draft or certificate or other
document which does not comply with the terms of such Letter of
Credit;
(v) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of
a Company or any of its Subsidiaries;
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(vi) any breach of this Agreement or any other Loan
Document by any party thereto;
(vii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Default shall
have occurred and be continuing;
provided, however that after paying in full its obligation hereunder, nothing
herein shall adversely affect the right of such Company or such Lender, as the
case may be, to commence any proceeding against the Applicable Issuer of such
Company for any wrongful disbursement made by such Issuer under a Letter of
Credit as a result of acts or omissions constituting gross negligence or
willful misconduct on the part of such Issuer.
(e) In addition to amounts payable as provided in
subsection 2.15(b), each Company hereby agrees to protect, indemnify, pay and
save harmless its Applicable Issuer and such Issuer's officers, employees or
agents from and against any and all claims, demands, liabilities, damages,
losses, and reasonable costs, charges and expenses (including reasonable fees,
expenses and disbursements of counsel) which such Issuer may incur or be
subject to as a consequence, direct or indirect, of (i) the issuance of any
Letter of Credit by such Issuer, other than as a result of the gross negligence
or willful misconduct of such Issuer or such Issuer's officers, employees or
agents or (ii) the failure of such Issuer to honor a drawing under any such
Letters of Credit as a result of any act or omission, whether rightful or
wrongful, of any present or future Governmental Authority.
(f) As between a Company and its Applicable Issuer, such
Company assumes all risks of the acts and omissions of, or misuse of the
Letters of Credit issued by such Issuer by, the respective beneficiaries of
such Letters of Credit. In furtherance and not in limitation of the foregoing,
no Issuer shall be responsible for: (i) the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of any such Letter of Credit,
even if it should in fact prove to be in any or all respects invalid,
insufficient inaccurate, fraudulent or forged; (ii) 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; (iii) failure of the beneficiary of any such Letter
of Credit to comply fully with any conditions required in order to draw upon
such Letter of Credit; (iv) errors, omissions, interruptions, or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (v) errors in interpretation of
technical terms; (vi) 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; (vii) the misapplication by the beneficiary of any
such Letter of Credit of the proceeds of any drawing under such Letter of
Credit; or (viii) any consequences arising from causes beyond the control of
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such Issuer; and none of the above shall affect or impair, or prevent the
vesting of, any of such Issuer's rights or powers hereunder,
In furtherance and extension and not in limitation of the
specific provisions set forth in the first paragraph of this subsection
2.15(f), any action taken or omitted by the Applicable Issuer of a Company
under or in connection with the Letters of Credit issued by it or any documents
and certificates delivered thereunder, if taken or omitted in good faith, shall
not put such Issuer under any resulting liability to such Company.
Notwithstanding anything to the contrary contained in this
subsection 2.15(f), each Company shall retain any and all rights it may have
against its Applicable Issuer and its officers, employees or agents for any
liability arising out of the gross negligence or willful misconduct of such
Issuer or its officers, employees or agents.
2.16. Currency of Payment.
All payments required hereunder to be made by a Company to its
Applicable Agent, its Applicable Lenders or its Applicable Issuer, or by such
Company's Applicable Agent to its Applicable Lenders or its Applicable Issuer,
or by such Company's Applicable Lenders to its Applicable Agent or Applicable
Issuer, or by such Company's Applicable Issuer to its Applicable Agent or
Applicable Lenders, shall be made in such Company's Applicable Currency.
Unless otherwise specified, all other payments shall be made in U.S. Dollars.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01. Taxes.
(a) Subject to subsections 3.01(d) and 3.01(g), any and
all payments by a Company to its Applicable Lenders or its Applicable Agent
under this Agreement shall be made free and clear of, and without deduction or
withholding for, any and all present or future taxes, levies, imposts,
deductions, charges or withholdings and all liabilities with respect thereto,
excluding, in the case of each such Lender and such Agent, such taxes (including
income taxes or franchise taxes) as are imposed on or measured by each such
Lender's or Agent's net income, capitalization or net worth by the
jurisdiction under the laws of which such Lender or such Agent, as the case may
be, is organized or maintains a Lending Office or any political subdivision
thereof (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes").
(b) In addition, each Company shall pay any present or
future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies which arise from any payment made hereunder or from
the execution, delivery or registration of, or otherwise with respect to, this
Agreement or any other Loan Documents (hereinafter referred to as "Other
Taxes").
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(c) Subject to subsection 3.01(g), each Company shall
indemnify each of its Applicable Lenders and its Applicable Agent for the full
amount of Taxes or Other Taxes (including any Taxes or Other Taxes imposed by
any jurisdiction on amounts payable under this Section 3.01) paid by such
Lender or such Agent and any liability (including penalties, interest,
additions to tax and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
Payment under this indemnification shall be made within 30 days from the date
such Lender or such Agent makes written demand therefor.
(d) If a Company shall be required by law to deduct or
withhold any Taxes or Other Taxes from or in respect of any sum payable
hereunder to any of its Applicable Lenders or its Applicable Agent then,
subject to subsection 3.01 (g):
(i) the sum payable shall be increased as necessary so
that after making all required deductions of Taxes or Other Taxes
(including deductions of Taxes or Other Taxes applicable to additional
sums payable under this Section 3.01) such Lender or such Agent, as
the case may be, receives an amount equal to the sum it would have
received had no such deductions been made;
(ii) such Company shall make such deductions; and
(iii) such Company shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with
applicable law.
(e) Within 30 days after the date of any payment by a
Company of Taxes or Other Taxes, such Company shall furnish to its Applicable
Agent the original or a certified copy of a receipt evidencing payment thereof,
or other evidence of payment satisfactory to such Agent.
(f) (i) Each U.S. Lender which is a foreign person (i,e.,
a person other than a United States person for United States Federal income tax
purposes) agrees that:
(A) it shall, no later than the Closing Date (or, in the
case of a U.S. Lender which becomes a party hereto pursuant to Section
10.08 after the Closing Date, the date upon which such Lender becomes
a party hereto) deliver to the U.S. Company through the U.S. Agent two
accurate and complete signed originals of Internal Revenue Service
Form 4224 or any successor thereto ("Form 4224"), or two accurate and
complete signed originals of Internal Revenue Service Form 1001 or any
successor thereto ("Form 1001"), as appropriate, in each case
indicating that such Lender is on the date of delivery thereof
entitled to receive payments of principal, interest and fees under
this Agreement free from withholding of United States Federal income
tax;
(B) if at any time such Lender makes any changes
necessitating a new Form 4224 or Form 1001, it shall with reasonable
promptness deliver to the U.S. Company through the U.S. Agent in
replacement for, or in addition to, the forms previously delivered by
it hereunder, two accurate and complete signed originals of
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Form 4224; or two accurate and complete signed originals of Form 1001,
as appropriate, in each case indicating that the U.S. Lender is on the
date of delivery thereof entitled to receive payments of principal,
interest and fees under this Agreement free from withholding of United
States Federal income tax;
(C) it shall, before or promptly after the occurrence of
any event (including the passing of time but excluding any event
mentioned in (ii) above) requiring a change in or renewal of the most
recent Form 4224 or Form 1001 previously delivered by such Lender and
deliver to the U.S. Company through the U.S. Agent two accurate and
complete original signed copies of Form 4224 or Form 1001 in
replacement for the forms previously delivered by such Lender; and
(D) it shall, promptly upon the U.S. Company's or the
U.S. Agent's reasonable request to that effect deliver to the U.S.
Company or the U.S. Agent (as the case may be) such other forms or
similar documentation as may be required from time to time by any
applicable law, treaty, rule or regulation in order to establish such
Lender's tax status for withholding purposes.
(ii) Each Canadian Lender agrees that it shall, no later than the Closing
Date (or, in the case of a Canadian Lender which becomes a party hereto
pursuant to Section 10.08 after the Closing Date, the date upon which such
Lender becomes a party hereto) deliver to the Canadian Company through the
Canadian Agent an instrument in writing certifying one of the following:
(A) that the Canadian Lender is not a non-resident of
Canada for the purposes of Part XIII of the Income Tax Act (Canada)
and that it is the sole beneficial owner of payments of principal,
interest and fees under this Agreement;
(B) its jurisdiction of incorporation and residence for
tax purposes, that it is the sole beneficial owner of payments of
principal, interest and fees under this Agreement and the rate of
withholding tax applicable to any payment of interest to it pursuant
to any applicable tax conventions between Canada, on the one hand, and
its Jurisdiction of residence for tax purposes, on the other hand; or
(C) its jurisdiction of incorporation and residence for
tax purposes, the names of the beneficial owners of payments of
principal, interest and fees under this Agreement, the residence for
tax purposes of each of such beneficial owners and the rate of
withholding tax applicable to any payment of interest in respect of
each beneficial owner pursuant to any applicable tax convention
between Canada, on the one hand, and the jurisdiction of residence for
tax purposes of each beneficial owner, on the other hand;
and undertaking to advise the Canadian Company or the Canadian Agent, as
applicable, of any changes in respect of (A), (B) or (C), as the case may be
In addition, each Canadian Lender shall, promptly upon the Canadian Company's
or the Canadian Agent's reasonable request to that effect, deliver to the
Canadian Company or the Canadian Agent (as the case may be) such other
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instruments in writing, forms or similar documentation as may be required from
time to time by any applicable law, treaty, rule or regulation or the official
interpretation of such laws or regulations by any Governmental Authority
charged with the interpretation or administration thereof (whether or not
having the force of law) in order to establish such Lender's tax status for
withholding purposes.
(g) (i) The U.S. Company will not be required to pay any
additional amounts in respect of United States Federal income tax pursuant to
subsection 3.01 to any Applicable Lender of such Company for the account of any
Lending Office of such Lender;
(A) if the obligation to pay such additional amounts
would not have arisen but for a failure by such Lender to comply with
its obligations under subsection 3.01(f)(i);
(B) if such Lender shall have delivered to the U.S.
Company a Form 4224 in respect of such Lending Office pursuant to
subsection 3.01 (f)(i), and such Lender shall not at any time be
entitled to exemption from deduction or withholding of United States
Federal income tax in respect of payments by the U.S. Company
hereunder for the account of such Lending Office for any reason other
than a change in United States law or regulations or in the official
interpretation of such law or regulations by any Governmental
Authority charged with the interpretation or administration thereof
(whether or not having the force of law) after the date of delivery of
such Form 4224; or
(C) if such Lender shall have delivered to the U.S.
Company a Form 1001 in respect of such Lending Office pursuant to
subsection 3.01(f)(i), and such Lender shall not at any time be
entitled to exemption from deduction or withholding of United States
Federal income tax in respect of payments by the U.S. Company
hereunder for the account of such Lending Office for any reason other
than a change in United States law or regulations or any applicable
tax treaty or regulations or in the official interpretation of any
such law, treaty or regulations by any Governmental Authority charged
with the interpretation or administration thereof (whether or not
having the force of law) after the date of delivery of such Form
1001.
(ii) The Canadian Company will not be required to pay any additional
amounts in respect of Canadian federal income tax pursuant to subsection 3.01
to any Applicable Lender of such Company for the account of any Lending Office
of such Lender if the obligation to pay such additional amounts would not have
arisen but for the fact that such Applicable Lender is a nonresident of Canada
within the meaning of the Income Tax Act (Canada), as now or restated, provided
that if, such Lender shall have delivered an instrument in writing pursuant to
subsection 3.01 (f)(ii), the Canadian Company has withheld and remitted, in
compliance with the provisions of subsections 3.01(d)(ii) and (iii) and 3.01(d)
Taxes and/or Other Taxes calculated and determined in accordance with the said
instrument.
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(h) If, at any time, the U.S. Company requests any U.S,
Lender to deliver any forms or other documentation pursuant to subsection
3.01(f)(i)(D), then the U.S. Company shall, on demand of such Lender through
the U.S. Agent, reimburse such Lender for any costs and expenses (including
Attorney Costs) reasonably incurred by such Lender in the preparation or
delivery of such forms or other documentation. If at any time, the Canadian
Company requests any Canadian Lender to deliver any forms or other
documentation pursuant to subsection 3.01(f)(ii), then the Canadian Company
shall, on demand of such Lender through the Canadian Agent, reimburse such
Lender for any costs and expenses (including Attorney Costs) reasonably
incurred by such Lender in the preparation or delivery of such instruments,
forms or other documentation.
(i) If a Company is required to pay additional amounts to
any of its Applicable Lenders or its Applicable Agent pursuant to subsection
3.01(d), then each such Lender and Agent shall use its reasonable best efforts
(consistent with legal and regulatory restrictions) to change the jurisdiction
of its Lending Office so as to eliminate any such additional payment by such
Company which may thereafter accrue if such change in the judgment of such
Lender is not otherwise disadvantageous to such Lender.
3.02. Illegality.
(a) If any Lender shall determine that the introduction
of any Requirement of Law, or any change in any Requirement of Law or in the
interpretation or administration thereof, has made it unlawful, or that any
central bank or other Governmental Authority has asserted that it is unlawful,
for its Lending Office to make BA Rate Loans or Offshore Rate Loans, then, on
notice thereof by such Lender to such Company through such Company's Applicable
Agent, the obligation of that Lender to make BA Rate Loans or Offshore Rate
Loans shall be suspended until such Lender shall have notified such Agent and
such Company that the circumstances giving rise to such determination no longer
exists.
(b) If a Lender of a Company shall determine that it is
unlawful to maintain any BA Rate Loan or Offshore Rate Loan, such Company shall
prepay in full all BA Rate Loans or Offshore Rate Loans of that Lender then
outstanding, together with interest accrued thereon, either on the last day of
the Interest Period thereof if such Lender may lawfully continue to maintain
such BA Rate Loans or Offshore Rate Loans to such day, or immediately, if such
Lender may not lawfully continue to maintain such BA Rate Loans or Offshore
Rate Loans, together with any amounts required to be paid in connection
therewith pursuant to Section 3.04.
(c) If the Canadian Company is required to prepay any BA
Rate Loan as provided in subsection 3.02(b), then concurrently with such
prepayment the Canadian Company may borrow from the affected Lender, in the
amount of such repayment a Canadian Base Rate Loan. If the U.S. Company is
required to prepay any Offshore Rate Loan as provided in subsection 3.02(b),
then concurrently with such prepayment the U.S. Company may borrow from the
affected Lender, in the amount of such repayment a Base Rate Loan.
(d) If the obligation of any Canadian Lender to make or
maintain any BA Rate Loans has been terminated, the Canadian Company may elect,
by giving notice to such Lender
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through the Canadian Agent that all Loans which would otherwise be made by such
Lender as BA Rate Loan shall be instead Canadian Base Rate Loans. If the
obligation of any U.S. Lender to make or maintain Offshore Rate Loans has been
terminated, the U.S. Company may elect, by giving notice to such Lender through
the U.S. Agent that all Loans which would otherwise be made by such Lender as
Offshore Rate Loans shall be instead Base Rate Loans.
(e) Before giving any notice to the U.S. Agent pursuant
to this Section 3.02, the affected Lender shall designate a different Lending
Office with respect to its Offshore Rate Loans if such designation will avoid
the need for giving such notice or making such demand and will not, in the
judgment of such Lender, be illegal or otherwise disadvantageous to such
Lender.
3.03. Increased Costs and Reduction of Return.
(a) If any Applicable Lender of a Company shall determine
that, due to either (i) the introduction after the Closing Date of or any
change in or in the interpretation of any law or regulation or (ii) the
compliance with any guideline or request issued after the Closing Date by any
central bank or other Governmental Authority (whether or not having the force
of law), there shall be any increase in the cost other than a cost relating to
Taxes to such Lender of agreeing to make or making, funding or maintaining any
Offshore Rate Loans or BA Rate Loans (other than any increase included in any
applicable Eurodollar Reserve Percentage), then such Company shall be liable
for, and shall from time to time, upon demand therefor by such Lender (with a
copy of such demand to the Applicable Agent of such Company), pay to such Agent
for the account of such Lender, additional amounts as are sufficient to
compensate such Lender for such increased costs.
(b) If any Applicable Lender of a Company shall have
determined that (i) the introduction after the Closing Date of any Capital
Adequacy Regulation, (ii) any change after the Closing Date in any Capital
Adequacy Regulation, (iii) any change after the Closing Date in the
interpretation or Administration of any Capital Adequacy Regulation by any
central bank or other Governmental Authority charged with the interpretation or
administration thereof, or (iv) compliance by such Lender (or its Lending
Office) or any corporation controlling such Lender, with any Capital Adequacy
Regulation issued after the Closing Date; affects or would affect the amount of
capital required or expected to be maintained by such Lender or any corporation
controlling such Lender and (taking into consideration such Lender's or such
corporation's policies with respect to capital adequacy) determines that the
amount of such required capital is increased as a consequence of its
Commitments, loans, credits or obligations under this Agreement, then, upon
demand of such Lender (with a copy to the Applicable Agent of such Company),
such Company shall pay to such Lender, from time to time as specified by such
Lender, additional amounts sufficient to compensate such Lender for such
increase.
(c) If a Company would be required to pay additional
amounts to any of its Applicable Lenders pursuant to this subsection 3.03, then
each such Lender and the Applicable Agent of such Company shall use its
reasonable best efforts (consistent with legal and regulatory restrictions) to
change the jurisdiction of its Lending Office so as to eliminate my such
additional
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payment by such Company which may thereafter accrue if such change in the
judgment of such Lender is not otherwise disadvantageous to such Lender.
3.04. Funding Losses.
Each Company agrees to reimburse each of its Applicable
Lenders and to hold each of its Applicable Lenders harmless from any loss or
expense which such Lender may sustain or incur as a consequence of:
(a) the failure of such Company to borrow or continue an
Offshore Rate Loan or a BA Rate Loan or convert a Base Rate Loan into an
Offshore Rate Loan or a Canadian Base Rate Loan into a BA Rate Loan after such
Company has given (or is deemed to have given) a Notice of Borrowing or a
Notice of Conversion/Continuation with respect thereto;
(b) the failure of such Company to make any prepayment
with respect to any Offshore Rate Loan or BA Rate Loan after such Company has
given a notice in accordance with Section 2.06;
(c) the prepayment (including pursuant to Section 2.07)
of an Offshore Rate Loan or a BA Rate Loan on a day which is not the last
day of the Interest Period with respect thereto; or
(d) the conversion pursuant to Section 2.04 of any BA
Rate Loan to a Canadian Base Rate Loan or any Offshore Rate Loan to a Base Rate
Loan on a day that is not the last day of the respective Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its Offshore Rate Loans or BA Rate Loans
hereunder or from fees payable to terminate the deposits from which such funds
were obtained, but excluding any loss of margin, for the period after
prepayment or failure to borrow or prepay. Solely for purposes of calculating
amounts payable by a Company to its Applicable Lenders under this Section 3.04
and under subsection 3.03(a), (i) each Offshore Rate Loan made by an Applicable
Lender of such Company (and each related reserve, special deposit or similar
requirement) shall be conclusively deemed to have been funded at the LIBOR used
in determining the Offshore Rate for such Offshore Rate Loan by a matching
deposit or other borrowing in the interbank eurodollar market for a comparable
amount and for a comparable period, whether or not such Offshore Rate Loan is
in fact so funded, and (ii) each BA Rate Loan made by an Applicable Lender (and
each related reserve, special deposit or similar requirement) shall be
conclusively deemed to have been funded at the BA Rate applicable to such BA
Rate Loan by the acceptance of its bankers' acceptance in a comparable amount
and for a comparable period, whether or not such BA Rate Loan is in fact so
funded.
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3.05. Inability to Determine Rates.
If the Canadian Agent shall have determined that for any
reason adequate and reasonable means do not exist for ascertaining the BA Rate
for any requested Interest Period with respect to a proposed BA Rate Loan or
that the BA Rate applicable pursuant to subsection 2.09(a) for any requested
Interest Period with respect to a proposed BA Rate Loan does not adequately and
fairly reflect the cost to the Canadian Lenders funding such Loan, such Agent
will forthwith give notice of such determination to the Canadian Company and
each Canadian Lender. Thereafter, the obligation of the Canadian Lenders to
make or maintain BA Rate Loans for the account of the Canadian Company
hereunder shall be suspended until the Canadian Agent revokes such notice in
writing. Upon receipt of such notice, the Canadian Company may revoke any
Notice of Borrowing or Notice of Conversion/Continuation then submitted by it.
If the Canadian Company does not revoke such notice, its Applicable Lenders
shall make, convert or continue the Loans, as proposed by the Canadian Company,
in the amount specified in the applicable notice submitted by the Canadian
Company, but such Loans shall be made, converted or continued as Canadian Base
Rate Loans. If the U.S. Agent shall have determined that for any reason
adequate and reasonable means do not exist for ascertaining the Offshore Rate
for any requested Interest Period with respect to a proposed Offshore Rate Loan
or that the Offshore Rate applicable pursuant to subsection 2.09(a) for any
requested Interest Period with respect to a proposed Offshore Rate Loan does
not adequately and fairly reflect the cost to the U.S. Lenders funding such
Loan, such Agent will forthwith give notice of such determination to the U.S.
Company and each U.S. Lender. Thereafter, the obligation of the U.S. Lenders to
make or maintain Offshore Rate Loans for the account of the U.S. Company
hereunder shall be suspended until the U.S. Agent revokes such notice in
writing. Upon receipt of such notice, the U.S. Company may revoke any Notice of
Borrowing or Notice of Conversion/Continuation then submitted by it. If the
U.S. Company does not revoke such notice, its Applicable Lenders shall make,
convert or continue the Loans, as proposed by the U.S. Company, in the amount
specified in the applicable notice submitted by the U.S. Company, but such
Loans shall be made, converted or continued as Base Rate Loans.
3.06. Certificates of Lenders.
Any Applicable Lender of a Company claiming reimbursement or
compensation pursuant to this Article III shall deliver to such Company (with a
copy to the Applicable Agent of such Company) a certificate setting forth in
reasonable detail the amount payable to such Lender hereunder and such
certificate shall be conclusive and binding on such Company in the absence of
manifest error.
3.07. Substitution or Termination of Lender,
If (a) the obligation of any Lender to make BA Rate Loans or
Offshore Rate Loans has been suspended pursuant to Section 3.02 or (b) any
Lender has demanded compensation or is entitled to the payment of Additional
amounts under Section 3.01 or 3.03,
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(i) the applicable Company shall have the right to obtain
a replacement lender for such Lender; provided, that such replacement
tender shall be an Eligible Assignee and the assignment by such Lender
to such replacement lender of such Lender's Loans, Commitments and
other rights and obligations hereunder shall be consummated in
compliance with Section 10.08; and
(ii) the applicable Company may elect to terminate this
Agreement as to such Lender; provided that such Company (A) terminates
this Agreement as to any Affiliate of such Lender, (B) notifies such
Lender through its Applicable Agent of such election at least three
Business Days before any date fixed for such a borrowing or such a
prepayment, as the case may be, and (C) repays all of the outstanding
Loans and other Obligations owing to such Lender and such Lender's
Affiliate at the end of the respective Interest Periods applicable
thereto or as otherwise required by Section 3.02. Upon receipt by the
Applicable Agent of any notice referred to in clause (B) above with
respect to any Lender, the Commitments of such Lender and any
Affiliate of such Lender shall terminate.
3.08. Survival.
The agreements and obligations of the Companies in this
Article III shall survive the payment of all other Obligations.
ARTICLE IV
CONDITIONS PRECEDENT
4.01. Conditions of Initial Loans.
The obligation of each Lender to make its initial Loan
hereunder is subject to the condition that the Agents shall have received on or
before the Closing Date all of the following, in form and substance
satisfactory to the Agents and each Lender and in sufficient copies for each
Lender:
(a) Credit Agreement and Notes.
This Agreement and the Notes, executed by the Companies and,
except in the case of the Notes, the Agents and each of the Lenders;
(b) Resolutions: Incumbency.
(i) Copies of the resolutions of the board of directors
of each Company approving and authorizing the execution, delivery and
performance by such Company of this Agreement and the other Loan
Documents to be delivered by it hereunder, and authorizing the
borrowing of the Loans to such Company, certified as of the Closing
Date by the Secretary or an Assistant Secretary of such Company,
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(ii) Certified copies of the resolutions of the board of
directors of each Subsidiary of a Company approving the Loan Documents
to be delivered by it hereunder; and
(iii) A certificate of the Secretary or Assistant Secretary
of each Company, and each Subsidiary of each Company, certifying the
names and true signatures of the officers of each Company and each
such Subsidiary authorized to execute, deliver and perform, as
applicable, this Agreement, and all other Loan Documents to be
delivered by it hereunder;
(c) Articles of Incorporation; By-laws and Good Standing.
Each of the following documents:
(i) the articles or certificate of incorporation of each
Company, and each Subsidiary of each Company, as in effect on the
Closing Date, certified by the Secretary of State (or similar,
applicable Governmental Authority) of the jurisdiction of
incorporation of such Company or such Subsidiary, as the case may be,
as of a recent date and by the Secretary or Assistant Secretary of
such Company or such Subsidiary, as the case may be, as of the Closing
Date, and the bylaws of such Company or such Subsidiary, as the case
may be, as in effect on the Closing Date, certified by the Secretary
or Assistant Secretary of such Company or such Subsidiary, as the case
may be, as of the Closing Date; and
(ii) a good standing certificate for each Company, and
each Subsidiary of the U.S. Company, from the Secretary of State (or
similar, applicable Governmental Authority) of its jurisdiction of
incorporation and each jurisdiction where such Company, and each such
Subsidiary of the U.S. Company, is qualified to do business as a
foreign corporation as of a recent date;
(d) Collateral Documents.
The reaffirmations or execution, as applicable, of the
Canadian Company Security Agreements, the U.S. Company Security Agreement the
U.S. Company Guaranty and all other agreements, instruments and documents
required to be delivered on the Closing Date under any of the foregoing
Collateral Documents, executed by the Companies and the Subsidiaries, in
appropriate form for recording, where necessary, together with:
(i) duly executed UCC-1 or equivalent financing
statements filed in all jurisdictions necessary to perfect the
security interests of the Agents for the benefit of the Lenders, and
all other filings, registrations and recordings necessary and
advisable to perfect the Liens of the Agents for the benefit of the
Lenders in accordance with applicable law, in each case duly executed
and filed, registered or recorded;
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(ii) written advice relating to such Lien and judgment
searches as the Agents shall have requested of the Companies, and duly
executed termination statements or other documents in appropriate form
for filing, registration or recording as may be necessary to confirm
that the Collateral is subject to no other Liens in favor of any
Persons (other than Permitted Liens);
(iii) evidence that all other actions necessary or, in the
reasonable opinion of the Agents or the Lenders, desirable to perfect
and protect the first priority security interest created by the
documents described in this subsection 4.01(d) have been taken, or
arrangements satisfactory to the Agents for the taking of such actions
shall have been made;
(iv) funds sufficient to pay any filing or recording tax
or fee in connection with any and all UCC-1 financing statements;
(v) evidence that the Applicable Agent has been named as
loss payee under all policies of casualty insurance, and as additional
insured under all policies of liability insurance, required under this
Agreement
(vi) flood insurance on terms satisfactory to the Agents
and the Lenders;
(vii) such consents, estoppels, subordination agreements
and other documents and instruments executed by landlords, tenants and
other Persons party to material contracts relating to any Collateral,
as requested by the Agents and the Lenders.
(e) Legal Opinions.
(i) an opinion of ▇▇▇▇▇ ▇▇▇▇, counsel to the U.S. Company
and addressed to the Agents and the Lenders substantially in the form
of Exhibit G-1;
(ii) intentionally omitted;
(iii) an opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, counsel to the
Canadian Company and addressed to the Agents and the Lenders
substantially in the form of Exhibit H;
(iv) an opinion of Goldberg, Kohn, Bell, Black, ▇▇▇▇▇▇▇▇▇▇
& Moritz, Ltd., special counsel to the U.S. Agent substantially in
the form of Exhibit I;
(v) an opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, special counsel to the
Canadian Agent substantially in the form of Exhibit J;
(vi) an opinion of Johns, Southward, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ &
Magetts, special British Columbia counsel to the Canadian Agent;
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(vii) an opinion of Pitt, ▇▇▇▇▇ and ▇▇▇▇▇▇, special
Manitoba counsel to the Canadian Agent; and
(viii) an opinion of Green Parish, special New Brunswick and
Nova Scotia counsel to the Canadian Agent,
(f) Payment of Fees.
The Companies shall have paid all accrued and unpaid fees,
costs and expenses to the extent then due and payable on the Closing Date,
together with Attorney Costs of the Agents to the extent invoiced prior to or
on the Closing Date, together with such additional amounts of Attorney Costs as
shall constitute the Agents' reasonable estimate of Attorney Costs incurred or
to be incurred through the closing proceedings; provided, that such estimate
shall not thereafter preclude final settling of accounts between the Companies
and Agents; including any such costs, fees and expenses arising under or
referenced in Sections 2.10, 3.01 and 10.04;
(g) UCC-3 Termination Statements.
Acknowledgment copies of UCC-3 termination statements filed by
the U.S. Bank of Washington, N.A. with respect to its liens on the assets of
Trade Products, Inc. that are to be terminated in connection with the
Acquisition or original copies of such UCC-3 termination statements,
(h) Certificate.
A certificate signed by a Responsible Officer of each Company,
dated as of the Closing Date, stating that:
(i) the representations and warranties contained in
Article V are true and correct on and as of such date, as though made
on and as of such date;
(ii) no Default or Event of Default exists or would result
from the initial Borrowing; and
(iii) there has occurred since December 31, 1995, no event
or circumstance that has resulted in a Material Adverse Effect;
(i) Financial Statements.
A certified copy of the financial statements of the U.S.
Company and its Subsidiaries as of September 30, 1996;
(j) Borrowing Base Certificate,
A Borrowing Base Certificate from each Company calculating the
Borrowing Base for such Company as of September 30, 1996,
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(k) Insurance Policies.
Standard lenders' payable endorsements with respect to the
insurance policies or other instruments or documents evidencing insurance
coverage on the properties of the Companies and Subsidiaries in accordance
with Section 6.06;
(l) Subordinated Debt Investment in U.S. Company.
Borrower shall have issued the Subordinated Notes pursuant to
the Subordinated Debt Documents the terms of which shall be acceptable to the
Agents and the Lenders, and U.S. Company shall have received net cash proceeds
of at least Ninety Millon U.S. Dollars (U.S.$90,000,000) in exchange for the
Subordinated Notes, which indebtedness shall bear interest at a rate not to
exceed 13% per annum.
(m) Acquisition.
The Acquisition shall have been consummated in accordance with
the terms of the Acquisition Documents and any other applicable documents and
in full compliance with applicable laws.
(n) Repayment of Existing Debt.
Evidence of the repayment of all existing Indebtedness of the
Companies and Subsidiaries including Indebtedness to the Lenders, except as set
in Schedule 7.5(A).
(o) Other Documents.
Such other approvals, opinions, documents or materials as the
Agents or any Lender may reasonably request; and
4.02. Conditions to All Borrowings and Issuance of Letters
of Credit.
The obligation of each Lender to make any Loan to be made by
it hereunder (including its initial Loan) or to participate in a Letters of
Credit as provided in Section 2.15, is subject to the satisfaction of the
following conditions precedent on the relevant borrowing or issuance date:
(a) Notice of Borrowing.
A Notice of Borrowing of a Company shall have been received by
such Company's Applicable Agent (with, in the case of the initial Loan only, a
copy for each Lender);
(b) Representations and Warranties.
The representations and warranties made by the Companies
contained in Article V shall be true and correct on and as of such borrowing or
issuance date with the same effect as if
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made on and as of such borrowing or issuance date (except to the extent such
representations and warranties expressly refer to an earlier date, in which
case they shall be true and correct as of such earlier date);
(c) No Existing Default.
No Default or Event of Default shall exist or shall result
from such Borrowing or issuance.
Each Notice of Borrowing submitted by a Company hereunder shall constitute a
representation and warranty by such Company hereunder, as of the date of each
such notice and as of the date of each borrowing or issuance, as applicable,
that the conditions in Section 4.02 are satisfied.
(d) No Change in Condition.
No Material Adverse Change shall have occurred,
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Each Company represents and warrants to each Agent and each
Lender that:
5.01. Corporate Existence and Power.
Such Company and each of its Subsidiaries:
(a) is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation;
(b) has the power and authority and all governmental
licenses, authorizations, consents and approvals (i) to own its assets and
carry on its business and (ii) to execute, deliver, and perform its obligations
under the Loan Documents;
(c) is duly qualified as a foreign corporation, and
licensed and in good standing, under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification or license; and
(d) is in compliance with all Requirements of Law;
except, in each case referred to in subclause (b)(i) or clause (c) or clause
(d), to the extent that the failure to do so could not reasonably be expected
to have a Material Adverse Effect.
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5.02. Corporate Authorization; No Contravention.
The execution, delivery and performance by such Company and
its Subsidiaries of this Agreement, and any other Loan Document to which such
Person is party, have been duly authorized by all necessary corporate action,
and do not and will not:
(a) contravene the terms of any of that Person's
Organization Documents;
(b) conflict with or result in any breach or
contravention of, or the creation of any Lien under, any document evidencing
any Contractual Obligation which could reasonably be expected to have a
Material Adverse Effect to which such Person is a party or any order,
injunction, writ or decree of any Governmental Authority to which such Person
or its Property is subject; or
(c) violate any Requirement of Law.
5.03. Governmental Authorization.
No approval, consent, exemption, authorization, or other action
by, or notice to, or filing with, any Governmental Authority (except for
recordings or filings in connection with the Liens granted under the
Collateral Documents) is necessary or required in connection with the
execution, delivery, performance or enforcement of this Agreement or any other
Loan Document.
5.04. Binding Effect.
This Agreement and each other Loan Document to which such
Company or any of its Subsidiaries is a party constitute the legal, valid and
binding obligations of such Person, enforceable against such Person in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency, or similar laws affecting the enforcement of creditors' rights
generally and equitable principles of general applicability.
5.05. Litigation.
Except as specifically disclosed in Schedule 5.5, there are no
actions, suits, proceedings, claims or disputes pending, or to the best
knowledge of such Company, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, against such Company, or its
Subsidiaries or any of their respective Properties which could reasonably be
expected to have a Material Adverse Effect. No injunction, writ, temporary
restraining order or any order of any nature has been issued by any court or
other Governmental Authority purporting to enjoin or restrain the execution,
delivery or performance of this Agreement or any other Loan Document, or
directing that the transactions provided for herein or therein not be
consummated as herein or therein provided.
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5.06. No Default.
No Default or Event of Default exists or would result from the
incurring of any Obligations by such Company or the grant or perfection of the
Liens on the Collateral under the Collateral Documents. Neither such Company
nor any of its Subsidiaries is in default under or with respect to any
Contractual Obligation in any respect which, individually or together with all
such defaults, could reasonably be expected to have a Material Adverse Effect
or that would, if such default had occurred after the Closing Date, create an
Event of Default under subsection 8.01(e).
5.07. ERISA Compliance.
(a) Schedule 5.7 lists all Plans in existence as of the
date hereof and separately identifies Plans intended to be Qualified Plans and
Multiemployer Plans. All written descriptions thereof provided to the Agents
are true and complete in all material respects.
(b) Each Plan is in compliance in all material respects
with the applicable provisions of ERISA, the U.S. Code and other Federal or
state law, including all requirements under the U.S. Code or ERISA for filing
reports (which are true and correct in all material respects as of the date
filed), and benefits have been paid in accordance with the provisions of each
Plan except where the failure to do any of the foregoing could not reasonably
be expected to have a Material Adverse Effect.
(c) Except as specifically disclosed in Schedule 5.7, as
of the date hereof there is no outstanding material liability under Title IV of
ERISA with respect to any Plan maintained or sponsored by the U.S. Company or
any ERISA Affiliate, nor with respect to any Plan to which the U.S. Company or
any ERISA Affiliate contributes or is obligated to contribute.
(d) Except as specifically disclosed in Schedule 5.7, as
of the date hereof no Plan subject to Title IV of ERISA has any material
Unfunded Pension Liability.
(e) Members of the Controlled Group have complied in all
material respects with the notice and continuation coverage requirements of
Section 4980B of the Code, except for such failures to comply which could not
reasonably be expected to have a Material Adverse Effect.
(f) Except as specifically disclosed in Schedule 5.7, no
ERISA Event has occurred or is reasonably expected to occur with respect to any
Plan which could reasonably be expected to have a Material Adverse Effect.
(g) There are no pending or, to the best knowledge of the
U.S. Company, threatened, claims, actions or lawsuits (other than routine
claims for benefits in the usual and ordinary course or claims, actions or
lawsuits which would not reasonably be expected to have a Material Adverse
Effect), asserted or instituted against (i) any Plan maintained or sponsored by
the U.S. Company or its assets, (ii) any member of the Controlled Group with
respect to any Qualified
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Plan, or (ill) any fiduciary with respect to any Plan for which the U.S.
Company may be directly or indirectly liable, through indemnification
obligations or otherwise.
(h) Except as specifically disclosed in Schedule 5.7, as
of the date hereof neither the U.S. Company nor any ERISA Affiliate has
incurred nor reasonably expects to incur (i) any liability (and no event has
occurred which, with the giving of notice under Section 4219 of ERISA, would
result in such liability) under Section 4201 or 4243 of ERISA with respect to a
Multiemployer Plan, or (ii) any liability under Title IV of ERISA (other than
premiums due and not delinquent under Section 4007 of ERISA) with respect to a
Plan which could reasonably be expected to have a Material Adverse Effect.
(i) Except as specifically disclosed in Schedule 5.7, as
of the date hereof neither the U.S. Company nor any ERISA Affiliate has
transfer red any Unfunded Pension Liability to a Person other than the U.S.
Company or an ERISA Affiliate or otherwise engaged in a transaction that could
be subject to Section 4069 or 4212(c) of ERISA.
5.08. Use of Proceeds; Margin Regulations.
The proceeds of the Loans are intended to be and shall be used
solely for the purposes set forth in and permitted by Section 6.11, and are
intended to be and shall be used in compliance with Section 7.07. Neither the
U.S. Company nor any of its Subsidiaries is generally engaged in the business
of purchasing or selling Margin Stock or extending credit for the purpose of
purchasing or carrying Margin Stock.
5.09. Title to Properties.
Such Company and its Subsidiaries have good and marketable
title in fee simple to, or valid leasehold interests in, all real Property
necessary or used in the ordinary conduct of their respective businesses,
except for such defects in title as could not, individually or in the
aggregate, have a Material Adverse Effect. As of the Closing Date, the Property
of such Company and its Subsidiaries is subject to no Liens, other than
Permitted Liens.
5.10. Taxes.
Such Company and its Subsidiaries have filed all federal and
other material tax returns and reports required to be filed, and have paid all
federal and other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their Properties, income or assets
otherwise due and payable, except those which are being contested in good faith
by appropriate proceedings and for which adequate reserves have been provided
in accordance with Applicable Accounting Principles of such Company and no
Notice of Lien has been filed or recorded. There is no proposed tax assessment
against such Company or any of its Subsidiaries which would, if the assessment
were made, have a Material Adverse Effect.
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5.11. Financial Condition.
(a) The audited consolidated balance sheets of the U.S.
Company and its Subsidiaries dated December 31, 1995, and the audited balance
sheets of Seller and its Subsidiaries dated December 31, 1995 and the related
consolidated statements of income or operations, shareholders' equity and cash
flows for the fiscal year ended on that date:
(i) were prepared in accordance with Applicable
Accounting Principles of the U.S. Company or Seller, as the case may
be, consistently applied throughout the period covered thereby, except
as otherwise expressly noted therein;
(ii) fairly present, in all material respects, the
financial condition of the U.S. Company and its Subsidiaries, or
Seller and its Subsidiaries, as the case may be, as of the date
thereof and results of operations for the period covered thereby; and
(iii) except as specifically disclosed in Schedule 5.11,
reflect all material indebtedness and other liabilities, direct or
contingent of the U.S. Company and its consolidated Subsidiaries or
Seller and its Subsidiaries, as the case may be, as of the date
thereof, including liabilities for taxes, material commitments and
Contingent Obligations.
(b) Since December 31, 1995, there has been no Material
Adverse Effect.
5.12. Environmental Matters.
(a) Except as specifically disclosed in Schedule 5.12,
the on-going operations of such Company and each of its Subsidiaries comply in
all respects with all Environmental Laws, except such non-compliance which could
not reasonably be expected to have a Material Adverse Effect.
(b) Except as specifically disclosed in Schedule 5.12,
such Company and each of its Subsidiaries have obtained all licenses, permits,
authorizations and registrations required under any Environmental Law
("Environmental Permits") and necessary for their respective ordinary course
operations, all such Environmental Permits are in good standing, and such
Company and each of its Subsidiaries are in compliance with all material terms
and conditions of such Environmental Permits, except, in each case, to the
extent that the failure to obtain, maintain in good standing or comply with any
such Environmental Permit could not reasonably be expected to have a Material
Adverse Effect.
(c) Except as specifically disclosed in Schedule 5.12,
none of such Company, any of its Subsidiaries or any of their respective
present Property or operations, is subject to any outstanding written order
from or agreement with any Governmental Authority, or subject to any judicial
or docketed administrative proceeding, respecting any Environmental Law,
Environmental Claim or Hazardous Material that could reasonably be expected to
have a Material Adverse Effect.
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(d) Except as specifically disclosed in Schedule 5.12,
(i) there are no Hazardous Materials or other conditions or circumstances
existing with respect to any Property, or arising from operations prior to the
Closing Date, of such Company or any of its Subsidiaries that could give rise
to Environmental Claims that could reasonably be expected to have a Material
Adverse Effect, and (ii) neither such Company nor any of its Subsidiaries has
any underground storage tanks (x) that are not properly registered or permitted
under applicable Environmental Laws, or (y) that are leaking or disposing of
Hazardous Materials off-site.
5.13. Regulated Entities.
None of such Company or any Subsidiary of such Company, is (a)
an "Investment Company" within the meaning of the Investment Company Act of
1940; or (b) subject to regulation under the Public Utility Holding Company Act
of 1935, the Federal Power Act, the Interstate Commerce Act, any state or
provincial public utilities code, or any other Federal, provincial or state
statute or regulation limiting its ability to incur Indebtedness.
5.14. No Burdensome Restrictions,
Neither such Company nor any of its Subsidiaries is a party to
or bound by any Contractual Obligation, or subject to any charter or corporate
restriction, or any Requirement of Law, which could reasonably be expected to
have a Material Adverse Effect.
5.15. Solvency.
On the Closing Date such Company and each of its Significant
Subsidiaries is, and after giving effect to the Acquisition and the initial
Borrowing, such Company and each of its Significant Subsidiaries will be,
Solvent.
5.16. Labor Relations.
There are no strikes, lockouts or other labor disputes against
such Company or any of its Subsidiaries, or, to the best of such Company's
knowledge, threatened against or affecting such Company or any of its
Subsidiaries, and no significant unfair labor practice complaint is pending
against such Company or any of its Subsidiaries or, to the best knowledge of
such Company, threatened against any of them before any Governmental Authority
that, in each case, could reasonably be expected to have a Material Adverse
Effect.
5.17. Copyrights, Patents Trademarks and Licenses, Etc.
Except to the extent that the failure to do so could not
reasonably be expected to have a Material Adverse Effect, such Company or its
Subsidiaries own or are licensed or otherwise have the right to use all of the
patents, trademarks, service marks, trade names, copyrights, contractual
franchises, authorizations and other rights that are reasonably necessary for
the operation of their respective businesses, without conflict with the rights
of any other Person. To the best knowledge of such Company, no slogan or other
advertising device, product, process,
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method, substance, part or other material now employed, or now contemplated to
be employed, by such Company or any of its Subsidiaries infringes upon any
rights held by any other Person in any manner that could reasonably be expected
to have a Material Adverse Effect; except as specifically disclosed in Schedule
5.5, no claim or litigation regarding any of the foregoing is pending or, to
the knowledge of such Company, threatened, and, to the knowledge of such
Company, no patent, invention, device, application, principle or any statute,
law, rule, regulation, standard or code is pending or proposed, which, in
either case, could reasonably be expected to have a Material Adverse Effect.
5.18. Subsidiaries.
As of the Closing Date, such Company has no Subsidiaries other
than those specifically disclosed in part (a) of Schedule 5.18 hereto and has
no equity investments in any other corporation or entity other than those
specifically disclosed in part (b) of Schedule 5.18.
5.19. Broker's; Transaction Fees.
Neither such Company nor any of its Subsidiaries has any
obligation to any Person in respect of any finder's, broker's or investment
banker's fee in connection with the transactions contemplated hereby, except as
described in Schedule 5.19.
5.20. Insurance.
The Properties of such Company and its Subsidiaries are
insured with financially sound and reputable insurance companies not Affiliates
of such Company, in such amounts, with such deductibles and covering such risks
as are customarily carried by companies engaged in similar businesses and
owning similar Properties in localities where such Company or such Subsidiary
operates.
5.21. Full Disclosure.
None of the representations or warranties made by such Company
or any of its Subsidiaries in the Loan Documents as of the date such
representations or warranties are made or deemed made, and none of the
statements contained in the exhibits, reports, statements or certificates
furnished by such Company or any of its Subsidiaries in connection with the
Loan Documents (including the offering and disclosure materials delivered by or
on behalf of such Company to the Lenders prior to the Closing Date), contains
any untrue statement of a material fact or, considered as a whole, omits any
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they are made, not
misleading as of the time when made or delivered.
5.22. Eligibility of Collateral.
Each Borrowing Base Certificate prepared by a Company and
delivered to its Applicable Agent shall be true and correct in all material
respects. No Account Receivable or item
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of Inventory which either Company shall, expressly or by implication (by
inclusion on a Borrowing Base Certificate or otherwise), request the Agents to
classify as an Eligible Account Receivable or as Eligible Inventory,
respectively, will be, as of the time when such request is made, intentionally
misclassified by such Company as an Eligible Account Receivable or Eligible
Inventory.
5.23. Acquisition.
The Acquisition has been consummated in accordance with and
pursuant to the terms of the Acquisition Documents, and in compliance in all
material respects with all applicable laws. The execution of all such
Acquisition Documents has been duly authorized by all necessary action on the
part of the U.S. Company and will not require any consent or approval of any
governmental agency or authority that has not been obtained prior to the date
hereof. The execution of all such Acquisition Documents does not conflict with
(i) any provisions of applicable law, (ii) the organizational documents of the
U.S. Company, (iii) any material agreement binding upon the U.S. Company or
(iv) any court or administrative order or decree applicable to the U.S.
Company.
5.24. Subordinated Notes.
The Subordinated Notes have been issued in accordance with and
pursuant to the terms of the Subordinated Debt Documents, and in compliance in
all material respects with all applicable laws. The execution of the
Subordinated Debt Documents and the issuance of the Subordinated Notes have
been duly authorized by all necessary action on the part of the U.S. Company
and will not require any consent or approval of any governmental agency or
authority that has not been obtained prior to the date hereof. The execution of
all such Subordinated Debt Documents and the issuance of the Subordinated Notes
do not conflict with (i) any provisions of applicable law, (ii) the
organizational documents of the U.S. Company, (iii) any material agreement
binding upon the U.S. Company or (iv) any court or administrative order or
decree applicable to the U.S. Company.
ARTICLE VI
AFFIRMATIVE COVENANTS
Each Company covenants and agrees that, so long as any Lender
shall have any Commitment hereunder, or any Loan or other Obligation shall
remain unpaid or unsatisfied, unless the Agents and the Majority Lenders waive
compliance in writing:
6.01. Financial Statements.
The U.S. Company shall deliver to the Agents in form and
detail satisfactory to the Agents and the Majority Lenders, with sufficient
copies for each Lender:
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(a) as soon as available, but not later than 95 days after the
end of each fiscal year, a copy of the audited consolidated balance sheet of
the U.S. Company as at the end of such year and the related consolidated
statements of income or operations, shareholders' equity and cash flows for
such fiscal year, setting forth in each case in comparative form the figures
for the previous fiscal year, and accompanied by the opinion of Deloitte &
Touche or another nationally-recognized independent public accounting firm
which report shall state that such consolidated financial statements present
fairly the financial position for the periods indicated in conformity with U.S.
GAAP applied on a basis consistent with prior years. Such opinion shall not be
qualified or limited by an Impermissible Qualification. The U.S. Company shall
use its reasonable best efforts to obtain a reliance agreement between the
Agents and Lenders and such accounting firm in form and substance satisfactory
to the U.S. Agent and the Majority Lenders;
(b) Intentionally Omitted;
(c) as soon as available, but not later than 50 days after the
end of the first three fiscal quarters of each year, a copy of the unaudited
consolidated balance sheet of the U.S. Company and its consolidated
Subsidiaries as of the end of such quarter and the related consolidated
statements of income, shareholders' equity and cash flows for the period
commencing on the first day and ending on the last day of such quarter, and
certified by an appropriate Responsible Officer as being complete and correct
and fairly presenting, in accordance with U.S. GAAP, the financial position and
the results of operations of such Company and the Subsidiaries (except for
footnote disclosure and year-end adjustments);
(d) Intentionally Omitted;
(e) as soon as available, but not later than 30 days after the
end of each month, a copy of a report (known as the U.S. Company's
"Consolidated Flash Report") for the period commencing on the first day and
ending on the last day of such month detailing (consistent with current
management reporting practices) the U.S. Company's management's best estimation
of (i) the consolidated revenue and gross profit of the U.S. Company for such
period, (ii) the revenue and gross profit of the U.S. Company and its
Subsidiaries on a consolidating basis and on a product line by product line
basis and (iii) such other internal monthly financial reports as are prepared
by the U.S. Company and requested by the Agent, certified by an appropriate
Responsible Officer as being complete and correct and fairly representing the
financial position and the results of operations of such Company and the
Subsidiaries.
(f) As soon as available, but not later than 30 days after the
end of each month, a Borrowing Base Certificate from each Company calculating
the Borrowing Base for such Company for the period ended on the last day of the
preceding month (provided, that the Borrowing Base Certificate for the U.S.
Company for the month ending October 31, 1996 shall give effect to the
acquisition of the accounts and inventory of Seller in connection with the
Acquisition).
(g) As soon as available, but not later than 60 days after the
end of each fiscal year of the U.S. Company, a copy of the projections and
annual business plan of the U.S.
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Company and its Subsidiaries on a consolidated basis for the forthcoming fiscal
year, on a month by month basis.
6.02. Certificates; Other Information.
The U.S. Company shall furnish to the Agents, with sufficient
copies for each Lender:
(a) concurrently with the delivery of the financial statements
referred to in subsection 6.01(a) above, a certificate of the independent
certified public accountants reporting on such financial statements stating
that in making the examination necessary therefor no knowledge was obtained of
any Default or Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements
referred to in subsections 6.01(a) and (c), (i) a Compliance Certificate of a
Responsible Officer of the U.S. Company (A) stating that, to the best of such
officer's knowledge, the Companies during such period, have observed and
performed all of their covenants and other agreements, and satisfied every
condition contained in this Agreement to be observed, performed or satisfied by
them, and that such officer has obtained no knowledge of any Default or Event
of Default except as specified in such certificate, and (B) showing in detail
the calculations supporting such statement in respect of Sections 7.13, 7.14,
7.15, 7.16 and 7.17, and (ii) and, if there has been a change in the Leverage
Ratio resulting in a change in the Applicable Margin, a Pricing Change
Certificate of a Responsible Officer of the U.S. Company;
(c) promptly after the same are sent copies of all financial
statements and reports which such Company sends to its public shareholders; and
promptly after the same are filed, copies of all financial statements and
regular, periodical or special reports which such Company may make to, or file
with, the Securities and Exchange Commission or any successor or similar
Governmental Authority; and
(d) promptly, such additional business, financial, corporate
affairs and other information as the Applicable Agent of such Company, at the
request of any Lender, may from time to time reasonably request.
6.03. Notices.
Such Company shall promptly notify each Agent and each Lender;
(a) of the occurrence of any Default or Event of Default;
(b) of (i) any breach or non-performance of, or any default
under, any Contractual Obligation of such Company or any of its Subsidiaries
and (ii) any dispute, litigation, investigation, proceeding or suspension which
may exist at any time between such Company or any of its Subsidiaries and any
Governmental Authority which, in any such case, could reasonably be expected to
result in a Material Adverse Effect;
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(c) of the commencement of, or any material development in,
any litigation or proceeding affecting such Company or any Subsidiary (i) in
which the amount of damages claimed is in excess of One Million Canadian
Dollars (Cdn$1,000,000) in the case of the Canadian Company and its
Subsidiaries and in excess of One Million U.S. Dollars (U.S.$1,000,000) in the
case of the U.S. Company and its Non-Canadian Subsidiaries, (ii) in which
injunctive or similar relief is sought and which, if adversely determined,
which could reasonably be expected to have a Material Adverse Effect, or (iii)
in which the relief sought is an injunction or other stay of the performance of
this Agreement or any Loan Document;
(d) upon, but in no event later than 10 days after, becoming
aware of (i) any and all enforcement, cleanup, removal or other governmental or
regulatory actions instituted, completed or threatened against such Company or
any of its Subsidiaries or any of their respective Properties pursuant to any
applicable Environmental Laws which actions would reasonably be anticipated to
lead to a liability of One Million U.S. Dollars (U.S.$1,000,000) or more, and
(ii) all other Environmental Claims involving a potential liability to such
Company or such Subsidiary of One Million U.S. Dollars (U.S.$1,000,000) or
more;
(e) of any other litigation or proceeding affecting such
Company or any of its Subsidiaries which such Company would be required to
report to the SEC pursuant to the Exchange Act, within four days after reporting
the same to the SEC;
(f) of any of the following ERISA events affecting such
Company or any member of its Controlled Group (but in no event more than 10
days after such event), together with a copy of any notice with respect to such
event that may be required to be filed with a Governmental Authority and any
notice delivered by a Governmental Authority to such Company or any member or
its Controlled Group with respect to such event:
(i) an ERISA Event;
(ii) the adoption of any new Qualified Plan by any member of
the Controlled Group;
(iii) the adoption of any amendment to a Qualified Plan if
such amendment results in a material increase in benefits or unfunded
liabilities; or
(iv) the commencement of contributions by any member of the
Controlled Group to any Qualified Plan that is subject to Title IV of
ERISA or Section 412 of the Code;
(g) any Material Adverse Effect subsequent to the date of the
most recent audited financial statements of the U.S. Company delivered to the
Lenders pursuant to subsections 6.01(a) or 4.01(i);
(h) of any material change in accounting policies or financial
reporting practices by such Company or any of its Subsidiaries; and
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(i) of any labor contract resulting in or threatening to
result in any strike, work stoppage, boycott, shutdown or other labor
disruption against or involving such Company or any of its Subsidiaries which
could reasonably be expected to have a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a
written statement by a Responsible Officer of such Company setting forth
details of the occurrence referred to therein, and stating what action, if any,
such Company proposes to take with respect thereto. Each notice under
subsection 6.03(a) shall describe with particularity any and all clauses or
provisions of this Agreement or other Loan Document that have been breached or
violated.
6.04. Preservation of Corporate Existence, Etc.
Such Company shall, and shall cause each of its Subsidiaries
to:
(a) preserve and maintain in full force and effect its
corporate existence and good standing under the laws of its state or
jurisdiction of incorporation except in connection with a transaction permitted
by Section 7.03;
(b) preserve and maintain in full force and effect all rights,
privileges, qualifications, permits, licenses and franchises necessary or
desirable in the normal conduct of its business except in connection with
transactions permitted by Section 7.03 and sales of assets permitted by Section
7.02 and except to the extent that the failure to do so could not reasonably be
expected to have a Material Adverse Effect;
(c) use its reasonable efforts, in the Ordinary Course of
Business, to preserve the goodwill and business of the customers, suppliers and
others having material business relations with it; and
(d) preserve or renew all of its registered trademarks, trade
names and service marks, the non-preservation of which could reasonably be
expected to have a Material Adverse Effect.
6.05. Maintenance of Property.
Such Company shall maintain, and shall cause each of its
Subsidiaries to maintain, and preserve all its Property which is used or useful
in its business in good working order and condition, ordinary wear and tear
excepted and make all necessary repairs thereto and renewals and replacements
thereof except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect or as permitted by Section 7.02.
6.06. Insurance; Condemnation.
In addition to insurance requirements set forth in the
Collateral Documents, such Company shall maintain, and shall cause each of its
Subsidiaries to maintain, with financially sound and reputable independent
insurers, insurance with respect to its Properties and business against loss or
damage of the kinds customarily insured against by Persons engaged in the same
or
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similar business, of such types and in such amounts as are customarily carried
under similar circumstances by such other Persons; including workers'
compensation insurance, public liability and property and casualty insurance.
All casualty, business interruption and key man insurance maintained by such
Company shall name the Applicable Agent as loss payee and all liability
insurance shall name the Applicable Agent as additional insured for the benefit
of the Applicable Lenders, as their interests may appear. In addition, all
business interruption and key management insurance shah be collaterally
assigned to the Applicable Agent of such Company. All such insurance policies
and loss payable clauses shall provide that they may not be cancelled, amended
or terminated unless the Applicable Agent of such Company is given at least the
same number of days' notice that the insurance company which issued such
policies is required to give such Company or any Subsidiary, but in no event
less than 30 days' prior written notice. All insurance proceeds shall be paid
directly to the Applicable Agent for application to the Obligations; provided,
that:
(a) in the event the amount of insurance proceeds received by
the Applicable Agent of a Company as a result of an Event of Loss suffered by
such Company or any of its Subsidiaries is equal to or less than One Million
Canadian Dollars (Cdn$1,000,000) in the case of the Canadian Company or any of
its Subsidiaries or One Million U.S. Dollars (U.S.$1,000,000) in the case of
the U.S. Company or any of its Non-Canadian Subsidiaries, such Applicable Agent
shall remit such proceeds to such Company to repair, replace, restore or
substitute for such damaged Property;
(b) in the event the amount of insurance proceeds received by
the Applicable Agent of a Company as a result of an Event of Loss suffered by
such Company or any of its Subsidiaries is greater than One Million Canadian
Dollars (Cdn$1,000,000) but equal to or less than Seven Million Five Hundred
Thousand Canadian Dollars (Cdn$7,500,000) in the case of the Canadian Company
or any of its Subsidiaries or greater than One Million U.S. Dollars
(U.S.$1,000,000) but equal to or less than Seven Million Five Hundred Thousand
U.S. Dollars (U.S.$7,500,000) in the case of the U.S. Company or any of its
Non-Canadian Subsidiaries, so long as (i) no Event of Default exists at the
time of such Event of Loss, and (ii) the Applicable Agent of such Company has
received written evidence reasonably satisfactory to such Agent and the
Majority Lenders to the effect that (A) such proceeds are, together with other
funds available to such Company (excluding, however, funds necessary to operate
such Company's business), in an amount sufficient to pay all costs of repair,
replacement, restoration or substitution of such damaged Property to an
economical unit of the same character as such Property was prior to such damage
and (B) the failure to be able to use such damaged Property during the period
during which such damaged Property is to be repaired, replaced, restored or
substituted could not reasonably be expected to have a Material Adverse Effect,
such Applicable Agent shall make such proceeds available to such Company as
provided below, and
(c) in the event the amount of insurance proceeds received by
the Applicable Agent of a Company as a result of an Event of Loss suffered by
such Company or any of its Subsidiaries is greater than Seven Million Five
Hundred Thousand Canadian Dollars (Cdn$7,500,000) in the case of the Canadian
Company or any of its Subsidiaries or greater than
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Seven Million Five Hundred Thousand U.S. Dollars (U.S.$7,500,000) in the case
of the U.S. Company or any of its Non-Canadian Subsidiaries, such Applicable
Agent may, with the consent of the Majority Lenders in their sole discretion,
make such proceeds available to such Company to pay the costs of repair,
replacement, restoration or substitution of such damaged Property as provided
below.
The amount of proceeds which is to be made available to a Company pursuant to
clause (b) or clause (c) above shall be held by such Company's Applicable Agent
in a Collateral Account to be disbursed from time to time to pay the cost of
repair, replacement, restoration or substitution either, at the Majority
Lenders' option, to such Company or directly to contractors, subcontractors,
and material suppliers and subject to such conditions to disbursement as the
Majority Lenders may impose to assure that the work is fully completed in a
good and workmanlike manner and paid for and that no Liens arise by reason
thereof. Notwithstanding anything contained herein to the contrary, if an Event
of Default arises after the occurrence of an Event of Loss of a Company, the
amount of proceeds with respect to such Event of Loss held by such Company's
Applicable Agent in a Collateral Account shall, at the request of the Majority
Lenders, be applied by such Applicable Agent to the Obligations. Upon request
of the Applicable Agent of such Company or any Applicable Lender of such
Company, such Company shall furnish the Applicable Agent, with sufficient
copies for each Applicable Lender, at reasonable intervals (but not more than
once per calendar year) a certificate of a Responsible Officer of such Company
(and, if requested by the Applicable Agent of such Company, any insurance
broker of such Company) setting forth the nature and extent of all insurance
maintained by such Company and its Subsidiaries in accordance with this Section
6.06 or any Collateral Documents (and which, in the case of a certificate of a
broker, was placed through such broker).
All proceeds arising in connection with any condemnation,
seizure or taking, by the exercise of power of eminent domain or otherwise, of
any Property, shall be paid directly to the Applicable Agent for application to
the Obligations; provided, that:
(x) in the event the amount of such proceeds received by a
Company or any of its Subsidiaries is equal to or less than One
Million Canadian Dollars (Cdn$1,000,000) in the case of the Canadian
Company or any of its Subsidiaries or One Million U.S. Dollars
(U.S.$1,000,000) in the case of the U.S. Company or any of its
Non-Canadian Subsidiaries, such Applicable Agent shall remit such
proceeds to such Company to replace, restore or substitute for such
condemned, seized or taken Property;
(y) in the event the amount of such proceeds received by a
Company or any of its Subsidiaries is greater than One Million
Canadian Dollars (Cdn$1,000,000) but equal to or less than Seven
Million Five Hundred Thousand Canadian Dollars (Cdn$7,500,000) in the
case of the Canadian Company or any of its Subsidiaries or greater
than One Million U.S. Dollars (U.S.$1,000,000) but equal to or less
than Seven Million Five Hundred Thousand U.S. Dollars (U.S.$7,500,000)
in the case of the U.S. Company or any of its Non-Canadian
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Subsidiaries, so long as (i) no Event of Default exists at the time of
such condemnation, seizure or taking, and (ii) the Applicable Agent of
such Company has received written evidence reasonably satisfactory to
such Agent and the Majority Lenders to the effect that (A) such
proceeds are, together with other funds available to such Company
(excluding, however, funds necessary to operate such Company's
business), in an amount sufficient to pay all costs of replacement,
restoration or substitution of such Property to an economical unit of
the same character as such Property was prior to such taking and (B)
the failure to be able to use such Property during the period during
which such Property is to be replaced, restored or substituted could
not reasonably be expected to have a Material Adverse Effect, such
Applicable Agent shall make such proceeds available to such Company as
provided below; and
(z) in the event the amount of such proceeds received by a
Company or any of its Subsidiaries is greater than Seven Million Five
Hundred Thousand Canadian Dollars (Cdn$7,500,000) in the case of the
Canadian Company or any of its Subsidiaries or greater than Seven
Million Five Hundred Thousand U.S. Dollars (U.S.$7,500,000) in the
case of the U.S. Company or any of its Non-Canadian Subsidiaries, such
Applicable Agent may, with the consent of the Majority Lenders in
their sole discretion, make such proceeds available to such Company to
pay the costs of replacement, restoration or substitution of such
Property as provided below.
The amount of proceeds which is to be made available to a Company pursuant to
clause (y) or clause (z) above shall be held by such Company's Applicable Agent
in a Collateral Account to be disbursed from time to time to pay the cost of
replacement, restoration or substitution either, at the Majority Lenders'
option, to such Company or directly to contractors, subcontractors, and
material suppliers and subject to such conditions to disbursement as the
Majority Lenders may impose to assure that the work is fully completed in a
good and workmanlike manner and paid for and that no Liens arise by reason
thereof. Notwithstanding anything contained herein to the contrary, if an Event
of Default arises after the occurrence of a condemnation, seizure or taking,
the amount of proceeds with respect to such a condemnation, seizure or taking
held by such Company's Applicable Agent in a Collateral Account shall, at the
request of the Majority Lenders, be applied by such Applicable Agent to the
Obligations.
6.07. Payment of Obligations.
Such Company shall, and shall cause its Subsidiaries to, pay
and discharge as the same shall become due and payable, all their respective
obligations and liabilities, including:
(a) all tax liabilities, assessments and governmental charges
or levies upon it or its properties or assets, unless the same are being
contested in good faith by appropriate proceedings and adequate reserves in
accordance with Applicable Accounting Principles of such Company are being
maintained by such Company or such Subsidiary; and
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(b) all lawful claims which, if unpaid, would by law become a
Lien upon its Property other than a Lien permitted under Section 7.01.
6.08. Compliance with Laws.
Such Company shall comply, and shall cause each of its
Subsidiaries to comply, with all Requirements of Law of any Governmental
Authority having jurisdiction over it or its business (including the Federal
Fair Labor Standards Act), except to the extent the failure to do so could not
reasonably be expected to have a Material Adverse Effect.
6.09. Inspection of Property and Books and Records.
Such Company shall maintain and shall cause each of its
Subsidiaries to maintain proper books of record and account, in which full, true
and correct entries in conformity with Applicable Accounting Principles of such
Company consistently applied shall be made of all financial transactions and
matters involving the assets and business of such Company and such
Subsidiaries. Such Company shall permit, and shall cause each of its
Subsidiaries to permit, representatives and independent contractors of the
Applicable Agent of such Company or any Applicable Lender of such Company to
visit and inspect any of their respective Properties, to perform collateral
audits, to examine their respective corporate, financial and operating records,
and make copies thereof or abstracts therefrom, and to discuss their respective
affairs, finances and accounts with their respective directors, officers, and
independent public accountants, with such Company having the right to be
present, in the case of any such discussion with its independent public
accountant, all at the expense of such Company and at such reasonable times
during normal business hours and as often as may be reasonably desired, upon
reasonable advance notice to such Company, provided, however, when an Event of
Default exists the Applicable Agent of such Company or any Applicable Lender of
such Company may do any of the foregoing at the expense of such Company at any
time during normal business hours and without advance notice.
6.10. Environmental Laws.
(a) Such Company shall, and shall cause each of its
Subsidiaries to, conduct its operations and keep and maintain its Property in
compliance with all Environmental Laws, except such non-compliance as could not
reasonably be expected to have a Material Adverse Effect.
(b) Upon the written request of the Applicable Agent of such
Company or any Applicable Lender of such Company, such Company shall submit or
cause its Subsidiaries to submit, to the Applicable Agent of such Company with
sufficient copies for each Lender, at such Company's sole cost and expense, at
reasonable intervals, a report providing an update of the status of any
environmental, health or safety compliance, hazard or liability issue
identified in any notice or report required pursuant to subsection 6.03(d),
that could reasonably be expected, individually or in the aggregate, to result
in liability in excess of One Million U.S. Dollars (U.S.$1,000,000).
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6.11. Use of Proceeds.
Such Company shall use the proceeds of the Loans solely for
working capital and other general corporate purposes not in contravention of
any Requirement of Law.
6.12. Further Assurances.
(a) Such Company shall ensure that all written information,
exhibits and reports furnished to the Agents or the Lenders do not and will not
contain any untrue statement of a material fact and do not and will not, when
considered as a whole, omit to state any material fact or any fact necessary to
make the statements contained therein not misleading in light of the
circumstances in which made, and will promptly disclose to the Agents and the
Lenders and correct any material defect or error that may be discovered therein
or in any Loan Document or in the execution, acknowledgment or recordation
thereof.
(b) Promptly upon request by its Applicable Agent or the
Majority Lenders, such Company shall (and shall cause any of its Subsidiaries
to) do, execute, acknowledge, deliver, record, re-record, file, re-file,
register and re-register, any and all such further acts, deeds, conveyances,
security agreements, mortgages, assignments, estoppel certificates, financing
statements and continuations thereof, termination statements, notices of
assignment, transfers, certificates, assurances and other instruments such
Agent or the Majority Lenders may reasonably require from time to time in order
(i) to carry out more effectively the purposes of this Agreement or any other
Loan Document, (ii) to subject to the Liens created by any of the Collateral
Documents any of the Properties, rights or interests covered by any of the
Collateral Documents, (iii) to perfect and maintain the validity, effectiveness
and priority of any of the Collateral Documents and the Liens intended to be
created thereby, and (iv) to better assure, convey, grant, assign, transfer,
preserve, protect and confirm to such Agent rights granted or now or hereafter
intended to be granted to the Agents and the Lenders under any Loan Document or
under any other document executed in connection therewith.
6.13. Inventory Reports.
Such Company shall conduct a physical inventory no less
frequently than semi-annually and shall provide the Agents and the Lenders a
report on each such physical inventory promptly thereafter, together with such
supporting information as the Agents and the Lenders shall request.
6.14. Excess Availability.
The Companies shall have Excess Availability of at least Five
Million U.S. Dollars (U.S.$5,000,000) for 30 consecutive days during each
fiscal year of the U.S. Company.
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6.15. Collateral Audit.
The Companies shall permit, and shall cause each of its
Subsidiaries to permit, representatives and independent contractors of the
Agents and the Lenders to perform a collateral audit of the Companies and their
Subsidiaries on or before January 15, 1997 (or such later date as the Agents
may determine). After such collateral audit is performed, the Agents may
redetermine the Borrowing Base (including without limitation altering the
advance rates set forth in the definition of Borrowing Base and/or adding an
advance rate with respect to equipment of the Companies as part of the
Borrowing Base) in their reasonable discretion based on the results of such
audit.
6.16. Significant Subsidiaries.
Within 45 days after any Subsidiary of a Company that is
domiciled and organized within the United States is deemed to be a Significant
Subsidiary, the Applicable Company shall cause the Significant Subsidiary to
(i) execute a Guaranty of the Obligations in favor of the Agents and the
Lenders, in form and substance reasonably satisfactory of the Agents and (ii)
grant the Agents and Lenders a Lien on all of its assets free and clear of all
Liens other than Permitted Liens pursuant to such documentation as is in form
and substance reasonably satisfactory to the Agents. Within 45 days after any
Subsidiary of a Company that is domiciled and organized outside of the United
States (other than the Canadian Company) is deemed to be a Significant
Subsidiary, the Applicable Company shall pledge at least 65% of the stock of
such Significant Subsidiary in favor of the Applicable Agent in form and
substance reasonably satisfactory to such Agent.
ARTICLE VII
NEGATIVE COVENANTS
Each Company hereby covenants and agrees that, so long as any
Lender shall have any Commitment hereunder, or any Loan or other Obligation
shall remain unpaid or unsatisfied, unless the Agents and the Majority Lenders
waive compliance in writing:
7.01. Limitation on Liens.
Such Company shall not, and shall not suffer or permit any of
its Subsidiaries to, directly or indirectly, make, create, incur, assume or
suffer to exist any Lien upon or with respect to any part of its Property,
whether now owned or hereafter acquired, other than the following ("Permitted
Liens"):
(a) any Lien existing on the Property of such Company or its
Subsidiaries on the Closing Date and, in the case of any Lien securing amounts
in excess of One Hundred Thousand U.S. Dollars (U.S.$100,000), set forth in
Schedule 7.1 securing Indebtedness outstanding on such date;
(b) any Lien created under any Loan Document;
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(c) Liens for taxes, fees, assessments or other governmental
charges which are not delinquent or remain payable without penalty, or to the
extent that non-payment thereof is permitted by Section 6.07; provided, that no
Notice of Lien has been filed or recorded under the U.S. Code;
(d) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other similar Liens arising in the Ordinary
Course of Business which are not delinquent or remain payable without penalty
or which are being contested in good faith and by appropriate proceedings,
which proceedings have the effect of preventing the forfeiture or sale of the
Property subject thereto;
(e) Liens consisting of pledges or deposits required in the
Ordinary Course of Business in connection with workers' compensation,
unemployment insurance and other social security legislation;
(f) Liens on the Property of such Company or any of its
Subsidiaries securing (i) the non-delinquent performance of bids, trade
contracts (other than for borrowed money), leases, statutory obligations, (ii)
contingent obligations on surety and appeal bonds, and (iii) other non-
delinquent obligations of a like nature; in each case, incurred in the Ordinary
Course of Business, provided all such Liens in the aggregate could not (even if
enforced) be reasonably expected to cause a Material Adverse Effect;
(g) Liens consisting of judgment or judicial attachment liens;
provided, that the enforcement of such Liens is effectively stayed and all such
Liens in the aggregate at any time outstanding for the Companies and their
Subsidiaries do not exceed One Million U.S. Dollars (U.S.$1,000,000);
(h) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the Ordinary Course of Business which, in the
aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the Property subject thereto or interfere
with the ordinary conduct of the businesses of such Company and its
Subsidiaries;
(i) Purchase money security interests on any Property (other
than inventory) acquired or held by such Company or its Subsidiaries in the
Ordinary Course of Business, securing Indebtedness incurred or assumed for the
purpose of financing all or any part of the cost of acquiring such Property,
provided, that (i) any such Lien attaches to such Property concurrently with or
within 90 days after the acquisition thereof, (ii) such Lien attaches solely to
the Property so acquired in such transaction, (iii) the principal amount of the
debt secured thereby does not exceed 100% of the cost of such Property, and
(iv) the principal amount of the Indebtedness of the Companies and their
Subsidiaries secured by any and all such purchase money security interests
shall not at any time exceed One Million U.S. Dollars (U.S.$1,000,000);
(j) Liens securing Capital Lease Obligations on assets subject
to such Capital Leases; provided, that such Capital Leases are permitted under
subsection 7.11(d); and
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(k) Liens arising solely by virtue of any statutory or common
law provision relating to banker's liens, rights of set-off or similar rights
and remedies as to deposit accounts or other funds maintained with a creditor
depository institution; provided, that (i) such deposit account is not a
dedicated cash collateral account and is not subject to restrictions against
access by such Company in excess of those set forth by regulations promulgated
by the Federal Reserve Board, and (ii) such deposit account is not intended by
such Company or any of its Subsidiaries to provide collateral to the depository
institution.
7.02. Disposition of Assets.
Such Company shall not, and shall not suffer or permit any of
its Subsidiaries to, directly or indirectly, sell, assign, lease, convey,
transfer or otherwise dispose of (whether in one or a series of transactions)
any Property (including accounts and notes receivable, with or without
recourse) or enter into any agreement to do any of the foregoing, except:
(a) dispositions of inventory, or used, worn-out or surplus
equipment, all in the Ordinary Course of Business;
(b) the sale of equipment to the extent that such equipment is
exchanged for credit against the purchase price of similar replacement
equipment, or the proceeds of such sale are reasonably promptly applied to the
purchase price of such replacement equipment, to the extent such sale and
replacement of equipment is in the Ordinary Course of Business;
(c) dispositions to the U.S. Company or any of its Significant
Subsidiaries or dispositions to any other Subsidiaries so long as the aggregate
amount of such dispositions in any fiscal year do not exceed Two Hundred Fifty
Thousand U.S. Dollars (U.S.$250,000); and
(d) so long as no Event of Default exists, dispositions of
assets with an aggregate fair market value not in excess of One Million U.S.
Dollars (U.S.$1,000,000) in any fiscal year of the U.S. Company.
7.03. Consolidations and Mergers.
Such Company shall not, and shall not suffer or permit any of
its Subsidiaries to, merge, consolidate with or into, or acquire (whether in
one transaction or in a series of transactions) substantially all of the assets
of any Person, except (a) for Permitted Acquisitions and (b) any Subsidiary of
such Company may merge with such Company, provided, that such Company shall be
the continuing or surviving corporation, or with any one or more Subsidiaries
of such Company, provided, that if any transaction shall be between a
Subsidiary and a Wholly-Owned Subsidiary, the Wholly-Owned Subsidiary shall be
the continuing or surviving corporation.
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7.04. Loans and Investments.
Such Company shall not purchase or acquire, or suffer or
permit any of its Subsidiaries to purchase or acquire, or make any commitment
therefor, any capital stock, equity interest, or any obligations or other
securities of, or any interest in, any Person, or make or commit to make any
advance, loan, extension of credit or capital contribution to or any other
investment in, any Person including any Affiliate of such Company, except for:
(a) investments in Cash Equivalents;
(b) extensions of credit in the nature of accounts receivable
or notes receivable arising from the sale or lease of goods or services in the
Ordinary Course of Business;
(c) extensions of credit by such Company to, and other
investments by such Company in, any of its Subsidiaries or by any of its
Subsidiaries to or in another of its Subsidiaries;
(d) loans of equipment to customers of the U.S. Company in the
Ordinary Course of Business;
(e) Contingent Obligations permitted under Section 7.08(d);
(f) investments necessary to consummate Permitted
Acquisitions; and
(g) Other extension of credit and investments in an amount not
to exceed One Million U.S. Dollars (U.S.$1,000,000) at any time outstanding.
7.05. Limitation on Indebtedness.
Such Company shall not, and shall not suffer or permit any of
its Subsidiaries to, create, incur, assume, suffer to exist, or otherwise
become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement;
(b) Indebtedness consisting of Contingent Obligations
permitted pursuant to Section 7.08;
(c) Indebtedness incurred under the Subordinated Debt
Documents in the principal amount not to exceed One Hundred Million U.S.
Dollars (U.S.$100,000,000);
(d) In addition to the Indebtedness permitted in subsections
(a) through (c) above, Indebtedness of the Companies set forth on Schedule
7.5(A) and such other Indebtedness so long as the aggregate principal amount
outstanding of the Indebtedness on Schedule 7.5(A) and such other Indebtedness
does not exceed Three Million U.S. Dollars (U.S.$3,000,000) less the amount of
Capital Lease Obligations of the Companies and their Subsidiaries; and
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(e) In addition to the Indebtedness permitted in subsections
(a) through (e) above, Indebtedness of the Companies set forth on Schedule
7.5(B), which Indebtedness shall be repaid in full by the Companies with five
Business Days after the Closing Date.
7.06. Transactions with Affiliates.
Such Company shall not, and shall not suffer or permit any of
its Subsidiaries to, enter into any transaction with any Affiliate of such
Company or of any such Subsidiary (other than with the U.S. Company or any of
its Subsidiaries) except (a) as expressly permitted by this Agreement, (b) in
the Ordinary Course of Business and pursuant to the reasonable requirements of
the business of such Company or such Subsidiary or (c) the payment of financial
advisory fees to ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇ or any of its Affiliates in
connection with any acquisition made or considered by the U.S. Company or any
of its Subsidiaries; in each case (a), (b) and (c), upon fair and reasonable
terms no less favorable to such Company or such Subsidiary than would obtain in
a comparable arm's-length transaction with a Person not an Affiliate of such
Company or such Subsidiary.
7.07. Use of Proceeds.
Such Company shall not, and shall not suffer or permit any of
its Subsidiaries to use any portion of the Loan proceeds, directly or
indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or otherwise
refinance indebtedness of such Company or others incurred to purchase or carry
Margin Stock, (iii) to extend credit for the purpose of purchasing or carrying
any Margin Stock, or (iv) to acquire any security in any transaction that is
subject to Section 13 or 14 of the Exchange Act.
7.08. Contingent Obligations.
Such Company shall not and shall not suffer or permit any of
its Subsidiaries to, create, incur, assume or suffer to exist any Contingent
Obligations except:
(a) endorsements for collection or deposit in the Ordinary
Course of Business;
(b) Rate Contracts entered into in the Ordinary Course of
Business;
(c) Contingent Obligations of such Company and its
Subsidiaries existing as of the Closing Date and listed in Schedule 7,8;
(d) Contingent Obligations in an aggregate amount not to
exceed Two Million Five Hundred Thousand U.S. Dollars (U.S.$2,500,000) at any
time arising in connection with any agreement by the U.S. Company or any of its
Subsidiaries to buy back inventory sold by the U.S. Company or any of its
Subsidiaries to any of their customers;
(e) Contingent Obligations in an aggregate amount not to
exceed Four Million U.S. Dollars (U.S.$4,000,000) arising in connection with
leasing and other similar arrangements entered into in connection with the sale
or leasing of electrical and video products of the U.S.
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Company or any of its Subsidiaries, so long as the aggregate principal amount
of any such leasing or similar arrangements with any particular customer of the
U.S. Company or any of its Subsidiaries does not exceed Five Hundred Thousand
U.S. Dollars (U.S.$500,000).
(f) Contingent Obligations arising under the Loan Documents;
and
(g) Contingent Obligations with respect to Indebtedness and
other obligations that such Company or Subsidiary would have been permitted to
incur as a primary obligation hereunder.
7.09. Joint Ventures.
Except as provided in Schedule 7.9, such Company shall not, and
shall not suffer or permit any of its Subsidiaries to enter into any Joint
Venture, other than (i) with a Company or any of its Subsidiaries, (ii) in the
Ordinary Course of Business or (iii) Joint Ventures that are Permitted
Acquisitions.
7.10. Compliance with ERISA.
The U.S. Company shall not, and shall not suffer or permit any
of its Subsidiaries to, (i) terminate any Qualified Plan so as to result in any
material liability to the U.S. Company or any ERISA Affiliate, (ii) permit to
exist any ERISA Event or any other event or condition, which results in a
material liability to any member of the Controlled Group that could reasonably
be expected to have a Material Adverse Effect, (iii) make a complete or partial
withdrawal (within the meaning of ERISA Section 4201) from any Multiemployer
Plan so as to result in any material liability to such Company or any ERISA
Affiliate, or (iv) permit the Unfunded Pension Liabilities of the Plans to
exceed One Million U.S. Dollars (U.S.$1,000,000).
7.11. Lease Obligations.
Such Company shall not, and shall not suffer or permit any of
its Subsidiaries to, create or suffer to exist any obligations for the payment
of rent for any Property under lease or agreement to lease, except for:
(a) leases of such Company and its Subsidiaries set forth in
Schedule 7.11;
(b) Operating Leases entered into by such Company or any of
its Subsidiaries after the Closing Date in the Ordinary Course of Business; and
(c) Capital Leases, so long as the aggregate principal amount
of Capital Lease Obligations of the U.S. Company and its Subsidiaries
outstanding at any time plus the leases on Schedule 7.11 does not exceed Three
Million U.S. Dollars (U.S.$3,000,000) less the amount of Indebtedness permitted
under Section 7.05(e).
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7.12. Restricted Payments.
Such Company shall not, and shall not suffer or permit any of
its Subsidiaries to, declare or make any dividend payment or other distribution
of assets, properties, cash, rights, obligations or securities on account of
any shares of any class of its capital stock, or purchase, redeem or otherwise
acquire for value any shares of its capital stock or any warrants, rights or
options to acquire such shares, now or hereafter outstanding; except that such
Company and any of its Subsidiaries may (i) declare and make dividend payments
or other distributions to, or make any such purchase, redemption or other
acquisition for value from, any Company or any of its Subsidiaries and (ii)
declare and make dividend payments or other distributions payable solely in its
common stock. Such Company shall also not, and shall not permit any of its
Subsidiaries to, prepay, purchase or redeem any Subordinated Debt or any
Indebtedness evidenced by the Subordinated Debt Documents, except that so long
as no Event of Default exists, such Company and any of its Subsidiaries may
redeem up to 35% of the Subordinated Debt through the application of Net
Issuance Proceeds from a substantially concurrent sale for cash.
7.13. Capital Expenditures.
The U.S. Company and its consolidated Subsidiaries shall not
make Capital Expenditures or commit to make Capital Expenditures in an
aggregate amount in excess of Eight Million U.S. Dollars (U.S.$8,000,000)
during any fiscal year.
7.14. Net Worth.
Net Worth at any time during any period set forth below shall
not be less than the applicable minimum amount set forth below opposite such
period:
---------------------------------------------------------------------------
MINIMUM NET
PERIOD WORTH
---------------------------------------------------------------------------
From the Closing Date through December 30, Base Net Worth
1997
---------------------------------------------------------------------------
From December 31, 1997 through December Base Net Worth plus
30, 1998 U.S.$2,000,000
---------------------------------------------------------------------------
From December 31, 1998 through December Base Net Worth plus
30, 1999 U.S.$4,000,000
---------------------------------------------------------------------------
From December 31, 1999 through December Base Net Worth plus
30, 2000 U.S.$6,000,000
---------------------------------------------------------------------------
From December 31, 2000 and at all times Base Net Worth plus
thereafter U.S.$8,000,000
---------------------------------------------------------------------------
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7.15. Leverage Ratio.
The Leverage Ratio, as determined for any date set forth
below, shall not exceed the ratio set forth below opposite such date:
-------------------------------------------------------------------------------
MAXIMUM
LEVERAGE
PERIOD RATIO
-------------------------------------------------------------------------------
Closing Date, December 31, 1996, March 31, 1997, June 5.25
30, 1997 and September 30, 1997
-------------------------------------------------------------------------------
December 31, 1997, March 31, 1998, June 30, 1998 and
September 30, 1998 5.00
-------------------------------------------------------------------------------
December 31, 1998, March 31, 1999, June 30, 1999, 4.50
September 30, 1999, December 31, 1999, March 31, 2000,
June 30, 2000 and September 30, 2000
-------------------------------------------------------------------------------
December 31, 2000 and the last day of each fiscal quarter 4.00
thereafter
-------------------------------------------------------------------------------
provided, however, upon receipt of Net Issuance Proceeds by the U.S. Company
after the Closing Date in excess of Ten Million U.S. Dollars (U.S.$10,000,000),
the Maximum Leverage Ratio will adjust to the greater of: (a) 3.00, and (b) the
Maximum Leverage Ratio noted above, minus the fraction, rounded down to the
nearest five basis points, of: (i) Net Issuance Proceeds received by the U.S.
Company after the Closing Date, divided by (ii) EBITDA for the twelve months of
the end of the most recently completed fiscal quarter.
7.16. Fixed Charge Ratio.
The Fixed Charge Ratio for the twelve month period ending on
December 31, 1996 and for the twelve month period ending on the last day of
each fiscal quarter thereafter shall not be less than 1.10; provided, however,
that if (a) Net Issuance Proceeds received by the U.S. Company after the
Closing Date are greater than or equal to Twenty Million U.S. Dollars
(U.S.$20,000,000), then the Fixed Charge Ratio requirement set forth above will
increase to 1.30, in five basis points increments in each of four successive
quarters beginning at the end of the first full quarter after receipt of the
Net Issuance Proceeds; or (b) the Net Issuance Proceeds received by the U.S.
Company after the Closing Date, are less than Twenty Million U.S. Dollars
(U.S.$20,000,000), but greater than Ten Million U.S. Dollars (U.S.$10,000,000),
then the Fixed Charge Ratio requirement set forth above will increase to 1.20,
in two and one-half basis points increments in each of four successive quarters
beginning at the end of the first full quarter after receipt of the Net Issuance
Proceeds.
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7.17. Interest Coverage Ratio.
The Interest Coverage Ratio for any period set forth below
shall not be less than the ratio set forth below opposite such period:
-------------------------------------------------------------------------------
MINIMUM
INTEREST
DATE COVERAGE
-------------------------------------------------------------------------------
For the twelve month period ending on December 31, 1.50
1996 and for the twelve month period ending on the last
day of each fiscal quarter thereafter to and including
September 30, 1999
-------------------------------------------------------------------------------
For the twelve month period ending on December 31, 1.75
1999, March 31, 2000, June 30, 2000 and September 30,
2000
-------------------------------------------------------------------------------
For the twelve month period ending on December 31, 2.00
2000 and for the twelve month period ending on the last
day of each fiscal quarter thereafter
-------------------------------------------------------------------------------
provided, however, that if: (a) Net Issuance Proceeds received by the U.S.
Company after the Closing Date are greater than or equal to Twenty Million U.S.
Dollars (U.S.$20,000,000), then the Interest Coverage Ratio requirement set
forth above will increase by 50 basis points, in 12.5 basis points increments
in each of four successive quarters beginning at the end of the first full
quarter after receipt of the Net Issuance Proceeds; or (b) if Net Issuance
Proceeds received by the U.S. Company after the Closing Date are less than
Twenty Million U.S. Dollars (U.S.$20,000,000), but greater than Ten Million
U.S. Dollars (U.S.$10,000,000), then the Interest Coverage Ratio will increase
by 25 basis points, in six and one-quarter basis points increments in each of
four successive quarters beginning at the end of the first full quarter after
receipt of the Net Issuance Proceeds.
7.18. Change in Business.
Such Company shall not, and shall not permit any of its
Subsidiaries to, engage, to any material extent in any line of business
substantially different from those lines of business carried on by the U.S.
Company and its Subsidiaries on the date hereof.
7.19. Change in Structure.
Except as expressly permitted under Section 7.03, such Company
shall not and shall not permit any of its Subsidiaries to amend its certificate
of incorporation or by-laws.
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7.20. Accounting Changes.
Such Company shall not, and shall not suffer or permit any of
its Subsidiaries to, make any significant change in accounting treatment or
reporting practices, except as required by Applicable Accounting Principles of
such Company, or change the fiscal year of such Company or of any of its
consolidated Subsidiaries (which fiscal years currently end on December 31st).
7.21. Subsidiaries.
Such Company shall not and shall not permit any of its
Subsidiaries to, establish, create or acquire any new Subsidiary other than
Subsidiaries that are created or acquired in connection with a Permitted
Acquisition.
7.22. Amendments to Acquisition Documents and Subordinated
Debt Documents.
Such Company shall not amend, modify or alter, or permit to be
amended, modified or altered: (a) any of the Acquisition Documents if the
effect of such amendment or modification is to amend or modify any provision of
any such documents in a manner adverse to the Lenders; or (b) any of the
Subordinated Debt Documents if the effect of such amendment or modification is
to (i) increase the principal amount of Indebtedness evidenced by any such
documents, (ii) accelerate any date fixed for any payment of principal or
interest on the Indebtedness evidenced by any such documents, (iii) increase
the interest rate or any fees or charges, or add any fees or charges, payable
in connection with the Indebtedness evidenced by any such documents, (iv) make
any covenant, default or other provision contained therein more restrictive on
Borrower, or (v) amend or modify any provision of any such documents in a
manner adverse to the Lenders.
ARTICLE VIII
EVENTS OF DEFAULT
8.01. Event of Default.
Any of the following shall constitute an "Event of Default":
(a) Non-Payment.
A Company fails to pay (i) when and as required to be paid
herein, any amount of principal of any Loan, or (ii) within five days after the
same shall become due, any interest, fee or any other amount payable hereunder
or pursuant to any other Loan Document; or
(b) Representation or Warranty.
Any representation or warranty by a Company or any of its
Subsidiaries made or deemed made herein, in any Loan Document, or which is
contained in any certificate, document or
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financial or other statement by a Company, any of its Subsidiaries, or their
respective Responsible Officers, furnished at any time under this Agreement, or
in or under any Loan Document, shall prove to have been incorrect in any
material respect on or as of the date made or deemed made; or
(c) Specific Defaults.
A Company fails to perform or observe any term, covenant or
agreement contained in Sections 6.01, 6.02, 6.03 or 6.09 and such failure shall
continue unremedied for a period of five days after the date upon which written
notice thereof is given to a Company by the Applicable Agent of such Company;
or a Company fails to perform or observe any term, covenant or agreement
contained Article VII;
(d) Other Defaults.
A Company or any of its Significant Subsidiaries fails to
perform or observe any other term or covenant contained in this Agreement or
any other Loan Document, and such default shall continue unremedied for a period
of 20 days after the earlier of (i) the date upon which a Responsible Officer
of such Company knew of such failure or (ii) the date upon which written notice
thereof is given to a Company by the Applicable Agent of such Company, or
(e) Cross-Default.
A Company or any of its Significant Subsidiaries (i) fails to
make any payment in respect of any Indebtedness or Contingent Obligation having
an aggregate principal amount (including undrawn committed or available amounts
and including amounts owing to all creditors under any combined or syndicated
credit arrangement) of more than One Million Canadian Dollars (Cdn$1,000,000)
in the case of the Canadian Company or any of its Significant Subsidiaries and
One Million U.S. Dollars (U.S.$1,000,000) in the case of the U.S. Company or
any of its Significant Subsidiaries (other than its Subsidiaries organized
under the laws of Canada or any province thereof) when due (whether by
scheduled maturity, required prepayment, acceleration, demand, or otherwise)
and such failure continues after the applicable grace or notice period, if any,
specified in the document relating thereto on the date of such failure; or (ii)
fails to perform or observe any other condition or covenant or any other event
shall occur or condition exist, under any agreement or instrument relating to
any such Indebtedness or Contingent Obligation, and such failure continues
after the applicable grace or notice period, if any, specified in the document
relating thereto on the date of such failure if the effect of such failure,
event or condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a trustee
or agent on behalf of such holder or holders or beneficiary or beneficiaries)
to cause such Indebtedness to be declared to be due and payable prior to its
stated maturity, or such Contingent Obligation to become payable or cash
collateral in respect thereof to be demanded; or
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(f) Insolvency; Voluntary Proceedings.
A Company or any of its Significant Subsidiaries (i) generally
fails to pay its debts as they become due, subject to applicable grace periods,
if any, whether at stated maturity or otherwise; (ii) voluntarily ceases to
conduct its business in the ordinary course; (iii) commences any Insolvency
Proceeding with respect to itself; or (iv) takes any action to effectuate or
authorize any of the foregoing; or
(g) Involuntary Proceedings.
(i) Any involuntary Insolvency Proceeding is commenced or
filed against a Company or any Significant Subsidiary of a Company, or any
writ, judgment, warrant of attachment, execution or similar process, is issued
or levied against a substantial part of a Company's or any of its Significant
Subsidiaries' Properties, and any such proceeding or petition shall not be
dismissed, or such writ, judgment, warrant of attachment, execution or similar
process shall not be released, vacated or fully bonded within 60 days after
commencement filing or levy; (ii) a Company or any of its Significant
Subsidiaries admits the material allegations of a petition against it in any
Insolvency Proceeding, or an order for relief (or similar order under non-U.S.
law) is ordered in any Insolvency Proceeding; or (iii) a Company or any of its
Significant Subsidiaries acquiesces in the appointment of a receiver, trustee,
custodian, conservator, liquidator, mortgagee in possession (or agent
therefor), or other similar Person for itself or a substantial portion of its
Property or business;
(h) Monetary Judgments.
One or more judgments, non-interlocutory orders, decrees or
arbitration awards shall be entered against a Company or any of its Significant
Subsidiaries involving in the aggregate a liability (not covered by independent
third-party insurance) as to any single or related series of transactions,
incidents or conditions, of One Million Canadian Dollars (Cdn$1,000,000) or
more in the case of the Canadian Company or any of its Significant Subsidiaries
or One Million U.S. Dollars (U.S.$1,000,000) or more in the case of the U.S.
Company or any of its Significant Subsidiaries (other than its Subsidiaries
organized under the laws of Canada or any province thereof), and the same shall
remain unsatisfied, unvacated and unstayed pending appeal for a period of 30
days after the entry thereof, or
(i) Non-Monetary Judgments.
Any non-monetary judgment order or decree shall be rendered
against a Company or any of its Significant Subsidiaries which does or could
reasonably be expected to have a Material Adverse Effect, and there shall be
any period of 30 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect; or
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(j) Collateral.
Any Collateral Document shall for any reason (other than
pursuant to the terms thereof) cease to create a valid security interest in any
material portion of the Collateral purported to be covered thereby or such
security interest shall for any reason cease to be a perfected and first
priority security interest subject only to Permitted Liens; or
(k) Ownership.
(i) The failure of MLGA Fund II, L.P., a Delaware limited
partnership ("MLGA") and its Affiliates to own, directly and free and
clear of all Liens, at least 80% of the shares of such capital stock
acquired in connection with that certain Stock Purchase Agreement
dated as of December 13, 1994; or
(ii) The failure of MLGA and its Affiliates to own more
capital stock of the U.S. Company than any other Person and such
Person's Affiliates; or
(iii) The failure of the U.S. Company at any time to own,
directly and free and clear of all Liens (other than the Liens of the
U.S. Agent), 100% of the issued and outstanding shares of capital
stock of the Canadian Company, on a fully diluted basis.
(iv) A "Change of Control" (as defined in the Subordinated
Debt Documents) shall occur.
(l) Loss of Licenses.
Any Governmental Authority shall revoke or fail to renew any
material license, permit or franchise of a Company or any of its Subsidiaries
or a Company or any of its Subsidiaries shall for any reason lose any material
license, permit or franchise or a Company or any of its Subsidiaries shall
suffer the imposition of any restraining order, escrow, suspension or impound
of funds in connection with any proceeding (judicial or administrative) with
respect to any material license, permit or franchise and, in any such case,
such revocation, failure to renew, loss or imposition is likely to have a
Material Adverse Effect; or
(m) Guarantor Defaults.
The Guarantor shall fail in any material respect to perform or
observe any term, covenant or agreement in the Guaranty to which it is a party;
or the guaranty of the Guarantor shall for any reason be partially (including
with respect to future advances) or wholly revoked or invalidated, or otherwise
cease to be in full force and effect, or the Guarantor shall contest in any
manner the validity or enforceability thereof or deny that it has any further
liability or obligation thereunder; or any event described at subsections (f)
or (g) shall occur with respect to the Guarantor.
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(n) Material Adverse Change.
A Material Adverse Change shall have occurred.
(o) Non-Compliance with Subordinated Debt Documents.
An "Event of Default" as defined in the Subordinated Debt
Documents shall occur or a default in the performance by any Company of any of
its agreements set forth in any agreement, instrument or document evidencing
any Subordinated Debt (and not constituting an Event of Default under any of
the other subsections of this Section 8.01), and continuance of such default
after the expiration of the grace or cure period (if any) set forth therein.
8.02. Remedies.
If any Event of Default occurs, the Applicable Agent of a
Company shall, at the request of, or may, with the consent of, the Majority
Lenders,
(a) declare the Commitment to make Loans and to participate in
Letters of Credit of each Applicable Lender of such Company to be terminated,
whereupon such Commitments shall forthwith be terminated;
(b) declare the unpaid principal amount of all outstanding
Loans, all interest accrued and unpaid thereon, and all other amounts owing or
payable hereunder or under any other Loan Document by such Company to be
immediately due and payable; without presentment demand, protest or other
notice of any kind, all of which are hereby expressly waived by such Company;
and
(c) exercise on behalf of itself and the Applicable Lenders of
such Company all rights and remedies available to it and the Applicable Lenders
of such Company under the Loan Documents or applicable law;
provided, however, that upon the occurrence of any event specified in
subsections (f)(iii) or (g) of Section 8.01 above (in the case of clause (i) of
subsection (g) upon the expiration of the 60-day period mentioned therein) with
respect to a Company, the obligation of each Applicable Lender of such Company
to make Loans to such Company shall automatically terminate and the unpaid
principal amount of all outstanding Loans and all interest and other amounts as
aforesaid of such Company shall automatically become due and payable without
further act of the Applicable Agent of such Company or any Applicable Lender of
such Company.
8.03. Rights Not Exclusive.
The rights provided for in this Agreement and the other Loan
Documents are cumulative and are not exclusive of any other rights, powers,
privileges or remedies provided by law or in equity, or under any other
instrument, document or agreement now existing or hereafter arising.
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ARTICLE IX
THE AGENT
9.01. Appointment and Authorization.
Each Lender irrevocably appoints, designates and authorizes
each Agent to take such action on its behalf under the provisions of this
Agreement and each other Loan Document and to exercise such powers and perform
such duties as are expressly delegated to it by the terms of this Agreement or
any other Loan Document, together with such powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary contained elsewhere in
this Agreement or in any other Loan Document, neither Agent shall have any
duties or responsibilities, except those expressly set forth herein, nor shall
either Agent have or be deemed to have any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against either Agent.
9.02. Delegation of Duties.
Each Agent may, at any time and from time to time, execute any
of its duties under this Agreement or any other Loan Document by or through
agents, employees or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. Without limiting the
foregoing, an Agent may, at any time and from time to time, execute any of its
duties under this Agreement or any other Loan Document by or through the other
Agent subject to any Requirement of Law. In connection with the foregoing, the
Agents may enter into such arrangements or agreements as the Agents deem
appropriate without the consent of the Lenders or the Companies. Neither Agent
shall be responsible for the negligence or misconduct of any agent, employee or
attorney-in-fact that it selects with reasonable care.
9.03. Liability of Agent.
None of the Agent-Related Persons shall (i) be liable for any
action taken or omitted to be taken by any of them under or in connection with
this Agreement or any other Loan Document (except for its own gross negligence
or willful misconduct), or (ii) be responsible in any manner to any of the
Lenders for any recital, statement, representation or warranty made by a
Company or any Subsidiary or Affiliate of a Company, or any officer thereof,
contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for
in, or received by either Agent under or in connection with, this Agreement or
any other Loan Document, or for the value of any Collateral or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of a Company or any other party to
any Loan Document to perform its obligations hereunder or thereunder. No Agent-
Related Person shall be under any obligation to any Lender to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or any other Loan Document, or to inspect
the Properties, books or records of a Company or any Subsidiaries or Affiliates
of a Company.
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9.04. Reliance by Agent.
(a) Each Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to a
Company), independent accountants and other experts selected by either Agent.
Each Agent shall be fully justified in failing or refusing to take any action
under this Agreement or any other Loan Document unless it shall first receive
such advice or concurrence of the Majority Lenders as it deems appropriate and,
if it so requests, it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it
by reason of taking or continuing to take any such action. Each Agent shall in
all cases be fully protected in acting, or in refraining from acting, under
this Agreement or any other Loan Document in accordance with a request or
consent of the Majority Lenders and such request and any action taken or
failure to act pursuant thereto shall be binding upon all of the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 4.01, each Lender that has executed this Agreement shall
be deemed to have consented to, approved or accepted or to be satisfied with
each document or other matter either sent by either Agent to such Lender for
consent, approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to such Lender.
9.05. Notice of Default.
Neither Agent shall be deemed to have knowledge or notice of
the occurrence of any Default or Event of Default, except with respect to
defaults in the payment of principal, interest and fees required to be paid by
a Company to such Agent for the account of such Company's Applicable Lenders,
unless such Agent shall have received written notice from a Lender or a Company
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event that either
Agent receives such a notice, such Agent shall give notice to the other Agent
and the Lenders. Each Agent shall take such action with respect to such Default
or Event of Default as shall be requested by the Majority Lenders in accordance
with Article VIII; provided, however, that unless and until such Agent shall
have received any such request, such Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable or in the best interest
of the Lenders.
9.06. Credit Decision.
Each Lender expressly acknowledges that none of the Agent-
Related Persons has made any representation or warranty to it and that no act
by an Agent hereinafter taken, including any review of the affairs of a Company
and its Subsidiaries shall be deemed to constitute any representation or
warranty by such Agent to any Lender. Each Lender represents to each Agent that
it has, independently and without reliance upon either Agent and based on such
documents
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and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of each Company and its Subsidiaries, and
all applicable bank regulatory laws relating to the transactions contemplated
thereby, and made its own decision to enter into this Agreement and extend
credit hereunder. Each Lender also represents that it will, independently and
without reliance upon either Agent and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action under this
Agreement and the other Loan Documents, and to make such investigations as it
deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of the Companies
and their Subsidiaries. Except for notices, reports and other documents
expressly herein required to be furnished to any Lenders by an Agent, such
Agent shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the business, prospects, operations,
property, financial and other condition or creditworthiness of a Company which
may come into the possession of any of the Agent-Related Persons.
9.07. Indemnification.
Whether or not the transactions contemplated hereby shall be
consummated, the Lenders shall indemnify upon demand the Agent-Related Persons
(to the extent not reimbursed by or on behalf of the Companies and without
limiting the obligation of the Companies to do so), ratably from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses and disbursements of any kind whatsoever
which may at any time (including at any time following the repayment of the
Loans and the termination or resignation of an Agent) be imposed on, incurred
by or asserted against any such Person in any way relating to or arising out of
this Agreement or any document contemplated by or referred to herein or therein
or the transactions contemplated hereby or thereby or any action taken or
omitted by any such Person under or in connection with any of the foregoing;
provided, however, that no Lender shall be liable for the payment to the Agent-
Related Persons of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from such Person's gross negligence or willful misconduct.
Without limitation of the foregoing, each Lender shall reimburse each Agent
upon demand for such Lender's ratable share of any costs or out-of-pocket
expenses (including Attorney Costs) incurred by such Agent in connection with
the preparation, execution, delivery, administration, modification, amendment
or enforcement (whether through negotiations, legal proceedings or otherwise)
of, or legal advice in respect of rights or responsibilities under, this
Agreement, any other Loan Document, or any document contemplated by or referred
to herein to the extent that such Agent is not reimbursed for such expenses by
or on behalf of a Company, Without limiting the generality of the foregoing, if
the Internal Revenue Service of the United States or any other Governmental
Authority or other jurisdiction asserts a claim that an Agent did not properly
withhold tax from amounts paid to or for the account of any Lender (because the
appropriate form was not delivered, was not properly executed, or because such
Lender failed to notify such Agent of a change in circumstances which rendered
the exemption from, or reduction of, withholding tax ineffective, or for any
other reason) such Lender shall indemnify such Agent fully for all amounts
paid, directly or indirectly, by such
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Agent as tax or otherwise, including penalties and interest, and including any
taxes imposed by any jurisdiction on the amounts payable to such Agent under
this Section, together with all costs and expenses (including Attorney Costs).
The obligation of the Lenders in this Section shall survive the payment of all
Obligations hereunder.
9.08. Agent in Individual Capacity.
BofA (Canada), BofA (U.S.) and the Affiliates of BofA (Canada)
and/or BofA (U.S.) may make loans to, issue letters of credit for the account
of, accept deposits from, acquire equity interests in and generally engage in
any kind of banking, trust, financial advisory, underwriting or other business
with a Company and its Subsidiaries and Affiliates as though such person were
not an Agent hereunder and without notice to or consent of the Lenders. The
Lenders acknowledge that pursuant to such activities, BofA (Canada), BofA
(U.S.) or their Affiliates may receive information regarding the Companies or
their Affiliates (including information that may be subject to confidentiality
obligations in favor of the Companies or such Affiliates) and acknowledge that
neither Agent shall be under any obligation to provide such information to
them. With respect to its Loans, each of BofA (Canada) and BofA (U.S.) shall
have the same rights and powers under this Agreement as any other Lender and
may exercise the same as though it were not an Agent, and the terms "Lender"
and "Lenders" shall include each of BofA (Canada) and BofA (U.S.) in its
individual capacity.
9.09. Successor Agent.
An Agent may resign as Agent upon 30 days' notice to the
Lenders. If an Agent shall resign as Agent under this Agreement the Majority
Lenders shall appoint from among the Lenders a successor agent for the Lenders.
If no successor agent is appointed prior to the effective date of the
resignation of an Agent, such Agent may appoint a successor agent from among the
Lenders. Upon the acceptance of its appointment as successor agent hereunder,
such successor agent shall succeed to all the rights, powers and duties of the
retiring Agent and the term "Agent" shall mean such successor agent (and if
such successor agent is succeeding the Canadian Agent, the term "Canadian Agent"
shall mean such successor agent and if such successor agent is succeeding the
U.S. Agent, the term "U.S. Agent" shall mean such successor agent) and the
retiring Agent's appointment, powers and duties as Agent shall be terminated.
After any retiring Agent's resignation hereunder as an Agent, the provisions of
this Article IX and Sections 10.04 and 10.05 shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was an Agent under this
Agreement. If no successor agent has accepted appointment as Agent by the date
which is 30 days following a retiring Agent's notice of resignation, the
retiring Agent's resignation shall nevertheless thereupon become effective and
the Lenders shall perform all of the duties of such retiring Agent hereunder
until such time, if any, as the Majority Lenders appoint a successor agent as
provided for above.
9.10. Collateral Matters.
(a) Each Agent is authorized, without the necessity of any
notice to or further consent from the Lenders, from time to time to take any
action with respect to the Collateral
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Documents to which such Agent is a party (or any Collateral the subject of such
Collateral Documents) which may be necessary to perfect and maintain perfected
the security interest in and Liens upon the Collateral granted pursuant to such
Collateral Documents.
(b) The Lenders irrevocably authorize each Agent, at the option
and in the discretion of such Agent, to release any Lien granted to or held by
such Agent upon any Collateral (i) upon termination of the Commitments and
payment in full of all Loans and all other Obligations payable under this
Agreement and under any other Loan Document; (ii) upon payment in full of all
Obligations secured by such Lien and termination of any Commitments under which
additional Obligations could arise which would be secured by such Lien; (iii)
constituting Property sold or to be sold or disposed of as part of or in
connection with any disposition permitted hereunder; (iv) constituting Property
in which a Company or any Subsidiary of a Company owned no interest at the time
the Lien was granted or at any time thereafter; (v) constituting Property
leased to a Company or any Subsidiary of a Company under a lease which has
expired or been terminated in a transaction permitted under this Agreement or
is about to expire and which has not been, and is not intended by such Company
or such Subsidiary to be, renewed or extended; (vi) consisting of an instrument
evidencing Indebtedness or other debt instrument, if the indebtedness evidenced
thereby has been paid in full; or (vii) if approved, authorized or ratified in
writing by the Majority Lenders or all the Lenders, as the case may be, as
provided in subsection 10.01(f). Upon request by an Agent at any time, the
Lenders will confirm in writing such Agent's authority to release particular
types or items of Collateral pursuant to this subsection 9.10(b).
(c) Each Lender agrees with and in favor of each other (which
agreement shall not be for the benefit of a Company or any of its Subsidiaries)
that a Company's obligation to such Lender under this Agreement and the other
Loan Documents is not and shall not be secured by any real property collateral
now or hereafter acquired by such Lender.
9.11. Co-Agents.
The parties hereto agree that the Co-Agents do not have any
special rights or powers under this Agreement but are entitled, in their
capacity as Co-Agents hereunder, to the same protections afforded to each Agent
under this Article IX.
ARTICLE X
MISCELLANEOUS
10.01. Amendments and Waivers.
No amendment or waiver of any provision of this Agreement or
any other Loan Document, and no consent with respect to any departure by a
Company therefrom, shall be effective unless the same shall be in writing and
signed by each Company or Subsidiary of a Company party thereto and the
Majority Lenders or, if the Lenders are not a party thereto, the Agents (with
the written consent of the Majority Lenders), and then such waiver shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that
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no such waiver, amendment, or consent shall, unless in writing and signed by
each Company or Subsidiary of a Company party to the Loan Document to which
such amendment, waiver or consent applies and all of the Lenders, or if the
Lenders are not a party thereto, the Agents (with the written consent of all of
the Lenders), do any of the following:
(a) increase or extend the Commitment of any Lender (or
reinstate any Commitment terminated pursuant to subsection 8.02(a)) or subject
any Lender to any additional obligations;
(b) postpone or delay any date fixed pursuant to Sections
2.08, 2.09, 2.10 or 2.15 for any payment of principal, interest, fees or other
amounts due to the Lenders (or any of them) hereunder or under any Loan
Document;
(c) reduce the principal of, or the rate of interest specified
herein on any Loan, or of any fees or other amounts payable hereunder or under
any Loan Document;
(d) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans which shall be required for the
Lenders or any of them to take any action hereunder;
(e) amend this Section 10.01 or Section 2.14 or any provision
providing for consent or other action by all Lenders; or
(f) discharge any Guarantor, or release Collateral with an
aggregate fair market value in excess of Two Million U.S. Dollars
(U.S.$2,000,000) in any one transaction or series of related transactions except
as otherwise may be provided herein or in the Collateral Documents,
and, provided, further, that no amendment, waiver or consent shall, unless in
writing and signed by the Agents in addition to the majority Lenders or all the
Lenders, as the case may be, affect the rights or duties of the Agents under
this Agreement or any other Loan Document.
10.02. Notices.
(a) All notices, requests and other communications provided
for hereunder shall be in writing (including, unless the context expressly
otherwise provides, by facsimile transmission; provided, that any matter
transmitted by facsimile shall be immediately confirmed by a telephone call to
the recipient at the number specified on the applicable signature page hereof)
and mailed, faxed or delivered, to the address or facsimile number specified
for notices on the applicable signature page hereof; or to such other address
as shall be designated by such party in a written notice to the other parties,
and as directed to each other party, at such other address as shall be
designated by such party in a written notice to the Companies and the Agents.
(b) All such notices, requests and communications shall, when
transmitted by overnight delivery be effective on the day following the day
when delivered to the overnight delivery service, or when faxed, be effective
when transmitted by facsimile machine, or if mailed,
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upon the third Business Day after the date deposited into the mail, or if
otherwise delivered, upon delivery; except that notices pursuant to Article II
or IX shall not be effective until actually received by the Agents.
(c) Each Company acknowledges and agrees that any agreement of
the Agents and the Lenders in Article II herein to receive certain notices by
telephone is solely for the convenience and at the request of such Company. The
Agents and the Lenders shall be entitled to rely on the authority of any Person
purporting to be a Person authorized by a Company to give such notice and the
Agents and the Lenders shall not have any liability to a Company or any other
Person on account of any action taken or not taken by the Agents or the Lenders
in reliance upon such telephonic notice. The obligation of a Company to repay
the Loans shall not be affected in any way or to any extent by any failure by
the Agents and the Lenders to receive written confirmation of any telephonic
notice or the receipt by the Agents and the Lenders of a confirmation which is
at variance with the terms understood by the Agents and the Lenders to be
contained in the telephonic notice.
(d) All notices sent to the Canadian Agent shall also be
simultaneously sent to the U.S. Agent.
10.03. No Waiver; Cumulative Remedies.
No failure to exercise and no delay in exercising, on the part
of either Agent or any Lender, any right, remedy, power or privilege hereunder,
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege.
10.04. Costs and Expenses.
Each Company shall, whether or not the transactions
contemplated hereby shall be consummated:
(a) pay or reimburse each of its Applicable Lenders and its
Applicable Agents five Business Days after demand for all costs and expenses
incurred by them in connection with the development preparation, negotiation,
delivery, closing, ongoing administration and execution of, and any amendment
supplement waiver or modification to (in each case, whether or not
consummated), this Agreement, any Loan Document and any other documents
prepared in connection herewith or therewith, and the consummation of the
transactions contemplated hereby and thereby, including the reasonable Attorney
Costs incurred by the Applicable Agent (including in its capacity as Agent)
with respect thereto;
(b) pay or reimburse each of its Applicable Lenders and its
Applicable Agent within five Business Days after demand for all costs and
expenses incurred by them in connection with the enforcement, attempted
enforcement, or preservation of any rights or remedies during the existence of
an Event of Default (including in connection with any "workout" or
restructuring regarding the Loans, and including in any Insolvency Proceeding
or appellate proceeding) under
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this Agreement, any other Loan Document and any such other documents, including
Attorney Costs, incurred by such Agent and any such Lender, and
(c) pay or reimburse its Applicable Agent within five Business
Days after demand for all appraisal (including the allocated cost of internal
appraisal services), audit, environmental inspection and review (including the
allocated cost of such internal services), search and filing costs, fees and
expenses, incurred or sustained by such Agent in connection with the matters
referred to under subsections (a) and (b) of this Section 10.04.
10.05. Indemnity.
Whether or not the transactions contemplated hereby shall be
consummated:
(a) General Indemnity.
Each Company shall, jointly and severally, pay, indemnify, and
hold each Lender, each Agent and each of their respective officers, directors,
employees, counsel, agents and attorneys-in-fact (each, an "Indemnified
Person") harmless from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, charges, expenses
or disbursements (including reasonable Attorney Costs) of any kind or nature
whatsoever with respect to any investigation, litigation or proceeding
(including any Insolvency Proceeding or appellate proceeding) related to this
Agreement or the Loans or the use of the proceeds thereof, the execution,
delivery, enforcement performance and administration of this Agreement and any
other Loan Documents, or the transactions contemplated hereby and thereby,
whether or not any Indemnified Person is a party thereto (all the foregoing,
collectively, the "Indemnified Liabilities"); provided, that neither Company
shall have any obligation hereunder to any Indemnified Person with respect to
Indemnified Liabilities arising from the gross negligence or willful misconduct
of such Indemnified Person.
(b) Environmental Indemnity.
(i) Each Company, jointly and severally, hereby agrees to
indemnify, defend and hold harmless each Indemnified Person, from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, charges, expenses or disbursements (including
reasonable Attorney Costs and the allocated cost of internal environmental
audit or review services), which may be incurred by or asserted against such
Indemnified Person in connection with or arising out of any pending or
threatened investigation, litigation or proceeding, or any action taken by any
Person, with respect to any Environmental Claim. No action taken by legal
counsel chosen by either Agent or any Lender in defending against any such
investigation, litigation or proceeding or requested remedial, removal or
response action shall vitiate or in any way impair a Company's obligation and
duty hereunder to indemnify and hold harmless each Agent and each Lender.
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(ii) In no event shall any site visit, observation, or testing
by either Agent or any Lender (or any contractee of either Agent or any Lender)
be deemed a representation or warranty that Hazardous Materials are or are not
present in, on, or under, the site, or that there has been or shall be
compliance with any Environmental Law. Neither of the Companies nor any other
Person is entitled to rely on any site visit, observation, or testing by either
Agent or any Lender. Neither of the Agents nor any Lender owes any duty of care
to protect either Company or any other Person against, or to inform either
Company or any other party of, any Hazardous Materials or any other adverse
condition affecting any site or Property. Neither Agent nor any Lender shall be
obligated to disclose to either Company or any other Person any report or
findings made as a result of, or in connection with, any site visit,
observation, or testing by either Agent or any Lender.
(c) Survival Defense.
The obligations in this Section 10.05 shall survive payment of
all other Obligations. At the election of any Indemnified Person, the Companies
shall defend such Indemnified Person using legal counsel satisfactory to such
Indemnified Person in such Person's sole discretion, at the sole cost and
expense of the Companies. All amounts owing under this Section 10.05 shall be
paid within 30 days after demand.
10.06. Marshaling; Payments Set Aside.
Neither of the Agents nor any Lender shall be under any
obligation to marshal any assets in favor of a Company or any other Person or
against or in payment of any or all of the Obligations. To the extent that a
Company makes a payment or payments to the Agents or the Lenders, or the Agents
or the Lenders enforce their Liens or exercise their rights of set-off, and
such payment or payments or the proceeds of such enforcement or set-off or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by an Agent in its discretion) to be repaid to a trustee, receiver
or any other party in connection with any Insolvency Proceeding, or otherwise,
then (a) to the extent of such recovery the obligation or part thereof
originally intended to be satisfied shall be reviewed and continued in full
force and effect as if such payment had not been made or such enforcement or
set-off had not occurred, and (b) each Lender severally agrees to pay to each
Agent upon demand its ratable share of the total amount so recovered from or
repaid by such Agent.
10.07. Successors and Assigns.
The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, except that neither Company may assign or transfer any of its rights
or obligations under this Agreement without the prior written consent of the
Agents and each Lender.
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10.08. Assignments, Participations, Etc.
(a) Any Applicable Lender of a Company may, with the written
consent of such Company and the Applicable Agent of such Company, which
consents shall not be unreasonably withheld, at any time assign and delegate to
one or more Eligible Assignees (provided, that no written consent of a Company
or an Agent shall be required in connection with any assignment and delegation
by a Lender to an Eligible Assignee that is an Affiliate of such Lender) (each
an "Assignee") all, or any ratable part of all, of the Loans, the Commitments
and the other rights and obligations of such Lender hereunder with respect to
such Company, so long as the minimum amount of such assignment (which, when
added to the portion of the Loans, the Commitments and the other rights and
obligations with respect to the other Company contemporaneously assigned by such
Lender or such Lender's Affiliate) equals Five Million U.S. Dollars
(U.S.$5,000,000); provided however, that (i) such Company and its Applicable
Agent may continue to deal solely and directly with such Lender in connection
with the interest so assigned to an Assignee until (A) written notice of such
assignment together with payment instructions, addresses and related information
with respect to the Assignee, shall have been given to such Company and such
Agent by such Lender and the Assignee; (B) such Lender and its Assignee shall
have delivered to such Company and such Agent an Assignment and Acceptance in
the form of Exhibit K (an "Assignment and Acceptance") together with any Note or
Notes subject to such assignment and (C) the assignor Lender or Assignee has
paid to such Agent a processing fee in the amount of Three Thousand U.S. Dollars
(U.S.$3,000); and (ii) no Applicable Lender of a Company may assign or delegate
any part of the Loans, the Commitments or the other rights and obligations of
such Lender hereunder with respect to such Company to an Assignee unless such
Lender (or the Affiliate of the Lender that is an Applicable Lender of the other
Company) assigns and delegates to such Assignee (or an Affiliate of such
Assignee) an equal percentage of the Loans, the Commitments and the other rights
and obligations of such Lender (or such Affiliate of such Lender) hereunder with
respect to the other Company.
(b) From and after the date that an Agent notifies the
assignor Lender that it has received (and provided its consent with respect to)
an executed Assignment and Acceptance and payment of the above-referenced
processing fee, (i) the Assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, shall have the rights and obligations of a
Lender under the Loan Documents, and (ii) the assignor Lender shall, to the
extent that rights and obligations hereunder and under the other Loan Documents
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights and be released from its obligations under the Loan Documents.
(c) Within five Business Days after its receipt of notice by
an Applicable Agent of a Company that it has received an executed Assignment
and Acceptance and payment of the processing fee (and provided that it consents
to such assignment pursuant to subsection 10.08(a)), such Company shall execute
and deliver to such Agent new Notes evidencing such Assignee's assigned Loans
and Commitment and, if the assignor Lender has retained a portion of its Loans
and its Commitment, replacement Notes in the principal amount of the Loans
retained by the assignor Lender (such Notes to be in exchange for, but not in
payment of, the Notes held by such
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assigning Lender). Immediately upon each Assignee's making its processing fee
payment under the Assignment and Acceptance, this Agreement shall be deemed to
be amended to the extent, but only to the extent, necessary to reflect the
addition of the Assignee and the resulting adjustment of the Commitments
arising therefrom. The Commitment allocated to each Assignee shall reduce such
Commitments of the assigning Lender pro tanto.
(d) Any Lender may at any time sell to one or more commercial
banks or other Persons not Affiliates of the Company (a "Participant")
participating interests in any Loans, the Commitment of that Lender and the
other interests of that Lender (the "originating Lender") hereunder and under
the other Loan Documents; provided, however, that (i) no Lender of a Company
may participate any part of the Loans, the Commitments or other interests of
such Lender to a Participant unless such Lender (or the Affiliate of such
Lender that is an Applicable Lender of the other Company) participates to such
Participant (or an Affiliate of such Participant) an equal percentage of the
Loans, the Commitments and other interests of such Lender (or such Affiliate of
such Lender) with respect to the other Company, (ii) the originating Lender's
obligations under this Agreement shall remain unchanged, (iii) the originating
Lender shall remain solely responsible for the performance of such obligations,
(iv) the Companies and the Agents shall continue to deal solely and directly
with the originating Lender in connection with the originating Lender's rights
and obligations under this Agreement and the other Loan Documents, and (v) no
Lender shall transfer or grant any participating interest under which the
Participant shall have rights to approve any amendment to, or any consent or
waiver with respect to, this Agreement or any other Loan Document. In the case
of any such participation, the Participant shall not have any rights under this
Agreement or any of the other Loan Documents, and all amounts payable by the
Company hereunder shall be determined as if such Lender had not sold such
participation, except that, if amounts outstanding under this Agreement are due
and unpaid, or shall have been declared or shall have become due and payable
upon the occurrence of an Event of Default, each Participant shall be deemed to
have the right of set-off in respect of its participating interest in amounts
owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement.
(e) Each Lender agrees to take normal and reasonable
precautions and exercise due care to maintain the confidentiality of all
information identified as "confidential" by a Company or any Subsidiary of a
Company and provided to it by a Company or any Subsidiary of a Company, or by
an Agent on such Company's or Subsidiary's behalf, in connection with this
Agreement or any other Loan Document, and neither it nor any of its Affiliates
shall use any such information for any purpose or in any manner other than
pursuant to the terms contemplated by this Agreement except to the extent such
information (i) was or becomes generally available to the public other than as
a result of a disclosure by such Lender, or (ii) was or becomes available on a
non-confidential basis from a source other than a Company, provided, that such
source is not bound by a confidentiality agreement with a Company known to such
Lender; provided further, however, that any Lender may disclose such
information (A) at the request or pursuant to any requirement of any
Governmental Authority to which such Lender is subject or in connection with an
examination of such Lender by any such authority, (B) pursuant to subpoena or
other court process; (C) when required to do so in accordance with the
provisions of any applicable
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Requirement of Law; (D) to the extent reasonably required in connection with
any litigation or proceeding to which an Agent, any Lender or their respective
Affiliates may be party, (E) to the extent reasonably required in connection
with the exercise of any remedy hereunder or under any other Loan Document, and
(F) to such Lender's independent auditors and other professional advisors.
Notwithstanding the foregoing, each Company authorizes each Lender to disclose
to any Participant or Assignee (each, a "Transferee") and to any prospective
Transferee, such financial and other information in such Lender's possession
concerning such Company or its Subsidiaries which has been delivered to an
Agent or any Lender pursuant to this Agreement or which has been delivered to
an Agent or any Lender by such Company in connection with the Lenders' credit
evaluation of such Company prior to entering into this Agreement; provided
that, unless otherwise agreed by such Company, such Transferee agrees in
writing to keep such information confidential to the same extent required of
the Lenders hereunder.
(f) Notwithstanding any other provision contained in this
Agreement or any other Loan Document to the contrary, any Lender to the U.S.
Company may assign all or any portion of the Loans or Notes held by it to any
Federal Reserve Bank or the United States Treasury as collateral security
pursuant to Regulation A of the Federal Reserve Board and any Operating
Circular issued by such Federal Reserve Bank, provided, that any payment in
respect of such assigned Loans or Notes made by a Company to or for the account
of the assigning or pledging Lender in accordance with the terms of this
Agreement shall satisfy such Company's obligations hereunder in respect of such
assigned Loans or Notes to the extent of such payment. No such assignment shall
release the assigning Lender from its obligations hereunder.
(g) BAI may assign its obligations as an Issuer to an
Affiliate of BAI without the prior written consent of any party hereto. In
connection with such assignment, each of the parties hereto agrees to execute
such documents as are reasonably requested by such Affiliate of BAI to
effectuate such assignment.
10.09. Set-off
In addition to any rights and remedies of the Lenders provided
by law, if an Event of Default exists, each Lender is authorized at any time
and from time to time, without prior notice to the Companies, any such notice
being waived by the Companies to the fullest extent permitted by law, to set-
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held by, and other indebtedness at any time
owing to, such Lender to or for the credit or the account of a Company against
any and all Obligations owing to such Lender, now or hereafter existing,
irrespective of whether or not an Agent or such Lender shall have made demand
under this Agreement or any Loan Document and although such Obligations may be
contingent or unmatured. Each Lender agrees promptly to notify the Companies
and the Agents after any such set-off and application made by such Lender,
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender under this
Section 10.09 are in addition to the other rights and remedies (including other
rights of set-off) which the Lender may have. NOTWITHSTANDING THE FOREGOING, NO
LENDER SHALL EXERCISE, OR ATTEMPT TO EXERCISE, ANY RIGHT OF SET-OFF, BANKER'S
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LIEN, OR THE LIKE, AGAINST ANY DEPOSIT ACCOUNT OR PROPERTY OF A COMPANY OR ANY
SUBSIDIARY OF A COMPANY HELD OR MAINTAINED BY THE LENDER WITHOUT THE PRIOR
WRITTEN CONSENT OF THE MAJORITY LENDERS.
10.10. Collateral Account.
(a) Each Company hereby authorizes and directs its Applicable
Agent to establish and maintain with such Applicable Agent, or at such
Applicable Agent's election, with an Affiliate of such Applicable Agent, as a
blocked account in the name of such Applicable Agent on behalf of the
Applicable Lenders of such Company, a deposit account designated as the
"Collateral Account".
(b) Al] amounts held in a Collateral Account pertaining to a
Company shall secure the Obligations of such Company and may be applied to the
Obligations of such Company as provided in the Loan Documents.
(c) Any interest received in respect of investments of any
amounts deposited in a Collateral Account pertaining to a Company shall be
remitted by such Company's Applicable Agent to such Company on the last
Business Day of each calendar quarter, provided that an Agent shall not remit
any such interest if any Event of Default has occurred and is continuing.
(d) Cash held by an Agent, or an Affiliate of an Agent, in the
Collateral Account shall be invested or reinvested as follows:
(i) Any funds on deposit in a Collateral Account shall be held
by an Agent, or any Affiliate of any Agent, in a non-interest-bearing
account provided, that so long as no Event of Default shall have
occurred and be continuing, a Company may, pursuant to written
instructions, direct its Applicable Agent to invest funds on deposit
in a Collateral Account in Cash Equivalents as indicated in such
instructions; and
(ii) Each Agent is hereby authorized to sell, and shall sell,
all or any designated part of the securities held in a Collateral
Account (A) so long as no Event of Default shall have occurred and be
continuing, upon receipt of appropriate written instructions from a
Company or (B) in any event if such sale is necessary to permit such
Agent to perform its duties hereunder. Neither Agent shall have any
responsibility for any loss resulting from a fluctuation in interest
rates, the sale or disposition of any Cash Equivalent prior to the
maturity date or otherwise.
Each Collateral Account shall be subject to such applicable laws, and such
application regulations of the Board of Governors of the Federal Reserve System
and of any other appropriate Governmental Authority, as may now or hereafter be
in effect.
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10.11. Intentionally Omitted.
10.12. Currency of Judgment.
If for the purpose of obtaining judgment in any court it is
necessary to convert a sum due hereunder in the currency in which it is due
(the "Original Currency") into another currency (the "Second Currency"), the
rate of exchange used shall be that at which the U.S. Agent, in accordance with
normal banking procedures, could purchase the Original Currency with the Second
Currency in the New York foreign exchange market on the Business Day preceding
that on which final judgment is given. Such rate of exchange shall include any
premium and costs of exchange payable in connection with such purchase. The
obligation in the Original Currency shall, notwithstanding any judgment in the
Second Currency, be discharged only to the extent that on the Business Day
following receipt by the U.S. Agent of any sum adjudged to be so due in the
Second Currency, the U.S. Agent may, in accordance with normal banking
procedures, purchase the Original Currency with the Second Currency paid to the
U.S. Agent in the New York foreign exchange market. If the amount of the
Original Currency so purchased is less than the amount originally due in the
Original Currency, the Company owing such judgment agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify the Agents and
Lenders against such loss.
10.13. Notification of Addresses, Lending Offices, Etc.
Each Lender shall notify the Agents in writing of any changes
in the address to which notices to such Lender should be directed, of addresses
of its Offshore Lending Office, of payment instructions in respect of all
payments to be made to it hereunder and of such other administrative
information as the Agents shall reasonably request.
10.14. Counterparts.
This Agreement may be executed by one or more of the parties
to this Agreement in any number of separate counterparts, each of which, when
so executed, shall be deemed an original, and all of said counterparts taken
together shall be deemed to constitute but one and the same instrument. A set
of the copies of this Agreement signed by all the parties shall be lodged with
the Companies and the Agents.
10.15. Severability.
The illegality or unenforceability of any provision of this
Agreement or any instrument or agreement required hereunder shall not in any
way affect or impair the legality or enforceability of the remaining provisions
of this Agreement or any instrument or agreement required hereunder.
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10.16. No Third Parties Benefited.
This Agreement is made and entered into for the sole
protection and legal benefit of the Companies, the Lenders (including the
Issuers) and the Agents, and their permitted successors and assigns, and no
other Person shall be a direct or indirect legal beneficiary of, or have any
direct or indirect cause of action or claim in connection with, this Agreement
or any of the other Loan Documents (other than a Person that is a party
thereto). Neither Agent nor any Lender shall have any obligation to any Person
not a party to this Agreement or other Loan Documents.
10.17. Governing Law and Jurisdiction.
(a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF ILLINOIS.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT AND ANY OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE
OF ILLINOIS OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS, AND
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE COMPANIES, THE AGENTS
AND THE LENDERS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE COMPANIES, THE AGENTS
AND THE LENDERS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING 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 ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE
COMPANIES, THE AGENTS AND THE LENDERS EACH WAIVE PERSONAL SERVICE OF ANY
SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY ILLINOIS LAW. NOTWITHSTANDING THE FOREGOING, THE AGENTS AND THE
LENDERS SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST A COMPANY
OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION.
10.18. Waiver of Jury Trial.
THE COMPANIES, THE LENDERS AND THE AGENTS EACH WAIVE THEIR
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER
LITIGATION OF ANY TYPE BROUGHT BY ANY OF THESE PARTIES AGAINST ANY OTHER PARTY
OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE.
THE COMPANIES, THE LENDERS AND THE AGENTS EACH AGREE THAT ANY SUCH CLAIM OR
CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT
LIMITING THE FOREGOING, THE PARTIES
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FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY
OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF
THIS AGREEMENT OR THE OTHER LOAN DOCUMENT OR ANY PROVISION HEREOF OR THEREOF.
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
10.19. Entire Agreement.
This Agreement, together with the other Loan Documents,
embodies the entire agreement and understanding among the Companies, the Lenders
and the Agents, and supersedes all prior or contemporaneous Agreements and
understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof, except for the fee letter referenced in subsections
2.10(a) and 2.10(c), and any prior arrangements made with respect to the payment
by the Companies of (or any indemnification for) any fees, costs or expenses
payable to or incurred (or to be incurred) by or on behalf of the Agents or the
Lenders.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written,
STUART ENTERTAINMENT INC.
By
-----------------------------------
Its President
Address for notices:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
BINGO PRESS & SPECIALTY LIMITED
By
-----------------------------------
Its President
Address for notices:
c/o Stuart Entertainment, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Secretary
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
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▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By
-----------------------------------
Its
----------------------------------
Address for notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Address for payments:
Bank of America NT & SA
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ABA# ▇▇▇▇▇▇▇▇▇
For the credit of BanControl, #12330-14369
Reference: Stuart Entertainment
Attn: Agency Management Services
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▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, as Agent
By
-----------------------------------
Its
----------------------------------
Address for notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Address for payments:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attn: Loans Department
Code: BOFACATT
Reference: Bingo Press
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
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▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, as a Lender
and Issuer
By
-----------------------------------
Its
----------------------------------
Address for notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Domestic and Offshore Lending Office:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Leveraged Finance Operations
Reference: Stuart Entertainment
BANK OF AMERICA CANADA, as a Lender and
Issuer
By
-----------------------------------
Its
----------------------------------
Address for notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
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▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ BANK, as Co-Agent
and a Lender
By
-----------------------------------
Its
----------------------------------
Address for notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: A. ▇▇▇▇ ▇▇▇▇▇▇, Vice President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Domestic and Offshore Lending ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
Administrative Representative
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Routing for Payments:
The Chase Manhattan Bank
A/C# 9009000119 for final credit
to PC520
Attn: ▇▇▇▇ ▇▇▇▇▇▇
ABA# ▇▇▇▇▇▇▇▇▇
Reference: Stuart Entertainment
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▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇,
as Co-Agent and a Lender
By
-----------------------------------
Its
----------------------------------
Address for notices:
on or before November 17, 1996
150 King Street West
16th Floor, Box 68
Toronto, Ontario M5H IJ9
Attn: ▇▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
After November 17, 1996:
1 First Canadian Place
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇
P.0. Box 106
Toronto, Ontario
M5X 1A4 Canada
Attn: ▇▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Routing for Payments:
Royal Bank of Canada
Main Branch, Toronto
Correspondent Banking Division
Transit # 07172
F/A The Chase Manhattan Bank of Canada
A/C# ▇▇▇-▇▇▇-▇
Reference: Bingo Press
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LIST OF EXHIBITS AND SCHEDULES
List of Exhibits
----------------
Exhibit A - Compliance Certificate
Exhibit B-1 - Canadian Company Notice of Borrowing
Exhibit B-2 - U.S. Company Notice of Borrowing
Exhibit C-1 - Canadian Company Notice of Conversion/Continuation
Exhibit C-2 - U.S. Company Notice of Conversion/Continuation
Exhibit D - Pricing Change Certificate
Exhibit E-1 - Canadian Company Revolving Notes
Exhibit E-2 - U.S. Company Revolving Notes
Exhibit G-1 - Opinion of ▇▇▇▇▇ ▇▇▇▇
Exhibit H - Opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Exhibit I - Opinion of Goldberg, Kohn, Bell, Black, ▇▇▇▇▇▇▇▇▇▇ &
Moritz, Ltd.
Exhibit J - Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Exhibit K - Assignment and Acceptance Agreement
List of Schedules
-----------------
Schedule 2.1 (b) Amount of Revolving Commitments
Schedule 5.5
Schedule 5.7
Schedule 5.11
Schedule 5.12
Schedule 5,18
Schedule 5.19
Schedule 7.1
Schedule 7.5(A)
Schedule 7.5(B)
Schedule 7.8
Schedule 7.9
Schedule 7.11
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