FINANCING AGREEMENT
DATED AS OF NOVEMBER 21, 2002
BY AND AMONG
COLUMBUS ▇▇▇▇▇▇▇▇ LIMITED,
LARCO INDUSTRIAL SERVICES LTD.
AS BORROWERS,
THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTY HERETO,
AS LENDERS,
AND
REGIMENT CAPITAL III, L.P.,
AS AGENT
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS; CERTAIN TERMS..........................................1
SECTION 1.01 DEFINITIONS...............................................1
SECTION 1.02 TERMS GENERALLY..........................................20
SECTION 1.03 ACCOUNTING AND OTHER TERMS...............................20
SECTION 1.04 TIME REFERENCES..........................................21
ARTICLE II THE LOANS.........................................................21
SECTION 2.01 TERM LOAN COMMITMENTS....................................21
SECTION 2.02 MAKING THE TERM LOAN.....................................21
SECTION 2.03 REPAYMENT OF THE TERM LOAN; EVIDENCE OF DEBT.............22
SECTION 2.04 INTEREST.................................................22
SECTION 2.05 REDUCTION OF THE TERM LOAN COMMITMENT; PREPAYMENT OF THE
TERM LOAN................................................24
SECTION 2.06 FEES.....................................................24
SECTION 2.07 SECURITIZATION...........................................24
SECTION 2.08 TAXES....................................................25
ARTICLE III [INTENTIONALLY OMITTED]..........................................26
ARTICLE IV FEES, PAYMENTS AND OTHER COMPENSATION.............................26
SECTION 4.01 AUDIT AND COLLATERAL MONITORING FEES.....................26
SECTION 4.02 PAYMENTS; COMPUTATIONS AND STATEMENTS....................26
SECTION 4.03 SHARING OF PAYMENTS, ETC.................................27
SECTION 4.04 APPORTIONMENT OF PAYMENTS................................28
SECTION 4.05 INCREASED COSTS AND REDUCED RETURN.......................29
SECTION 4.06 JOINT AND SEVERAL LIABILITY OF THE BORROWERS.............30
ARTICLE V CONDITIONS TO THE TERM LOAN........................................31
SECTION 5.01 CONDITIONS PRECEDENT TO EFFECTIVENESS....................31
ARTICLE VI REPRESENTATIONS AND WARRANTIES....................................34
SECTION 6.01 REPRESENTATIONS AND WARRANTIES...........................34
ARTICLE VII COVENANTS OF THE LOAN PARTIES....................................45
SECTION 7.01 AFFIRMATIVE COVENANTS....................................45
SECTION 7.02 NEGATIVE COVENANTS.......................................52
ARTICLE VIII MANAGEMENT, COLLECTION AND STATUS OF
ACCOUNTS RECEIVABLE AND OTHER
COLLATERAL......................................................58
SECTION 8.01 MANAGEMENT OF COLLATERAL.................................58
SECTION 8.02 ACCOUNTS RECEIVABLE DOCUMENTATION........................60
SECTION 8.03 STATUS OF ACCOUNTS RECEIVABLE AND OTHER COLLATERAL.......60
SECTION 8.04 COLLATERAL CUSTODIAN.....................................61
SECTION 8.05 COMPLIANCE WITH WORKING CAPITAL LOAN AGREEMENT...........61
ARTICLE IX EVENTS OF DEFAULT.................................................62
SECTION 9.01 EVENTS OF DEFAULT........................................62
ARTICLE X AGENT..............................................................65
SECTION 10.01 APPOINTMENT..............................................65
SECTION 10.02 NATURE OF DUTIES.........................................66
SECTION 10.03 RIGHTS, EXCULPATION, ETC.................................67
SECTION 10.04 RELIANCE.................................................67
SECTION 10.05 INDEMNIFICATION..........................................68
SECTION 10.06 AGENT INDIVIDUALLY.......................................68
SECTION 10.07 SUCCESSOR AGENT..........................................68
SECTION 10.08 COLLATERAL MATTERS.......................................69
SECTION 10.09 AGENCY FOR PERFECTION....................................70
ARTICLE XI [INTENTIONALLY OMITTED]...........................................70
ARTICLE XII MISCELLANEOUS....................................................70
SECTION 12.01 NOTICES, ETC.............................................70
SECTION 12.02 AMENDMENTS, ETC..........................................72
SECTION 12.03 NO WAIVER; REMEDIES, ETC.................................72
SECTION 12.04 EXPENSES; TAXES; ATTORNEYS' FEES.........................72
SECTION 12.05 RIGHT OF SET-OFF.........................................73
SECTION 12.06 SEVERABILITY.............................................74
SECTION 12.07 ASSIGNMENTS AND PARTICIPATIONS...........................74
SECTION 12.08 COUNTERPARTS.............................................77
SECTION 12.09 GOVERNING LAW............................................77
SECTION 12.10 CONSENT TO JURISDICTION; SERVICE OF PROCESS
AND VENUE................................................77
SECTION 12.11 WAIVER OF JURY TRIAL, ETC................................78
SECTION 12.12 CONSENT BY THE AGENT AND LENDERS.........................78
SECTION 12.13 NO PARTY DEEMED DRAFTER..................................78
SECTION 12.14 REINSTATEMENT; CERTAIN PAYMENTS..........................78
SECTION 12.15 INDEMNIFICATION..........................................79
SECTION 12.16 COLUMBUS ▇▇▇▇▇▇▇▇ AS AGENT FOR BORROWERS.................80
SECTION 12.17 RECORDS..................................................81
SECTION 12.18 BINDING EFFECT...........................................81
SECTION 12.19 INTEREST.................................................81
SECTION 12.20 CONFIDENTIALITY..........................................82
SECTION 12.21 INTEGRATION..............................................83
FINANCING AGREEMENT
Financing Agreement, dated as of November 21, 2002, by and among
Columbus ▇▇▇▇▇▇▇▇ Limited, a Canadian corporation ("COLUMBUS ▇▇▇▇▇▇▇▇"), ▇▇▇▇▇
Industrial Services Ltd., an Ontario corporation ("LARCO" and together with
Columbus ▇▇▇▇▇▇▇▇, each A "BORROWER" and collectively, the "BORROWERS"), the
financial institutions from time to time party hereto (each a "LENDER" and
collectively, the "LENDERS"), and Regiment Capital III, L.P., a limited
partnership, as agent for the Lenders (in such capacity, THE "AGENT").
RECITALS
Each of the Borrowers is a wholly-owned Subsidiary (as hereinafter
defined) of Columbus ▇▇▇▇▇▇▇▇ Corporation (the "PARENT").
The Borrowers have asked the Lenders to extend credit to the Borrowers
consisting of a term loan in the aggregate principal amount of $10,000,000.00.
The proceeds of the term loan shall be used to partially refinance the Existing
Indebtedness (as hereinafter defined) under the Existing Credit Facility (as
hereinafter defined), thereby constituting a partial replacement of the Existing
Credit Facility, and to pay fees and expenses related to this Agreement. The
Lenders are severally, and not jointly, willing to extend such credit to the
Borrowers subject to the terms and conditions hereinafter set forth.
In consideration of the premises and the covenants and agreements
contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; CERTAIN TERMS
Section 1.01 DEFINITIONS.
As used in this Agreement, the following terms shall have the
respective meanings indicated below, such meanings to be applicable equally to
both the singular and plural forms of such terms:
"ACCOUNT DEBTOR" means each debtor, customer or obligor in any way
obligated on or in connection with any Account Receivable.
"ACCOUNT RECEIVABLE" means, with respect to any Person, any and all
rights of such Person to payment for goods sold and/or services rendered,
including accounts, general intangibles and any and all such rights evidenced by
chattel paper, instruments or documents, whether due or to become due and
whether or not earned by performance, and whether now or hereafter acquired or
arising in the future, and any proceeds arising therefrom or relating thereto.
"ACTION" has the meaning specified therefor in Section 12.12.
"ADDITIONAL MORTGAGES" has the meaning specified therefor in Section
7.01(l).
"ADDITIONAL MORTGAGED PROPERTY" means any Real Property Asset that is
now owned or leased, or hereinafter acquired or leased, by the Loan Parties,
which the Agent determines to acquire a Debenture on following the Effective
Date.
"ADMINISTRATIVE BORROWER" has the meaning specified in Section 12.16.
"AFFILIATE" means, with respect to a specified Person, another Person
that Controls or is Controlled by or is under common Control with the Person
specified. Notwithstanding anything herein to the contrary, in no event shall
any Agent or any Lender be considered an "Affiliate" of any Loan Party.
"AGENT" has the meaning specified therefor in the preamble hereto.
"AGENT ADVANCES" has the meaning specified therefor in Section
10.08(a).
"AGENT'S ACCOUNT" means an account at a bank designated by the Agent
from time to time as the account into which the Loan Parties shall make all
payments to the Agent for the benefit of the Agent and the Lenders under this
Agreement and the other Loan Documents.
"AGREEMENT" means this Financing Agreement, including all amendments,
modifications and supplements and any exhibits or schedules to any of the
foregoing, and shall refer to the Agreement as the same may be in effect at the
time such reference becomes operative.
"ANNIVERSARY FEE" has the meaning specified therefore in Section
2.06(b).
"ANNIVERSARY FEE PERCENTAGE" means a percentage equal to (a) on the
first anniversary of the Effective Date, 1.00%, (b) on the second anniversary of
the Effective Date, 1.25%, (c) on the third anniversary of the Effective Date,
1.50%, and (d) on the fourth anniversary of the Effective Date, 1.75%.
"APPLICABLE CANADIAN PENSION LAWS" means any law (statutory or common),
rule, regulation, guideline, directive, order or notice of any Canadian federal
or provincial (or other political subdivision thereof) Governmental Authority or
any entity exercising executive, legislative, quasi-judicial, regulatory or
administrative functions pertaining to, having jurisdiction over or affecting
any pension plan or other employee benefit plan, including any Canadian Pension
Plan or Canadian Plan.
"APPLICABLE MARGIN" means, as of any date of determination, a
percentage equal to (a) during the period of time from and after the Effective
Date up to the date that is immediately prior to the first anniversary of the
Effective Date, 0.00%, (b) during the period of time from and including the date
that is the first anniversary of the Effective Date up to the date that is
immediately prior to the second anniversary of the Effective Date, 0.50%, (c)
during the period of time from and including the date that is the second
anniversary of the Effective Date up to the date that is immediately prior to
the third anniversary of the Effective Date, 1.00%, and (d) during the period of
time from and including the date that is the third anniversary of the Effective
Date up to and including the Final Maturity Date, 1.50%.
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"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered
into by an assigning Lender and an assignee, and accepted by the Agent, in
accordance with Section 12.07 hereof and in form and substance satisfactory to
the Agent.
"AUTHORIZED OFFICER" means, with respect to any Person, the chief
executive officer, chief financial officer, president or executive vice
president of such Person.
"BANK" means JPMorgan Chase Bank, its successors or any other bank
designated by the Agent to the Administrative Borrower from time to time.
"BANKRUPTCY CODE" means the United States Bankruptcy Code (11 ▇.▇.▇.▇▇.
101, ET SEQ.), as amended, and any successor statute.
"BASE INTEREST RATE" means the greater of (i) 11.50% per annum and (ii)
the Reference Rate plus 5.00% per annum.
"BOARD" means the Board of Governors of the Federal Reserve System of
the United States.
"BOARD OF DIRECTORS" means, with respect to any Person, the board of
directors (or comparable managers) of such Person or any committee thereof duly
authorized to act on behalf of the board.
"BORROWER" and "BORROWERS" have the respective meanings specified
therefor in the preamble hereto.
"BORROWER SECURITY AGREEMENT" means each General Security Agreement
made by a Borrower or the Parent in favor of the Agent, for the benefit of the
Agent and the Lenders, substantially in the form of Exhibit A hereto, securing
the Obligations.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other day
on which commercial banks in New York City or Toronto are authorized or required
to close.
"CANADIAN DOLLAR," "CANADIAN DOLLARS" and the symbol "C$" each means
lawful money of Canada.
"CANADIAN PENSION PLANS" means each and every pension plan established
by the Borrowers under Canadian federal or provincial law for the benefit of
employees of any one of the Borrowers.
"CANADIAN PENSION Regulator" means any Governmental Authority,
tribunal, office, government agency or board or any other entity exercising
executive, legislative, quasi-judicial, regulatory or administrative functions
pertaining to, or relating to, any Applicable Canadian Pension Laws.
"CANADIAN PLAN" means any employee benefit plan (other than a Canadian
Pension Plan) established or maintained by, or for the benefit of the Borrowers
for the benefit of its respective employees.
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"CAPITAL EXPENDITURES" means, for any period, the sum for the Parent
and its Subsidiaries, including the Borrowers (determined on a consolidated
basis without duplication in accordance with GAAP), of the aggregate amount of
expenditures made or liabilities incurred during such period (including the
aggregate amount of Capital Lease Obligations incurred during such period) to
acquire or construct fixed assets, plant and equipment (including renewals,
improvements and replacements, but excluding repairs) computed in accordance
with GAAP; PROVIDED that such term shall not include any such expenditures in
connection with any replacement or repair of Property affected by a Casualty
Event.
"CAPITAL GUIDELINE" means any law, rule, regulation, policy, guideline
or directive (whether or not having the force of law and whether or not the
failure to comply therewith would be unlawful) of any central bank or
Governmental Authority (i) regarding capital adequacy, capital ratios, capital
requirements, the calculation of a bank's capital or similar matters, or (ii)
affecting the amount of capital required to be obtained or maintained by any
Lender or any Person controlling any Lender or the manner in which any Lender or
any Person controlling any Lender allocates capital to any of its contingent
liabilities (including letters of credit), advances, acceptances, commitments,
assets or liabilities.
"CAPITAL LEASE OBLIGATIONS" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"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, and (ii) with
respect to any Person that is not a corporation, any and all partnership,
membership or other equity interests of such Person.
"CASUALTY EVENT" means, with respect to any Property of any Person, any
loss of or damage to, or any condemnation or other taking of, such Property for
which such Person or any of its Subsidiaries receives insurance proceeds, or
proceeds of a condemnation award or other compensation.
"CLOSING FEE" has the meaning specified therefor in Section 2.06(a).
"COLLATERAL" means all of the property and assets and all interests
therein and proceeds thereof now owned or hereafter acquired by any Person upon
which a Lien is granted or purported to be granted by such Person as security
for all or any part of the Obligations.
"COLLATERAL DOCUMENT" means any Pledge Agreement, any Borrower Security
Agreement, any Intellectual Property Security Agreement, any Debenture, and any
other instruments and documents, including without limitation Uniform Commercial
Code financing statements and PPSA financing statements, any Landlord's Waiver
and Consent, any PPSA estoppel letters, and the like, required to be executed or
delivered pursuant to this Agreement or any Collateral Document.
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"COMPLIANCE CERTIFICATE" has the meaning specified therefor in Section
7.01(a)(ii).
"CONTINGENT OBLIGATION" means, with respect to any Person, any
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations ("primary obligations") of
any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, (i) the direct or indirect guaranty,
endorsement (other than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such
Person of the obligation of a primary obligor, (ii) the obligation to make
take-or-pay or similar payments, if required, regardless of nonperformance by
any other party or parties to an agreement, (iii) any obligation of such Person,
whether or not contingent, (A) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (B) to advance or
supply funds (1) for the purchase or payment of any such primary obligation or
(2) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (C) to
purchase property, assets, 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 such primary obligation against loss in respect
thereof; PROVIDED, HOWEVER, that the term "Contingent Obligation" shall not
include any product warranties extended in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation with respect to which
such Contingent Obligation is made (or, if less, the maximum amount of such
primary obligation for which such Person may be liable pursuant to the terms of
the instrument evidencing such Contingent Obligation) or, if not stated or
determinable, the maximum reasonably anticipated liability with respect thereto
(assuming such Person is required to perform thereunder), as determined by such
Person in good faith.
"CONTROL" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"CONTROLLING" and "CONTROLLED" have meanings correlative thereto. A Person who
owns or holds capital stock, beneficial interests or other securities
representing five percent (5%) or more of the Total Voting Power of another
Person shall be deemed, for purposes of this Agreement, to "control" such other
Person.
"COPYRIGHTS" means all copyrights, whether statutory or common law,
owned by or assigned to the Loan Parties, and all exclusive and nonexclusive
licenses to the Loan Parties from third parties or rights to use copyrights
owned by such third parties, including, without limitation, the registrations,
applications and licenses listed on Schedule 6.01(e) hereto, along with any and
all (a) renewals and extensions thereof, (b) income, royalties, damages, claims
and payments now and hereafter due and/or payable with respect thereto,
including, without limitation, damages and payments for past, present or future
infringements thereof, (c) rights to ▇▇▇ for past, present and future
infringements thereof, and (d) foreign copyrights and any other rights
corresponding thereto throughout the world.
"DEBENTURE" means each debenture made by a Loan Party in favor of the
Agent, for the benefit of the Agent and the Lenders, substantially in the form
of Exhibit B hereto, securing the Obligations.
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"DEFAULT" means an event which, with the giving of notice or the lapse
of time or both, would constitute an Event of Default.
"DESIGNATED FINANCIAL OFFICER" means an individual holding one or more
of the following offices with a Borrower or otherwise having executive
responsibilities for financial matters and listed in Schedule 1.01(B) hereto:
chief financial officer, principal accounting officer, treasurer, assistant
treasurer or controller.
"DISCLOSED MATTERS" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 6.01(f) hereto.
"DISPOSITION" means any transaction, or series of related transactions,
pursuant to which any Person or any of its Subsidiaries sells, assigns,
transfers or otherwise disposes of any property or assets (whether now owned or
hereafter acquired) to any other Person, in each case, whether or not the
consideration therefor consists of cash, securities or other assets owned by the
acquiring Person, EXCLUDING any sales of Inventory in the ordinary course of
business on ordinary business terms.
"DOLLAR," "DOLLARS" and the symbol "$" each means lawful money of the
United States of America.
"EFFECTIVE DATE" means the date, on or before November 30, 2002, on
which all of the conditions precedent set forth in Section 5.01 are satisfied or
waived and the Term Loan is made.
"ENVIRONMENTAL ACTIONS" means any complaint, summons, citation, notice,
directive, order, claim, litigation, investigation, judicial or administrative
proceeding, judgment, letter or other communication from any Person or
Governmental Authority involving violations of Environmental Laws or Releases of
Hazardous Materials (i) from any assets, properties or businesses owned or
operated by any Loan Party or any predecessor in interest; (ii) from adjoining
properties or businesses; or (iii) onto any facilities which received Hazardous
Materials generated by any Loan Party or any predecessor in interest.
"ENVIRONMENTAL LAWS" means all applicable federal, state, provincial,
local and foreign laws, statutes, acts, ordinances, codes, rules, standards,
orders-in-council, regulations, decrees, permits, licenses or other binding
determinations of any Governmental Authority now or hereafter in effect, and in
each case as amended or supplemented from time to time, and any applicable
judicial, regulatory or administrative interpretation thereof, including any
applicable judicial, regulatory or administrative order, consent decree, order
or judgment, imposing liability or standards of conduct for or relating to the
regulation and protection of human health, safety, the environment and natural
resources (including ambient air, surface water, groundwater, wetlands, land
surface or subsurface strata, wildlife, aquatic species and vegetation) or
imposing liability or standards of conduct for or relating to Hazardous
Materials.
"ENVIRONMENTAL LIABILITIES" means all liabilities, monetary
obligations, Remedial Actions, losses, damages, punitive damages, consequential
damages, treble damages, costs and expenses (including all reasonable fees,
disbursements and expenses of counsel, experts and consultants and costs of
investigations and feasibility studies), fines, penalties, sanctions and
- 6 -
interest incurred as a result of any claim or demand by any Governmental
Authority or any third party, and which relate to any environmental condition or
a Release of Hazardous Materials from or onto (i) any property presently or
formerly owned by any Loan Party or (ii) any facility which received Hazardous
Materials generated by any Loan Party.
"ENVIRONMENTAL LIEN" means any Lien in favor of any Governmental
Authority for Environmental Liabilities.
"EQUITY RIGHTS" means, with respect to any Person, any subscriptions,
options, warrants, commitments, preemptive rights or agreements of any kind
(including any stockholders' or voting trust agreements) for the issuance or
sale of, or securities convertible into, any additional shares of Capital Stock
of any class, or partnership or other ownership interests of any type in, such
Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, and regulations
thereunder, in each case, as in effect from time to time. References to sections
of ERISA shall be construed also to refer to any successor sections.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that, together with the Loan Parties, is treated as a single
employer within the meaning of Section 414(b), (c), (m) or (o) of the Internal
Revenue Code. Notwithstanding the foregoing, for purposes of any liability
related to a Multiemployer Plan under Title IV of ERISA, the term "ERISA
Affiliate" means any trade or business that, together with the Loan Parties, is
treated as a single employer within the meaning of Section 4001(b) of ERISA.
"ERISA EVENT" means (a) a "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder for which the notice
requirement has not been waived with respect to any Pension Plan, (b) the
existence with respect to any Pension Plan of an "accumulated funding
deficiency" (as defined in Section 412 of the Internal Revenue Code or Section
302 of ERISA), whether or not waived, (c) the filing pursuant to Section 412(d)
of the Internal Revenue Code or Section 303(d) of ERISA of an application for a
waiver of the minimum funding standard with respect to any Pension Plan, (d) the
incurrence by any Loan Party or any ERISA Affiliate of any liability under Title
IV of ERISA with respect to the termination of any Pension Plan, (e) the receipt
by any Loan Party or any ERISA Affiliate from the PBGC or plan administrator of
any notice relating to an intention to terminate any Pension Plan or Pension
Plans or to appoint a trustee to administer any Pension Plan, or (f) the receipt
by any Loan Party or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from any Loan Party or any ERISA Affiliate of any notice of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.
"EVENT OF DEFAULT" means any of the events set forth in Section 9.01.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXISTING CREDIT FACILITY" means the Credit Agreement, dated as of
March 31, 1998, among the Parent, the lenders named therein, and Fleet National
Bank, as Agent.
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"EXISTING INDEBTEDNESS" means (i) Indebtedness of the Loan Parties
existing as of the Effective Date which is being refinanced in full with the
proceeds of the US Term Loan and the Working Capital Loans on the Effective Date
including Indebtedness under the Existing Credit Facility and (ii) Indebtedness
of the Loan Parties existing as of the Effective Date which is permitted to
remain outstanding after the Effective Date under Section 7.02(a) of the US
Financing Agreement and is listed on Schedule 7.02(a) thereto.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate
per annum equal to, for each day during such period, the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by the Agent from three
Federal funds brokers of recognized standing selected by it.
"FIELD SURVEY AND AUDIT" means a field survey and audit of the Loan
Parties and an appraisal of the Collateral performed by auditors, examiners
and/or appraisers selected by the Agent, at the sole cost and expense of the
Borrowers.
"FINAL MATURITY DATE" means the date which is five years plus one day
after the Effective Date, or such earlier date on which the Term Loan shall
become due and payable in accordance with the terms of this Agreement and the
other Loan Documents.
"FINANCIAL STATEMENTS" means (i) the audited consolidated balance sheet
of the Parent and its Subsidiaries for the Fiscal Years ended March 31, 2000,
March 31, 2001 and March 31, 2002, and the related consolidated statement of
operations, shareholders' equity and cash flows for the Fiscal Years then ended,
and (ii) the unaudited consolidated balance sheet of the Parent and its
Subsidiaries for the 6 months ended September 30, 2002, and the related
consolidated statement of operations, shareholder's equity and cash flows for
the 6 months then ended.
"FISCAL YEAR" means the fiscal year of the Parent and its Subsidiaries
ending on March 31st of each year.
"GAAP" has the meaning set out in the US Financing Agreement.
"GOVERNMENTAL AUTHORITY" means any nation or government, any federal,
state, provincial, city, town, municipality, county, local or other political
subdivision thereof or thereto and any department, commission, board, bureau,
instrumentality, agency or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government in Canada or in the United States.
"GUARANTOR" means each Person which guarantees, pursuant to Section
7.01(n) or otherwise, all or any part of the Obligations.
"HAZARDOUS MATERIAL" means (a) any element, compound or chemical that
is defined, listed or otherwise classified as a contaminant, pollutant, toxic
pollutant, toxic or hazardous substance, extremely hazardous substance or
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chemical, hazardous waste, special waste, or solid waste under Environmental
Laws or that is likely to cause immediately, harm to or have an adverse effect
on, the environment or risk to human health or safety, including, without
limitation, any pollutant, contaminant, waste, hazardous waste, toxic substance
or dangerous good which is defined or identified in any Environmental Law and
which is present in the environment in such quantity or state that it
contravenes any Environmental Law; (b) petroleum and its refined products; (c)
polychlorinated biphenyls; (d) any substance exhibiting a hazardous waste
characteristic, including, without limitation, corrosivity, ignitability,
toxicity or reactivity as well as any radioactive or explosive materials; and
(e) any raw materials, building components (including, without limitation,
asbestos-containing materials) and manufactured products containing hazardous
substances listed or classified as such under Environmental Laws.
"HEDGING AGREEMENT" means any interest rate, foreign currency,
commodity or equity swap, collar, cap, floor or forward rate agreement, or other
agreement or arrangement designed to protect against fluctuations in interest
rates or currency, commodity or equity values (including, without limitation,
any option with respect to any of the foregoing and any combination of the
foregoing agreements or arrangements), and any confirmation executed in
connection with any such agreement or arrangement.
"HIGHEST LAWFUL RATE" means, with respect to the Agent or any Lender,
the maximum non-usurious interest rate, if any, that at any time or from time to
time may be contracted for, taken, reserved, charged or received on the
Obligations under laws applicable to the Agent or such Lender which are
currently in effect or, to the extent allowed by law, under such applicable laws
which may hereafter be in effect and which allow a higher maximum non-usurious
interest rate than applicable laws now allow.
"INDEBTEDNESS" means, with respect to any Person, without duplication,
(i) all indebtedness of such Person for borrowed money; (ii) all obligations of
such Person for the deferred purchase price of property or services (other than
trade payables which are not for borrowed money) or other accounts payable
(including accrued expenses and deferred taxes) incurred in the ordinary course
of such Person's business and not outstanding for more than 90 days after the
date such payable was created); (iii) all obligations of such Person evidenced
by bonds, debentures, notes or other similar instruments or upon which interest
payments are customarily made; (iv) all reimbursement, payment or other
obligations and liabilities of such Person created or arising under any
conditional sales or other title retention agreement with respect to property
used and/or acquired by such Person, even though the rights and remedies of the
lessor, seller and/or lender thereunder may be limited to repossession or sale
of such property; (v) all Capital Lease Obligations of such Person; (vi) all
obligations and liabilities, contingent or otherwise, of such Person, in respect
of letters of credit, acceptances and similar facilities; (vii) all obligations
and liabilities, calculated on a basis satisfactory to the Agent and in
accordance with accepted practice, of such Person under Hedging Agreements;
(viii) all Contingent Obligations; (ix) liabilities incurred under Title IV of
ERISA with respect to any plan (other than a Multiemployer Plan) covered by
Title IV of ERISA and maintained for employees of such Person or any of its
ERISA Affiliates; (x) liabilities incurred under Applicable Canadian Pension
Laws with respect to Canadian Pension Plans; (xi) Withdrawal Liability incurred
under ERISA by such Person or any of its ERISA Affiliates with respect to any
Multiemployer Plan; (xii) Withdrawal Liability incurred under Applicable
Canadian Pension Laws; and (xiii) all obligations referred to in clauses (i)
- 9 -
through (xii) of this definition of another Person secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) a Lien upon property owned by such Person, even though such
Person has not assumed or become liable for the payment of such Indebtedness.
The Indebtedness of any Person shall include the Indebtedness of any partnership
of or joint venture in which such Person is a general partner or a joint
venturer.
"INDEMNIFIED MATTERS" has the meaning specified therefor in Section
12.15.
"INDEMNITEES" has the meaning specified therefor in Section 12.15.
"INSOLVENCY LAWS" means (i) the Bankruptcy Code, (ii) the Bankruptcy
and Insolvency Act (Canada), (iii) the Companies' Creditors Arrangement Act
(Canada), (iv) any successors to such statutes, and (v) any other applicable
insolvency or other similar law of any jurisdiction including, without
limitation, any law of any jurisdiction permitting a debtor to obtain a stay or
a compromise of the claims of its creditors against it.
"INSOLVENCY PROCEEDING" means any proceeding commenced by or against
any Person under any provision of any Insolvency Laws or under any other
bankruptcy or insolvency law, assignments for the benefit of creditors, formal
or informal moratoria, compositions, or extensions generally with creditors, or
proceedings seeking reorganization, arrangement, or other similar relief.
"INTEREST EXPENSE" means, for any Person during any period, the sum,
(determined on a consolidated basis without duplication in accordance with
GAAP), of the following: (a) all interest in respect of Indebtedness accrued or
paid during such period (whether or not actually paid during such period), PLUS
(b) the net amounts payable (or MINUS the net amounts receivable) in respect of
Hedging Agreements accrued during such period (whether or not actually paid or
received during such period) excluding reimbursement of legal fees and other
similar transaction costs and excluding payments required by reason of the early
termination of Hedging Agreements in effect on the date hereof, PLUS (c) all
fees, including letter of credit fees and expenses (but excluding reimbursement
of legal fees), incurred hereunder and under the US Financing Agreement and the
Working Capital Loan Agreement during such period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended (or any successor statute thereto) and the regulations thereunder.
"INVENTORY" means, with respect to any Person, all goods and
merchandise of such Person, including, without limitation, all raw materials,
work-in-process, packaging, supplies, materials and finished goods of every
nature used or usable in connection with the shipping, storing, advertising or
sale of such goods and merchandise, whether now owned or hereafter acquired, and
all such other property the sale or other disposition of which would give rise
to an Account Receivable or cash.
"INVESTMENT" means, for any Person: (a) the acquisition (whether for
cash, Property, services or securities or otherwise) of Capital Stock, bonds,
notes, debentures, partnership, limited liability company or other ownership
interests or other securities of any other Person or any agreement to make any
such acquisition (including, without limitation, any "short sale" or any sale of
- 10 -
any securities at a time when such securities are not owned by the Person
entering into such short sale); (b) the making of any deposit with, or advance,
loan or other extension of credit to, any other Person (including the purchase
of Property from another Person subject to an understanding or agreement,
contingent or otherwise, to resell such Property to such Person, but excluding
any such advance, loan or extension of credit representing the purchase price of
Inventory or supplies sold by such Person in the ordinary course of business,
PROVIDED that in no event shall the term of any such Inventory or supply
advance, loan or extension of credit exceed 180 days); or (c) the entering into
of any Guaranty of, or other contingent obligation with respect to, Indebtedness
or other liability of any other Person and (without duplication) any amount
committed to be advanced, lent or extended to such Person.
"INTELLECTUAL PROPERTY SECURITY AGREEMENT" means an Intellectual
Property Security Agreement made by a Loan Party in favor of the Agent,
substantially in the form of Exhibit C hereto, securing the Obligations.
"ITA" means the Income Tax Act (Canada), as the same may from time to
time be in effect.
"LANDLORD'S WAIVER AND CONSENT" means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the lessor
under the related Lease, in the form approved by the Agent in its sole
discretion.
"LEASE" means any lease of real property to which any Loan Party is a
party as lessor or lessee.
"LEASEHOLD PROPERTY" means any leasehold interest of any Loan Party as
lessee under any Lease, other than any such leasehold interest designated from
time to time by the Agent in its sole discretion as not being required to be
included in the Collateral and not being of material importance to the business
or operations of the Loan Parties.
"LENDER" has the meaning specified therefor in the preamble hereto.
"LIABILITIES" has the meaning specified therefor in Section 2.07.
"LIEN" means any mortgage, deed of trust, pledge, lien (statutory or
otherwise), security interest, charge or other encumbrance or security or
preferential arrangement of any nature, including, without limitation, any
conditional sale or title retention arrangement, any capital lease and any
assignment, deposit arrangement or financing lease intended as, or having the
effect of, security.
"LOAN ACCOUNT" means an account maintained hereunder by the Agent on
its books of account at the Payment Office and, with respect to the Borrowers,
in which the Borrowers will be charged with the Term Loan made to, and all other
Obligations incurred by, the Borrowers.
"LOAN DOCUMENT" means this Agreement, any Collateral Document, any
Intellectual Property Security Agreement or other document filed with the
Canadian Intellectual Property Office, the Participation Agreement, and any
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other agreement, instrument, and other document executed and delivered pursuant
hereto or thereto or otherwise evidencing or securing the Term Loan or any other
Obligation.
"LOAN PARTY" means any Borrower or any Guarantor.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on any of (i)
the operations, business, assets, properties, condition (financial or otherwise)
or prospects of any Loan Party or the Loan Parties taken as a whole, (ii) the
ability of any Loan Party to perform any of its obligations under any Loan
Document to which it is a party, (iii) the legality, validity or enforceability
of this Agreement or any other Loan Document, (iv) the rights and remedies of
the Agent or any Lender under any Loan Document, or (v) the validity, perfection
or priority of a Lien in favor of the Agent for the benefit of the Lenders on
any of the Collateral with an aggregate fair market value in excess of $100,000.
"MATERIAL INDEBTEDNESS" means Indebtedness (other than the Term Loan
and US Term Loan), including, without limitation, obligations in respect of one
or more Hedging Agreements, in an aggregate principal amount exceeding
$1,000,000. For purposes of determining Material Indebtedness, the "principal
amount" of the obligations of any Person in respect of a Hedging Agreement at
any time shall be the maximum aggregate amount (giving effect to any netting
agreements) that such Person would be required to pay if such Hedging Agreement
were terminated at such time.
"MATERIAL LEASEHOLD PROPERTY" means a Leasehold Property reasonably
determined by the Agent to be of material value as Collateral or of material
importance to the operations of the Loan Parties and as to which the aggregate
amount of all rents payable during any Fiscal Year exceeds $100,000.
"MATERIAL OWNED PROPERTY" means any real property owned by any Loan
Party that is reasonably determined by the Agent to be of material value as
Collateral or of material importance to the operations of the Loan Parties.
"MATERIAL RENTAL OBLIGATIONS" means obligations of the Loan Parties to
pay rent under any one or more operating leases with respect to any real or
personal property that is material to the business of the Loan Parties and as to
which the aggregate amount of all rents payable during any Fiscal Year exceeds
$100,000.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc. and any successor
thereto.
"MORTGAGED PROPERTY" means, at any time of determination, any and all
real property owned or leased by the Loan Parties that are subject to a
Debenture in favor of the Agent for the benefit of the Lenders and the Agent,
including without limitation the Properties listed on Schedule 1.01(C).
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA to which any Loan Party or any of its ERISA Affiliates has
contributed to, or has been obligated to contribute, at any time during the
preceding six (6) years.
"NOTICE OF BORROWING" has the meaning specified therefor in Section
2.02(a).
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"OBLIGATIONS" means all present and future indebtedness, obligations,
and liabilities of each Loan Party to the Agent and the Lenders under the Loan
Documents, whether or not the right of payment in respect of such claim is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
disputed, undisputed, legal, equitable, secured, unsecured, and whether or not
such claim is discharged, stayed or otherwise affected by any proceeding
referred to in Section 9.01. Without limiting the generality of the foregoing,
the Obligations of each Loan Party under the Loan Documents include (a) the
obligation to pay principal, interest (including the Term Loan Accrued Interest
Amount), charges, expenses, fees, attorneys' fees and disbursements, indemnities
and other amounts payable by such Person under the Loan Documents, and (b) the
obligation of such Person to reimburse any amount in respect of any of the
foregoing that the Agent or any Lender (in its sole discretion) may elect to pay
or advance on behalf of such Person.
"PARENT" has the meaning specified therefor in the preamble hereto.
"PARTICIPANT REGISTER" has the meaning specified therefor in Section
12.07(b)(v).
"PARTICIPATION AGREEMENT" means the Master Risk Participation
Agreement, dated as of the date hereof, by and among the Parent, the Borrowers,
the Agent and the Lenders.
"PATENTS" means all patents issued or assigned to and all patent
applications made by the Loan Parties and, to the extent that the grant of a
security interest does not cause a breach or termination thereof, all exclusive
and nonexclusive licenses to the Loan Parties from third parties or rights to
use patents owned by such third parties, including, without limitation, the
patents, patent applications and licenses listed on Schedule 6.01(e) hereto,
along with any and all (a) inventions and improvements described and claimed
therein, (b) reissues, divisions, continuations, extensions and
continuations-in-part thereof, (c) income, royalties, damages, claims and
payments now and hereafter due and/or payable under and with respect thereto,
including, without limitation, damages and payments for past or future
infringements thereof, (d) rights to ▇▇▇ for past, present and future
infringements thereof, and (e) any other rights corresponding thereto throughout
the world.
"PAYMENT OFFICE" means the Agent's office located at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or at such other office or offices of the Agent as
may be designated in writing from time to time by the Agent to the
Administrative Borrower.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"PENSION PLAN" means any Plan that is a defined benefit pension plan
subject to the provisions of Title IV of ERISA or Section 412 of the Internal
Revenue Code or Section 302 of ERISA, and in respect of which any Loan Party or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
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"PERMITTED INVESTMENTS" means:
(a) direct obligations of, or obligations the principal of and interest
on which are unconditionally guaranteed by, the United States of America or
Canada (or by any agency thereof to the extent such obligations are backed by
the full faith and credit of the United States of America or Canada), in each
case maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, the highest
credit rating obtainable from Standard and Poor's or from Moody's;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within 180 days from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts issued
or offered by, any domestic office of any commercial bank organized under the
laws of the United States of America or any State thereof or which is a Schedule
I bank under the Bank Act (Canada) and, in either case, which has a combined
capital and surplus and undivided profits of not less than $250,000,000;
(d) fully collateralized repurchase agreements with a term of not more
than 30 days for securities described in clause (a) above and entered into with
a financial institution satisfying the criteria described in clause (c) above;
(e) advances, loans and extensions of credit to any director, officer
or employee of the Loan Parties, if the aggregate outstanding amount of all such
advances, loans and extensions of credit (excluding travel advances in the
ordinary course of business) together with advances, loans and extensions of
credit made by the Parent or any of its Subsidiaries to their directors,
officers or employees under the US Financing Agreement does not at any time
exceed $500,000;
(f) investments in money market mutual funds that are rated AAA by
Standard & Poor's; and
(g) stocks, bonds, funds, covered call options, cash equivalents and
cash included in the portfolio of Investments owned by CM Insurance Company,
Inc. under the investment objective of "Aggressive Growth/Moderate Income" using
the following asset guidelines: cash, 0% to 20%; bonds, 0% to 30%; stocks, 70%
to 90%; other, 0% to 20%; in each case, invested at the discretion of Fleet
Investment Advisors, Inc. and Gold-K Securities, Inc.
"PERMITTED LIENS" has the meaning specified therefor in Section
7.02(b).
"PERSON" means an individual, corporation, limited liability company,
partnership, association, joint-stock company, trust, unincorporated
organization, joint venture or other enterprise or entity or Governmental
Authority.
"PLAN" means any employee benefit plan within the meaning of Section
3(3) of ERISA in which any Loan Party or any ERISA Affiliate is an "employer" as
defined in Section 3(5) of ERISA, or any employee benefit plan established and
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maintained by, or for the benefit of such Loan Party for the benefit of its
respective employees, including, but not limited to, any Pension Plan or
Multiemployer Plan.
"PLEDGE AGREEMENT" means a Pledge and Security Agreement made by a Loan
Party in favor of the US Agent for the benefit of the US Lenders, substantially
in the form of Exhibit B to the US Financing Agreement or otherwise acceptable
to the Agent.
"POST-DEFAULT RATE" means a rate of interest per annum equal to the
rate of interest otherwise in effect from time to time pursuant to the terms of
this Agreement plus 3%.
"PPSA" means the Personal Property Security Act (Ontario) and the
Regulations thereunder, as from time to time in effect, PROVIDED, HOWEVER, if
attachment, perfection or priority of Agent's or Lenders' security interests in
any Collateral are governed by the personal property security laws of any
jurisdiction other than Ontario, "PPSA" shall means those personal property
security laws in such other jurisdiction for the purposes of the provisions
hereof relating to such attachment, perfection or priority and for the
definitions related to such provisions.
"PRO RATA SHARE" means, with respect to a Lender's obligation to make
the Term Loan and receive payments of interest, fees, and principal with respect
thereto, and all other matters (including, without limitation, the
indemnification obligations arising under Section 10.05), the percentage
obtained by dividing (i) such Lender's Term Loan Commitment, by (ii) the Total
Term Loan Commitment, PROVIDED that if the Total Term Loan Commitment has been
reduced to zero, the numerator shall be the aggregate unpaid principal amount of
such Lender's portion of the Term Loan and the denominator shall be the
aggregate unpaid principal amount of the Term Loan.
"PROPERTY" means any interest of any kind in property or assets,
whether real, personal or mixed, and whether tangible or intangible.
"PROPRIETARY RIGHTS" has the meaning specified therefor in Section
6.01(e)(ii).
"PTO" means the United States Patent and Trademark Office or any
successor or substitute office in which filings are necessary or, in the opinion
of the Agent, desirable in order to create or perfect Liens on any Patents or
Trademarks.
"RATING AGENCIES" has the meaning specified therefor in Section 2.07.
"REAL PROPERTY ASSET" means, at any time of determination, any and all
real property owned or leased by the Loan Parties.
"REFERENCE BANK" means JPMorgan Chase Bank, its successors or any other
commercial bank designated by the Agent to the Administrative Borrower from time
to time.
"REFERENCE RATE" means the rate of interest publicly announced by the
Reference Bank in New York, New York from time to time as its reference rate,
base rate or prime rate. The reference rate, base rate or prime rate is
determined from time to time by the Reference Bank as a means of pricing some
loans to its borrowers and neither is tied to any external rate of interest or
index nor necessarily reflects the lowest rate of interest actually charged by
- 15 -
the Reference Bank to any particular class or category of customers. Each change
in the Reference Rate shall be effective from and including the date such change
is publicly announced as being effective.
"REGISTER" has the meaning specified therefor in Section 12.07(b)(ii).
"REGISTERED LOAN" has the meaning specified therefor in Section
12.07(b)(ii).
"REGISTERED PROPRIETARY RIGHTS" has the meaning specified therefor in
Section 6.01(e)(iii).
"REGULATION T", "REGULATION U" and "REGULATION X" mean, respectively,
Regulations T, U and X of the Board or any successor, as the same may be amended
or supplemented from time to time.
"RELEASE" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, seeping, migrating,
dumping or disposing of any Hazardous Material (including the abandonment or
discarding of barrels, containers and other closed receptacles containing any
Hazardous Material) into the indoor or outdoor environment, including, without
limitation, the movement of Hazardous Materials through or in the ambient air,
soil, surface or ground water, or property.
"REMEDIAL ACTION" means all actions taken to (i) clean up, remove,
remediate, contain, treat, monitor, assess, evaluate or in any other way address
Hazardous Materials in the indoor or outdoor environment; (ii) prevent or
minimize a Release or threatened Release of Hazardous Materials so they do not
migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment; (iii) perform pre-remedial studies and
investigations and post-remedial operation and maintenance activities; or (iv)
perform any other actions authorized by 42 U.S.C. ss. 9601.
"REQUIRED LENDERS" means Lenders whose Pro Rata Shares of the Term Loan
aggregate at least 51%.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of, or other equity interest in, any Loan Party now or hereafter outstanding,
except a dividend payable solely in shares of stock or other equity interests,
(ii) any redemption, retirement, sinking fund or similar payment, purchase or
other acquisition for value, direct or indirect, of any shares of any class of
stock of, or other equity interest in, any Loan Party now or hereafter
outstanding, (iii) any payment made to retire, or to obtain the surrender of,
any outstanding warrants, options or other rights to acquire shares of any class
of stock of, or other equity interest in, any Loan Party, (iv) any payment or
prepayment of principal of, premium, if any, or interest on, or redemption
purchase, retirement, defeasance (including economic or legal defeasance),
sinking fund or similar payment with respect to the Senior Subordinated Notes
and/or any intercompany Indebtedness owing by the Parent or any of its
Subsidiaries, and (v) any payment made to any Affiliates of any Loan Party in
respect of management, consulting or other similar services provided to any Loan
Party.
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"RESTRICTIVE AGREEMENTS" has the meaning specified therefor in Section
6.01(m)(ii).
"SEC" means the Securities and Exchange Commission or any other similar
or successor agency of the Federal government administering the Securities Act.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the SEC thereunder,
all as the same shall be in effect from time to time.
"SECURITIZATION" has the meaning specified therefor in Section 2.07.
"SECURITIZATION PARTIES" has the meaning specified therefor in Section
2.07.
"SENIOR SUBORDINATED NOTE DOCUMENTS" means the Senior Subordinated Note
Indenture, the Senior Subordinated Notes and all other documents, instruments
and agreements executed and delivered in connection with the Senior Subordinated
Notes.
"SENIOR SUBORDINATED NOTE INDENTURE" means the Columbus ▇▇▇▇▇▇▇▇
Corporation Series A and Series B 8 1/2% Senior Subordinated Notes Due 2008
Indenture, dated as of March 31, 1998 (as supplemented by the Supplemental
Indenture, dated as of March 31, 1998, the Second Supplemental Indenture, dated
as of February 12, 1999, the Third Supplemental Indenture, dated as of March 1,
1999, the Fourth Supplemental Indenture, dated as of November 1, 1999, the Fifth
Supplemental Indenture, dated as of April 4, 2002 and the Sixth Supplemental
Indenture, dated as of August 5, 2002), between the Parent, as issuer, and State
Street Bank and Trust Company, N.A., as trustee.
"SENIOR SUBORDINATED NOTES" means the Parent's 8 1/2% senior
subordinated notes due 2008 issued pursuant to the Senior Subordinated Note
Indenture.
"STANDARD & POOR'S" means Standard & Poor's Ratings Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. and any successor thereto.
"SUBSIDIARY" means, with respect to any Person at any date, any
corporation, limited or general partnership, limited liability company, trust,
estate, association, joint venture or other business entity (i) the accounts of
which would be consolidated with those of such Person in such Person's
consolidated financial statements if such financial statements were prepared in
accordance with GAAP or (ii) of which more than 50% of (A) the outstanding
Capital Stock having (in the absence of contingencies) ordinary voting power to
elect a majority of the board of directors or other managing body of such
Person, (B) in the case of a partnership or limited liability company, the
interest in the capital or profits of such partnership or limited liability
company or (C) in the case of a trust, estate, association, joint venture or
other entity, the beneficial interest in such trust, estate, association or
other entity business is, at the time of determination, owned or controlled
directly or indirectly through one or more intermediaries, by such Person.
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"SYNTHETIC LEASE" means, any lease of goods or other property, whether
real or personal, which is treated as an operating lease under GAAP and as a
loan or financing for U.S. income tax purposes.
"TAXES" has the meaning specified therefor in Section 2.08(a).
"TERM LOAN" means, collectively, the loans made by the Lenders to the
Borrowers on the Effective Date pursuant to Section 2.01(a).
"TERM LOAN COMMITMENT" means, with respect to each Lender, the
commitment of such Lender to make the Term Loan to the Borrowers in the amount
set forth in Schedule 1.01(A) hereto, as the same may be terminated or reduced
from time to time in accordance with the terms of this Agreement.
"TERM LOAN ACCRUED INTEREST AMOUNT" means, as at any date of
determination, the amount of all interest with respect to the Term Loan that has
been accrued and not paid currently in accordance with Section 2.04(a).
"TITLE INSURANCE POLICY" means a mortgagee's loan policy, in form and
substance satisfactory to the Agent, together with all endorsements made from
time to time thereto, issued by or on behalf of a title insurance company
satisfactory to the Agent, insuring the Lien created by a Mortgage in an amount
and on terms satisfactory to the Agent, delivered to the Agent.
"TRADEMARKS" means all trademarks (including service marks), federal
and state trademark registrations and applications made by the Loan Parties,
common law trademarks and trade names owned by or assigned to the Loan Parties,
all registrations and applications for the foregoing and all exclusive and
nonexclusive licenses from third parties of the right to use trademarks of such
third parties, including, without limitation, the registrations, applications,
unregistered trademarks, service marks and licenses listed on Schedule 6.01(e)
hereto, along with any and all (a) renewals thereof, (b) income, royalties,
damages and payments now and hereafter due and/or payable with respect thereto,
including, without limitation, damages, claims and payments for past or future
infringements thereof, (c) rights to ▇▇▇ for past, present and future
infringements thereof, and (d) foreign trademarks, trademark registrations, and
trade name applications for any thereof and any other rights corresponding
thereto throughout the world.
"TOTAL TERM LOAN COMMITMENT" means the sum of the amounts of the
Lenders' Term Loan Commitments.
"TOTAL VOTING POWER" means, with respect to any Person, the total
number of votes which holders of securities having the ordinary power to vote,
in the absence of contingencies, are entitled to cast in the election of
directors of such Person.
"UCC FILING AUTHORIZATION LETTER" means a letter duly executed by each
Loan Party authorizing the Agent to file appropriate financing statements on
Form UCC-1 and/or in a form provided for in the PPSA without the signature of
such Loan Party in such office or offices as may be necessary or, in the opinion
of the Agent, desirable to perfect the security interests purported to be
created by each Collateral Document.
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"UNIFORM COMMERCIAL CODE" has the meaning specified therefor in Section
1.03.
"US AGENT" means Regiment Capital III, L.P., in its capacity as agent
to the US Lenders.
"US BORROWERS" means the Parent and each Subsidiary of the Parent
listed as a Guarantor under the US Financing Agreement.
"US FINANCING AGREEMENT" means the Financing Agreement by and among the
US Borrowers, the US Lenders and the US Agent.
"US INTERCREDITOR AGREEMENT" means the Lien Subordination and
Intercreditor Agreement by and among the Parent, the US Agent, the US Lenders,
the Working Capital Agent and the Working Capital Lenders.
"US LENDERS" means the financial institutions from time to time party
to the US Financing Agreement.
"US LOAN DOCUMENTS" means the US Financing Agreement and any other
agreement, instrument and other document executed and delivered pursuant thereto
or otherwise evidencing or securing the US Term Loan or any other obligation
thereunder.
"US TERM LOAN" means the term loan made by the US Lenders to the US
Borrowers on the Effective Date pursuant to the US Financing Agreement in the
aggregate principal amount of $60,000,000.00.
"WITHDRAWAL LIABILITY" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
"WORKING CAPITAL AGENT" means Fleet Capital Corporation, as agent for
the Working Capital Lenders under the Working Capital Loan Agreement.
"WORKING CAPITAL AVAILABILITY" means "Domestic Excess Availability" as
such term is defined in the Working Capital Loan Agreement as such agreement is
in effect on the date hereof.
"WORKING CAPITAL BORROWING BASE" means, collectively, the "Domestic
Borrowing Base" and the "Canadian Borrowing Base" as each such term is defined
in the Working Capital Loan Agreement as such agreement is in effect on the date
hereof.
"WORKING CAPITAL INDEBTEDNESS" means, collectively, the Indebtedness of
the Parent owing to the Working Capital Agent and the Working Capital Lenders
and (ii) the Indebtedness of the Borrowers owing to the Canadian Lender (as
defined in the Working Capital Loan Agreement as in effect on the date hereof),
in each case under the Working Capital Loan Agreement.
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"WORKING CAPITAL LENDERS" means the lenders from time to time party to
the Working Capital Loan Agreement.
"WORKING CAPITAL LOAN AGREEMENT" means the amended and restated credit
and security agreement, dated as of the date hereof, by and among the Parent,
the Borrowers, the Guarantors (as such term is defined in the US Financing
Agreement), the Working Capital Lenders and the Working Capital Agent.
"WORKING CAPITAL LOAN DOCUMENTS" means, collectively, (i) the Working
Capital Loan Agreement, and (ii) all other agreements, instruments, and other
documents executed and delivered in connection therewith.
"WORKING CAPITAL LOANS" means, collectively, the (i) Working Capital
Revolving Loans and (ii) the Working Capital Term Loan.
"WORKING CAPITAL REVOLVING LOANS" means the "Revolving Loan" (as
defined in the Working Capital Loan Agreement as in effect on the date hereof).
"WORKING CAPITAL TERM LOAN" means the "Term Loan" (as defined in the
Working Capital Loan Agreement as in effect on the date hereof).
Section 1.02 TERMS GENERALLY.
The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words
"include", "includes" and "including" shall be deemed to be followed by the
phrase "without limitation". The word "will" shall be construed to have the same
meaning and effect as the word "shall". Unless the context requires otherwise,
(a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or
other document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein), (b) any reference herein to any Person shall be construed to
include such Person's successors and assigns, (c) the words "herein", "hereof"
and "hereunder", and words of similar import, shall be construed to refer to
this Agreement in its entirety and not to any particular provision hereof, (d)
all references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any right or interest in or to
assets and properties of any kind whatsoever, whether real, personal or mixed
and whether tangible or intangible. References in this Agreement to
"determination" by the Agent include good faith estimates by the Agent (in the
case of quantitative determinations) and good faith beliefs by the Agent (in the
case of qualitative determinations).
Section 1.03 ACCOUNTING AND OTHER TERMS.
Unless otherwise expressly provided herein, each accounting term used
herein shall have the meaning given it under GAAP applied on a basis consistent
with those used in preparing the Financial Statements. All terms used in this
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Agreement which are defined in Article 8 or Article 9 of the Uniform Commercial
Code as in effect from time to time in the State of New York (the "UNIFORM
COMMERCIAL CODE") and which are not otherwise defined herein shall have the same
meanings herein as set forth therein, provided that terms used herein which are
defined in the Uniform Commercial Code as in effect in the State of New York on
the date hereof shall continue to have the same meaning notwithstanding any
replacement or amendment of such statute except as the Agent may otherwise
determine.
Section 1.04 TIME REFERENCES.
Unless otherwise indicated herein, all references to time of day refer
to Eastern Standard Time or Eastern daylight saving time, as in effect in New
York City on such day. For purposes of the computation of a period of time from
a specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each means "to but excluding";
PROVIDED, HOWEVER, that with respect to a computation of fees or interest
payable to the Agent or any Lender, such period shall in any event consist of at
least one full day.
ARTICLE II
THE LOANS
Section 2.01 TERM LOAN COMMITMENTS.
(a) Subject to the terms and conditions and relying upon the
representations and warranties herein set forth, each Lender severally agrees to
make the Term Loan to the Borrowers on the Effective Date, in an aggregate
principal amount not to exceed the amount of such Lender's Term Loan Commitment.
(b) Notwithstanding the foregoing, the aggregate principal
amount of the Term Loan made on the Effective Date shall not exceed the Total
Term Loan Commitment. Any principal amount of the Term Loan which is repaid or
prepaid may not be reborrowed.
Section 2.02 MAKING THE TERM LOAN.
(a) The Administrative Borrower shall give the Agent prior
telephonic notice (immediately confirmed in writing, substantially in the form
of Exhibit D (a "NOTICE OF BORROWING")), not later than 12:00 noon (New York
City time) on the date which is one (1) Business Day prior to the Effective
Date. Such Notice of Borrowing shall be irrevocable and shall specify (i) the
aggregate principal amount of the Term Loan, (ii) the use of the proceeds of the
Term Loan, and (iii) the proposed borrowing date, which must be a Business Day.
The Agent and the Lenders may act without liability upon the basis of written,
telecopied or telephonic notice believed by the Agent in good faith to be from
the Administrative Borrower (or from any Authorized Officer thereof designated
in writing purportedly from the Administrative Borrower to the Agent). The
Borrowers hereby waive the right to dispute the Agent's record of the terms of
any such telephonic Notice of Borrowing. The Agent and each Lender shall be
entitled to rely conclusively on any Authorized Officer's authority to request
the Term Loan on behalf of the Borrowers until the Agent receives written notice
to the contrary. The Agent and the Lenders shall have no duty to verify the
authenticity of the signature appearing on any written Notice of Borrowing.
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(b) The Term Loan shall be made by the Lenders simultaneously
and proportionately to their Pro Rata Shares of the Total Term Loan Commitment,
it being understood that no Lender shall be responsible for any default by any
other Lender in that other Lender's obligations to make the Term Loan requested
hereunder, nor shall the Term Loan Commitment of any Lender be increased or
decreased as a result of the default by any other Lender in that other Lender's
obligation to make the Term Loan requested hereunder, and each Lender shall be
obligated to make the Term Loan required to be made by it by the terms of this
Agreement regardless of the failure by any other Lender.
Section 2.03 REPAYMENT OF THE TERM LOAN; EVIDENCE OF DEBT.
(a) The outstanding principal of the Term Loan, together with
any Term Loan Accrued Interest Amount (subject to Section 2.04(a)(ii)), shall be
repaid in full on the Final Maturity Date.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the Indebtedness of the Borrowers to
such Lender resulting from the Term Loan made by such Lender, including the
amounts of principal and interest payable and paid to such Lender from time to
time hereunder.
(c) The Agent shall maintain accounts in which it shall record
(i) the amount of the Term Loan made hereunder, (ii) the amount of any principal
or interest due and payable or to become due and payable from the Borrowers to
each Lender hereunder and (iii) the amount of any sum received by the Agent
hereunder for the account of the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be PRIMA FACIE evidence of the
existence and amounts of the obligations recorded therein; PROVIDED that the
failure of any Lender or the Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrowers to repay
the Term Loan in accordance with the terms of this Agreement.
(e) Any Lender may request that the Term Loan made by it be
evidenced by a promissory note. In such event, the Borrowers shall execute and
deliver to such Lender a promissory note payable to the order of such Lender
(or, if requested by such Lender, to such Lender and its registered assigns) in
a form furnished by the Agent and reasonably acceptable to the Administrative
Borrower. Thereafter, the Term Loan evidenced by such promissory note and
interest thereon shall at all times (including after assignment pursuant to
Section 12.07) be represented by one or more promissory notes in such form
payable to the order of the payee named therein (or, if such promissory note is
a registered note, to such payee and its registered assigns).
Section 2.04 INTEREST.
(a) TERM LOAN.
(i) The Term Loan shall bear interest on the
principal amount thereof from time to time outstanding, from the date of the
Term Loan until such principal amount becomes due, and on any Term Loan Accrued
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Interest Amount from time to time outstanding, at a rate per annum equal to the
sum of (A) the lesser of (1) the Base Interest Rate plus the Applicable Margin
and (2) 15.0% PLUS (B) 1.25%; PROVIDED that, in the absence of a continuing
Event of Default, that portion of such interest equal to 1.25% per annum shall,
in the absence of an election by the Borrowers to pay such interest currently,
be accrued as a Term Loan Accrued Interest Amount, PROVIDED, FURTHER, that, the
Borrowers may, on or prior to the date that is 5 Business Days prior to due date
thereof, elect to pay all accrued and unpaid interest under this Section
2.04(a)(i)(B) currently.
(ii) Notwithstanding anything to the contrary
contained in Section 2.04(a)(i), (A) in the event that the Borrowers repay in
full in cash all Obligations (other than the Term Loan Accrued Interest Amount)
under this Agreement and the other Loan Documents on or prior to the first
anniversary of the Effective Date, the Borrowers shall not be required to repay
any of the Term Loan Accrued Interest Amount and (B) in the event that the
Borrowers repay in full in cash all Obligations (other than the Term Loan
Accrued Interest Amount) under this Agreement and the other Loan Documents on or
prior to the second anniversary of the Effective Date, the Borrowers shall not
be required to repay 50% of the Term Loan Accrued Interest Amount.
(b) DEFAULT INTEREST. To the extent permitted by law, upon the
occurrence and during the continuance of an Event of Default, the principal of,
and all accrued and unpaid interest on, the Term Loan, fees, indemnities, or any
other Obligations of the Loan Parties under this Agreement and the other Loan
Documents, shall bear interest, from the date such Event of Default occurred
until the date such Event of Default is cured or waived in writing in accordance
herewith, at a rate per annum equal at all times to the Post-Default Rate.
(c) INTEREST PAYMENT. Interest on the Term Loan shall be
payable monthly, in arrears, on the first day of each month, commencing on the
first day of the month following the month in which the Term Loan is made and at
maturity (whether upon demand, by acceleration or otherwise). Interest at the
Post-Default Rate shall be payable on demand. The Borrowers hereby authorize the
Agent to, and the Agent may, from time to time, charge the Loan Account pursuant
to Section 4.02 with the amount of any interest payment due and payable
hereunder.
(d) GENERAL. All interest shall be computed on the basis of a
year of 360 days for the actual number of days, including the first day but
excluding the last day, elapsed. For purposes of disclosure pursuant to the
Interest Act (Canada), the annual rates of interest or fees to which the rates
of interest or fees provided in this Agreement or in the Loan Documents (and
stated herein or therein, as applicable, to be computed on the basis of a 360
day year or any other period of time less than a calendar year) are equivalent
are the rates so determined multiplied by the actual number.
(e) MAXIMUM RATE. All obligations hereunder in respect of
interest are subject to Section 12.19 hereof.
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Section 2.05 REDUCTION OF THE TERM LOAN COMMITMENT; PREPAYMENT OF THE
TERM LOAN.
(a) REDUCTION OF THE TERM LOAN COMMITMENT. The Total Term Loan
Commitment shall terminate at 5:00 p.m. (New York City time) on the Effective
Date.
(b) OPTIONAL PREPAYMENT. The Borrowers may, upon at least five
(5) Business Days' prior written notice to the Agent, prepay without penalty or
premium the principal of the Term Loan, in whole or in part. Each prepayment
made pursuant to this clause (b) shall be accompanied by the payment of accrued
interest to the date of such payment on the amount prepaid. Each such prepayment
shall be applied against the remaining installments of principal due on the Term
Loan in the inverse order of maturity.
(c) INTEREST AND FEES. Any prepayment made pursuant to this
Section 2.05(c) shall be accompanied by accrued interest on the principal amount
being prepaid to the date of prepayment, and if such prepayment would reduce the
outstanding principal amount of the Term Loan to zero, such prepayment shall be
accompanied by the payment of all fees accrued to such date pursuant to Section
2.06.
Section 2.06 FEES.
(a) CLOSING FEE. On or prior to the Effective Date, the
Borrowers shall pay to the Agent for the account of the Lenders, in accordance
with their Pro Rata Shares, a non-refundable closing fee (the "CLOSING FEE")
equal to $300,000.00, which shall be deemed fully earned when paid.
(b) ANNIVERSARY FEE. The Borrowers shall pay to the Agent for
the account of the Lenders, in accordance with their Pro Rata Shares, a
non-refundable anniversary fee (the "ANNIVERSARY FEE") in an amount equal to the
product of (i) Anniversary Fee Percentage MULTIPLIED BY (ii) the outstanding
principal amount of the Term Loan, which shall be deemed fully earned when paid
and which shall be payable on each anniversary of the Effective Date.
Section 2.07 SECURITIZATION.
The Loan Parties hereby acknowledge that the Lenders and their
Affiliates may sell or securitize the Term Loan (A "SECURITIZATION") through the
pledge of the Term Loan as collateral security for loans to the Lenders or their
Affiliates or through the sale of the Term Loan or the issuance of direct or
indirect interests in the Term Loan, which loans to the Lenders or their
Affiliates or direct or indirect interests will be rated by ▇▇▇▇▇'▇, Standard &
Poor's or one or more other rating agencies (the "RATING AGENCIES"). The Loan
Parties shall cooperate with the Lenders and their Affiliates to effect the
Securitization including, without limitation, by (a) amending this Agreement and
the other Loan Documents, and executing such additional documents, as reasonably
requested by the Lenders in connection with the Securitization, PROVIDED THAT
(i) any such amendment or additional documentation does not impose material
additional costs on the Loan Parties and (ii) any such amendment or additional
documentation does not materially adversely affect the rights, or materially
increase the obligations, of the Loan Parties under the Loan Documents or change
or affect in a manner adverse to the Loan Parties the financial terms of the
Term Loan, (b) providing such information as may be reasonably requested by the
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Lenders in connection with the rating of the Term Loan or the Securitization,
and (c) providing in connection with any rating of the Term Loan a certificate
(i) agreeing to indemnify the Lenders and their Affiliates, any of the Rating
Agencies, or any party providing credit support or otherwise participating in
the Securitization (collectively, the "SECURITIZATION PARTIES") for any losses,
claims, damages or liabilities (the "LIABILITIES") to which the Lenders, their
Affiliates or such Securitization Parties may become subject insofar as the
Liabilities arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Loan Document or in any
writing delivered by or on behalf of any Loan Party to the Lenders in connection
with any Loan Document or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, and such indemnity shall survive any
transfer by the Lenders or their successors or assigns of the Term Loan and (ii)
agreeing to reimburse the Lenders and their Affiliates for any legal or other
expenses reasonably incurred by such Persons in connection with defending the
Liabilities.
Section 2.08 TAXES.
(a) All payments made by any Loan Party hereunder or under any
other Loan Document shall be made without set-off, counterclaim, deduction or
other defense. All such payments shall be made free and clear of and without
deduction for any present or future income, franchise, sales, use, excise, stamp
or other taxes, levies, imposts, deductions, charges, fees, withholdings,
restrictions or conditions of any nature now or hereafter imposed, levied,
collected, withheld or assessed by any jurisdiction (whether pursuant to United
States or Canadian federal, state, provincial or local law or any foreign law)
or by any political subdivision or taxing authority thereof or therein, and all
interest, penalties or additional amounts, excluding taxes on the net income of
any Lender or the Agent imposed by the jurisdiction in which such Lender or the
Agent is organized or any political subdivision thereof or taxing authority
thereof or any jurisdiction in which such Person's principal or applicable
lending office is located or any political subdivision thereof or taxing
authority thereof (such nonexcluded taxes, levies, imposts, deductions, charges,
fees, withholdings, restrictions, conditions, interest, penalties and additional
amounts being hereinafter collectively referred to as "TAXES"). If any Loan
Party shall be required to deduct or to withhold any Taxes from or in respect of
any amount payable hereunder or under any other Loan Document,
(i) the amount so payable shall be increased so that
after making all required deductions and withholdings (including Taxes on
amounts payable pursuant to this sentence) the Lenders or the Agent, as the case
may be, receive an amount equal to the sum they would have received had no such
deduction or withholding been made,
(ii) such Loan Party shall make such deduction or
withholding,
(iii) such Loan Party shall pay the full amount
deducted or withheld to the relevant taxation authority in accordance with
applicable law, and
(iv) as promptly as possible thereafter, such Loan
Party shall send the Lenders and the Agent an official receipt (or, if an
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official receipt is not available, such other documentation as shall be
satisfactory to the Lenders or the Agent, as the case may be) evidencing payment
of the amount or amounts so deducted or withheld. In addition, each Loan Party
agrees to pay any present or future taxes, charges or similar levies which arise
from any payment made hereunder or from the execution, delivery, performance,
recordation or filing of, or otherwise with respect to, this Agreement or any
other Loan Document other than the foregoing excluded taxes (hereinafter
referred to as "OTHER TAXES").
(b) The Loan Parties hereby jointly and severally indemnify
and agree to hold the Lenders and the Agent harmless from and against Taxes or
Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by
any jurisdiction on amounts payable under this Section 2.08) paid by any Lender
or the Agent and any liability (including penalties, interest and expenses for
nonpayment, late payment or otherwise) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or legally
asserted. Such indemnification shall be paid within 10 days from the date on
which any such Lender or the Agent makes written demand therefor, which demand
shall identify in reasonable detail the nature and amount of such Taxes or Other
Taxes.
(c) If any Loan Party fails to perform any of its obligations
under this Section 2.08, the Loan Parties shall indemnify the Lenders and the
Agent for any taxes, interest or penalties that may become payable as a result
of any such failure. The obligations of the Loan Parties under this Section 2.08
shall survive the termination of this Agreement and the payment of the Term Loan
and all other amounts payable hereunder.
ARTICLE III
[INTENTIONALLY OMITTED]
ARTICLE IV
FEES, PAYMENTS AND OTHER COMPENSATION
Section 4.01 AUDIT AND COLLATERAL MONITORING FEES.
The Borrowers acknowledge that pursuant to Section 7.01(f),
representatives of the Agent and the Lenders may visit any or all of the Loan
Parties and/or conduct audits, inspections, valuations and/or field examinations
of any or all of the Loan Parties. The Borrowers agree to pay (i) $1,500 per day
per examiner plus the examiner's out-of-pocket costs and reasonable expenses
incurred in connection with all such visits, audits, inspections, valuations and
field examinations and (ii) the cost of all visits, audits, inspections,
valuations and field examinations conducted by a third party on behalf of the
Agent or the Lenders.
Section 4.02 PAYMENTS; COMPUTATIONS AND STATEMENTS.
(a) The Borrowers will make each payment under this Agreement
not later than 12:00 noon (New York City time) on the day when due, in lawful
money of the United States of America and in immediately available funds, to the
Agent's Account. All payments received by the Agent after 12:00 noon (New York
City time) on any Business Day will be credited to the Loan Account on the next
succeeding Business Day. All payments shall be made by the Borrowers without
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set-off, counterclaim, deduction or other defense to the Agent and the Lenders.
After receipt, the Agent will promptly thereafter cause to be distributed like
funds relating to the payment of principal ratably to the Lenders in accordance
with their Pro Rata Shares and like funds relating to the payment of any other
amount payable to any Lender to such Lender, in each case to be applied in
accordance with the terms of this Agreement, provided that the Agent will cause
to be distributed all interest and fees received from or for the account of the
Borrowers not less than once each month and in any event promptly after receipt
thereof. The Lenders and the Borrowers hereby authorize the Agent to, and the
Agent may, from time to time, charge the Loan Account of the Borrowers with any
amount due and payable by the Borrowers under any Loan Document. For greater
certainty, such amounts charged to the Loan Account will not constitute part of
the principal amount of the Term Loan. Each of the Lenders and the Borrowers
agree that the Agent shall have the right to make such charges whether or not
any Default or Event of Default shall have occurred and be continuing. Any
amount charged to the Loan Account of the Borrowers shall be deemed an
Obligation of the Borrowers hereunder made by the Lenders to the Borrowers,
funded by the Agent on behalf of the Lenders. The Lenders and the Borrowers
confirm that any charges which the Agent may so make to the Loan Account of the
Borrowers as herein provided will be made as an accommodation to the Borrowers
and solely at the Agent's discretion. Whenever any payment to be made under any
such Loan Document 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
extension of time shall in such case be included in the computation of interest
or fees, as the case may be. All computations of fees shall be made by the Agent
on the basis of a year of 360 days for the actual number of days (including the
first day but excluding the last day) occurring in the period for which such
fees are payable. Each determination by the Agent of an interest rate or fees
hereunder shall be conclusive and binding for all purposes in the absence of
manifest error.
(b) The Agent shall provide the Administrative Borrower,
promptly after the end of each calendar month, a summary statement (in the form
from time to time used by the Agent) of the opening and closing daily balances
in the Loan Account of the Borrowers during such month, the amounts and dates of
all payments on account of the Term Loan during such month, the amount of
interest accrued on the Term Loan during such month, and the amount and nature
of any charges to the Loan Account made during such month on account of fees,
commissions, expenses and other Obligations. All entries on any such statement
shall be presumed to be correct and, 30 days after the same is sent, shall be
final and conclusive absent manifest error.
Section 4.03 SHARING OF PAYMENTS, ETC.
If any Lender shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise) on account of any
Obligation in excess of its ratable share of payments on account of similar
obligations obtained by all the Lenders, such Lender shall forthwith purchase
from the other Lenders such participations in such similar obligations 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 such purchasing Lender, such
purchase from each Lender shall be rescinded and such Lender shall repay to the
purchasing Lender the purchase price to the extent of such recovery together
with an amount equal to such Lender's ratable share (according to the proportion
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of (i) the amount of such Lender's required repayment to (ii) the total amount
so recovered from the purchasing Lender of any interest or other amount paid by
the purchasing Lender in respect of the total amount so recovered). The
Borrowers agree that any Lender so purchasing a participation from another
Lender pursuant to this Section 4.03 may, to the fullest extent permitted by
law, exercise all of its rights (including the Lender's right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrowers in the amount of such participation.
Section 4.04 APPORTIONMENT OF PAYMENTS.
Subject to Section 2.02 hereof and to any written agreement among the
Agent and/or the Lenders:
(a) all payments of principal and interest in respect of the
Term Loan, all payments of fees (other than the fees set forth in Section 2.06
hereof and the audit and collateral monitoring fee provided for in Section 4.01)
and all other payments in respect of any other Obligations, shall be allocated
by the Agent among such of the Lenders as are entitled thereto, in proportion to
their respective Pro Rata Shares or otherwise as provided herein or, in respect
of payments not made on account of the Term Loan, as designated by the Person
making payment when the payment is made.
(b) After the occurrence and during the continuance of an
Event of Default, the Agent may, and upon the direction of the Required Lenders
shall, apply all payments in respect of any Obligations and all proceeds of the
Collateral, subject to the provisions of this Agreement, (i) FIRST, to pay the
Obligations in respect of any fees, expense reimbursements, indemnities and
other amounts then due to the Agent until paid in full; (ii) SECOND, to pay
interest due in respect of the Agent Advances until paid in full; (iii) THIRD,
to pay principal of the Agent Advances until paid in full; (iv) FOURTH, ratably
to pay the Obligations in respect of any fees and indemnities then due to the
Lenders until paid in full; (v) FIFTH, ratably to pay interest due in respect of
the Term Loan until paid in full; (vi) SIXTH, ratably to pay principal of the
Term Loan until paid in full, and (vii) SEVENTH, to the ratable payment of all
other Obligations then due and payable.
(c) In each instance, so long as no Event of Default has
occurred and is continuing, Section 4.04(b) shall not be deemed to apply to any
payment by the Borrowers specified by the Borrowers to the Agent to be for the
prepayment of all or part of the principal of the Term Loan in accordance with
the terms and conditions of Section 2.05.
(d) For purposes of Section 4.04(b), "paid in full" with
respect to interest shall include interest accrued after the commencement of any
Insolvency Proceeding irrespective of whether a claim for such interest is
allowable in such Insolvency Proceeding.
(e) In the event of a direct conflict between the priority
provisions of this Section 4.04 and other provisions contained in any other Loan
Document, it is the intention of the parties hereto that both such priority
provisions in such documents shall be read together and construed, to the
fullest extent possible, to be in concert with each other. In the event of any
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actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms
and provisions of this Section 4.04 shall control and govern.
Section 4.05 INCREASED COSTS AND REDUCED RETURN.
(a) If any Lender or the Agent shall have determined that the
adoption or implementation of, or any change in, any law, rule, treaty or
regulation, or any policy, guideline or directive of, or any change in, the
interpretation or administration thereof by, any court, central bank or other
administrative or Governmental Authority, or compliance by any Lender or the
Agent or any Person controlling any such Lender or the Agent with any directive
of, or guideline from, any central bank or other Governmental Authority or the
introduction of, or change in, any accounting principles applicable to any
Lender or the Agent or any Person controlling any such Lender or the Agent (in
each case, whether or not having the force of law), shall (i) subject any Lender
or the Agent, or any Person controlling any such Lender or the Agent to any tax,
duty or other charge with respect to this Agreement or the Term Loan made by
such Lender or the Agent, or change the basis of taxation of payments to any
Lender or the Agent or any Person controlling any such Lender or the Agent of
any amounts payable hereunder (except for taxes on the overall net income of any
Lender or the Agent or any Person controlling any such Lender or the Agent),
(ii) impose, modify or deem applicable any reserve, special deposit or similar
requirement against the Term Loan or against assets of or held by, or deposits
with or for the account of, or credit extended by, any Lender or the Agent or
any Person controlling any such Lender or the Agent or (iii) impose on any
Lender or the Agent or any Person controlling any such Lender or the Agent any
other condition regarding this Agreement or the Term Loan, and the result of any
event referred to in clauses (i), (ii) or (iii) above shall be to increase the
cost to any Lender or the Agent of making the Term Loan or agreeing to make the
Term Loan, or to reduce any amount received or receivable by any Lender or the
Agent hereunder, then, upon demand by any such Lender or the Agent, the
Borrowers shall pay to such Lender or the Agent such additional amounts as will
compensate such Lender or the Agent for such increased costs or reductions in
amount.
(b) If any Lender or the Agent shall have determined that any
Capital Guideline or the adoption or implementation of, or any change in, any
Capital Guideline by the Governmental Authority charged with the interpretation
or administration thereof, or compliance by any Lender or the Agent or any
Person controlling such Lender or the Agent with any Capital Guideline or with
any request or directive of any such Governmental Authority with respect to any
Capital Guideline, or the implementation of, or any change in, any applicable
accounting principles (in each case, whether or not having the force of law),
either (i) affects or would affect the amount of capital required or expected to
be maintained by any Lender or the Agent or any Person controlling such Lender
or the Agent, and any Lender or the Agent determines that the amount of such
capital is increased as a direct or indirect consequence of the Term Loan or any
Lender's or the Agent's or any such other controlling Person's other obligations
hereunder, or (ii) has or would have the effect of reducing the rate of return
on any Lender's or the Agent's or any such other controlling Person's capital to
a level below that which such Lender or the Agent or such controlling Person
could have achieved but for such circumstances as a consequence of the Term Loan
or any agreement to make the Term Loan, or such Lender's or the Agent's or such
other controlling Person's other obligations hereunder (in each case, taking
into consideration, such Lender's or the Agent's or such other controlling
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Person's policies with respect to capital adequacy), then, upon demand by any
Lender or the Agent, the Borrowers shall pay to such Lender or the Agent from
time to time such additional amounts as will compensate such Lender or the Agent
for such cost of maintaining such increased capital or such reduction in the
rate of return on such Lender's or the Agent's or such other controlling
Person's capital.
(c) All amounts payable under this Section 4.05 shall bear
interest from the date that is 10 days after the date of demand by any Lender or
the Agent until payment in full to such Lender or the Agent at the Reference
Rate. A certificate of such Lender or the Agent claiming compensation under this
Section 4.05, specifying the event herein above described and the nature of such
event shall be submitted by such Lender or the Agent to the Administrative
Borrower, setting forth the additional amount due and an explanation of the
calculation thereof, and such Lender's or the Agent's reasons for invoking the
provisions of this Section 4.05, and shall be final and conclusive absent
manifest error.
Section 4.06 JOINT AND SEVERAL LIABILITY OF THE BORROWERS.
(a) Notwithstanding anything in this Agreement or any other
Loan Document to the contrary, each of the Borrowers hereby accepts joint and
several liability hereunder and under the other Loan Documents in consideration
of the financial accommodations to be provided by the Agent and the Lenders
under this Agreement and the other Loan Documents, for the mutual benefit,
directly and indirectly, of each of the Borrowers and in consideration of the
undertakings of the other Borrower to accept joint and several liability for the
Obligations. Each of the Borrowers, jointly and severally, hereby irrevocably
and unconditionally accepts, not merely as a surety but also as a co-debtor,
joint and several liability with the other Borrower, with respect to the payment
and performance of all of the Obligations (including, without limitation, any
Obligations arising under this Section 4.06), it being the intention of the
parties hereto that all of the Obligations shall be the joint and several
obligations of each of the Borrowers without preferences or distinction among
them. If and to the extent that any of the Borrowers shall fail to make any
payment with respect to any of the Obligations as and when due or to perform any
of the Obligations in accordance with the terms thereof, then in each such
event, the other Borrower will make such payment with respect to, or perform,
such Obligation. Subject to the terms and conditions hereof, the Obligations of
each of the Borrowers under the provisions of this Section 4.06 constitute the
absolute and unconditional, full recourse Obligations of each of the Borrowers,
enforceable against each such Person to the full extent of its properties and
assets.
(b) The provisions of this Section 4.06 are made for the
benefit of the Agent, the Lenders and their successors and assigns, and may be
enforced by them from time to time against any or all of the Borrowers as often
as occasion therefor may arise and without requirement on the part of the Agent,
the Lenders or such successors or assigns first to marshal any of its or their
claims or to exercise any of its or their rights against any of the other
Borrowers or to exhaust any remedies available to it or them against any of the
other Borrowers or to resort to any other source or means of obtaining payment
of any of the Obligations hereunder or to elect any other remedy. The provisions
of this Section 4.06 shall remain in effect until all of the Obligations shall
have been paid in full or otherwise fully satisfied.
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(c) Each of the Borrowers hereby agrees that it will not
enforce any of its rights of contribution or subrogation against the other
Borrower with respect to any liability incurred by it hereunder or under any of
the other Loan Documents, any payments made by it to the Agent or the Lenders
with respect to any of the Obligations or any Collateral, until such time as all
of the Obligations have been paid in full in cash. Any claim which any Borrower
may have against the other Borrower with respect to any payments to the Agent or
the Lenders hereunder or under any other Loan Documents are hereby expressly
made subordinate and junior in right of payment, without limitation as to any
increases in the Obligations arising hereunder or thereunder, to the prior
payment in full in cash of the Obligations.
ARTICLE V
CONDITIONS TO THE TERM LOAN
Section 5.01 CONDITIONS PRECEDENT TO EFFECTIVENESS.
This Agreement shall become effective as of the Business Day (the
"EFFECTIVE DATE") when each of the following conditions precedent shall have
been satisfied in a manner satisfactory to the Agent:
(a) PAYMENT OF FEES, ETC. The Borrowers shall have paid on or
before the date of this Agreement all fees, costs, expenses and taxes then
payable pursuant to Section 2.06 and Section 12.04.
(b) REPRESENTATIONS AND WARRANTIES; NO EVENT OF DEFAULT. The
following statements shall be true and correct: (i) the representations and
warranties contained in ARTICLE VI and in each other Loan Document, certificate
or other writing delivered to the Agent or any Lender pursuant hereto or thereto
on or prior to the Effective Date are true and correct on and as of the
Effective Date as though made on and as of such date and (ii) no Default or
Event of Default shall have occurred and be continuing on the Effective Date or
would result from this Agreement or the other Loan Documents becoming effective
in accordance with its or their respective terms.
(c) LEGALITY. The making of the Term Loan shall not contravene
any law, rule or regulation applicable to the Agent or any Lender.
(d) DELIVERY OF DOCUMENTS. The Agent shall have received on or
before the Effective Date the following, each in form and substance satisfactory
to the Agent and, unless indicated otherwise, dated the Effective Date:
(i) a Borrower Security Agreement, duly executed by
each Loan Party;
(ii) a Debenture, duly executed by the applicable
Loan Party;
(iii) an Intellectual Property Security Agreement
executed by each Loan Party and by any Affiliate of a Loan Party holding
intellectual property rights in Canada;
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(iv) a Pledge Agreement, duly executed by each Loan
Party;
(v) evidence of the recording of the Debenture in
such office or offices as may be necessary or, in the opinion of the Agent,
desirable to perfect the Lien over the Real Property Asset purported to be
created thereby or to otherwise protect the rights of the Agent and the Lenders
thereunder;
(vi) a Title Insurance Policy with respect to each
Debenture registered against Real Property Assets, dated as of the Effective
Date;
(vii) a survey of each Mortgaged Property, in form
and substance satisfactory to the Agent, certified to the Agent and to the
issuer of the relevant Title Insurance Policy;
(viii) a copy of each letter issued by the applicable
Governmental Authority, evidencing each Mortgaged Property's compliance with all
applicable building codes, fire codes, other health and safety rules and
regulations, parking, density and height requirements and other building and
zoning laws;
(ix) appropriate registration forms under
the PPSA, each duly filed in such office or offices as may be necessary or, in
the opinion of the Agent, desirable to perfect the security interests purported
to be created by the Collateral Documents;
(x) certified copies of all PPSA registrations
recorded in the offices referred to in paragraph (ix) above, none of which,
except as otherwise agreed in writing by the Agent, shall cover any of the
Collateral and the results of searches for any tax Lien and judgment Lien filed
against such Person or its property, which results, except as otherwise agreed
to in writing by the Agent, shall not show any such Liens;
(xi) the US Intercreditor Agreement, duly executed by
the Working Capital Agent and the Working Capital Lenders, and acknowledged by
the Loan Parties;
(xii) a PPSA estoppel letter in respect of any
Permitted Liens for which PPSA registrations have been filed listing a Loan
Party as debtor;
(xiii) a copy of the resolutions of each Loan Party,
certified as of the Effective Date by an Authorized Officer thereof, authorizing
(A) the borrowings hereunder and the transactions contemplated by the Loan
Documents to which such Loan Party is or will be a party, (B) approval of share
transfers pursuant to the Pledge Agreements, and (C) the execution, delivery and
performance by such Loan Party of each Loan Document to which such Loan Party is
or will be a party and the execution and delivery of the other documents to be
delivered by such Person in connection herewith and therewith;
(xiv) a certificate of an Authorized Officer of each
Loan Party, certifying the names and true signatures of the representatives of
such Loan Party authorized to sign each Loan Document to which such Loan Party
is or will be a party and the other documents to be executed and delivered by
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such Loan Party in connection herewith and therewith, together with evidence of
the incumbency of such authorized officers;
(xv) a certificate of status or similar certificate
with respect to the jurisdiction in which each Loan Party is incorporated;
(xvi) a copy of the articles and by-laws, limited
liability company agreement, operating agreement, agreement of limited
partnership or other organizational document of each Loan Party, together with
all amendments thereto, certified as of the Effective Date by an Authorized
Officer of such Loan Party;
(xvii) an opinion from counsel to the Borrowers,
▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, in form and substance satisfactory to the Agent, as
to such matters as the Agent may reasonably request;
(xviii) a certificate of an Authorized Officer of
each Loan Party, certifying as to the matters set forth in subsection (b) of
this Section 5.01;
(xix) a certificate of a Designated Financial Officer
of each Loan Party, certifying as to the solvency of such Loan Party, which
certificate shall be satisfactory in form and substance to the Agent;
(xx) evidence of the insurance coverage required by
Section 7.01(e) and the terms of each Debenture and such other insurance
coverage with respect to the business and operations of the Loan Parties as the
Agent may reasonably request, in each case, where requested by the Agent, with
such endorsements as to the named insureds or loss payees thereunder as the
Agent may request and providing that such policy may be terminated or canceled
(by the insurer or the insured thereunder) only upon 30 days' prior written
notice to the Agent and each such named insured or loss payee, together with
evidence of the payment of all premiums due in respect thereof for such period
as the Agent may request;
(xxi) a certificate of an Authorized Officer of the
Administrative Borrower, certifying the names and true signatures of the persons
that are authorized to provide the Notice of Borrowing and all other notices
under this Agreement and the other Loan Documents;
(xxii) a Landlord's Waiver and Consent, executed by
each landlord with respect to each Material Leasehold Property, together with a
copy of the relevant Lease, and all amendments thereto, between the applicable
Loan Party and the landlord party thereto;
(xxiii) a satisfactory ASTM 1527-00 Phase I
Environmental Site Assessment ("Phase I ESA") (and, if requested by the Agent
based upon the results of such Phase I ESA, an ASTM 1527-00 Phase II
Environmental Site Assessment) of each Mortgaged Property, in form and substance
and by an independent firm satisfactory to the Agent; and
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(xxiv) such other agreements, instruments, approvals,
opinions and other documents, each satisfactory to the Agent in form and
substance, as the Agent may reasonably request.
(e) MATERIAL ADVERSE EFFECT. The Agent shall have determined,
in its sole judgment, that no event or development shall have occurred since
September 30, 2002 which could have a Material Adverse Effect.
(f) WORKING CAPITAL FINANCING. On or prior to the Effective
Date, the Agent shall have received evidence that the transactions contemplated
by the US Financing Agreement and the Working Capital Loan Agreement shall have
been consummated.
(g) APPROVALS. All consents, authorizations and approvals of,
and filings and registrations with, and all other actions in respect of, any
Governmental Authority or other Person required in connection with the making of
the Term Loan or the conduct of the Loan Parties' business shall have been
obtained and shall be in full force and effect.
(h) PROCEEDINGS; RECEIPT OF DOCUMENTS. All proceedings in
connection with the making of the Term Loan and the other transactions
contemplated by this Agreement and the other Loan Documents, and all documents
incidental hereto and thereto, shall be satisfactory to the Agent and its
counsel, and the Agent and such counsel shall have received all such information
and such counterpart originals or certified or other copies of such documents as
the Agent or such counsel may reasonably request.
(i) MANAGEMENT REFERENCE CHECKS. The Agent shall have received
satisfactory reference checks for, and shall have had an opportunity to meet
with, key management of each Loan Party.
(j) DUE DILIGENCE. The Agent shall have completed its
business, legal and collateral due diligence with respect to each Loan Party and
the results thereof shall be acceptable to the Agent, in its sole and absolute
discretion. Without limiting the foregoing, the Agent shall have received a
Field Survey and Audit, dated not earlier than 30 days prior to the Effective
Date, and such Field Survey and Audit and the results thereof shall be
acceptable to the Agent, in its sole and absolute discretion.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Section 6.01 REPRESENTATIONS AND WARRANTIES.
Each Loan Party hereby represents and warrants to the Agent and the
Lenders as follows:
(a) ORGANIZATION; POWERS. Each of the Loan Parties has been
duly formed or organized and is validly existing and in good standing under the
laws of its jurisdiction of organization or formation. Each of the Loan Parties
has all requisite power to own its property and authority to carry on its
business as now conducted and as presently contemplated, and is qualified to do
- 34 -
business in, and is in good standing and duly authorized to do business in,
every jurisdiction where such qualification is required, except where the
failure to have such power or authority or to be so qualified or in good
standing, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.
(b) AUTHORIZATION; ENFORCEABILITY. The borrowing of the Term
Loan and the grant of security interests pursuant to the Loan Documents are
within the power and authority of each of the Loan Parties, as applicable and
have been duly authorized by all necessary action on the part of the Loan
Parties, as applicable. This Agreement and the other Loan Documents have been
duly authorized, executed and delivered by the Loan Parties, as applicable, and
constitute legal, valid and binding obligations of the Loan Parties, as
applicable, enforceable in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.
(c) GOVERNMENTAL APPROVALS; NO CONFLICTS. The borrowing of the
Term Loan and the grant of the security interests pursuant to the Loan Documents
(i) do not require any consent or approval of, registration or filing with, or
any other action by, any Governmental Authority which has not been obtained,
except as disclosed on Schedule 6.01(c), (ii) will not violate any applicable
law, policy or regulation or the organizational documents of the Loan Parties or
any order of any Governmental Authority, (iii) will not violate or result in a
default under any material term of any indenture, agreement or other instrument
binding upon the Loan Parties, or any of their assets, or give rise to a right
thereunder to require any payment to be made by the Loan Parties, and (iv)
except for the Liens created by the Loan Documents, will not result in the
creation or imposition of any Lien on any asset of the Loan Parties.
(d) FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE.
(i) The Loan Parties have heretofore delivered to the
Agent and the Lenders the following financial statements:
(A) the consolidated balance sheets and
statements of operations and cash flows of the Parent and its Subsidiaries, as
of and for the Fiscal Years ended March 31, 2000, March 31, 2001, and March 31,
2002, audited and accompanied by an opinion of the Parent's independent public
accountants;
(B) the unaudited consolidated balance sheet
and statements of operations and cash flows of the Parent and its Subsidiaries,
as of and for the fiscal year-to-date period ended September 30, 2002, certified
by a Designated Financial Officer of the Parent that such financial statements
fairly present the financial condition of the Parent and its Subsidiaries as at
such date and the results of the operations of the Parent and its Subsidiaries
for the period ended on such date and that all such financial statements,
including the related schedules and notes thereto have been prepared in all
material respects in accordance with GAAP applied consistently throughout the
periods involved, except as disclosed on Schedule 6.01(d); and
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(C) the projected consolidated balance
sheets, statements of operations and cash flows, for the Parent and its
Subsidiaries for the Fiscal Years ended March 31, 2003 through March 31, 2007.
Except as disclosed on Schedule 6.01(d), such financial statements (except for
the projections) present fairly, in all material respects, the respective
consolidated financial position and results of operations and cash flows of the
respective entities as of such respective dates and for such periods in
accordance with GAAP, subject to year-end audit adjustments and the absence of
footnotes in the case of such unaudited or pro forma statements. The projections
were prepared by the Parent in good faith and were based on assumptions that
were reasonable when made.
(ii) Except as disclosed on Schedule 6.01(d), since
September 30, 2002, there has been no material adverse change in the business,
assets, operations or condition, financial or otherwise, of the Loan Parties
from that set forth in the September 30, 2002 financial statements referred to
in clause (B) of paragraph (i) above.
(iii) None of the Loan Parties have on the date
hereof any contingent liabilities, liabilities for taxes, unusual forward or
long-term commitments or unrealized or anticipated losses from any unfavorable
commitments in each case that are material, except as referred to or reflected
or provided for in the financial statements described in this Section 6.01(d) or
in Schedule 6.01(d) hereto, or as otherwise permitted pursuant to this
Agreement.
(e) PROPERTIES.
(i) Each of the Loan Parties has good and marketable
title to, or valid, subsisting and enforceable leasehold interests in, all
Property material to its business. All machinery and equipment of each of the
Loan Parties is in good operating condition and repair, and all necessary
replacements of and repairs thereto have be made so as to preserve and maintain
the value and operating efficiency of such machinery and equipment.
(ii) Set forth on Schedule 6.01(e) hereto is a
complete list of all Patents, Trademarks and Copyrights. The Loan Parties own,
or are licensed to use, all Patents, Trademarks and Copyrights and other
intellectual property material to their business (collectively, the "PROPRIETARY
RIGHTS"), and to the knowledge of the Loan Parties, the use thereof by the Loan
Parties does not infringe upon the rights of any other Person, except for any
such infringements that, individually or in the aggregate, could not reasonably
be expected to have a Material Adverse Effect.
(iii) Schedule 6.01(e) clearly identifies all
Patents, Trademarks and Copyrights that have been duly registered in, filed in
or issued by the PTO or the United States Register of Copyrights or the Canadian
Intellectual Property Office, as applicable (collectively, the "REGISTERED
PROPRIETARY RIGHTS"). The Registered Proprietary Rights have been properly
maintained and renewed in accordance with all applicable provisions of law and
administrative regulations in the United States or Canada, as applicable. The
Loan Parties have taken commercially reasonable steps to protect their
Registered Proprietary Rights and to maintain the confidentiality of all
Proprietary Rights that are not generally in the public domain.
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(iv) As of the date hereof, Schedule 6.01(e) contains
a true, accurate and complete list of (A) all Real Property Assets, whether
owned or leased, and (B) all Leases, subleases or assignments of Leases
(together with all amendments, modifications, supplements, renewals or
extensions of any thereof) affecting each Leasehold Property, regardless of
whether the Loan Parties are the landlord or tenant (whether directly or as an
assignee or successor in interest) under such Lease, sublease or assignment.
Except as specified in Schedule 6.01(e), each agreement listed in clause (B) of
the immediately preceding sentence is in full force and effect and none of the
Loan Parties has any knowledge of any default that has occurred and is
continuing thereunder, and each such agreement constitutes the legal, valid and
binding obligation of the Loan Parties, as applicable, enforceable against the
Loan Parties, as applicable, in accordance with its terms, except as enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to or limiting creditors' rights generally or by equitable
principles.
(f) LITIGATION AND ENVIRONMENTAL MATTERS.
(i) Except as set forth on Schedule 6.01(f), there
are no Environmental Actions of any kind by or before any arbitrator or
Governmental Authority pending against or, to the knowledge of the Loan Parties,
threatened against or affecting the Loan Parties that (A) if adversely
determined, could have a Material Adverse Effect or (B) relates to this
Agreement or any other Loan Document or any transaction contemplated hereby or
thereby.
(ii) The Loan Parties have taken all necessary steps
to investigate the past and present condition and usage of the Real Property
Assets and the operations conducted thereon and, based upon such diligent
investigation, have determined, except as set forth on Schedule 6.01(f), that:
(A) none of the Loan Parties or any operator
of the Real Property Assets currently or formerly owned, leased or operated by
the Loan Parties or any predecessor-in-interest or any operations thereon are in
violation or alleged violation, in any material respect, of any Environmental
Laws;
(B) None of the Loan Parties have become
subject to any Environmental Liabilities and do not know of any basis for any
Environmental Liabilities which could reasonably be expected to result in excess
of $200,000.00 individually or $4,000,000.00 in the aggregate;
(C) None of the Loan Parties have received
notice from any third party including, without limitation, any Governmental
Authority, (1) that any one of them has been identified by a Governmental
Authority as a potentially responsible party under Environmental Law; (2) that
the Loan Parties or any predecessor-in-interest has generated, transported or
disposed of any Hazardous Materials at any site at which a Governmental
Authority has conducted or has ordered a party to conduct a Remedial Action,
removal or other response action pursuant to any Environmental Law; or (3) that
the Loan Parties are or shall be a named party to any Environmental Action
arising out of any third party's incurrence of costs, expenses, losses or
- 37 -
damages of any kind whatsoever in connection with the Release of Hazardous
Materials;
(D) (1) no portion of the Real Property
Assets currently or formerly owned, leased or operated by a Loan Party has been
used for the generation, handling, processing, storage or disposal of Hazardous
Materials except in accordance in all material respects with applicable
Environmental Laws; and no underground tank or other underground storage
receptacle for Hazardous Materials is located on any portion of the Real
Property Assets currently or formerly owned, leased or operated by a Loan Party;
(2) there have been no Releases or threatened Releases of Hazardous Materials
on, upon, into or from the properties of a Loan Party, which Releases would have
a material adverse effect on the value of any of the Real Property Assets or
adjacent properties; (3) to the best knowledge of the Loan Parties, there have
been no generation, storage, disposal or Releases on, upon, from or into any
real property in the vicinity of any of the Real Property Assets which, through
soil or groundwater contamination, may have come to be located on, and which
would have a material adverse effect on the value of, any Real Property Asset;
and (4) in addition, any Hazardous Materials that have been generated on any of
the Real Property Assets currently or formerly owned, leased or operated by the
Loan Parties or any predecessor-in-interest have been transported offsite only
by carriers having an identification number issued by any Governmental
Authority, treated or disposed of, to the knowledge of the Loan Parties only by
treatment or disposal facilities maintaining valid permits as required under
applicable Environmental Laws, which transporters and facilities have been and
are, to the best knowledge of the Loan Parties operating in compliance in all
material respects with such permits and applicable Environmental Laws; and
(E) none of the Loan Parties or any of the
Real Property Assets are subject to any applicable Environmental Law requiring
the performance of Hazardous Material site assessments, or the removal or
remediation of Hazardous Materials, or the giving of notice to any Governmental
Authority or the recording or delivery to other Persons of an environmental
disclosure document or statement by virtue of the transactions set forth herein
and contemplated hereby, or as a condition to the recording of any Mortgage or
to the effectiveness of any other transactions contemplated hereby.
(iii) Since the date of this Agreement, there has
been no change in the status of the Disclosed Matters that, individually or in
the aggregate, has had, or materially increased the likelihood of having, a
Material Adverse Effect.
(g) COMPLIANCE WITH LAWS AND AGREEMENTS. Except as set forth
on Schedule 6.01(g), each of the Loan Parties is in material compliance with all
laws, decrees, judgments, licenses, rules, regulations, policies, permits,
approvals and orders of any Governmental Authority applicable to it, its
property or the operation of its business and all material terms of indentures,
agreements and other instruments binding upon it or its property.
(h) INVESTMENT AND HOLDING COMPANY STATUS. None of the Loan
Parties is (i) an "investment company", or an "affiliated company" or a
"principal underwriter" of an "investment company", as defined in, or subject to
regulation under, the Investment Company Act of 1940, as amended, (ii) a
"holding company", or a "subsidiary company" of a "holding company", or an
- 38 -
"affiliate" of a "holding company", as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935, as amended or (iii) a
"bank holding company" as defined in, or subject to regulation under, the Bank
Holding Company Act of 1956, as amended.
(i) TAXES. Except as set forth on Schedule 6.01(i), each of
the Loan Parties has timely made, filed or caused to be filed all federal,
state, provincial and local tax returns, declarations and reports required to
have been filed or made and has paid or caused to be paid all taxes, assessments
and other governmental charges required to have been paid by it, except (A) as
of the Effective Date, taxes that are being contested in good faith by
appropriate proceedings, so long as such contest operates to suspend the
enforcement of compliance therewith, the collection thereof and/or the
imposition of any penalty, fine or Lien with respect thereto, and for which the
Loan Parties have set aside on books adequate reserves with respect thereto in
accordance with GAAP, which reserves shall be acceptable to Agent and (B) after
the Effective Date, as permitted by Section 7.01(d). There are no unpaid taxes
in any material amount claimed to be due by the taxing authority of any
jurisdiction, and none of the officers of the Loan Parties know of any basis for
any such claim.
(j) ERISA; CANADIAN PLANS. Except as set forth on Schedule
6.01(j), none of the Loan Parties have any Pension Plans or Canadian Pension
Plans. No ERISA Event has occurred or is reasonably expected to occur with
respect to any Plan or Canadian Plan. None of the Loan Parties have a present
intention to terminate any Pension Plan or Canadian Pension Plans (except in
connection with the transactions described in Schedules 7.02(d)(ii) and
7.02(d)(iii)), with respect to which the Loan Parties would incur a cost of more
than $100,000 to terminate such Plan or Canadian Plans, as applicable, including
amounts required to be contributed to fund such Plan or Canadian Plan, as
applicable, upon termination thereof and all costs and expenses associated
therewith, including, without limitation, attorneys' and actuaries' fees and
expenses in connection with such termination and reasonable expenses and
settlement or judgment costs and attorneys' fees and expenses in connection with
any litigation related to such termination. There are no pending, or to the best
of the knowledge of the Loan Parties, threatened claims, actions, proceedings or
lawsuits (other than for the claims in the normal course), asserted or
instituted against (i) any Canadian Plan or Canadian Pension Plan or its assets;
(ii) any fiduciary with respect to any Canadian Plan or Canadian Pension Plan.
All Canadian Plans and Canadian Pension Plans applicable to the Loan Parties
comply, in all material respects, with the provisions of Applicable Canadian
Pension Laws. All necessary governmental approvals have been obtained in respect
of the operation of any Canadian Plan or Canadian Pension Plan or any Loan
Party.
(k) DISCLOSURE. As of the Effective Date, the Loan Parties
have disclosed to the Agent all material agreements, instruments and corporate
or other restrictions to which the Loan Parties are subject after the Effective
Date, and all other matters known to the Loan Parties, that, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.
The organizational structure of the Parent and its Subsidiaries is as set forth
on Schedule 6.01(l). The information, reports, financial statements, exhibits
and schedules furnished at or prior to the Effective Date in writing by or on
behalf of the Loan Parties to the Agent in connection with the negotiation,
preparation or delivery of this Agreement and the other Loan Documents or
included herein or therein or delivered pursuant hereto or thereto, at the
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Effective Date, when taken as a whole do not contain any untrue statement of
material fact or omit to state any material fact necessary to make the
statements herein or therein, in light of the circumstances under which they
were made, not materially misleading. All written information furnished after
the Effective Date by the Loan Parties to the Agent and/or the Lenders in
connection with this Agreement and the other Loan Documents and the transactions
contemplated hereby and thereby will be true, complete and accurate in every
material respect, or (in the case of pro forma information and projections)
prepared in good faith based on reasonable assumptions, on the date as of which
such information is stated or certified. There is no fact known to the Loan
Parties that could reasonably be expected to have a Material Adverse Effect that
has not been disclosed herein, in the other Loan Documents or in a report,
financial statement, exhibit, schedule, disclosure letter or other writing
furnished to the Agent for use in connection with the transactions contemplated
hereby or thereby.
(l) CAPITALIZATION. As of the Effective Date, the capital
structure and ownership of the Subsidiaries of the Parent are correctly
described on Schedule 6.01(l). As of the Effective Date, the authorized, issued
and outstanding Capital Stock of the Parent and each of its Subsidiaries
consists of the Capital Stock described on Schedule 6.01(l), all of which is
duly and validly issued and outstanding, fully paid and nonassessable. Except as
set forth on Schedule 6.01(l), as of the Effective Date, (x) there are no
outstanding Equity Rights with respect to the Parent or any of its Subsidiaries
and, (y) there are no outstanding obligations of the Parent or any of its
Subsidiaries to repurchase, redeem, or otherwise acquire any shares of Capital
Stock of or other interest in the Parent or any of its Subsidiaries, nor are
there any outstanding obligations of the Parent or any of its Subsidiaries to
make payments to any Person, such as "phantom stock" payments, where the amount
thereof is calculated with reference to the fair market value or equity value of
the Parent or any of its Subsidiaries.
(m) SUBSIDIARIES.
(i) Set forth on Schedule 6.01(m) is a complete and
correct list of all Subsidiaries of the Parent as of the date hereof, together
with, for each such Subsidiary, (A) the jurisdiction of organization of such
Subsidiary, (B) each Person holding ownership interests in such Subsidiary and
(C) the nature of the ownership interests held by each such Person and the
percentage of ownership of such Subsidiary represented by such ownership
interests. Except as disclosed in Schedule 6.01(m), (x) the Parent and each Loan
Party owns, free and clear of all Liens (other than Liens permitted hereunder),
and has the unencumbered right to vote, all outstanding ownership interests in
each Person shown to be held by it in Schedule 6.01(m), (y) all of the issued
and outstanding Capital Stock of each such Person organized as a corporation is
validly issued, fully paid and nonassessable and (z) there are no outstanding
Equity Rights with respect to such Person.
(ii) Except as set forth on Schedule 7.02(h), as of
the date of this Agreement, none of the Loan Parties are subject to any
indenture, agreement, instrument or other arrangement containing any provision
of the type described in Section 7.02(h) ("RESTRICTIVE AGREEMENTS"), other than
any such provision the effect of which has been unconditionally, irrevocably and
permanently waived.
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(n) INDEBTEDNESS, LIENS AND AGREEMENTS.
(i) Schedule 6.01(n) contains a complete and correct
list, as of the Effective Date, of any Indebtedness or any extension of credit
(or commitment for any extension of credit) to, or guarantee by, the Loan
Parties in an amount in excess of $100,000, and the aggregate principal or face
amount outstanding or that may become outstanding with respect thereto is
correctly described on Schedule 6.01(n).
(ii) Schedule 6.01(n) contains a complete and correct
list, as of the Effective Date, of each Lien (other than the Liens in favor of
the Agent) securing Indebtedness of any Person and covering any property of the
Loan Parties and the aggregate Indebtedness secured (or which may be secured) by
each such Lien and the Property covered by each such Lien is correctly described
in the appropriate part of Schedule 6.01(n).
(iii) Schedule 6.01(n) contains a complete and
correct list, as of the Effective Date, of each contract and arrangement to
which the Loan Parties are a party for which breach, nonperformance,
cancellation or failure to renew would have a Material Adverse Effect other than
purchase orders made in the ordinary course of business and subject to customary
terms.
(iv) To the extent requested by the Agent, true and
complete copies of each agreement listed on Schedule 6.01(n) have been delivered
to the Agent, together with all amendments, waivers and other modifications
thereto. All such agreements are valid, subsisting, in full force and effect,
are currently binding and will continue to be binding upon the Loan Parties that
is a party thereto and, to the best knowledge of the Loan Parties, binding upon
the other parties thereto in accordance with their terms. The Loan Parties are
not in default under any such agreements, the occurrence of which could have a
Material Adverse Effect.
(o) FEDERAL RESERVE REGULATIONS. None of the Loan Parties are
engaged principally or as one of its important activities in the business of
extending credit for the purpose of purchasing or carrying margin stock (as
defined in Regulation U of the Board). The making of the Term Loan hereunder,
the use of the proceeds thereof as contemplated hereby, and the security
arrangements contemplated by the Loan Documents, will not violate or be
inconsistent with any of the provisions of Regulations T, U, or X of the Board.
(p) SOLVENCY. As of the Effective Date and after giving effect
to the Term Loan hereunder and the consummation of the transactions contemplated
hereby and by the US Loan Documents and the Working Capital Loan Documents:
(i) the aggregate value of all properties of the
Parent and its Subsidiaries at their present fair saleable value on a going
concern basis (i.e., the amount that may be realized within a reasonable time,
considered to be six months to one year, either through collection or sale at
the regular market value, conceiving the latter as the amount that could be
obtained for such properties within such period by a capable and diligent
businessman from an interested buyer who is willing to purchase under ordinary
selling conditions), exceeds the amount of all the debts and liabilities
(including contingent, subordinated, unmatured and unliquidated liabilities) of
the Parent and its Subsidiaries;
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(ii) the Parent and its Subsidiaries will not, on a
consolidated basis, have an unreasonably small amount of capital with which to
conduct their business operations as heretofore conducted; and
(iii) the Parent and its Subsidiaries will have, on a
consolidated basis, sufficient cash flow to enable them to pay their debts as
they mature.
(q) FORCE MAJEURE. Since September 30, 2002, none of the
business, properties and other assets of the Parent and its Subsidiaries is
affected by any fire or other casualty, strike, lockout or other labor trouble,
embargo, sabotage, confiscation, contamination, riot, civil disturbance,
activity of armed forces or act of God that has or could reasonably be expected
to have a Material Adverse Effect.
(r) ACCOUNTS RECEIVABLE. Unless otherwise indicated to the
Agent in writing:
(i) Each Account Receivable is genuine and in all
respects what it purports to be, and it is not evidenced by a judgment;
(ii) Each Account Receivable arises out of a
completed, bona fide sale and delivery of goods or rendition of services by a
Loan Party in the ordinary course of its business and in accordance with the
terms and conditions of all purchase orders, contracts or other documents
relating thereto and forming a part of the contract between such Loan Party and
the Account Debtor, and, in the case of goods, title to the goods has passed
from the Loan Party to the Account Debtor;
(iii) Each Account Receivable is for a liquidated
amount maturing as stated in the duplicate invoice covering such sale or
rendition of services, a copy of which has been furnished or is available to the
Agent;
(iv) Each Account Receivable, and the Agent's
security interest therein, is not, and will not (by voluntary act or omission of
the Loan Parties) be in the future, subject to any offset, Lien, deduction,
defense, dispute, counterclaim or any other adverse condition except for
disputes resulting in returned goods where the amount in controversy is deemed
by the Agent to be immaterial, and each such Account Receivable is absolutely
owing to one of the Loan Parties and is not contingent in any respect or for any
reason;
(v) No Loan Party has made any agreement with any
Account Debtor for any extension, compromise, settlement or modification of any
Account Receivable or any deduction therefrom, except discounts or allowances
which are granted by the Loan Parties in the ordinary course of their businesses
for prompt payment and which are reflected in the calculation of the net amount
of each respective invoice related thereto and are reflected in the borrowing
base certificates and collateral update certificates furnished to the Agent
hereunder;
(vi) To the best knowledge of the Loan Parties, the
Account Debtor under each Account Receivable had the capacity to contract at the
time any contract or other document giving rise to an Account Receivable was
executed and such Account Debtor is not insolvent; and
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(vii) To the best knowledge of the Loan Parties,
there are no proceedings or actions which are threatened or pending against any
Account Debtor which might result in any material adverse change in such Account
Debtor's financial condition or the collectability of any Account Receivable.
(s) LABOR AND EMPLOYMENT MATTERS.
(i) Except as set forth on Schedule 6.01(s), (A) to
the knowledge of the Loan Parties, no employee of the Loan Parties is
represented by a labor union, no labor union has been certified or recognized as
a representative of any such employee, and the Loan Parties do not have any
obligation under any collective bargaining agreement or other agreement with any
labor union or any obligation to recognize or deal with any labor union, and
there are no such contracts or other agreements pertaining to or which determine
the terms or conditions of employment of any employee of the Loan Parties; (B)
to the knowledge of the Loan Parties, there are no pending or threatened
representation campaigns, elections or proceedings; (C) the Loan Parties do not
have knowledge of any strikes, slowdowns or work stoppages of any kind, or
threats thereof, and no such activities occurred during the 24-month period
preceding the Effective Date; (D) none of the Loan Parties have engaged in,
admitted committing or been held to have committed any unfair labor practice;
and (E) to the knowledge of the Loan Parties, there are no controversies or
grievances between the Loan Parties and any of their employees or
representatives thereof; in each case, which would have a Material Adverse
Effect.
(ii) Except as set forth on Schedule 6.01(s), the
Loan Parties have at all times complied in all material respects, and are in
material compliance with, all applicable laws, rules and regulations respecting
employment, wages, hours, compensation, benefits, and payment and withholding of
taxes in connection with employment.
(iii) Except as set forth on Schedule 6.01(s), to the
knowledge of the Loan Parties, the Loan Parties have at all times complied with,
and are in compliance with, all applicable laws, rules and regulations
respecting occupational health and safety, whether now existing or subsequently
amended or enacted, including, without limitation, the Occupational Safety &
Health Act of 1970, 29 U.S.C. Section 651 et seq. and the state analogies
thereto, all as amended or superseded from time to time, and any common law
doctrine relating to worker health and safety, except for noncompliance which
could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
(t) BANK ACCOUNTS. Schedule 6.01(t) lists all banks and other
financial institutions at which the Loan Parties maintain deposits and/or other
accounts as of the Effective Date, and such Schedule correctly identifies the
name and address of each depository, the name in which the account is held, a
description of the purpose of the account, and the complete account number.
(u) OBLIGATIONS AS SENIOR DEBT. The Obligations constitute
Senior Debt (as defined in the Senior Subordinated Note Indenture) and
Designated Senior Debt (as defined in the Senior Subordinated Note Indenture).
As such, all of the Obligations (and the Agent and Lenders) are entitled to the
benefits of each of the subordination and other provisions contained in the
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Senior Subordinated Note Indenture which are available in respect of Senior Debt
and Designated Senior Debt (and to the holders thereof), and each of such
subordination and other provisions is in full force and effect and enforceable
in accordance with its terms.
(v) WORKING CAPITAL LOAN DOCUMENTS. The Loan Parties have
heretofore furnished to the Agent true, complete and correct copies of each of
the Working Capital Loan Documents (including schedules, exhibits and annexes
thereto). The Working Capital Loan Documents have not been amended, supplemented
or modified, and constitute the complete understanding among the parties thereto
in respect of the matters and transactions covered thereby, except for
amendments thereto delivered to the Agent prior to the Effective Date. Each of
the Working Capital Loan Documents is in full force and effect, and the Loan
Parties are not in default under any of such documents.
(w) CERTAIN TRANSACTIONS. Except for arm's length transactions
pursuant to which the Loan Parties make payments in the ordinary course of
business upon terms no less favorable than the Loan Parties could obtain from
third parties, none of the officers, directors, or employees of the Loan Parties
are presently a party to any transaction with the Loan Parties (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Loan Parties, any corporation, partnership, trust or other
entity in which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee or partner.
(x) SEPARATE EXISTENCE.
(i) All customary formalities regarding the corporate
existence of each Loan Party have been at all times since its formation and will
continue to be observed.
(ii) Each Loan Party has at all times since its
formation accurately maintained, and will continue to accurately maintain, its
financial statements, accounting records and other organizational documents
separate from those of any Affiliate of such Loan Party and any other Person. No
Loan Party has at any time since its formation commingled, and will not
commingle, its assets with those of any of its Affiliates or any other Person.
Each Loan Party has at all times since its formation accurately maintained, and
will continue to accurately maintain its own bank accounts and separate books of
account.
(iii) Each Loan Party has at all times since its
formation paid, and will continue to pay, its own liabilities from its own
separate assets.
(iv) Each Loan Party has at all times since its
formation identified itself, and will continue to identify itself, in all
dealings with the public, under its own name and as a separate and distinct
Person. No Loan Party has at any time since its formation identified itself, or
will identify itself, as being a division or a part of any other Person other
than another Loan Party.
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(v) SCHEDULES. All of the information which is
required to be scheduled to this Agreement is set forth on the Schedules
attached hereto, is correct and accurate and does not omit to state any
information material thereto.
ARTICLE VII
COVENANTS OF THE LOAN PARTIES
Section 7.01 AFFIRMATIVE COVENANTS.
So long as any principal of or interest on the Term Loan or any other
Obligation (whether or not due) shall remain unpaid, each Loan Party covenants
and agrees with the Agent and the Lenders that:
(a) FINANCIAL STATEMENTS AND OTHER INFORMATION. The Loan
Parties acknowledge that reporting requirements have been specified to be
provided by the Parent under the terms of the US Financing Agreement. The Loan
Parties acknowledge that they are obliged to provide such information as shall
be required for the completion of such reports. The Agent agrees that it shall
receive and rely upon copies of the reports provided by the Parent under the
terms of the US Financing Agreement. In addition, the Administrative Borrower,
on its own behalf and on behalf of the Loan Parties, will furnish to the Agent
and each Lender:
(i) simultaneously with the delivery of the financial
statements of the Parent to the Agent under the US Financing Agreement, a
certificate of a Designated Financial Officer of the Administrative Borrower, in
form and in substance satisfactory to the Agent (such certificate, the
"COMPLIANCE CERTIFICATE") stating that such Designated Financial Officer has
reviewed the provisions of this Financing Agreement and the other Loan Documents
and he/she has made or has caused to be made under his or her supervision a
review of the condition and operations of the Loan Parties during the period
covered by such financial statements with a view to determining whether the Loan
Parties were in compliance with all of the provisions of this Financing
Agreement and the Loan Documents at the times such compliance is required hereby
and thereby, and that such review has not disclosed, and such Designated
Financial Officer has no knowledge of, the existence during such period of an
Event of Default or Default or, if an Event of Default or Default existed,
describing the nature and period of existence thereof and the action which the
Loan Parties propose to take or have taken with respect thereto;
(ii) as soon as available and in any event no later
than 1:00 p.m. (New York City time) on Wednesday of each week (or, if such day
is not a Business Day, on the preceding Business Day) (or with such greater
frequency as the Agent may reasonably request), a borrowing base certificate in
the form delivered to the Working Capital Agent, with respect to the Collateral
of each of the Loan Parties as of the close of business on the previous Friday
(or, if such day is not a Business Day, on the preceding Business Day) (PROVIDED
that Inventory and total Eligible Accounts (as defined in the Working Capital
Loan Agreement) may be calculated as of the close of business on the last
Business Day of the previous month), together with such other information
relating to the Collateral as the Agent shall reasonably request, and
accompanied by such supporting detail and documentation as the Agent shall
reasonably request;
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(iii) as soon as available and in any event within 30
days after the end of each month with respect to such month (or more frequently
if requested by the Agent), (A) a collateral update certificate in the form
delivered to the Working Capital Agent, (B) an accounts receivable/loan
reconciliation report in the form delivered to the Working Capital Agent, (C) a
summary of Inventory by type and location, (D) an accounts receivable aging
report (which report shall contain amounts denominated in Dollars), and (E) such
other information relating to the Collateral as the Agent shall reasonably
request, in each case, accompanied by such supporting detail and documentation
as the Agent shall reasonably request;
(iv) as soon as available and in any event no later
than 45 days after the last Business Day of each calendar quarter, a term loan
borrowing base certificate in the form delivered to the Working Capital Agent,
together with an updated list of eligible fixed assets and such other
information relating to the term loan borrowing base collateral under the
Working Capital Loan Agreement as the Agent shall reasonably request, and
accompanied by such supporting detail and documentation as the Agent shall
reasonably request;
(v) as soon as available and in any event within 10
days after the end of each month (or more frequently if requested by the Agent),
a rolling 13 week cash flow projection, of the Parent and its Subsidiaries in a
form and in such details as is reasonably satisfactory to the Agent, updating
the prior cash flow projection and, for prior periods ending up to one week
prior to the date of the report, showing actual performance and any variances of
actual performance from projected performance;
(vi) promptly upon receipt thereof, copies of all
management letters and accountants' letters received by the Loan Parties;
(vii) promptly after submission to any Governmental
Authority, all documents and information furnished to such Governmental
Authority in connection with any investigation of any Loan Party other than
routine inquiries by such Governmental Authority;
(viii) as soon as possible and in any event within 5
days after execution, receipt or delivery thereof, copies of any material
notices that any Loan Party executes or receives in connection with any Material
Indebtedness (including, without limitation, the Senior Subordinated Notes and
the Working Capital Indebtedness);
(ix) as soon as possible and in any event within 5
days after execution, receipt or delivery thereof, copies of any material
notices that any Loan Party executes or receives in connection with the sale or
other Disposition of the Capital Stock of, or all or substantially all of the
assets of, any Loan Party;
(x) promptly after the sending or filing thereof,
copies of all statements, reports and other information any Loan Party sends to
any holders of its Indebtedness or its securities or files with the SEC or any
Canadian or other national (domestic or foreign) securities exchange;
(xi) promptly following any request therefor, such
other information regarding the operations, business affairs and financial
condition of the Loan Parties, or compliance with the terms of this Agreement,
as the Agent or any Lender may reasonably request.
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(b) NOTICES OF MATERIAL EVENTS. The Loan Parties will furnish
to the Agent and each Lender prompt written notice of the following:
(i) the occurrence of any Default hereunder or any
default or event of default under any Working Capital Loan Document;
(ii) the filing or commencement of any action, suit
or proceeding by or before any arbitrator or Governmental Authority against or
affecting any Loan Party or Affiliate (A) with respect to any claim in excess of
$100,000 or (B) that, if adversely determined, could reasonably be expected to
have a Material Adverse Effect;
(iii) the occurrence of any ERISA Event related to a
Plan or any similar event related to any Canadian Plan of any Loan Party or
knowledge after due inquiry of any ERISA Event related to a Plan or any similar
event related to any Canadian Plan of any other ERISA Affiliate that, alone or
together with any other ERISA Events that have occurred, could reasonably be
expected to result in liability of the Loan Parties in an aggregate amount
exceeding $100,000;
(iv) any other development that has, or could
reasonably be expected to have, a Material Adverse Effect.
Each notice delivered under this Section 7.01(b) shall be accompanied by a
statement of a Designated Financial Officer of the Administrative Borrower
setting forth the details of the event or development requiring such notice and
any action taken or proposed to be taken with respect thereto.
(c) EXISTENCE; CONDUCT OF BUSINESS. Each Loan Party shall do
or cause to be done all things necessary to preserve, renew and keep in full
force and effect its legal existence and the rights, licenses, permits,
privileges and franchises material to the conduct of its business; PROVIDED that
the foregoing shall not prohibit any merger, consolidation, liquidation,
dissolution or any discontinuance or sale of such business permitted under
Section 7.02(d).
(d) PAYMENT OF OBLIGATIONS. Each Loan Party shall pay its
obligations (including Tax liabilities) in an amount in excess of $100,000,
before the same shall become delinquent or in default, except where (i) the
validity or amount thereof is being contested in good faith by appropriate
proceedings, so long as such contest operates to suspend the enforcement of
compliance therewith, the collection thereof and/or the imposition of any
penalty, fine or Lien with respect thereto, (ii) such Person has set aside on
its books adequate reserves with respect thereto in accordance with GAAP, which
reserves shall be acceptable to Agent.
(e) MAINTENANCE OF PROPERTIES; INSURANCE. Each Loan Party
shall (i) keep and maintain all property material to the conduct of its business
in good working order and condition, ordinary wear and tear excepted, and (ii)
maintain insurance, with financially sound and reputable insurance companies, as
may be required by law and such other insurance in such amounts and against such
risks as are customarily maintained by companies engaged in the same or similar
- 47 -
businesses operating in the same or similar locations, including, without
limitation, business interruption and product liability insurance. Such
insurance shall be in such minimum amounts that such Person will not be deemed a
co-insurer under applicable insurance laws, regulations and policies and
otherwise shall be in such amounts, contain such terms, be in such forms and be
for such periods as may be reasonably satisfactory to the Agent. Without
limiting the generality of the foregoing, Each Loan Party will maintain or cause
to be maintained replacement value casualty insurance on the Collateral under
such policies of insurance, in each case with such insurance companies, in such
amounts, with such deductibles, and covering such terms and risks as are at all
times satisfactory to the Agent in its commercially reasonable judgment. All
general liability and other liability policies with respect to the Loan Parties
shall name the Agent for the benefit of the Lenders as an additional insured
thereunder as its interests may appear, and all business interruption and
casualty insurance policy shall contain a loss payable clause or endorsement,
satisfactory in form and substance to the Agent, that names the Agent for the
benefit of the Lenders as the loss payee thereunder. All policies of insurance
shall provide for at least 30 days prior written notice to the Agent of any
modifications or cancellation of such policy.
(f) BOOKS AND RECORDS; INSPECTION RIGHTS. Each Loan Party
shall keep proper books of record and account in which entries are made of all
dealings and transactions in relation to its business and activities which
fairly record such transactions and activities. Each Loan Party shall permit any
representatives designated by the Agent or any Lender to visit and inspect its
properties, to examine and make extracts from its books and records, to conduct
audits, physical counts, valuations, appraisals or examinations (whether by
internal commercial finance examiners or independent auditors) of all Collateral
and the Loan Parties, and to discuss its affairs, finances and condition with
its officers and independent accountants at any reasonable times and as
frequently as the Agent deems appropriate provided that, so long as no Default
has occurred and is continuing, (i) all such visits shall be on reasonable prior
notice, at reasonable times during regular business hours, and (ii) the Agent
and the Lenders shall not conduct any such audit, valuation or appraisal, in
each case, more than once each year. The Loan Parties shall, in accordance with
Section 4.01, reimburse the Agent and the Lenders for all costs incurred in
connection with such audits, physical counts, valuations, appraisals or
examinations. Each of the Loan Parties authorizes the Agent and, if accompanied
by the Agent, the Lenders to communicate directly with such Loan Party's
independent certified public accountants and authorizes such accountants to
disclose to the Agent and the Lenders any and all financial statements and other
supporting financial documents and schedules including copies of any management
letters with respect to the business, financial condition and other affairs of
the Loan Parties. At the request of the Agent, each Loan Party shall deliver a
letter addressed to such accountants instructing them to comply with the
provisions of this Section 7.01(f). The Loan Parties, in consultation with the
Agent, will arrange for a meeting to be held at least once every year (and after
the occurrence and during the continuance of a Default, more frequently, if
requested by the Agent or the Required Lenders) with the Lenders and the Agent
hereunder at which the business and operations of the Loan Parties are
discussed. The Loan Parties will permit environmental consultants selected by
the Agent to visit the properties of the Loan Parties and perform examinations
of the Real Property Assets of the Loan Parties at such times and with such
frequencies as the Agent or any Lender shall reasonably request; PROVIDED that,
so long as no Default has occurred and is continuing, the Agent and the Lenders
shall not request that the Real Property Assets of the Loan Parties be examined
- 48 -
by environmental consultants more frequently than once every year commencing on
the first anniversary of the Effective Date. The Loan Parties shall reimburse
the Agent and the Lenders for all fees, costs and expenses charged by such
environmental consultants for each such examination.
(g) FISCAL YEAR. Each Loan Party shall maintain their current
Fiscal Year and current method of determining the last day of the first three
fiscal quarters in each Fiscal Year.
(h) COMPLIANCE WITH LAWS. Each Loan Party shall comply in all
material respects with (i) all permits, licenses and authorizations, including,
without limitation, environmental permits, licenses and authorizations, issued
by a Governmental Authority, (ii) all laws, rules, regulations and orders
including, without limitation, Environmental Laws, of any Governmental Authority
and (iii) all contractual obligations, in each case applicable to it or its
property.
(i) USE OF PROCEEDS. The proceeds of the Term Loan will be
used only for (i) fees and expenses incurred in connection with the transactions
contemplated by this Agreement, the US Financing Agreement and the Working
Capital Loan Agreement, and (ii) for general corporate and working capital
purposes of the Loan Parties. No part of the proceeds of the Term Loan will be
used, whether directly or indirectly, for any purpose that entails a violation
of any of the Regulations of the Board, including Regulations T, U and X.
(j) ERISA. The Loan Parties (i) will maintain, and cause each
ERISA Affiliate to maintain, each Plan or Canadian Plan, as applicable, in
material compliance with the provisions of such Plan or Canadian Plan, as
applicable, and all applicable requirements of ERISA and of the Internal Revenue
Code or of Applicable Canadian Pension Laws, as applicable, and with all
applicable rulings and regulations issued under the provisions of ERISA and of
the Internal Revenue Code or of Applicable Canadian Pension Laws, as applicable,
and (ii) will not and, to the extent authorized, will not permit any of the
ERISA Affiliates to (A) engage in any transaction with respect to any Plan or
Canadian Plan, as applicable, which would subject any Loan Party to either a
civil penalty assessed pursuant to Section 502(i) of ERISA or a tax imposed by
Section 4975 of the Internal Revenue Code or Canadian Plan, as applicable, (B)
fail to make full payment when due of all amounts which, under the provisions of
any Plan or Canadian Plan, as applicable,, any Loan Party or any ERISA Affiliate
is required to pay as contributions thereto, or permit to exist any accumulated
funding deficiency (as such term is defined in Section 302 of ERISA and Section
412 of the Internal Revenue Code), whether or not waived, with respect to any
Pension Plan or Canadian Pension Plan, as applicable, or (C) fail to make any
payments to any Multiemployer Plan that any Loan Party or any of the ERISA
Affiliates may be required to make under any agreement relating to such
Multiemployer Plan or any law pertaining thereto.
(k) ENVIRONMENTAL MATTERS; REPORTING AND ASSESSMENTS. (i) The
Loan Parties will observe and comply in all material respects with all
Environmental Laws and all permits and authorizations issued by any Governmental
Authority under Governmental Law (collectively, "ENVIRONMENTAL PERMITS"). The
Loan Parties will give the Agent prompt written notice of (A) any presence,
Release or threat of Release of any Hazardous Materials at or from any Real
Property Asset, (B) any actual or alleged violation as to any Environmental Law
- 49 -
or Environmental Permit by any Loan Party, (C) the commencement of any
Environmental Action or Remedial Action or other communication to it or of which
it has knowledge, or with the exercise of due diligence, should have had
knowledge regarding the presence or suspected presence of any Hazardous Material
at, on about, under, within or in connection with any Real Property Asset or any
migration thereof from or to such Real Property Asset, (D) the discovery of any
occurrence or condition on any real property adjoining or in the vicinity of any
Real Property Asset that could cause such Real Property Asset or any part
thereof to be subject to any restrictions on ownership, occupancy,
transferability, or use, or subject the owner or any Person having any interest
in such Real Property Asset to any liability, penalty, or disability under any
Environmental Law, and (E) the receipt of any notice or discovery of any
information regarding any actual, alleged, or potential Release, disposal or any
other presence or existence of any Hazardous Material at, on, about, under,
within, near or in connection with any Real Property Asset; in each case, which
(x) would have a material adverse effect on any Environmental Permits held by
any Loan Party, (y) will, or is likely to, have a Material Adverse Effect, or
(z) will require a material expenditure by such Loan Party to cure such alleged
problem or violation.
(ii) The Agent may, from time to time, in its
reasonable discretion, obtain one or more environmental assessments or audits of
any Real Property Asset prepared by a hydrogeologist, an independent engineer or
other qualified consultant or expert approved by the Agent to evaluate or
confirm (A) whether any Hazardous Materials are present in the soil, sediment,
air or water at such Real Property Asset and (B) whether the use and operation
of such Real Property Asset complies with all Environmental Laws; PROVIDED that,
so long as no Default has occurred and is continuing, the Agent shall not
request any such environmental assessments or audits of any Real Property Asset
more frequently than once every other year. Environmental assessments may
include, without limitation, detailed visual inspections of such Real Property
Asset, including any and all storage areas, storage tanks, drains, dry ▇▇▇▇▇ and
leaching areas, and the taking of soil samples, surface water samples and ground
water samples, as well as such other investigations or analyses as the Agent
deems appropriate. All such environmental assessments shall be conducted and
made at the sole expense of the Borrower.
(l) MATTERS RELATING TO ADDITIONAL REAL PROPERTY COLLATERAL.
(i) In the event that any Loan Party acquires any
Material Owned Property after the Effective Date that the Agent determines is an
Additional Mortgaged Property or in the event that the Agent determines that any
Real Property Asset existing on the Effective Date has become an Additional
Mortgaged Property after the Effective Date, the Administrative Borrower shall
deliver to the Agent, as soon as practicable after the Agent has notified the
Administrative Borrower that such Real Property Asset is an Additional Mortgaged
Property, fully executed Debentures ("ADDITIONAL MORTGAGES"), in proper form for
recording in all appropriate places in all applicable jurisdictions, encumbering
the interest of the applicable Loan Party in such Additional Mortgaged Property,
together with Title Insurance Policies or commitments therefor, and copies of
all surveys, deeds, title exception documents, flood hazard certificates and
other documents as the Agent may reasonably require, together with copies of all
deeds with respect to such Additional Mortgaged Property.
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(ii) In the event that any Loan Party enters into any
Lease with respect to any Material Leasehold Property after the Effective Date,
the Administrative Borrower shall deliver to the Agent copies of the Lease, and
all amendments thereto, between the Loan Party and the landlord or tenant,
together with a Landlord's Waiver and Consent with respect thereto and where
required by the terms of any such Lease, the consent of the mortgagee, ground
lessor or other party.
(iii) If requested by the Agent, the Loan Parties
shall permit an independent real estate appraiser satisfactory to the Agent,
upon reasonable notice, to visit and inspect any Additional Mortgaged Property
for the purpose of preparing an appraisal of such Additional Mortgaged Property
satisfying the requirements of all applicable laws and regulations (in each case
to the extent required under such laws and regulations as determined by the
Agent in its sole discretion).
(m) CASH DEPOSITS/BANK ACCOUNTS. The Loan Parties shall take
all actions necessary to maintain, preserve and protect the rights and interests
of the Agent with respect to all cash deposits of the Loan Parties and all other
proceeds of Collateral and shall not, without the Agent's prior written consent,
open any deposit or other bank account, or instruct any Account Debtor to make
payment to any account other than to an established dominion account, lockbox
account or other controlled account under the Working Capital Agent's control;
PROVIDED that so long as no Default or Event of Default shall have occurred and
be continuing, the Loan Parties shall be permitted to maintain (i) payroll
accounts and other accounts not subject to the Working Capital Agent's control
so long as the aggregate amount of funds on deposit in all such payroll accounts
does not materially exceed estimated payroll for the next payroll period, and
(ii) local bank accounts not subject to the Working Capital Agent's control so
long as (x) the aggregate amount of funds on deposit in all such local bank
accounts does not exceed $500,000, and (y) the aggregate amount of funds on
deposit in any such local bank account does not exceed $50,000.
(n) NEW GUARANTORS. The Loan Parties will cause each
Subsidiary created, acquired or otherwise existing on or after the Effective
Date to immediately become a Guarantor and a Loan Party hereunder and shall
execute and deliver, and cause such Subsidiary to execute and deliver, to the
Agent, for the benefit of the Agent and the Lenders, all such Loan Documents and
other documents, and take all such actions, and cause such Subsidiary to take
all such actions, as may be required by the Agent in connection therewith.
(o) PUNCTUAL PAYMENT. The Loan Parties will duly and
punctually pay or cause to be paid the principal and interest on the Term Loan,
all fees and expenses, and all other Obligations under this Agreement and the
other Loan Documents to which any Loan Party is a party, all in accordance with
the terms of this Agreement and such other Loan Documents.
(p) CHANGE IN COLLATERAL; COLLATERAL RECORDS. The Loan Parties
will (i) give the Agent not less than 30 days' prior written notice of any
change in the location of any Collateral, other than to locations set forth on
Schedule 7.01(p) and with respect to which the Agent has filed financing
statements and otherwise fully perfected its Liens thereon, (ii) advise the
Agent promptly, in sufficient detail, of any material adverse change relating to
the type, quantity or quality of the Collateral or the Lien granted thereon and
(iii) as soon as reasonably possible but in any event, not later than seven
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Business Days following the Agent's request, or if the Agent shall reasonably
determine that exigent circumstances exist, such earlier date as the Agent shall
specify, execute and deliver to the Agent for the benefit of the Lenders from
time to time, solely for the Agent's convenience in maintaining a record of
Collateral, such written statements and schedules as the Agent may reasonably
require, designating, identifying or describing the Collateral.
(q) CANADIAN PENSION PLANS. Each Loan Party shall make all
contributions required to be made by it under any Canadian Pension Plan or
Canadian Plan and immediately give notice to the Agent of any material change
to, or default under, any such Canadian Pension Plan or Canadian Plan or
Applicable Canadian Pension Laws or of any action or proceeding commenced or
threatened in respect of such Canadian Pension Plan or Canadian Plan under
Applicable Canadian Pension Laws, whether by a Canadian Pension Regulator, or
otherwise.
(r) FURTHER ASSURANCES. The Loan Parties will take such action
and execute, acknowledge and deliver, at their sole cost and expense, such
agreements, instruments or other documents as the Agent may require from time to
time in order (i) to carry out more effectively the purposes of this Agreement
and the other Loan Documents, (ii) to subject to valid and perfected Liens any
of the Collateral or any other property of any Loan Party, (iii) to establish
and maintain the validity and effectiveness of any of the Loan Documents and the
validity, perfection and priority of the Liens intended to be created thereby,
and (iv) to better assure, convey, grant, assign, transfer and confirm unto the
Agent and each Lender the rights now or hereafter intended to be granted to it
under this Agreement or any other Loan Document.
(s) MOTOR VEHICLE COLLATERAL. The Loan Parties will, within 90
days of the Effective Date, take such actions as may be necessary to cause the
Agent's Lien on each titled motor vehicle (the fair market value of which is
greater than $5,000) of the Loan Parties to be noted on all certificates of
title with respect to such vehicle, including, without limitation, filing
applications for new certificates of title with respect thereto.
Section 7.02 NEGATIVE COVENANTS.
So long as any principal of or interest on the Term Loan or any other
Obligation (whether or not due) shall remain unpaid, each Loan Party covenants
and agrees with the Agent and the Lenders that:
(a) INDEBTEDNESS. The Loan Parties will not create, incur,
assume or permit to exist any Indebtedness, except:
(i) Indebtedness created hereunder and under the US
Financing Agreement;
(ii) Existing Indebtedness on the Effective Date
which is set forth in Schedule 7.02(a) and has been designated on such schedule
as Indebtedness that will remain outstanding following the funding of the Term
Loan, and any extension, renewal, refunding or replacement of any such
Indebtedness; PROVIDED, HOWEVER, that (A) such extension, renewal, refunding or
replacement is pursuant to terms that are not less favorable to the Loan Parties
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and the Lenders than the terms of the Indebtedness being extended, renewed,
refunded or replaced and (B) after giving effect to such extension, renewal,
refunding or replacement, the amount of such Indebtedness is not greater than
the amount of Indebtedness outstanding immediately prior to such extension,
renewal, refunding or replacement;
(iii) Intercompany loans among the Parent and its
Subsidiaries which are Guarantors (as such term is defined under the US
Financing Agreement); PROVIDED, that (A) the Investment corresponding to such
Indebtedness is permitted pursuant Section 7.02(e) hereof, (B) such intercompany
loan is evidenced by a promissory note, (C) such promissory note is pledged to
the Working Capital Agent and the Agent, and (D) there are no restrictions
whatsoever on the ability of the applicable Loan Party to repay such loan;
(iv) Guaranties permitted under Section 7.02(c); and
(v) Working Capital Indebtedness of the Loan Parties
in an aggregate principal amount not to exceed at any time the lesser of (A)
$7,000,000 and (B) 100% of the Canadian Borrowing Base (as defined in the
Working Capital Loan Agreement as in effect on the date hereof), provided, that
Working Capital Indebtedness other than in respect of the Canadian Letter of
Credit (as defined in the Working Capital Loan Agreement as in effect on the
date hereof) shall not exceed at any time outstanding the sum of (x) the lesser
of (I) $7,000,000 and (II) 100% of the Canadian Borrowing Base (as defined in
the Working Capital Loan Agreement as in effect on the date hereof) and (y) the
outstanding principal amount of the term loan under the Working Capital Loan
Agreement as reduced from time to time by the scheduled principal payments and
prepayments of such term loan as set forth in the Working Capital Loan Agreement
as in effect on the date hereof, PROVIDED, FURTHER, that the Working Capital
Agent, the Working Capital Lenders and the Loan Parties shall have executed and
delivered to the Agent the US Intercreditor Agreement; and the extension of
maturity, replacement, refinancing or modification of the terms thereof,
provided that such extension, replacement, refinancing or modification (x) is
pursuant to terms that are not less favorable to the Loan Parties and the
Lenders than the terms of the Working Capital Indebtedness being so extended,
replaced, refinanced or modified, and (y) is subject to the US Intercreditor
Agreement or a similar intercreditor agreement, in form and substance
satisfactory to the Agent and the Lenders, having substantially the same terms
and conditions as the US Intercreditor Agreement.
(b) LIENS. The Loan Parties will not create, incur, assume or
permit to exist any Lien on any Property or asset now owned or hereafter
acquired by it, file or suffer to exist under the Uniform Commercial Code, PPSA
or any similar law or statute of any jurisdiction, a financing statement (or the
equivalent thereof) that names any Loan Party as debtor, to sign or suffer to
exist any security agreement authorizing any secured party thereunder to file
such financing statement (or the equivalent thereof), or assign or sell any
income or revenues (including Accounts Receivable) or rights in respect of any
thereof, except (the following being called "PERMITTED LIENS"):
(i) Liens created under the Loan Documents and the US
Loan Documents;
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(ii) any Lien on any property or asset of any Loan
Party existing on the Effective Date and set forth in Schedule 7.02(b)
(excluding, however, following the making of the Term Loan hereunder, the Liens
in favor of any Person other than the Agent securing Indebtedness not designated
on said schedule as Indebtedness to remain outstanding following the funding of
the Term Loan), but not the extension of coverage thereof to other property or
the extension of maturity, refinancing or other modification of the terms
thereof or the increase of the Indebtedness secured thereby;
(iii) Liens imposed by any Governmental Authority for
Taxes, assessments or charges in respect of obligations not yet delinquent or in
the case of Taxes and assessments on Properties other than Mortgaged Properties
not exceeding $250,000 in the aggregate more than 90 days overdue which are
being contested in good faith and by appropriate proceedings, so long as such
contest operates to suspend the enforcement of compliance with and/or collection
thereof, and so long as adequate reserves with respect thereto are maintained on
the books of the applicable Loan Party in accordance with GAAP and which
reserves shall be acceptable to the Agent;
(iv) landlords', carriers', warehousemen's,
mechanics', materialmen's, repairmen's or other like Liens on Properties other
than Mortgaged Properties, and vendors' Liens imposed by statute or common law
not securing the repayment of Indebtedness, arising in the ordinary course of
business which are not overdue for a period of more than 60 days or which are
being contested in good faith and by appropriate proceedings promptly initiated
and diligently conducted, and a reserve or other appropriate provision, if any,
as shall be required by GAAP shall have been made therefor, and so long as such
contest operates to suspend the enforcement of compliance with and/or collection
thereof, and Liens securing judgments (including, without limitation,
pre-judgment attachments) the existence of which do not result in an Event of
Default;
(v) pledges or deposits under worker's compensation,
unemployment insurance and other social security legislation and pledges or
deposits to secure the performance of bids, tenders, trade contracts (other than
for borrowed money), leases (other than capital leases), utility purchase
obligations, statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature incurred in the ordinary course of
business;
(vi) encumbrances on any Real Property Asset other
than a Mortgaged Property consisting of easements, rights-of-way, zoning
restrictions, easements, licenses, restrictions and other similar encumbrances
incurred in the ordinary course of business, restrictions on the use of Property
or minor imperfections in title thereto which, in the aggregate, are not
material in amount, and which do not, in the aggregate, materially detract from
the value of such Real Property Asset or materially interfere with the ordinary
conduct of the business of any Loan Party;
(vii) Liens consisting of bankers' liens and rights
of setoff, in each case, arising by operation of law, and Liens on documents
presented in letter of credit drawings;
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(viii) the replacement, extension or renewal of any
Lien permitted by clauses (ii) and (vii) of this Section 7.02(b) upon or in the
same property theretofore subject thereto in connection with the replacement,
extension or renewal (without increase in the amount or any change in any direct
or contingent obligor) of the Indebtedness secured thereby; and
(ix) the Liens granted under the Working Capital Loan
Documents to secure the Working Capital Indebtedness permitted pursuant to
Section 7.02(a)(v), provided that, the Working Capital Agent, the Working
Capital Lenders and the Loan Parties shall have executed and delivered to the
Agent the US Intercreditor Agreement.
(c) CONTINGENT LIABILITIES. The Loan Parties will not
guarantee the Indebtedness or other obligations of any Person, or guarantee the
payment of dividends or other distributions upon the stock of, or the earnings
of, any Person, except:
(i) endorsements of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of
business;
(ii) guarantees and letters of credit in effect on
the date hereof which are disclosed in Schedule 7.02(a), and any replacements
thereof in amounts not exceeding such guarantees;
(iii) obligations in respect of letters of credit
issued under the Working Capital Loan Agreement; and
(iv) guarantees issued pursuant to this Agreement and
the Working Capital Loan Agreement.
(d) FUNDAMENTAL CHANGES; ASSET SALES.
(i) The Loan Parties will not enter into any
transaction of merger or consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution), except that any Loan
Party may, so long as no Default or Event of Default shall have occurred or be
continuing or result therefrom, be merged or combined with or into the Parent or
any other Loan Party, PROVIDED that if such merger involves the Parent or a
Guarantor (as such term is defined under the US Financing Agreement), (x) the
Parent or a Guarantor (as such term is defined under the US Financing Agreement)
shall be the surviving entity and (y) no Change of Control (as such term is
defined under the US Financing Agreement) shall result therefrom. The Loan
Parties will not form any Subsidiary without the prior written consent of the
Agent. The Loan Parties will not acquire any business or property from, or
Capital Stock of, or other equity interests in, or be a party to any acquisition
of, any Person except for purchases of property to be used in the ordinary
course of business, Investments permitted under Section 7.02(e) and Capital
Expenditures.
(ii) The Loan Parties will not convey, sell, lease,
transfer or otherwise dispose (including any Disposition) of, in one transaction
or a series of transactions, any part of their business or property, whether now
owned or hereafter acquired (including, without limitation, receivables and
leasehold interests), except:
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(A) obsolete property (including leasehold
interests), tools or equipment no longer used or useful in their business, or
worn out or in need of replacement and that are replaced with assets of
reasonably equivalent value or utility or which are otherwise productive or
useful in the conduct of such Loan Party's business;
(B) any Inventory or other property sold or
disposed of in the ordinary course of business and on ordinary business terms;
(C) sales of property from a Loan Party to
another Loan Party permitted pursuant to Section 7.02(g); or
(D) sales of a Loan Party permitted under
sections 7.02(d)(ii)(D) and (E) of the US Financing Agreement;
(iii) Notwithstanding anything to the contrary
contained in this Section 7.02(d), so long as no Default or Event of Default
shall have occurred or be continuing or would result therefrom, the Loan Parties
shall be permitted to consummate the transactions described on Schedule
7.02(d)(iii).
(e) INVESTMENTS; HEDGING AGREEMENTS.
(i) The Loan Parties will not, and will not permit
any of their Subsidiaries to, make or permit to remain outstanding any
Investment, except:
(A) Investments consisting of guarantees
permitted by Section 7.02(c);
(B) Investments by the Loan Parties in the
Parent or any Guarantor (as such term is defined under the US Financing
Agreement);
(C) Investments existing on the Effective
Date and described on Schedule 7.02(e);
(D) Permitted Investments; and
(E) Checking and deposit accounts with banks
used in the ordinary course of business.
(ii) The Loan Parties will not enter into any Hedging
Agreement, other than Hedging Agreements entered into in the ordinary course of
business with the prior written consent of the Agent to hedge or mitigate risks
to which the Loan Parties are exposed in the conduct of their business or the
management of their liabilities.
(f) RESTRICTED JUNIOR PAYMENTS. The Loan Parties will not
declare or make any Restricted Junior Payment at any time, other than:
(i) payments of dividends or management fees by a
Loan Party to the Parent or another wholly-owned Subsidiary of the Parent;
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(ii) payments of dividends and distributions payable
solely in common stock of such Person; and
(iii) payment on intercompany loans permitted by
Section 7.02(a)(iii).
(g) TRANSACTIONS WITH AFFILIATES. Except as expressly
permitted by this Agreement, the Loan Parties will not directly or indirectly
(i) make any Investment in an Affiliate; (ii) transfer, sell, lease, assign or
otherwise dispose of any property to an Affiliate; (iii) merge into or
consolidate with an Affiliate, or purchase or acquire property from an
Affiliate; or (iv) enter into any other transaction directly or indirectly with
or for the benefit of an Affiliate (including, without limitation, guarantees
and assumptions of obligations of an Affiliate); PROVIDED that:
(A) any Affiliate who is an individual may
serve as a director, officer, employee or consultant of any Loan Party, receive
reasonable compensation for his or her services in such capacity and benefit
from Permitted Investments to the extent specified in clause (e) of the
definition thereof;
(B) the Loan Parties may engage in and
continue the transactions with or for the benefit of Affiliates which are
described in Schedule 7.02(g) or are referred to in Sections 7.02(e) or 7.02(f)
(but only to the extent specified in such Sections); and
(C) the Loan Parties may engage in
transactions with Affiliates in the ordinary course of business on terms which
are no less favorable to the Loan Parties than those likely to be obtained in an
arms' length transaction between a Loan Party and a non-affiliated third party.
(h) RESTRICTIVE AGREEMENTS; RESTRICTIONS ON NEGATIVE PLEDGES
AND UPSTREAM LIMITATION. The Loan Parties will not directly or indirectly, enter
into, incur or permit to exist any agreement or other arrangement (other than
this Agreement, the US Financing Agreement and the Working Capital Loan
Agreement) that prohibits, restricts or imposes any condition upon (i) the
ability of any such Person to create, incur or permit to exist any Lien upon any
of its property or assets, or (ii) the ability of such Person to pay dividends
or other distributions with respect to any shares of its Capital Stock or other
equity interests or to make or repay loans or advances to any other Person or to
guarantee the Indebtedness of any other Person; PROVIDED that (A) the foregoing
shall not apply to restrictions and conditions imposed by law, (B) the foregoing
shall not apply to restrictions and conditions existing on the date hereof
identified on Schedule 7.02(h) (but shall apply to any extension or renewal of,
or any amendment or modification expanding the scope of, any such restriction or
condition), (C) the foregoing shall not apply to customary restrictions and
conditions contained in agreements relating to the sale of stock or assets of a
Subsidiary pending such sale, provided such restrictions and conditions apply
only to the Subsidiary that is to be sold and such sale is permitted hereunder,
(D) clause (i) of the foregoing shall not apply to restrictions or conditions
imposed by any agreement relating to secured Indebtedness permitted by this
Agreement if such restrictions or conditions apply only to the property or
assets securing such Indebtedness, and (E) clause (i) of the foregoing shall not
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apply to customary provisions in leases and other contracts (excluding license
agreements) restricting the assignment thereof.
(i) SALE-LEASEBACK TRANSACTIONS. No Loan Party will directly
or indirectly, enter into any arrangements with any Person whereby such Person
shall sell or transfer (or request another Person to purchase) any property,
real, personal or mixed, used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property from any Person.
(j) LINES OF BUSINESS. The Loan Parties will not engage to any
substantial extent in any line or lines of business activity other than (i) the
types of businesses engaged in by them as of the Effective Date and businesses
substantially related thereto, and (ii) such other lines of business as may be
consented to by the Agent and the Required Lenders.
(k) OTHER INDEBTEDNESS. The Loan Parties will not purchase,
redeem, retire or otherwise acquire for value, or set apart any money for a
sinking, defeasance or other analogous fund for the purchase, redemption,
retirement or other acquisition of, or make any voluntary payment or prepayment
of the principal of or interest on, or any other amount owing in respect of any
Senior Subordinated Notes, except to the extent permitted by Section 7.02(f).
(l) MODIFICATIONS OF CERTAIN DOCUMENTS. The Loan Parties will
not consent to any modification of or supplement to any of the provisions of any
documents or agreements evidencing or governing the Working Capital Loans or any
other Existing Indebtedness.
ARTICLE VIII
MANAGEMENT, COLLECTION AND STATUS OF
ACCOUNTS RECEIVABLE AND OTHER COLLATERAL
Section 8.01 MANAGEMENT OF COLLATERAL.
(a) The Agent (and all Persons designated by the Agent for
such purpose) may, at any time and from time to time after the occurrence and
during the continuance of an Event of Default, whether before or after
notification to any Account Debtor and whether before or after the maturity of
any of the Obligations, (i) enforce collection of any Accounts Receivable or
contract rights of the Loan Parties by suit or otherwise; (ii) exercise all of
the rights and remedies of the Loan Parties with respect to proceedings brought
to collect any Accounts Receivable; (iii) surrender, release or exchange all or
any part of any Accounts Receivable of the Loan Parties, or compromise or extend
or renew for any period (whether or not longer than the original period) any
Indebtedness thereunder; (iv) sell or assign any Account Receivable of the Loan
Parties upon such terms, for such amount and at such time or times as the Agent
deems advisable; (v) prepare, file and sign the names of the Loan Parties on any
proof of claim in bankruptcy or other similar document against any Account
Debtor indebted on an Account Receivable of the Loan Parties; and (vi) do all
other acts and things which are necessary, in the Agent's sole discretion, to
fulfill the Obligations of the Loan Parties under this Agreement and to allow
the Agent to collect the Accounts Receivable. In addition to any other provision
hereof or in any of the other Loan Documents, the Agent may at any time on or
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after the occurrence of an Event of Default, at the sole expense of the Loan
Parties, notify any parties obligated on any of the Accounts Receivable of the
Loan Parties to make payment directly to the Agent of any amounts due or to
become due thereunder.
(b) Each Loan Party hereby appoints the Agent or its designee
on behalf of the Agent as the Loan Parties' attorney-in-fact with power
exercisable during the continuance of an Event of Default to endorse any Loan
Party's name upon any notes, acceptances, checks, drafts, money orders or other
evidences of payment relating to the Accounts Receivable, to sign any Loan
Party's name on any invoice or ▇▇▇▇ of lading relating to any of the Accounts
Receivable, drafts against Account Debtors with respect to Accounts Receivable,
assignments and verifications of Accounts Receivable and notices to Account
Debtors with respect to Accounts Receivable, to send verification of Accounts
Receivable, and to notify the Postal Service authorities to change the address
for delivery of mail addressed to any Loan Party to such address as the Agent
may designate and to do all other acts and things necessary to carry out this
Agreement. All acts of said attorney or designee are hereby ratified and
approved, and said attorney or designee shall not be liable for any acts of
omission or commission (other than acts of omission or commission constituting
gross negligence or willful misconduct as determined by a final judgment of a
court of competent jurisdiction), or for any error of judgment or mistake of
fact or law; this power being coupled with an interest is irrevocable until the
Term Loan and the other Obligations under the Loan Documents are paid in full
and all of the Loan Documents are terminated.
(c) Nothing herein contained shall be construed to constitute
the Agent as agent of any Loan Party for any purpose whatsoever, and the Agent
shall not be responsible or liable for any shortage, discrepancy, damage, loss
or destruction of any part of the Collateral wherever the same may be located
and regardless of the cause thereof (other than from acts of omission or
commission constituting gross negligence or willful misconduct as determined by
a final judgment of a court of competent jurisdiction). The Agent shall not,
under any circumstance or in any event whatsoever, have any liability for any
error or omission or delay of any kind occurring in the settlement, collection
or payment of any of the Accounts Receivable or any instrument received in
payment thereof or for any damage resulting therefrom (other than acts of
omission or commission constituting gross negligence or willful misconduct as
determined by a final judgment of a court of competent jurisdiction). The Agent,
by anything herein or in any assignment or otherwise, does not assume any of the
obligations under any contract or agreement assigned to the Agent and shall not
be responsible in any way for the performance by any Loan Party of any of the
terms and conditions thereof.
(d) If any Account Receivable includes a charge for any tax
payable to any Governmental Authority, the Agent is hereby authorized (but in no
event obligated) in its discretion to pay the amount thereof to the proper
taxing authority for the Loan Parties' account and to charge the Loan Parties
therefor. The Loan Parties shall notify the Agent if any Account Receivable
includes any taxes due to any such Governmental Authority and, in the absence of
such notice, the Agent shall have the right to retain the full proceeds of such
Account Receivable and shall not be liable for any taxes that may be due by
reason of the sale and delivery creating such Account Receivable.
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(e) Notwithstanding any other terms set forth in the Loan
Documents, the rights and remedies of the Agent and the Lenders herein provided,
and the obligations of the Loan Parties set forth herein, are cumulative of, may
be exercised singly or concurrently with, and are not exclusive of, any other
rights, remedies or obligations set forth in any other Loan Document or as
provided by law.
Section 8.02 ACCOUNTS RECEIVABLE DOCUMENTATION.
The Loan Parties will at such intervals as the Agent may require,
execute and deliver confirmatory written assignments of the Accounts Receivable
to the Agent and furnish such further schedules and/or information as the Agent
may require relating to the Accounts Receivable, including, without limitation,
sales invoices or the equivalent, credit memos issued, remittance advices,
reports and copies of deposit slips and copies of original shipping or delivery
receipts for all merchandise sold. In addition, the Loan Parties shall notify
the Agent of any non-compliance in respect of the representations, warranties
and covenants contained in Section 8.03. The items to be provided under this
Section 8.02 are to be in form reasonably satisfactory to the Agent and are to
be executed and delivered to the Agent from time to time solely for its
convenience in maintaining records of the Collateral. The Loan Parties' failure
to give any of such items to the Agent shall not affect, terminate, modify or
otherwise limit the Agent's Lien on the Collateral. The Loan Parties shall not
re-date any invoice or sale or make sales on extended dating beyond that
customary in the Loan Parties' industry, and shall not re-▇▇▇▇ any Accounts
Receivable without promptly disclosing the same to the Agent and providing the
Agent with a copy of such re-billing, identifying the same as such. If the Loan
Parties become aware of anything materially detrimental to any of the Loan
Parties' customers' credit, the Loan Parties will promptly advise the Agent
thereof.
Section 8.03 STATUS OF ACCOUNTS RECEIVABLE AND OTHER COLLATERAL.
With respect to Collateral of any Loan Party at the time the Collateral
becomes subject to the Agent's Lien, each Loan Party covenants, represents and
warrants: (a) such Loan Party shall be the sole owner, free and clear of all
Liens (except for the Liens granted in the favor of the Agent for the benefit of
the Lenders and Permitted Liens), and shall be fully authorized to sell,
transfer, pledge and/or grant a security interest in each and every item of said
Collateral; (b) each Account Receivable shall be a good and valid account
representing an undisputed bona fide indebtedness incurred or an amount
indisputably owed by the Account Debtor therein named, for a fixed sum as set
forth in the invoice relating thereto with respect to an absolute sale and
delivery upon the specified terms of goods sold or services rendered by such
Loan Party; (c) no Account Receivable shall be subject to any defense, offset,
counterclaim, discount or allowance except as may be stated in the invoice
relating thereto, discounts and allowances as may be customary in such Loan
Party's business and as otherwise disclosed to the Agent, and each Account
Receivable will be paid when due; (d) none of the transactions underlying or
giving rise to any Account Receivable shall violate any applicable state or
federal laws or regulations, and all documents relating thereto shall be legally
sufficient under such laws or regulations and shall be legally enforceable in
accordance with their terms; (e) no agreement under which any deduction or
offset of any kind, other than normal trade discounts, may be granted or shall
have been made by such Loan Party at or before the time such Account Receivable
is created; (f) all agreements, instruments and other documents relating to any
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Account Receivable shall be true and correct and in all material respects what
they purport to be; (g) all signatures and endorsements that appear on all
material agreements, instruments and other documents relating to any Account
Receivable shall be genuine and all signatories and endorsers shall have full
capacity to contract; (h) such Loan Party shall maintain books and records
pertaining to said Collateral in such detail, form and scope as the Agent shall
reasonably require; (i) such Loan Party shall immediately notify the Agent if
any Account Receivable arises out of contracts with any Governmental Authority,
and will execute any instruments and take any steps required by the Agent in
order that all monies due or to become due under any such contract shall be
assigned to the Agent and notice thereof given to such Governmental Authority
under the Federal Assignment of Claims Act or any similar state or local law;
(j) such Loan Party will, immediately upon learning thereof, report to the Agent
any material loss or destruction of, or substantial damage to, any of the
Collateral, and any other matters affecting the value, enforceability or
collectibility of any of the Collateral; (k) if any amount payable under or in
connection with any Account Receivable is evidenced by a promissory note or
other instrument, such promissory note or instrument shall be immediately
pledged, endorsed, assigned and delivered to the Agent for the benefit of the
Lenders as additional Collateral; (l) such Loan Party shall not re-date any
invoice or sale or make sales on extended dating beyond that which is customary
in the ordinary course of its business and in the industry; (m) such Loan Party
shall conduct a physical count of its Inventory at such intervals as the Agent
may reasonably request and such Loan Party shall promptly supply the Agent with
a copy of such count accompanied by a report of the value (based on the lower of
cost (on a first in first out basis) and market value) of such Inventory; and
(n) such Loan Party is not and shall not be entitled to pledge the Agent's or
any Lender's credit on any purchases or for any purpose whatsoever.
Section 8.04 COLLATERAL CUSTODIAN.
Upon the occurrence and during the continuance of any Default or Event
of Default, the Agent may at any time and from time to time employ and maintain
on the premises of any Loan Party a custodian selected by the Agent who shall
have full authority to do all acts necessary to protect the Agent's and the
Lenders' interests. Each Loan Party hereby agrees to, and to cause its
Subsidiaries to, cooperate with any such custodian and to do whatever the Agent
may reasonably request to preserve the Collateral. All costs and expenses
incurred by the Agent by reason of the employment of the custodian shall be the
responsibility of the Borrowers and charged to the Loan Account.
Section 8.05 COMPLIANCE WITH WORKING CAPITAL LOAN AGREEMENT.
The Loan Parties shall comply with the cash management provisions of
the Working Capital Loan Agreement (or any successor or replacement agreement
acceptable to the Agent), PROVIDED that, if the Working Capital Loan Agreement
shall have been terminated and the Loan Parties shall not have entered into a
successor or replacement agreement acceptable to the Agent, then the Loan
Parties shall enter into control agreements, lockbox agreements and other
similar agreements in form and substance reasonably satisfactory to the Agent.
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ARTICLE IX
EVENTS OF DEFAULT
Section 9.01 EVENTS OF DEFAULT.
If any of the following Events of Default shall occur and be
continuing:
(a) the Loan Parties shall fail to pay to the Agent or the
Lenders, any principal of or interest on the Term Loan or any other Obligation
of the Loan Parties to the Agent or the Lenders when the same shall become due
and payable, whether at the due date thereof or at a date fixed for prepayment
thereof, by acceleration of such due or prepayment date, or otherwise;
(b) any representation or warranty made or deemed made by or
on behalf of any Loan Party in connection with this Agreement, any of the other
Loan Documents or any amendment or modification hereof or thereof, or in any
report, certificate, financial statement or other document furnished pursuant to
or in connection with this Agreement, any of the other Loan Documents or any
amendment or modification hereof or thereof, shall prove to have been incorrect
in any material respect when made or deemed made;
(c) the Loan Parties (i) shall fail to observe or perform any
covenant, condition or agreement contained in Sections 7.01(a), 7.01(b),
7.01(c), 7.01(e), 7.01(f), 7.01(g), 7.01(h), 7.01(i), 7.01(j), 7.01(k), 7.01(m),
7.01(n), 7.01(o), 7.01(p), 7.01(q), or in Section 7.02; (ii) shall fail to
observe or perform any other covenant, condition or agreement contained in
Sections 7.01(d), 7.01(l), 7.01(r) or 7.01(s) and such failure described in this
clause (ii) shall continue unremedied for a period of 10 days after the earlier
of (x) the date on which any officer of any Loan Party knows or should have
known of such failure or (y) the date any Loan Party receives notice thereof
from the Agent; or (iii) shall fail to observe or perform any covenant or
agreement contained in any Borrower Security Agreement or other Collateral
Document to which it is a party beyond the applicable notice or cure period;
(d) the Loan Parties shall fail to observe or perform any
covenant, condition or agreement contained in this Agreement (other than those
specified in clauses (a), (b) or (c) of this Section 9.01) or any other Loan
Document, and such failure shall continue unremedied for a period of 20 days
after the earlier of (x) the date on which any officer of any Loan Party knows
or should have known of such failure or (y) any Loan Party receives notice
thereof from the Agent;
(e) any Loan Party shall fail to make any payment (whether of
principal, interest or otherwise and regardless of amount) in respect of any
Material Indebtedness or any Material Rental Obligation, when and as the same
shall become due and payable, after giving effect to any grace period with
respect thereto;
(f) any event or condition occurs that results in (i) (A) any
Material Indebtedness of the Loan Parties becoming due prior to its scheduled
maturity, (B) that enables or permits (with or without the giving of notice, the
lapse of time or both) the holder or holders of any Material Indebtedness or any
trustee or agent on its or their behalf to cause such Material Indebtedness to
become due, or to require the prepayment, repurchase, redemption or defeasance
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thereof, prior to its scheduled maturity, or (C) requires the Loan Parties to
offer to repay, repurchase, redeem, or defease such Material Indebtedness, or
(ii) the Lease with respect to any Material Rental Obligation of the Loan
Parties being terminated prior to its scheduled expiration date or that enables
or permits (with or without the giving of notice, the lapse of time or both) the
counterparty to such Lease to cause such Lease to be terminated prior to its
scheduled expiration date;
(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation, reorganization or
other relief in respect of any Loan Party or its debts, or of a substantial part
of its assets, under any Insolvency Law or similar law now or hereafter in
effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for and Loan Party or for a substantial part of
its assets, and, in any such case, such proceeding or petition shall continue
undismissed for 60 days or an order or decree approving or ordering any of the
foregoing shall be entered;
(h) any Loan Party shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or other
relief under any Insolvency Law or similar law now or hereafter in effect, (ii)
consent to the institution of, or fail to contest in a timely and appropriate
manner, any proceeding or petition described in clause (g) of this Section 9.01,
(iii) apply for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for any Loan Party or for a
substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a
general assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;
(i) any Loan Party shall become unable, admit in writing or
fail generally to pay its debts as they become due;
(j) a final judgment or judgments for the payment of money (x)
in excess of $1,000,000 in the aggregate (exclusive of judgment amounts fully
covered by insurance where the insurer has admitted liability in respect of such
judgment) or (y) in excess of $1,000,000 in the aggregate (regardless of
insurance coverage), shall be rendered by one or more courts, administrative
tribunals or other bodies having jurisdiction over a Loan Party and the same
shall not be discharged (or provision shall not be made for such discharge),
bonded, or a stay of execution thereof shall not be procured, within 60 days
from the date of entry thereof and the such Loan Party shall not, within said
period of 60 days, or such longer period during which execution of the same
shall have been stayed, appeal therefrom and cause the execution thereof to be
stayed during such appeal;
(k) an ERISA Event shall have occurred that, when taken
together with all other ERISA Events that have occurred, could reasonably be
expected to have a Material Adverse Effect;
(l) any Loan Party shall be liable for any Environmental
Liabilities payment of which could reasonably be expected to have a Material
Adverse Effect;
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(m) any Loan Document shall at any time for any reason (other
than pursuant to the express terms thereof) cease to be valid and binding on or
enforceable against any Loan Party intended to be a party thereto, or the
validity or enforceability thereof shall be contested by any party thereto, or a
proceeding shall be commenced by any Loan Party or any Governmental Authority
having jurisdiction over any of them, seeking to establish the invalidity or
unenforceability thereof, or any Loan Party shall deny in writing that it has
any liability or obligation purported to be created under any Loan Document (in
each case, an "UNENFORCEABILITY EVENT"); or (ii) any Unenforceability Event
shall occur with respect to one or more provisions of any Loan Document if such
event could reasonably be expected to have a Material Adverse Effect;
(n) any Borrower Security Agreement, any Pledge Agreement, any
Mortgage or any other security document, after delivery thereof pursuant hereto,
shall for any reason fail or cease to create a valid and perfected and, except
to the extent permitted by the terms hereof or thereof and subject to the US
Intercreditor Agreement, first priority Lien in favor of the Agent for the
benefit of the Lenders on any Collateral with a fair market value in excess of
$100,000 purported to be covered thereby;
(o) any bank at which any deposit account, blocked account, or
lockbox account of any Loan Party is maintained shall fail to comply with any of
the terms of any deposit account agreement, blocked account agreement, control
Agreement or similar agreement in respect of such account to which such bank is
a party or any securities intermediary, commodity intermediary or other
financial institution at any time in custody, control or possession of any
investment property of any Loan Party shall fail to comply with any of the terms
of any investment property control agreement in respect of such property to
which such Person is a party if such failure could reasonably be expected to
have a Material Adverse Effect;
(p) any Loan Party is enjoined, restrained or in any way
prevented by the order of any court or any Governmental Authority from
conducting all or any material part of its business for more than 15 days;
(q) any cessation of a substantial part of the business of any
Loan Party for a period which materially and adversely affects the ability of
such Person to continue its business on a profitable basis;
(r) the loss, suspension or revocation of, or failure to
renew, any license or permit now held or hereafter acquired by any Loan Party,
if such loss, suspension, revocation or failure to renew could reasonably be
expected to have a Material Adverse Effect;
(s) the indictment, or the threatened indictment of any Loan
Party under any criminal statute, or commencement or threatened commencement of
criminal or civil proceedings against any Loan Party, pursuant to which statute
or proceedings the penalties or remedies sought or available include forfeiture
to any Governmental Authority of any material portion of the property of such
Person;
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(t) there shall occur any loss theft, damage or destruction of
any Collateral not fully covered (subject to such reasonable deductibles as the
Agent shall have approved) by insurance which has or could reasonably be
expected to have a Material Adverse Effect;
(u) there shall occur an event or development that has had a
material adverse effect on (i) the businesses, operations, properties,
condition, financial or otherwise, that impairs the Loan Parties from performing
their obligations under the Loan Documents, or (ii) the validity or
enforceability of any of the Loan Documents or the rights and remedies of the
Agent and the Lenders thereunder;
(v) an "Event of Default" shall have occurred under the US
Financing Agreement or the Working Capital Loan Agreement;
then, and in any such event, the Agent may, and shall at the request of the
Required Lenders, by notice to the Administrative Borrower, (i) declare all or
any portion of the Term Loan then outstanding to be due and payable, whereupon
all or such portion of the aggregate principal of the Term Loan, all accrued and
unpaid interest thereon, all fees and all other amounts payable under this
Agreement and the other Loan Documents shall become due and payable immediately,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by each Loan Party and (ii) exercise any and all of
its other rights and remedies under applicable law, hereunder and under the
other Loan Documents; PROVIDED, HOWEVER, that upon the occurrence of any Event
of Default described in subsection (g), (h) or (i) of this Section 9.01, without
any notice to any Loan Party or any other Person or any act by the Agent or any
Lender, the Term Loan, together with all accrued and unpaid interest thereon,
all fees and all other amounts due under this Agreement and the other Loan
Documents shall become due and payable automatically and immediately, without
presentment, demand, protest or notice of any kind, all of which are expressly
waived by each Loan Party.
ARTICLE X
AGENT
Section 10.01 APPOINTMENT.
Each Lender hereby irrevocably appoints and authorizes the Agent to
perform the duties of the Agent as set forth in this Agreement including: (i) to
receive on behalf of each Lender any payment of principal of or interest on the
Term Loan outstanding hereunder and all other amounts accrued hereunder for the
account of the Lenders and paid to the Agent, and, subject to Section 2.02 of
this Agreement, to distribute promptly to each Lender its Pro Rata Share of all
payments so received; (ii) to distribute to each Lender copies of all material
notices and agreements received by the Agent and not required to be delivered to
each Lender pursuant to the terms of this Agreement, provided that the Agent
shall not have any liability to the Lenders for the Agent's inadvertent failure
to distribute any such notices or agreements to the Lenders; (iii) to maintain,
in accordance with its customary business practices, ledgers and records
reflecting the status of the Obligations, the Term Loan, and related matters and
to maintain, in accordance with its customary business practices, ledgers and
records reflecting the status of the Collateral and related matters; (iv) to
execute or file any and all financing or similar statements or notices,
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amendments, renewals, supplements, documents, instruments, proofs of claim,
notices and other written agreements with respect to this Agreement or any other
Loan Document; (v) to make the Term Loan and Agent Advances, for the Agent or on
behalf of the applicable Lenders as provided in this Agreement or any other Loan
Document; (vi) to perform, exercise, and enforce any and all other rights and
remedies of the Lenders with respect to the Loan Parties, the Obligations, or
otherwise related to any of same to the extent reasonably incidental to the
exercise by the Agent of the rights and remedies specifically authorized to be
exercised by the Agent by the terms of this Agreement or any other Loan
Document; (vii) to incur and pay such fees necessary or appropriate for the
performance and fulfillment of its functions and powers pursuant to this
Agreement or any other Loan Document; and (viii) subject to Section 10.03 of
this Agreement, to take such action as the Agent deems appropriate on its behalf
to administer the Term Loan and the Loan Documents and to exercise such other
powers delegated to the Agent by the terms hereof or the other Loan Documents
(including, without limitation, the power to give or to refuse to give notices,
waivers, consents, approvals and instructions and the power to make or to refuse
to make determinations and calculations) together with such powers as are
reasonably incidental thereto to carry out the purposes hereof and thereof. As
to any matters not expressly provided for by this Agreement and the other Loan
Documents (including, without limitation, enforcement or collection of the Term
Loan), the Agent shall not be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions of the Required Lenders shall be
binding upon all Lenders.
Section 10.02 NATURE OF DUTIES.
The Agent shall have no duties or responsibilities except those
expressly set forth in this Agreement or in the other Loan Documents. The duties
of the Agent shall be mechanical and administrative in nature. The Agent shall
not have by reason of this Agreement or any other Loan Document a fiduciary
relationship in respect of any Lender. Nothing in this Agreement or any other
Loan Document, express or implied, is intended to or shall be construed to
impose upon the Agent any obligations in respect of this Agreement or any other
Loan Document except as expressly set forth herein or therein. Each Lender shall
make its own independent investigation of the financial condition and affairs of
the Loan Parties in connection with the making and the continuance of the Term
Loan hereunder and shall make its own appraisal of the creditworthiness of the
Loan Parties and the value of the Collateral, and the Agent shall have no duty
or responsibility, either initially or on a continuing basis, to provide any
Lender with any credit or other information with respect thereto, whether coming
into their possession before the Term Loan hereunder or at any time or times
thereafter, provided that, upon the reasonable request of a Lender, the Agent
shall provide to such Lender any documents or reports delivered to the Agent by
the Loan Parties pursuant to the terms of this Agreement or any other Loan
Document. If the Agent seeks the consent or approval of the Required Lenders to
the taking or refraining from taking any action hereunder, the Agent shall send
notice thereof to each Lender. The Agent shall promptly notify each Lender any
time that the Required Lenders have instructed the Agent to act or refrain from
acting pursuant hereto.
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Section 10.03 RIGHTS, EXCULPATION, ETC.
The Agent and its directors, officers, agents or employees shall not be
liable for any action taken or omitted to be taken by them under or in
connection with this Agreement or the other Loan Documents, except for their own
gross negligence or willful misconduct as determined by a final judgment of a
court of competent jurisdiction. Without limiting the generality of the
foregoing, the Agent (i) may treat the payee of the Term Loan as the owner
thereof until the Agent receives written notice of the assignment or transfer
thereof, pursuant to Section 12.07 hereof, signed by such payee and in form
satisfactory to the Agent; (ii) may consult with legal counsel (including,
without limitation, counsel to the Agent or counsel to the Loan Parties),
independent public accountants, and other experts selected by any of them and
shall not be liable for any action taken or omitted to be taken in good faith by
any of them in accordance with the advice of such counsel or experts; (iii) make
no warranty or representation to any Lender and shall not be responsible to any
Lender for any statements, certificates, warranties or representations made in
or in connection with this Agreement or the other Loan Documents; (iv) shall not
have any duty to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of this Agreement or the other Loan
Documents on the part of any Person, the existence or possible existence of any
Default or Event of Default, or to inspect the Collateral or other property
(including, without limitation, the books and records) of any Person; (v) shall
not be responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or the other
Loan Documents or any other instrument or document furnished pursuant hereto or
thereto; and (vi) shall not be deemed to have made any representation or
warranty regarding the existence, value or collectibility of the Collateral, the
existence, priority or perfection of the Agent's Lien thereon, or any
certificate prepared by any Loan Party in connection therewith, nor shall the
Agent be responsible or liable to the Lenders for any failure to monitor or
maintain any portion of the Collateral. The Agent shall not be liable for any
apportionment or distribution of payments made in good faith pursuant to Section
4.04, and if any such apportionment or distribution is subsequently determined
to have been made in error the sole recourse of any Lender to whom payment was
due but not made, shall be to recover from other Lenders any payment in excess
of the amount which they are determined to be entitled. The Agent may at any
time request instructions from the Lenders with respect to any actions or
approvals which by the terms of this Agreement or of any of the other Loan
Documents the Agent is permitted or required to take or to grant, and if such
instructions are promptly requested, the Agent shall be absolutely entitled to
refrain from taking any action or to withhold any approval under any of the Loan
Documents until it shall have received such instructions from the Required
Lenders. Without limiting the foregoing, no Lender shall have any right of
action whatsoever against the Agent as a result of the Agent acting or
refraining from acting under this Agreement or any of the other Loan Documents
in accordance with the instructions of the Required Lenders.
Section 10.04 RELIANCE.
The Agent shall be entitled to rely upon any written notices,
statements, certificates, orders or other documents or any telephone message
believed by it in good faith to be genuine and correct and to have been signed,
sent or made by the proper Person, and with respect to all matters pertaining to
this Agreement or any of the other Loan Documents and its duties hereunder or
thereunder, upon advice of counsel selected by it.
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Section 10.05 INDEMNIFICATION.
To the extent that the Agent is not reimbursed and indemnified by any
Loan Party, the Lenders will reimburse and indemnify the Agent from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses, advances or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against the
Agent in any way relating to or arising out of this Agreement or any of the
other Loan Documents or any action taken or omitted by the Agent under this
Agreement or any of the other Loan Documents, in proportion to each Lender's Pro
Rata Share, including, without limitation, advances and disbursements made
pursuant to Section 10.08; PROVIDED, HOWEVER, that no Lender shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses, advances or disbursements for which
there has been a final judicial determination that such liability resulted from
the Agent's gross negligence or willful misconduct. The obligations of the
Lenders under this Section 10.05 shall survive the payment in full of the Term
Loan and the termination of this Agreement.
Section 10.06 AGENT INDIVIDUALLY.
With respect to its Pro Rata Share of the Total Term Loan Commitment
hereunder and the Term Loan made by it, the Agent shall have and may exercise
the same rights and powers hereunder and is subject to the same obligations and
liabilities as and to the extent set forth herein for any other Lender. The
terms "Lenders" or "Required Lenders" or any similar terms shall, unless the
context clearly otherwise indicates, include the Agent in its individual
capacity as a Lender or one of the Required Lenders. The Agent and its
Affiliates may accept deposits from, lend money to, and generally engage in any
kind of banking, trust or other business with any Borrower as if it were not
acting as the Agent pursuant hereto without any duty to account to the other
Lenders.
Section 10.07 SUCCESSOR AGENT.
(a) The Agent may resign from the performance of all its
functions and duties hereunder and under the other Loan Documents at any time by
giving at least 30 Business Days' prior written notice to the Administrative
Borrower and each Lender. Such resignation shall take effect upon the acceptance
by a successor Agent of appointment pursuant to clauses (b) and (c) below or as
otherwise provided below.
(b) Upon any such notice of resignation, the Required Lenders
shall appoint a successor Agent. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
Agent, and the Agent shall be discharged from its duties and obligations under
this Agreement and the other Loan Documents. After the Agent's resignation
hereunder as the Agent, the provisions of this ARTICLE X shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was the
Agent under this Agreement and the other Loan Documents.
(c) If a successor Agent shall not have been so appointed
within said 30 Business Day period, the Agent shall then appoint a successor
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Agent who shall serve as the Agent until such time, if any, as the Required
Lenders appoint a successor Agent as provided above.
Section 10.08 COLLATERAL MATTERS.
(a) The Agent may from time to time make such disbursements
and advances ("AGENT ADVANCES") which the Agent, in its sole discretion, deems
necessary or desirable to preserve, protect, prepare for sale or lease or
dispose of the Collateral or any portion thereof, to enhance the likelihood or
maximize the amount of repayment by the Borrowers of the Term Loan and the other
Obligations or to pay any other amount chargeable to the Borrowers pursuant to
the terms of this Agreement, including, without limitation, costs, fees and
expenses as described in Section 12.04. The Agent Advances shall be repayable on
demand, shall bear interest at the rate per annum set forth in Section 2.04 and
shall be secured by the Collateral. The Agent Advances shall constitute
Obligations hereunder which may be charged to the Loan Account in accordance
with Section 4.02. The Agent shall notify each Lender and the Administrative
Borrower in writing of each such Agent Advance, which notice shall include a
description of the purpose of such Agent Advance. Without limitation to its
obligations pursuant to Section 10.05, each Lender agrees that it shall make
available to the Agent, upon the Agent's demand, in Dollars in immediately
available funds, the amount equal to such Lender's Pro Rata Share of each such
Agent Advance. If such funds are not made available to the Agent by such Lender,
the Agent shall be entitled to recover such funds on demand from such Lender,
together with interest thereon for each day from the date such payment was due
until the date such amount is paid to the Agent, at the Federal Funds Rate for 3
Business Days and thereafter at the Reference Rate.
(b) The Lenders hereby irrevocably authorize the Agent, at its
option and in its discretion, to release any Lien granted to or held by the
Agent upon any Collateral upon payment and satisfaction of the Term Loan and all
other Obligations which have matured and which the Agent has been notified in
writing are then due and payable; or constituting property being sold or
disposed of in compliance with the terms of this Agreement and the other Loan
Documents; or constituting property in which the Loan Parties owned no interest
at the time the Lien was granted or at any time thereafter; or if approved,
authorized or ratified in writing by the Lenders. Upon request by the Agent at
any time, the Lenders will confirm in writing the Agent's authority to release
particular types or items of Collateral pursuant to this Section 10.08(b).
(c) Without in any manner limiting the Agent's authority to
act without any specific or further authorization or consent by the Lenders (as
set forth in Section 10.08(b)), each Lender agrees to confirm in writing, upon
request by the Agent, the authority to release Collateral conferred upon the
Agent under Section 10.08(b). Upon receipt by the Agent of confirmation from the
Lenders of its authority to release any particular item or types of Collateral,
and upon prior written request by any Loan Party, the Agent shall (and is hereby
irrevocably authorized by the Lenders to) execute such documents as may be
necessary to evidence the release of the Liens granted to the Agent for the
benefit of the Lenders upon such Collateral; PROVIDED, HOWEVER, that (i) the
Agent shall not be required to execute any such document on terms which, in the
Agent's opinion, would expose the Agent to liability or create any obligations
or entail any consequence other than the release of such Liens without recourse
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or warranty, and (ii) such release shall not in any manner discharge, affect or
impair the Obligations or any Lien upon (or obligations of any Loan Party in
respect of) all interests in the Collateral retained by any Loan Party.
(d) The Agent shall have no obligation whatsoever to any
Lender to assure that the Collateral exists or is owned by the Loan Parties or
is cared for, protected or insured or has been encumbered or that the Lien
granted to the Agent pursuant to this Agreement or any other Loan Document has
been properly or sufficiently or lawfully created, perfected, protected or
enforced or is entitled to any particular priority, or to exercise at all or in
any particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of the rights, authorities and powers granted or
available to the Agent in this Section 10.08 or in any other Loan Document, it
being understood and agreed that in respect of the Collateral, or any act,
omission or event related thereto, the Agent may act in any manner it may deem
appropriate, in its sole discretion, given the Agent's own interest in the
Collateral as one of the Lenders and that the Agent shall have no duty or
liability whatsoever to any other Lender, except as otherwise provided herein.
Section 10.09 AGENCY FOR PERFECTION.
The Agent and each Lender hereby appoints the Agent and each other
Lender as agent and bailee for the purpose of perfecting the security interests
in and liens upon the Collateral in assets which, in accordance with Article 9
of the Uniform Commercial Code or applicable provisions of the PPSA, can be
perfected only by possession or control (or where the security interest of a
secured party with possession or control has priority over the security interest
of another secured party) and the Agent and each Lender hereby acknowledges that
it holds possession of or otherwise controls any such Collateral for the benefit
of the Agent and the Lenders as secured party. Should any Lender obtain
possession or control of any such Collateral, such Lender shall notify the Agent
thereof, and, promptly upon the Agent's request therefor shall deliver such
Collateral to the Agent or in accordance with the Agent's instructions. Each
Loan Party by its execution and delivery of this Agreement hereby consents to
the foregoing.
ARTICLE XI
[INTENTIONALLY OMITTED]
ARTICLE XII
MISCELLANEOUS
Section 12.01 NOTICES, ETC.
All notices and other communications provided for hereunder shall be in
writing and shall be mailed, telecopied or delivered, if to any Loan Party, at
the following address:
Columbus ▇▇▇▇▇▇▇▇ Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
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with a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: 416-863-2653
if to the Agent, to it at the following address:
Regiment Capital III, L.P.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ Thomson Apps & Dellelce, LLP
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other parties complying as to delivery with the terms
of this Section 12.01. All such notices and other communications shall be
effective, (i) if mailed, when received or 3 days after deposited in the mails,
whichever occurs first, (ii) if telecopied, when transmitted and confirmation
received, or (iii) if delivered, upon delivery, except that notices to the Agent
pursuant to ARTICLE II shall not be effective until received by the Agent.
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Section 12.02 AMENDMENTS, ETC.
No amendment or waiver of any provision of this Agreement, and no
consent to any departure by any Loan Party therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Required Lenders
or by the Agent with the consent of the Required Lenders, and then such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given, PROVIDED, HOWEVER, that no amendment, waiver or consent
shall (i) reduce the principal of, or interest on, the Term Loan payable to any
Lender, reduce the amount of any fee payable for the account of any Lender, or
postpone or extend any date fixed for any payment of principal of, or interest
or fees on, the Term Loan, in each case without the written consent of any
Lender affected thereby, (ii) increase the Total Term Loan Commitment without
the written consent of each Lender, (iii) change the percentage of the Term Loan
Commitments or of the aggregate unpaid principal amount of the Term Loan that is
required for the Lenders or any of them to take any action hereunder, (iv) amend
the definition of "Required Lenders" or "Pro Rata Share", (v) release all or a
substantial portion of the Collateral (except as otherwise provided in this
Agreement and the other Loan Documents), subordinate any Lien granted in favor
of the Agent for the benefit of the Lenders, or release any Borrower or any
Guarantor, or (vi) amend, modify or waive Section 4.04 or this Section 12.02 of
this Agreement, in each case, without the written consent of each Lender.
Notwithstanding the foregoing, no amendment, waiver or consent shall, unless in
writing and signed by the Agent, affect the rights or duties of the Agent (but
not in its capacity as a Lender) under this Agreement or the other Loan
Documents.
Section 12.03 NO WAIVER; REMEDIES, ETC.
No failure on the part of the Agent or any Lender to exercise, and no
delay in exercising, any right hereunder or under any other Loan Document shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right under any Loan Document preclude any other or further exercise thereof or
the exercise of any other right. The rights and remedies of the Agent and the
Lenders provided herein and in the other Loan Documents are cumulative and are
in addition to, and not exclusive of, any rights or remedies provided by law.
The rights of the Agent and the Lenders under any Loan Document against any
party thereto are not conditional or contingent on any attempt by the Agent and
the Lenders to exercise any of their rights under any other Loan Document
against such party or against any other Person.
Section 12.04 EXPENSES; TAXES; ATTORNEYS' FEES.
The Borrowers will pay on demand, all costs and expenses incurred by or
on behalf of the Agent and each Lender, regardless of whether the transactions
contemplated hereby are consummated, including, without limitation, reasonable
fees, costs, client charges and expenses of counsel for the Agent and each
Lender, accounting, due diligence, periodic field audits, physical counts,
valuations, investigations, searches and filings, monitoring of assets,
appraisals of Collateral, title searches and reviewing environmental
assessments, miscellaneous disbursements, examination, travel, lodging and
meals, arising from or relating to: (a) the negotiation, preparation, execution,
delivery, performance and administration of this Agreement and the other Loan
Documents (including, without limitation, the preparation of any additional Loan
Documents pursuant to Sections 7.01(l) and 7.01(n), or the review of any of the
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agreements, instruments and documents referred to in Sections 7.01(f) and
7.01(k)), (b) any requested amendments, waivers or consents to this Agreement or
the other Loan Documents whether or not such documents become effective or are
given, (c) the preservation and protection of any of the Lenders' rights under
this Agreement or the other Loan Documents, (d) the defense of any claim or
action asserted or brought against the Agent or any Lender by any Person that
arises from or relates to this Agreement, any other Loan Document, the Agent's
or the Lenders' claims against any Loan Party, or any and all matters in
connection therewith, (e) the commencement or defense of, or intervention in,
any court proceeding arising from or related to this Agreement or any other Loan
Document, (f) the filing of any petition, complaint, answer, motion or other
pleading by the Agent or any Lender, or the taking of any action in respect of
the Collateral or other security, in connection with this Agreement or any other
Loan Document, (g) the protection, collection, lease, sale, taking possession of
or liquidation of, any Collateral or other security in connection with this
Agreement or any other Loan Document, (h) any attempt to enforce any Lien or
security interest in any Collateral or other security in connection with this
Agreement or any other Loan Document, (i) any attempt to collect from any Loan
Party, (j) all liabilities and costs arising from or in connection with the
past, present or future operations of any Loan Party involving any damage to
real or personal property or natural resources or harm or injury alleged to have
resulted from any Release of Hazardous Materials on, upon or into such property,
(k) any Environmental Liabilities incurred in connection with the investigation,
removal, cleanup and/or remediation of any Hazardous Materials present or
arising out of the operations of any facility of any Loan Party, (l) any
Environmental Liabilities incurred in connection with any Environmental Lien, or
(m) the receipt by the Agent or any Lender of any advice from professionals with
respect to any of the foregoing. Without limitation of the foregoing or any
other provision of any Loan Document: (x) the Borrowers agree to pay all stamp,
document, transfer, recording or filing taxes or fees and similar impositions
now or hereafter determined by the Agent or any Lender to be payable in
connection with this Agreement or any other Loan Document, and the Borrowers
agree to save the Agent and each Lender harmless from and against any and all
present or future claims, liabilities or losses with respect to or resulting
from any omission to pay or delay in paying any such taxes, fees or impositions,
(y) the Borrowers agree to pay all broker fees that may become due in connection
with the transactions contemplated by this Agreement and the other Loan
Documents, and (z) if the Borrowers fail to perform any covenant or agreement
contained herein or in any other Loan Document, the Agent may itself perform or
cause performance of such covenant or agreement, and the expenses of the Agent
incurred in connection therewith shall be reimbursed on demand by the Borrowers.
Section 12.05 RIGHT OF SET-OFF.
Upon the occurrence and during the continuance of any Event of Default,
the Agent or any Lender may, and is hereby authorized to, at any time and from
time to time, without notice to any Loan Party (any such notice being expressly
waived by the Loan Parties) and to the fullest extent permitted by law, set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other Indebtedness at any time owing by the Agent
or such Lender to or for the credit or the account of any Loan Party against any
and all obligations of the Loan Parties either now or hereafter existing under
any Loan Document, irrespective of whether or not the Agent or such Lender shall
have made any demand hereunder or thereunder and although such obligations may
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be contingent or unmatured. The Agent and each Lender agrees to notify such Loan
Party promptly after any such set-off and application made by the Agent or such
Lender provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of the Agent and the
Lenders under this Section 12.05 are in addition to the other rights and
remedies (including other rights of set-off) which the Agent and the Lenders may
have under this Agreement or any other Loan Documents of law or otherwise.
Section 12.06 SEVERABILITY.
Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining portions
hereof or affecting the validity or enforceability of such provision in any
other jurisdiction.
Section 12.07 ASSIGNMENTS AND PARTICIPATIONS.
(a) This Agreement and the other Loan Documents shall be
binding upon and inure to the benefit of each Loan Party and the Agent and each
Lender and their respective successors and assigns; PROVIDED, HOWEVER, that none
of the Loan Parties may assign or transfer any of its rights hereunder without
the prior written consent of each Lender and any such assignment without the
Lenders' prior written consent shall be null and void.
(b) Each Lender may, with the written consent of the Agent,
assign to one or more other lenders or other entities all or a portion of its
rights and obligations under this Agreement (including, without limitation, all
or a portion of its Term Loan); PROVIDED, HOWEVER, that (i) such assignment is
in an amount which is at least $5,000,000 or a multiple of $1,000,000 in excess
thereof (or the remainder of such Lender's Term Loan) (except such minimum
amount shall not apply to an assignment by a Lender to an Affiliate of such
Lender or a fund or account managed by such Lender or an Affiliate of such
Lender or its investment manager), (ii) the parties to each such assignment
shall execute and deliver to the Agent, for its acceptance, an Assignment and
Acceptance, together with any promissory note subject to such assignment and
such parties shall deliver to the Agent a processing and recordation fee of
$5,000 (except the payment of such fee shall not be required in connection with
an assignment by a Lender to an Affiliate of such Lender or a fund or account
managed by such Lender or an Affiliate of such Lender or its investment manager)
and (iii) no written consent of the Agent shall be required in connection with
any assignment by a Lender to an Affiliate of such Lender or a fund or account
managed by such Lender or an Affiliate of such Lender or its investment manager.
Upon such execution, delivery and acceptance, from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be at
least 3 Business Days after the delivery thereof to the Agent (or such shorter
period as shall be agreed to by the Agent and the parties to such assignment),
(A) the assignee thereunder shall become a "Lender" hereunder and, in addition
to the rights and obligations hereunder held by it immediately prior to such
effective date, have the rights and obligations hereunder that have been
assigned to it pursuant to such Assignment and Acceptance and (B) the assigning
Lender thereunder shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights and be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
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of an assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto). The Agent shall provide the
Administrative Borrower with notice of each assignment by a Lender which
requires the Agent's consent pursuant to this Section 12.07(b) promptly after
the effectiveness of such assignment.
(i) By executing and delivering an Assignment and
Acceptance, the assigning Lender and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (A) other than as
provided in such Assignment and Acceptance, the assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
Loan Document furnished pursuant hereto; (B) the assigning Lender makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of any Loan Party or any of its Subsidiaries or the
performance or observance by any Loan Party of any of its obligations under this
Agreement or any other Loan Document furnished pursuant hereto; (C) such
assignee confirms that it has received a copy of this Agreement and the other
Loan Documents, together with such other documents and information it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (D) such assignee will, independently and without
reliance upon the assigning Lender, the Agent or any Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents; (E) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement and the other Loan Documents as are delegated
to the Agent by the terms hereof and thereof, together with such powers as are
reasonably incidental hereto and thereto; and (F) such assignee agrees that it
will perform in accordance with their terms all of the obligations which by the
terms of this Agreement and the other Loan Documents are required to be
performed by it as a Lender.
(ii) The Agent shall, on behalf of the Borrowers,
maintain, or cause to be maintained at the Payment Office, a copy of each
Assignment and Acceptance delivered to and accepted by it and a register (the
"REGISTER") for the recordation of the names and addresses of the Lenders and
the principal amount of the Term Loan (the "REGISTERED LOANS") from time to
time. The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrowers, the Agent and the Lenders
shall treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Borrowers and any Lender at any reasonable time and from
time to time upon reasonable prior notice. In the case of any assignment
pursuant to Section 12.07(b)(iii), the assigning Lender shall maintain a
comparable register on behalf of the Borrower.
(iii) Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender and an assignee, together with any
promissory notes subject to such assignment, the Agent shall, if the Agent
consents to such assignment and if such Assignment and Acceptance has been
completed (i) accept such Assignment and Acceptance and (ii) record the
information contained therein in the Register.
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(iv) A Registered Loan (and the registered note, if
any, evidencing the same) may be assigned or sold in whole or in part only by
registration of such assignment or sale on the Register (and each registered
note shall expressly so provide). Any assignment or sale of all or part of such
Registered Loan (and the registered note, if any, evidencing the same) may be
effected only by registration of such assignment or sale on the Register,
together with the surrender of the registered note, if any, evidencing the same
duly endorsed by (or accompanied by a written instrument of assignment or sale
duly executed by) the holder of such registered note, whereupon, at the request
of the designated assignee(s) or transferee(s), one or more new registered notes
in the same aggregate principal amount shall be issued to the designated
assignee(s) or transferee(s). Prior to the registration of assignment or sale of
any Registered Loan (and the registered note, if any, evidencing the same), the
Agent shall treat the Person in whose name such Registered Loan (and the
registered note, if any, evidencing the same) is registered as the owner thereof
for the purpose of receiving all payments thereon and for all other purposes,
notwithstanding notice to the contrary.
(v) In the event that any Lender sells participations
in a Registered Loan, such Lender shall maintain a register on which it enters
the name of all participants in the Registered Loans held by it (the
"PARTICIPANT REGISTER"). A Registered Loan (and the registered note, if any,
evidencing the same) may be participated in whole or in part only by
registration of such participation on the Participant Register (and each
registered note shall expressly so provide). Any participation of such
Registered Loan (and the registered note, if any, evidencing the same) may be
effected only by the registration of such participation on the Participant
Register.
(vi) Any foreign Person who purchases or is assigned
or participates in any portion of such Registered Loan shall provide the Agent
and the Lender with a completed Internal Revenue Service Form W-8BEN
(Certificate of Foreign Status) or a substantially similar form for such
purchaser, participant or any other affiliate who is a holder of beneficial
interests in the Registered Loan.
(c) Each Lender may sell participations to one or more banks
or other entities in or to all or a portion of its rights and obligations under
this Agreement and the other Loan Documents (including, without limitation, all
or a portion of its Term Loan); provided, that (i) such Lender's obligations
under this Agreement (including without limitation, its Commitments hereunder)
and the other Loan Documents shall remain unchanged; (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, and the Borrowers, the Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and the other Loan
Documents; and (iii) a participant shall not be entitled to require such Lender
to take or omit to take any action hereunder except (A) action directly
effecting an extension of the maturity dates or decrease in the principal amount
of the Term Loan, (B) action directly effecting an extension of the due dates or
a decrease in the rate of interest payable on the Term Loan or the fees payable
under this Agreement, or (C) actions directly effecting a release of all or a
substantial portion of the Collateral or any Loan Party (except as set forth in
Section 10.08 of this Agreement or any other Loan Document). The Loan Parties
agree that each participant shall be entitled to the benefits of Section 2.08
and Section 4.05 of this Agreement with respect to its participation in any
portion of the Term Loan as if it was a Lender.
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Section 12.08 COUNTERPARTS.
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which shall be deemed
to be an original, but all of which taken together shall constitute one and the
same agreement. Delivery of an executed counterpart of this Agreement by
telecopier shall be equally as effective as delivery of an original executed
counterpart of this Agreement. Any party delivering an executed counterpart of
this Agreement by telecopier also shall deliver an original executed counterpart
of this Agreement but the failure to deliver an original executed counterpart
shall not affect the validity, enforceability, and binding effect of this
Agreement. The foregoing shall apply to each other Loan Document MUTATIS
MUTANDIS.
Section 12.09 GOVERNING LAW.
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY PROVIDED
TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT)
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW
YORK.
Section 12.10 CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE.
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT MAY BE BROUGHT IN ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ IN THE
COUNTY OF NEW YORK OR OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH
LOAN PARTY HEREBY IRREVOCABLY ACCEPTS IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH LOAN PARTY
HEREBY IRREVOCABLY APPOINTS THE SECRETARY OF STATE OF THE STATE OF NEW YORK AS
ITS AGENT FOR SERVICE OF PROCESS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING AND
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE
AFOREMENTIONED COURTS AND IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE
ADMINISTRATIVE BORROWER AT ITS ADDRESS FOR NOTICES AS SET FORTH IN SECTION 12.01
AND TO THE SECRETARY OF STATE OF THE STATE OF NEW YORK, SUCH SERVICE TO BECOME
EFFECTIVE 10 DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF
THE AGENT AND THE LENDERS TO SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY LOAN PARTY
IN ANY OTHER JURISDICTION. EACH LOAN PARTY HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE JURISDICTION OR LAYING OF VENUE OF ANY SUCH LITIGATION
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BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT ANY
LOAN PARTY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, EACH LOAN PARTY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY
IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
Section 12.11 WAIVER OF JURY TRIAL, ETC.
EACH LOAN PARTY, THE AGENT AND EACH LENDER HEREBY WAIVES ANY RIGHT TO A
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS
UNDER THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS, OR UNDER ANY AMENDMENT,
WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN
THE FUTURE MAY BE DELIVERED IN CONNECTION THEREWITH, OR ARISING FROM ANY
FINANCING RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREES
THAT ANY SUCH ACTION, PROCEEDINGS OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT
AND NOT BEFORE A JURY. EACH LOAN PARTY CERTIFIES THAT NO OFFICER,
REPRESENTATIVE, AGENT OR ATTORNEY OF THE AGENT OR ANY LENDER HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT THE AGENT OR ANY LENDER WOULD NOT, IN THE EVENT OF
ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO ENFORCE THE FOREGOING WAIVERS.
EACH LOAN PARTY HEREBY ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL INDUCEMENT
FOR THE AGENT AND THE LENDERS ENTERING INTO THIS AGREEMENT.
Section 12.12 CONSENT BY THE AGENT AND LENDERS.
Except as otherwise expressly set forth herein to the contrary, if the
consent, approval, satisfaction, determination, judgment, acceptance or similar
action (an "ACTION") of the Agent or any Lender shall be permitted or required
pursuant to any provision hereof or any provision of any other agreement to
which any Loan Party is a party and to which the Agent or any Lender has
succeeded thereto, such Action shall be required to be in writing and may be
withheld or denied by the Agent or such Lender, in its sole discretion, with or
without any reason, and without being subject to question or challenge on the
grounds that such Action was not taken in good faith.
Section 12.13 NO PARTY DEEMED DRAFTER.
Each of the parties hereto agrees that no party hereto shall be deemed
to be the drafter of this Agreement.
Section 12.14 REINSTATEMENT; CERTAIN PAYMENTS.
If any claim is ever made upon the Agent or any Lender for repayment or
recovery of any amount or amounts received by the Agent or such Lender in
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payment or on account of any of the Obligations, the Agent or such Lender shall
give prompt notice of such claim to each other Lender and the Borrower, and if
the Agent or such Lender repays all or part of such amount by reason of (i) any
judgment, decree or order of any court or administrative body having
jurisdiction over the Agent or such Lender or any of its property, or (ii) any
good faith settlement or compromise of any such claim effected by the Agent or
such Lender with any such claimant, then and in such event each Loan Party
agrees that (A) any such judgment, decree, order, settlement or compromise shall
be binding upon it notwithstanding the cancellation of any Indebtedness
hereunder or under the other Loan Documents or the termination of this Agreement
or the other Loan Documents, and (B) it shall be and remain liable to the Agent
or such Lender hereunder for the amount so repaid or recovered to the same
extent as if such amount had never originally been received by the Agent or such
Lender.
Section 12.15 INDEMNIFICATION.
(a) GENERAL INDEMNITY. In addition to each Loan Party's other
Obligations under this Agreement, each Loan Party agrees to, jointly and
severally, defend, protect, indemnify and hold harmless the Agent and each
Lender and all of their respective officers, directors, employees, attorneys,
consultants and agents (collectively called the "INDEMNITEES") from and against
any and all losses, damages, liabilities, obligations, penalties, fees,
reasonable costs and expenses (including, without limitation, reasonable
attorneys' fees, costs and expenses) incurred by such Indemnitees, whether prior
to or from and after the Effective Date, whether direct, indirect or
consequential, as a result of or arising from or relating to or in connection
with any of the following: (i) the negotiation, preparation, execution or
performance or enforcement of this Agreement, any other Loan Document or of any
other document executed in connection with the transactions contemplated by this
Agreement, (ii) the Agent's or any Lender's furnishing of funds to the Borrowers
under this Agreement or the other Loan Documents, including, without limitation,
the management of the Term Loan, (iii) any matter relating to the financing
transactions contemplated by this Agreement or the other Loan Documents or by
any document executed in connection with the transactions contemplated by this
Agreement or the other Loan Documents, or (iv) any claim, litigation,
investigation or proceeding relating to any of the foregoing, whether or not any
Indemnitee is a party thereto (collectively, the "INDEMNIFIED MATTERS");
PROVIDED, HOWEVER, that the Loan Parties shall not have any obligation to any
Indemnitee under this subsection (a) for any Indemnified Matter caused by the
gross negligence or willful misconduct of such Indemnitee, as determined by a
final judgment of a court of competent jurisdiction.
(b) ENVIRONMENTAL INDEMNITY. Without limiting Section 12.15(a)
hereof, each Loan Party agrees to, jointly and severally, defend, indemnify, and
hold harmless the Indemnitees against any and all Environmental Liabilities and
all other claims, demands, penalties, fines, liability (including strict
liability), losses, damages, costs and expenses (including without limitation,
reasonable legal fees and expenses, consultant fees and laboratory fees),
arising out of (i) any Releases or threatened Releases (x) at any property
presently or formerly owned or operated by any Loan Party or any Subsidiary of
any Loan Party, or any predecessor in interest, or (y) of any Hazardous
Materials generated and disposed of by any Loan Party or any Subsidiary of any
Loan Party, or any predecessor in interest; (ii) any violations of Environmental
Laws; (iii) any Environmental Action relating to any Loan Party or any
Subsidiary of any Loan Party, or any predecessor in interest; (iv) any personal
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injury (including wrongful death) or property damage (real or personal) arising
out of exposure to Hazardous Materials used, handled, generated, transported or
disposed by any Loan Party or any Subsidiary of any Loan Party, or any
predecessor in interest; and (v) any breach of any warranty or representation
regarding environmental matters made by the Loan Parties in Section 6.01(f) or
the breach of any covenant made by the Loan Parties in Section 7.01(k).
Notwithstanding the foregoing, the Loan Parties shall not have any obligation to
any Indemnitee under this subsection (b) regarding any potential environmental
matter covered hereunder which is caused by the gross negligence or willful
misconduct of such Indemnitee, as determined by a final judgment of a court of
competent jurisdiction.
(c) The indemnification for all of the foregoing losses,
damages, fees, costs and expenses of the Indemnitees are chargeable against the
Loan Account. To the extent that the undertaking to indemnify, pay and hold
harmless set forth in this Section 12.15 may be unenforceable because it is
violative of any law or public policy, each Loan Party shall, jointly and
severally, contribute the maximum portion which it is permitted to pay and
satisfy under applicable law, to the payment and satisfaction of all Indemnified
Matters incurred by the Indemnitees. The indemnities set forth in this Section
12.15 shall survive the repayment of the Obligations and discharge of any Liens
granted under the Loan Documents.
Section 12.16 COLUMBUS ▇▇▇▇▇▇▇▇ AS AGENT FOR BORROWERS.
Each Borrower hereby irrevocably appoints Columbus ▇▇▇▇▇▇▇▇ as the
borrowing agent and attorney-in-fact for the Borrowers (the "ADMINISTRATIVE
BORROWER") which appointment shall remain in full force and effect unless and
until the Agent shall have received prior written notice signed by all of the
Borrowers that such appointment has been revoked and that another Borrower has
been appointed Administrative Borrower. Each Borrower hereby irrevocably
appoints and authorizes the Administrative Borrower (i) to provide to the Agent
and receive from the Agent all notices with respect to Term Loan obtained for
the benefit of any Borrower and all other notices and instructions under this
Agreement and (ii) to take such action as the Administrative Borrower deems
appropriate on its behalf to obtain the Term Loan and to exercise such other
powers as are reasonably incidental thereto to carry out the purposes of this
Agreement. It is understood that the handling of the Loan Account and Collateral
of the Borrowers in a combined fashion, as more fully set forth herein, is done
solely as an accommodation to the Borrowers in order to utilize the collective
borrowing powers of the Borrowers in the most efficient and economical manner
and at their request, and that neither the Agent nor the Lenders shall incur
liability to the Borrowers as a result hereof. Each of the Borrowers expects to
derive benefit, directly or indirectly, from the handling of the Loan Account
and the Collateral in a combined fashion since the successful operation of each
Borrower is dependent on the continued successful performance of the integrated
group. To induce the Agent and the Lenders to do so, and in consideration
thereof, each of the Borrowers hereby jointly and severally agrees to indemnify
the Indemnitees and hold the Indemnitees harmless against any and all liability,
expense, loss or claim of damage or injury, made against such Indemnitee by any
of the Borrowers or by any third party whosoever, arising from or incurred by
reason of (a) the handling of the Loan Account and Collateral of the Borrowers
as herein provided, (b) the Agent and the Lenders relying on any instructions of
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the Administrative Borrower, or (c) any other action taken by the Agent or any
Lender hereunder or under the other Loan Documents.
Section 12.17 RECORDS.
The unpaid principal of and interest on the Term Loan, the interest
rate or rates applicable to such unpaid principal and interest, the duration of
such applicability, the Commitments, and the accrued and unpaid fees payable
pursuant to Section 2.06 hereof, including, without limitation, the Closing Fee,
shall at all times be ascertained from the records of the Agent, which shall be
conclusive and binding absent manifest error.
Section 12.18 BINDING EFFECT.
This Agreement shall become effective when it shall have been executed
by each Loan Party, the Agent and each Lender and when the conditions precedent
set forth in Section 5.01 hereof have been satisfied or waived in writing by the
Agent, and thereafter shall be binding upon and inure to the benefit of each
Loan Party, the Agent and each Lender, and their respective successors and
assigns, except that the Loan Parties shall not have the right to assign their
rights hereunder or any interest herein without the prior written consent of
each Lender, and any assignment by any Lender shall be governed by Section 12.07
hereof.
Section 12.19 INTEREST.
It is the intention of the parties hereto that the Agent and each
Lender shall conform strictly to usury laws applicable to it. Accordingly, if
the transactions contemplated hereby or by any other Loan Document would be
usurious as to the Agent or any Lender under laws applicable to it (including
the laws of the United States of America, the State of New York, Canada, the
Province of Ontario or any other jurisdiction whose laws may be mandatorily
applicable to the Agent or such Lender notwithstanding the other provisions of
this Agreement, including, to the extent mandatorily applicable, the Criminal
Code (Canada)), then, in that event, notwithstanding anything to the contrary in
this Agreement or any other Loan Document or any agreement entered into in
connection with or as security for the Obligations, it is agreed as follows: (i)
the aggregate of all consideration which constitutes interest under law
applicable to the Agent or any Lender that is contracted for, taken, reserved,
charged or received by the Agent or such Lender under this Agreement or any
other Loan Document or agreements or otherwise in connection with the
Obligations shall under no circumstances exceed the maximum amount allowed by
such applicable law, any excess shall be canceled automatically and if
theretofore paid shall be credited by the Agent or such Lender on the principal
amount of the Obligations (or, to the extent that the principal amount of the
Obligations shall have been or would thereby be paid in full, refunded by the
Agent or such Lender, as applicable, to the Borrowers); and (ii) in the event
that the maturity of the Obligations is accelerated by reason of any Event of
Default under this Agreement or otherwise, or in the event of any required or
permitted prepayment, then such consideration that constitutes interest under
law applicable to the Agent or any Lender may never include more than the
maximum amount allowed by such applicable law, and excess interest, if any,
provided for in this Agreement or otherwise shall be canceled automatically by
the Agent or such Lender, as applicable, as of the date of such acceleration or
prepayment and, if theretofore paid, shall be credited by the Agent or such
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Lender, as applicable, on the principal amount of the Obligations (or, to the
extent that the principal amount of the Obligations shall have been or would
thereby be paid in full, refunded by the Agent or such Lender to the Borrower).
All sums paid or agreed to be paid to the Agent or any Lender for the use,
forbearance or detention of sums due hereunder shall, to the extent permitted by
law applicable to the Agent or such Lender, be amortized, prorated, allocated
and spread throughout the full term of the Term Loan until payment in full so
that the rate or amount of interest on account of the Term Loan hereunder does
not exceed the maximum amount allowed by such applicable law. If at an time and
from time to time (x) the amount of interest payable to the Agent or any Lender
on any date shall be computed at the Highest Lawful Rate applicable to the Agent
or such Lender pursuant to this Section 12.19 and (y) in respect of any
subsequent interest computation period the amount of interest otherwise payable
to the Agent or such Lender would be less than the amount of interest payable to
the Agent or such Lender computed at the Highest Lawful Rate applicable to the
Agent or such Lender, then the amount of interest payable to the Agent or such
Lender in respect of such subsequent interest computation period shall continue
to be computed at the Highest Lawful Rate applicable to the Agent or such Lender
until the total amount of interest payable to the Agent or such Lender shall
equal the total amount of interest which would have been payable to the Agent or
such Lender if the total amount of interest had been computed without giving
effect to this Section 12.19.
For purposes of this Section 12.19, the term "applicable law" shall
mean that law in effect from time to time and applicable to the loan transaction
between the Borrower, on the one hand, and the Agent and the Lenders, on the
other, that lawfully permits the charging and collection of the highest
permissible, lawful non-usurious rate of interest on such loan transaction and
this Agreement, including laws of the State of New York and, to the extent
controlling, laws of the United States of America, laws of Canada and the
Province of Ontario, including, to the extent controlling, the Criminal Code
(Canada).
The right to accelerate the maturity of the Obligations does not
include the right to accelerate any interest that has not accrued as of the date
of acceleration.
Section 12.20 CONFIDENTIALITY.
The Agent and each Lender agrees (on behalf of itself and each of its
affiliates, directors, officers, employees and representatives) to use
reasonable precautions to keep confidential, in accordance with its customary
procedures for handling confidential information of this nature and in
accordance with safe and sound practices of comparable commercial finance
companies, any non-public information supplied to it by the Loan Parties
pursuant to this Agreement or the other Loan Documents which is identified in
writing by the Loan Parties as being confidential at the time the same is
delivered to such Person (and which at the time is not, and does not thereafter
become, publicly available or available to such Person from another source not
known to be subject to a confidentiality obligation to such Person not to
disclose such information), PROVIDED that nothing herein shall limit the
disclosure of any such information (i) to the extent required by statute, rule,
regulation or judicial process, (ii) to counsel for the Agent or any Lender,
(iii) to examiners, auditors, accountants or Securitization Parties, (iv) in
connection with any litigation to which the Agent or any Lender is a party or
(v) to any assignee or participant (or prospective assignee or participant) so
long as such assignee or participant (or prospective assignee or participant)
first agrees, in writing, to be bound by confidentiality provisions similar in
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substance to this Section 12.20. The Agent and each Lender agrees that, upon
receipt of a request or identification of the requirement for disclosure
pursuant to clause (iv) hereof, it will make reasonable efforts to keep the Loan
Parties informed of such request or identification; PROVIDED that the each Loan
Party acknowledges that the Agent and each Lender may make disclosure as
required or requested by any Governmental Authority or representative thereof
and that the Agent and each Lender may be subject to review by Securitization
Parties or other regulatory agencies and may be required to provide to, or
otherwise make available for review by, the representatives of such parties or
agencies any such non-public information.
Section 12.21 INTEGRATION.
This Agreement, together with the other Loan Documents, reflects the
entire understanding of the parties with respect to the transactions
contemplated hereby and shall not be contradicted or qualified by any other
agreement, oral or written, before the date hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
BORROWERS:
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COLUMBUS ▇▇▇▇▇▇▇▇ LIMITED
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Assistant Treasurer
LARCO INDUSTRIAL SERVICES LTD.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Treasurer
AGENT AND LENDER:
-----------------
REGIMENT CAPITAL III, L.P.
By: Regiment Capital Management, L.L.C., its
General Partner
By: Regiment Capital Advisors, L.L.C., its
manager
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
LENDER:
-------
ABLECO FINANCE LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President