AMENDED AND RESTATED CREDIT AGREEMENT
dated as of
December 31, 2002
among
MAVERICK TUBE CORPORATION
MAVERICK TUBE, L.P.
MAVERICK GP, INC.
PRECISION TUBE HOLDING CORPORATION
MAVERICK INVESTMENT CORPORATION
PRECISION GP, LLC
PRECISION TUBE TECHNOLOGY, L.P.
MAVERICK C&P, INC.
as the US Borrowers
and
PRUDENTIAL STEEL LTD.
MAVERICK TUBE (CANADA) INC.
MAVERICK EXCHANGECO (NOVA SCOTIA) ULC
PRECISION TUBE CANADA LIMITED
as the Canadian Borrowers
and
JPMORGAN CHASE BANK, Individually and
as an Issuing Bank and as the Administrative Agent,
and
CIT BUSINESS CREDIT CANADA INC.
Individually and as an Issuing Bank and as the Canadian Administrative Agent,
and
GENERAL ELECTRIC CAPITAL CORPORATION, Individually and
as the Documentation Agent
and
FINANCIAL INSTITUTIONS,
NOW OR HEREAFTER PARTIES HERETO
as the Lenders
Domestic Revolving Credit Facility
Multi-Currency Canadian Revolving Credit Facility
Term Loan Facility
Secured Over-Advance Facility
TABLE OF CONTENTS
Page No.
--------
Article 1
DEFINITIONS; CONSTRUCTION
Section 1.1 Definitions............................................3
Section 1.2 Accounting Terms and Determinations...................37
Section 1.3 Other Definitional Terms..............................37
Article 2
AMOUNT AND TERMS OF LOANS
Section 2.1 Loans and Commitments.................................37
Section 2.2 Borrowing Requests....................................40
Section 2.3 Letters of Credit.....................................40
Section 2.4 Disbursement of Funds.................................45
Section 2.5 Notes and Maturity....................................47
Section 2.6 Interest..............................................47
Section 2.7 Interest Periods......................................49
Section 2.8 Bankers' Acceptances..................................49
Section 2.9 Repayment of Loans....................................51
Section 2.10 Voluntary Termination or Reduction of Revolving
Credit Commitments; Mandatory Termination of
SOFA Commitments......................................54
Section 2.11 Mandatory Prepayments; Voluntary Prepayments;
Order of Application..................................54
Section 2.12 Continuation and Conversion Options...................59
Section 2.13 Fees..................................................60
Section 2.14 Payments, etc.........................................62
Section 2.15 Interest Rate Not Ascertainable, etc..................63
Section 2.16 Illegality............................................63
Section 2.17 Increased Costs.......................................64
Section 2.18 Change of Lending Office..............................66
Section 2.19 Funding Losses........................................66
Section 2.20 Sharing of Payments, etc..............................66
Section 2.21 Taxes.................................................68
Section 2.22 Pro Rata Treatment....................................69
Section 2.23 Replacement of Lenders................................69
Section 2.24 Advances of Revolving Credit Loans to Satisfy
Lender Indebtedness...................................70
Section 2.25 Joint and Several Liability of US Borrowers;
Rights of Contribution among US Borrowers.............70
Section 2.26 Participations in US Swingline Loans..................71
Article 3
CONDITIONS TO BORROWINGS
Section 3.1 Closing...............................................72
Section 3.2 Conditions Precedent to All Loans and Letters
of Credit.............................................77
Section 3.3 Post Closing Conditions...............................77
Article 4
SECURITY
Section 4.1 Security Granted by US Credit Parties.................77
Section 4.2 Security Granted by Canadian Credit Parties...........78
Section 4.3 Establishment of US Lockbox...........................78
Section 4.4 Establishment of Canadian Lockbox.....................78
Section 4.5 Establishment of US Blocked Account...................78
Section 4.6 Establishment of Canadian Blocked Account.............79
Section 4.7 Application of Proceeds of US Blocked Account.........79
Section 4.8 Application of Proceeds of Canadian Blocked Account...79
Article 5
REPRESENTATIONS AND WARRANTIES
Section 5.1 Corporate Existence...................................80
Section 5.2 Corporate Power and Authorization.....................80
Section 5.3 Binding Obligations...................................80
Section 5.4 No Legal Bar or Resultant Lien........................80
Section 5.5 No Consent............................................80
Section 5.6 Financial Information.................................80
Section 5.7 Litigation............................................81
Section 5.8 Use of Proceeds.......................................81
Section 5.9 US Employee Benefits..................................81
Section 5.10 Canadian Employee Benefits............................82
Section 5.11 Taxes; Governmental Charges...........................83
Section 5.12 Titles, etc...........................................83
Section 5.13 Defaults..............................................83
Section 5.14 Casualties; Taking of Properties......................83
Section 5.15 Compliance with the Law...............................83
Section 5.16 No Material Misstatements.............................83
Section 5.17 Investment Company Act................................83
Section 5.18 Public Utility Holding Company Act....................84
Section 5.19 Capital Structure.....................................84
Section 5.20 Insurance.............................................84
Section 5.21 Environmental Matters.................................84
Section 5.22 Solvency..............................................85
Section 5.23 Employee Matters......................................85
Section 5.24 Real Property.........................................85
Section 5.25 Perfection Certificate; Schedules to other
Financing Documents...................................86
Section 5.26 Existing Indebtedness.................................86
Section 5.27 Purchase Documents....................................86
Section 5.28 Precision Purchase Documents..........................86
Section 5.29 Representations With Respect to Certain Credit
Parties...............................................86
Section 5.30 Accounts..............................................86
Article 6
AFFIRMATIVE COVENANTS
Section 6.1 Maintenance and Compliance, etc.......................87
Section 6.2 Payment of Taxes and Claims, etc......................87
Section 6.3 Further Assurances....................................87
Section 6.4 Performance of Obligations............................87
Section 6.5 Insurance.............................................88
Section 6.6 Accounts and Records..................................88
Section 6.7 Right of Inspection...................................88
Section 6.8 Operation and Maintenance of Property.................88
Section 6.9 New Subsidiaries; Additional Liens....................88
Section 6.10 Reporting Covenants...................................89
Article 7
NEGATIVE COVENANTS
Section 7.1 Financial Covenants...................................93
Section 7.2 Indebtedness..........................................93
Section 7.3 Liens.................................................94
Section 7.4 Mergers, Sales, etc...................................94
Section 7.5 Dividends, etc........................................95
Section 7.6 Investments, Loans, etc...............................95
Section 7.7 Sales and Leasebacks..................................96
Section 7.8 Nature of Business....................................97
Section 7.9 ERISA Compliance......................................97
Section 7.10 Sale or Discount of Receivables.......................98
Section 7.11 Negative Pledge Agreements............................98
Section 7.12 Transactions with Affiliates..........................98
Section 7.13 Unconditional Purchase Obligations....................99
Section 7.14 Equity................................................99
Section 7.15 Capital Expenditures..................................99
Section 7.16 Intercompany Transactions.............................99
Section 7.17 Acquisitions; Creation of Subsidiaries................99
Section 7.18 Accounts..............................................99
Section 7.19 Modifications to Indebtedness Agreements..............99
Section 7.20 Fiscal Year..........................................100
Section 7.21 Modification of Purchase Documents...................100
Section 7.22 Modification of Precision Purchase Documents.........100
Section 7.23 Negative Covenants With Respect to Certain
Credit Parties.......................................100
Article 8
EVENTS OF DEFAULT
Section 8.1 Payments.............................................100
Section 8.2 Covenants Without Notice.............................100
Section 8.3 Other Covenants......................................100
Section 8.4 Other Financing Document Obligations.................101
Section 8.5 Representations......................................101
Section 8.6 Non-Payments of Other Indebtedness...................101
Section 8.7 Defaults Under Other Agreements......................101
Section 8.8 Bankruptcy Under US Law..............................101
Section 8.9 Bankruptcy Under Canadian Law........................101
Section 8.10 Money Judgment.......................................102
Section 8.11 Discontinuance of Business...........................103
Section 8.12 Financing Documents..................................103
Section 8.13 Change of Control....................................103
Article 9
AGENTS
Section 9.1 Appointment of Agents................................104
Section 9.2 Limitation of Duties of Agents.......................104
Section 9.3 Lack of Reliance on the Agents.......................104
Section 9.4 Certain Rights of the Agents.........................105
Section 9.5 Reliance by Agents...................................105
Section 9.6 Indemnification of Agents............................105
Section 9.7 Agents in their Individual Capacity..................105
Section 9.8 May Treat Lender as Owner............................105
Section 9.9 Successor Agent......................................106
Section 9.10 Documentation Agent..................................106
Article 10
MISCELLANEOUS
Section 10.1 Notices..............................................106
Section 10.2 Amendments and Waivers...............................106
Section 10.3 No Waiver; Remedies Cumulative.......................108
Section 10.4 Payment of Expenses, Indemnities, etc................108
Section 10.5 Right of Setoff......................................111
Section 10.6 Benefit of Agreement.................................111
Section 10.7 Successors and Assigns; Participations and
Assignments..........................................111
Section 10.8 Governing Law; Submission to Jurisdiction; etc.......114
Section 10.9 Independent Nature of Lenders' Rights................115
Section 10.10 Invalidity...........................................116
Section 10.11 Renewal, Extension or Rearrangement..................116
Section 10.12 Confidentiality......................................116
Section 10.13 Interest.............................................117
Section 10.14 Entire Agreement.....................................117
Section 10.15 Attachments..........................................117
Section 10.16 Counterparts.........................................117
Section 10.17 Survival of Indemnities..............................118
Section 10.18 Headings Descriptive.................................118
Section 10.19 Satisfaction Requirement.............................118
Section 10.20 Exculpation Provisions...............................118
Section 10.22 No Financial Assistance by Canadian Credit Parties...119
Section 10.23 Missouri Law Provision...............................119
SCHEDULES
Schedule 1.3......Projections
Schedule 3.3......Post-Closing Matters
Schedule 5.7......Litigation
Schedule 5.9......US Employee Benefits Disclosures
Schedule 5.15.....Compliance with Laws
Schedule 5.19.....Capital Structure
Schedule 5.20.....Insurance
Schedule 5.21.....Environmental Matters
Schedule 5.23.....Employee Matters
Schedule 5.24.....Real Property Locations
Schedule 5.26.....Indebtedness
Schedule 7.2......Permitted Indebtedness
Schedule 7.3......Permitted Liens
Schedule 7.6......Permitted Investments
Schedule 7.8......Nature of Business
EXHIBITS
Exhibit A-1.......Form of US Borrowing Base Report
Exhibit A-2.......Form of Canadian Borrowing Base Report
Exhibit A-3.......Form of SOFA Borrowing Base Report
Exhibit B-1.......Form of Borrowing Request (US Revolving Credit Loan)
Exhibit B-2.......Form of Borrowing Request (Canadian Revolving Credit Loans)
Exhibit B-3.......Form of Request for US Letters of Credit
Exhibit B-4.......Form of Request for Canadian Letters of Credit
Exhibit B-5.......Form of Borrowing Request (US Swingline Loans)
Exhibit B-6.......Form of Borrowing Request (SOFA Loans)
Exhibit C-1.......Form of Canadian Real Estate Mortgage
Exhibit C-2.......Form of Canadian Assignment of Leases and Rents
Exhibit D.........Form of Canadian Revolving Credit Note
Exhibit E.........Form of Perfection Certificate Update
Exhibit F.........Form of Term Lender Joinder Agreement
Exhibit G.........Form of Term Note
Exhibit H.........Form of US Real Estate Mortgage
Exhibit I.........Form of US Revolving Credit Note
Exhibit J.........Form of US Swingline Note
Exhibit K.........Form of B/A Equivalent Note
Exhibit L.........Form of Borrower Joinder Agreement
Exhibit M.........Form of Compliance Certificate
Exhibit N-1.......Form of Interim Account Report (US Borrowers)
Exhibit N-2.......Form of Interim Account Report (Canadian Borrowers)
Exhibit O-1.......Form of Inventory Designation Report (US Borrowers)
Exhibit O-2.......Form of Inventory Designation Report (Canadian Borrowers)
Exhibit P.........Form of Assignment and Acceptance
Exhibit Q.........Form of Restricted Account Agreement
Exhibit R.........Form of Certificate of Effectiveness
Exhibit S.........Form of SOFA Note
LIST OF DEFINED TERMS
Page No.
--------
$.........................................................................15
ABR.......................................................................50
ABR Loan...................................................................3
Acceptance Fee.............................................................3
Account Party..........................................................3, 44
Acquired Assets............................................................1
Acquisition.............................................................1, 3
Acquisition Transactions...................................................3
Adjusted Interest Expense..................................................3
Administrative Agent.......................................................3
Advance Notice.............................................................3
Affiliate..................................................................4
Agent......................................................................4
Agents.....................................................................4
Aggregate Canadian Revolving Credit Exposure...............................4
Aggregate Revolving Credit Exposure........................................4
Aggregate SOFA Exposure....................................................4
Aggregate US Revolving Credit Exposure.....................................4
Agreement..................................................................4
Applicable Commitment Fee Percentage.......................................5
applicable law...........................................................123
Applicable Margin..........................................................5
Applicable Percentage......................................................6
Application................................................................6
Assessment Rate............................................................6
Assignment and Acceptance.............................................6, 117
Availability Reserves......................................................6
B/A........................................................................7
B/A Cover..................................................................7
B/A Equivalent Note....................................................7, 53
B/A Loan...................................................................7
Bailee.....................................................................7
Bailee's Letter............................................................7
Bankruptcy Code.......................................................7, 106
Base CD Rate...............................................................7
Beneficially Own..........................................................13
Board......................................................................7
Borrower................................................................1, 7
Borrower Joinder Agreement................................................92
Borrowers...............................................................1, 7
Borrowing..................................................................8
Borrowing Base Report......................................................8
Borrowing Request..........................................................8
Business Day...............................................................8
C$ 8
C$ Denominated Loan........................................................8
C&P........................................................................1
Canadian Administrative Agent..............................................8
Canadian Administrative Agent Overline....................................56
Canadian Blocked Account...................................................8
Canadian Borrower..........................................................1
Canadian Borrowers.........................................................8
Canadian Borrowing Base....................................................8
Canadian Credit Party......................................................9
Canadian Equipment Component...............................................9
Canadian Excess Availability...............................................9
Canadian Excess Cash Flow Amount...........................................9
Canadian Fee Letter.......................................................10
Canadian Guaranty and Security Agreement..................................12
Canadian Included-in-Transit Limit........................................10
Canadian Inventory Limit..................................................10
Canadian Lender...........................................................10
Canadian Lender Indebtedness..............................................10
Canadian Letter of Credit.................................................10
Canadian Letter of Credit Liabilities.....................................10
Canadian Letters of Credit............................................10, 43
Canadian Loans............................................................10
Canadian Lockbox..........................................................10
Canadian Lockbox Agreement................................................10
Canadian Lockbox Bank.....................................................11
Canadian Maximum Available Amount.........................................11
Canadian Prime Rate.......................................................11
Canadian Prime Rate Loans.................................................11
Canadian Priority Claims Reserve..........................................11
Canadian Real Estate Mortgage.............................................11
Canadian Revolving Credit Commitment..................................11, 41
Canadian Revolving Credit Commitments.....................................41
Canadian Revolving Credit Exposure........................................11
Canadian Revolving Credit Loan........................................11, 40
Canadian Revolving Credit Note............................................12
Canadian Revolving Credit Percentage......................................12
Canadian WIP Limit........................................................12
Capital Expenditures......................................................12
Capital Lease Obligations.................................................12
Cash Management Affiliate.................................................12
Cash Management Agreement.................................................12
Cash Management Reserves..................................................12
CDOR Rate.................................................................13
CERCLA....................................................................19
Certificate of Effectiveness..............................................13
Change of Control.........................................................13
Closing Date..............................................................13
Code......................................................................13
Collateral................................................................13
Combined Revolving Credit Commitment......................................14
Commitment................................................................14
Company................................................................1, 14
Contract Period...........................................................14
Credit Parties............................................................14
Credit Party..............................................................14
Credit Percentage.........................................................14
Current Information.......................................................14
Dated Assets..........................................................14, 73
Dated Liabilities.....................................................14, 73
Default...................................................................14
Dilution..................................................................14
Dilution Percentage.......................................................15
Disbursement Account..................................................15, 48
Discount Proceeds.........................................................15
Discount Rate.............................................................15
disposal..................................................................19
disposed..................................................................19
Disposition...............................................................15
Documentary Letter of Credit..............................................15
Documentation Agent..................................................15, 111
Dollar....................................................................15
Dollar Denominated Loans..................................................15
Dollar Equivalent.........................................................15
EBITDA....................................................................15
Eligible Account..........................................................16
Eligible Account Advance Percentage.......................................18
Eligible Bailee Inventory.................................................18
Eligible ▇▇▇▇ and Hold Accounts...........................................18
Eligible Included-In-Transit Inventory....................................18
Eligible Inventory........................................................18
Eligible Inventory Advance Percentage.....................................19
Environmental Laws........................................................19
Equity....................................................................20
equity distribution.......................................................99
ERISA.....................................................................20
ERISA Affiliate...........................................................20
ERISA Termination Event...................................................20
Event of Default.....................................................20, 105
Excess Availability.......................................................20
Excess Cash Flow..........................................................20
Excess Net Cash Proceeds..................................................20
Exchangeco.............................................................1, 20
Excluded Taxes............................................................21
Existing Borrowers.........................................................1
Existing Credit Agreement..................................................1
Existing Financing Documents...............................................2
Existing Indebtedness.....................................................21
Federal Funds Effective Rate..............................................21
Fee Letter................................................................21
Financial Statements......................................................21
Financing Documents.......................................................21
Financing Parties........................................................122
Fiscal Quarter............................................................22
Fiscal Year...............................................................22
Fixed Charge Coverage Ratio...............................................22
Foreign Lender............................................................22
Funded Indebtedness.......................................................22
Funds Flow from Operations................................................22
GAAP......................................................................22
Governmental Authority....................................................22
Governmental Requirement..................................................23
GP Inc.................................................................1, 23
GP LLC.................................................................1, 23
Group.....................................................................13
Guaranty and Security Agreement...........................................23
hazardous substance.......................................................19
herein....................................................................39
hereof....................................................................39
hereunder.................................................................39
Highest Lawful Rate.......................................................23
Holding................................................................1, 23
Included-In-Transit Inventory.............................................23
Included-in-Transit Limit.................................................23
Indebtedness..............................................................23
Indemnified Taxes.........................................................24
Information..............................................................122
Initial Reserve...........................................................24
Interest Expense..........................................................24
Interest Period...........................................................24
Inventory Limit...........................................................24
Investment.............................................................1, 24
Issuing Bank..............................................................24
JPMorgan..................................................................25
JPMorgan Canada...........................................................25
Judgment Conversion Date.................................................121
Judgment Currency........................................................120
L/C Cover.................................................................25
Landlord Consent and Subordination Agreement..............................25
Landlord Waiver Agreement.................................................25
laws applicable to any Financing Party...................................123
Lender.................................................................1, 25
Lender Indebtedness.......................................................25
Lenders....................................................................1
Lending Office............................................................26
Letter of Credit..........................................................26
Letter of Credit Liabilities..............................................26
Letters of Credit.........................................................26
LIBOR Loan................................................................26
LIBOR Rate................................................................26
Lien......................................................................26
Loan......................................................................26
Loans.....................................................................26
Lockbox...................................................................26
Lockbox Agreement.........................................................27
LTV Steel..................................................................1
Margin Stock..............................................................27
Material Adverse Effect...................................................27
Maturity Date.............................................................27
Maverick International....................................................27
Mellon Account............................................................27
Minimum Excess Availability...............................................27
Mortgaged Real Property...................................................27
Net Cash Proceeds.........................................................27
New Subsidiary........................................................27, 92
Non Financed Capital Expenditures.........................................27
Notes.....................................................................27
Obligated Party...........................................................28
Obligation Currency......................................................121
oil.......................................................................19
OPA.......................................................................19
Other Taxes...............................................................28
Overadvance...........................................................28, 57
Participant..............................................................118
Payment Office............................................................28
PBGC......................................................................28
Perfection Certificate Update.............................................28
Perfection Certificates...................................................28
Permitted Borrowing Base Adjustments......................................28
Permitted Liens.......................................................28, 98
Person....................................................................28
Plan......................................................................29
Precision..............................................................1, 29
Precision Canada.......................................................1, 29
Precision International...................................................29
Precision Purchase Documents..........................................29, 90
Precision Scotland........................................................29
Precision Sellers.....................................................29, 90
Prime Rate................................................................29
Processing Reserves.......................................................29
Projections...............................................................29
Property..................................................................29
Prudential.............................................................1, 30
Purchase Agreement.....................................................1, 30
Purchase Documents....................................................30, 90
Quarterly Dates...........................................................30
rate of exchange.........................................................121
RCRA......................................................................19
Real Estate Mortgage......................................................30
Real Property.............................................................30
Register.............................................................30, 118
Regulation D..............................................................30
Regulations U and X.......................................................30
Reimbursement Obligations.................................................30
Related Affiliate.........................................................30
Related Person............................................................13
release...................................................................19
Required Lenders..........................................................30
Required Revolving Lenders................................................30
Required SOFA Lenders.....................................................31
Required Term Lenders.....................................................31
Responsible Officer.......................................................31
Restated Account...........................................................7
Restricted Account Agreement..............................................31
Revolving Credit Commitments..............................................31
Revolving Credit Exposure.................................................31
Revolving Credit Loan.....................................................31
Revolving Credit Notes....................................................31
Revolving Lenders.........................................................31
Rolling Period............................................................31
Secured Affiliate.........................................................31
Security Instruments......................................................31
Sellers................................................................1, 31
Settlement Date...........................................................32
SOFA Borrowing Base.......................................................32
SOFA Commitment.......................................................32, 41
SOFA Commitment Termination Date..........................................32
SOFA Commitments..........................................................41
SOFA Conversion Date......................................................32
SOFA Exposure.............................................................32
SOFA Lender...............................................................32
SOFA Loan.............................................................32, 40
SOFA Maturity Date........................................................32
SOFA Maximum Available Amount.............................................32
SOFA Note.................................................................32
SOFA Percentage...........................................................32
SOFA Term Amount......................................................33, 58
solid waste...............................................................19
Solvent...................................................................33
Spot Exchange Rate........................................................33
Standby Letter of Credit..................................................33
Statutory Reserves........................................................33
Stock Repurchase..........................................................99
Storage/Handling Reserves.................................................33
subject Borrower..........................................................73
Subsidiary................................................................33
Swap Agreement............................................................34
Swap Reserves.............................................................34
Tax Benefit...............................................................71
Taxes.....................................................................34
Temporary Lockbox Institutions............................................34
Term Commitment...........................................................34
Term Lender...............................................................34
Term Lender Joinder Agreement.............................................34
Term Loans................................................................34
Term Note.................................................................34
Term Percentage...........................................................34
threatened release........................................................19
Three-Month Secondary CD Rate.............................................34
Transactions..............................................................35
Transferee...............................................................119
Tri-Party Agreement.......................................................35
True-Up Loans..........................................................3, 35
Tube...................................................................1, 35
Tube Canada............................................................1, 35
Tubing.....................................................................1
Type......................................................................35
UCC.......................................................................35
UCP.......................................................................44
Unrelated Person..........................................................13
US Base Rate..............................................................35
US Blocked Account........................................................35
US Borrower................................................................1
US Borrowers...........................................................1, 35
US Borrowing Base.........................................................35
US Credit Party...........................................................36
US Equipment Component....................................................36
US Excess Availability....................................................36
US Excess Cash Flow Amount................................................36
US Funding Amount.....................................................37, 42
US Included-in-Transit Limit..............................................37
US Inventory Limit........................................................37
US Lender.................................................................37
US Lender Indebtedness....................................................37
US Letter of Credit.......................................................37
US Letter of Credit Liabilities...........................................37
US Letters of Credit..................................................37, 43
US Loans..................................................................38
US Lockbox................................................................37
US Lockbox Agreement......................................................37
US Maximum Available Amount...............................................38
US Real Estate Mortgage...................................................38
US Revolving Credit Commitment........................................38, 40
US Revolving Credit Commitments...........................................41
US Revolving Credit Exposure..............................................38
US Revolving Credit Loan..............................................38, 40
US Revolving Credit Note..................................................38
US Revolving Credit Percentage............................................38
US Revolving Lender.......................................................38
US Swingline Availability.................................................38
US Swingline Commitment...............................................39, 41
US Swingline Exposure.....................................................39
US Swingline Lender.......................................................39
US Swingline Loan.........................................................40
US Swingline Loans........................................................39
US Swingline Note.........................................................39
US WIP Limit..............................................................39
Voting Stock..............................................................39
WIP Limit.................................................................39
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement") is made
and entered into as of the 31st day of December, 2002, among Maverick Tube
Corporation, a Delaware corporation (the "Company"), Maverick Investment
Corporation, a Delaware corporation ("Investment"), Maverick Tube, L.P., a
Delaware limited partnership ("Tube"), Precision Tube Holding Corporation, a
Delaware corporation ("Holding"), Maverick GP, Inc., a Delaware corporation ("GP
Inc."), Precision GP, LLC, a Delaware limited liability company ("GP LLC"),
Precision Tube Technology, L.P., a Texas limited partnership ("Precision"),
Maverick C&P, Inc., a Delaware corporation ("C&P" and collectively with the
Company, Investment, Tube, Holding, GP Inc., GP LLC and Precision, the "US
Borrowers" and individually, a "US Borrower"), Prudential Steel Ltd., an Alberta
corporation ("Prudential"), Maverick Exchangeco (Nova Scotia) ULC, a Nova Scotia
unlimited liability company ("Exchangeco"), Maverick Tube (Canada) Inc., an
Alberta corporation ("Tube Canada"), Precision Tube Canada Limited, an Alberta
corporation ("Precision Canada" and collectively with Prudential, Exchangeco and
Tube Canada, the "Canadian Borrowers" and individually, a "Canadian Borrower")
(the US Borrowers and the Canadian Borrowers are together referred to herein as
the "Borrowers" and individually, a "Borrower"), JPMorgan Chase Bank,
individually as a Lender and an Issuing Bank and as the Administrative Agent,
CIT Business Credit Canada Inc., individually as a Lender and as the Canadian
Administrative Agent and as Issuing Bank, General Electric Capital Corporation,
individually as a Lender and as Documentation Agent, each additional Issuing
Bank hereunder from time to time, and each of the lenders that is a signatory
hereto or which hereafter becomes a party hereto as provided in Section 10.7
including, without limitation, the US Swingline Lender (as defined below)
(individually, a "Lender" and, collectively, the "Lenders").
RECITALS:
WHEREAS, the Borrowers other than C&P (the "Existing Borrowers"), the
Agents and the Lenders are parties to that certain Credit Agreement dated as of
March 28, 2002 (as heretofore amended, the "Existing Credit Agreement"),
pursuant to which the Lenders extended certain financing to the Existing
Borrowers in accordance with the terms and conditions set forth therein; and
WHEREAS, pursuant to that certain Asset Purchase Agreement (the
"Purchase Agreement") dated as of October 15, 2002 by and among the Company, The
LTV Corporation, a Delaware corporation, LTV Steel Company, Inc., a New Jersey
corporation ("LTV Steel"), a Georgia Tubing Corporation, a Delaware corporation
("Tubing" collectively with LTV and LTV Steel are referred to herein as
"Sellers"), the Company agreed to purchase all of the Acquired Assets (as
defined in the Purchase Agreement) (collectively, the "Acquisition"); and
WHEREAS, in connection with the Acquisition, C&P was formed as a wholly
owned subsidiary of Tube and the Company has assigned to C&P the right to
acquire the Acquired Assets; and
WHEREAS, in order to facilitate the Acquisition, the Borrowers have
requested that the Existing Credit Agreement be amended and restated in its
entirety pursuant to which, among other things, (a) the aggregate amount of the
US Revolving Credit Commitments will be increased, and (b) a secured
over-advance commitment of $10,000,000 will be provided.
WHEREAS, proceeds of (a) the Revolving Credit Loans and Term Loans will
be used solely (i) to finance a portion of the purchase price of the
Acquisition, (ii) to pay fees and expenses related to the Acquisition, (iii) to
support working capital requirements of the Borrowers, and (iv) for general
corporate purposes of Borrowers, and (b) the SOFA Loans will be used solely to
repay the US Revolving Credit Loans.
AGREEMENTS:
In consideration of the mutual covenants and agreements herein
contained, the Borrowers, the Administrative Agent, the Canadian Administrative
Agent, the Issuing Banks and the Lenders agree that, subject to the satisfaction
of each condition precedent contained in Section 3.1 hereof, the satisfaction of
which shall be evidenced by the execution by the Borrowers and the
Administrative Agent of the Certificate of Effectiveness (as herein defined),
the Existing Credit Agreement shall be amended and restated as of the Closing
Date in its entirety in the form of this Agreement. It is the intention of the
Borrowers, the Lenders, the Issuing Banks and the Agents that this Agreement
supersede and replace the Existing Credit Agreement in its entirety; provided,
that, (a) such amendment and restatement shall operate to renew, amend and
modify the rights and obligations of the parties under the Existing Credit
Agreement, as applicable and as provided herein, but shall not effect a novation
thereof, (b) unless otherwise provided for herein and evidenced by a separate
written agreement, amendment or release, no other Financing Document, as defined
in, and executed and/or delivered pursuant to the terms of, the Existing Credit
Agreement (collectively, the "Existing Financing Documents") shall be amended,
terminated or released in any respect and all of such other Existing Financing
Documents shall remain in full force and effect except that the Borrowers and
the Lenders agree that by executing this Agreement the definition of "Credit
Agreement" contained in such Existing Financing Documents shall be amended to
refer to this Agreement and all future amendments hereto, and (c) the Liens
securing the Lender Indebtedness under and as defined in the Existing Credit
Agreement and granted pursuant to the Existing Financing Documents and the
liabilities and obligations of the Borrowers shall not be extinguished, but
shall be carried forward, and such Liens shall secure such Lender Indebtedness,
in each case, as renewed, amended, restated and modified hereby.
Upon delivery of the Certificate of Effectiveness, (a) each US Lender
who holds US Revolving Credit Loans in an aggregate amount less than its US
Revolving Credit Percentage (after giving effect to the amendment and
restatement) of all US Revolving Credit Loans shall advance new US Revolving
Credit Loans which shall be disbursed to the Administrative Agent and used to
repay US Revolving Credit Loans outstanding to each US Lenders who holds US
Revolving Credit Loans in an aggregate amount greater than its US Revolving
Credit Percentage of all US Revolving Credit Loans, (b) each Canadian Lender who
holds Canadian Revolving Credit Loans in an aggregate amount less than its
Canadian Revolving Credit Percentage (after giving effect to the amendment and
restatement) of all Canadian Revolving Credit Loans shall advance new Canadian
Revolving Credit Loans which shall be disbursed to the Canadian Administrative
Agent and used to repay Canadian Revolving Credit Loans outstanding to the
Canadian Lenders who holds Canadian Revolving Credit Loans in an aggregate
amount greater than its Canadian Revolving Credit Percentage of all Canadian
Revolving Credit Loans, (c) each US Lender's participation in each US Letter of
Credit shall be automatically adjusted to equal its US Revolving Credit
Percentage (after giving effect to the amendment and restatement), (d) each
Canadian Lender's participation in each Canadian Letter of Credit shall be
automatically adjusted to equal its Canadian Revolving Credit Percentage (after
giving effect to the amendment and restatement); (e) such other adjustments
shall be made as the Administrative Agent and the Canadian Administrative Agent
shall specify so that (i) each US Lender's US Revolving Credit Exposure equals
its US Revolving Credit Percentage (after giving effect to the amendment and
restatement) of the Aggregate US Revolving Credit Exposure, and (ii) each
Canadian Lender's Canadian Revolving Credit Exposure equals its Canadian
Revolving Credit Percentage (after giving effect to the amendment and
restatement) of the Aggregate Canadian Revolving Credit Exposure. The loans
and/or adjustments described in this paragraph are referred to herein as the
"True-Up Loans".
The Borrowers, the Lenders, the Issuing Banks and the Agents hereby
further agree as follows:
Article 1. DEFINITIONS; CONSTRUCTION
Section 1.1. Definitions. As used herein, the following terms shall have the
meanings herein specified (to be equally applicable to both the singular and
plural forms of the terms defined). Reference to any party in a Financing
Document shall mean that party and its successors and assigns.
"ABR" shall have the meaning provided in Section 2.6(a).
"ABR Loan" shall mean a Revolving Credit Loan, Term Loan or US
Swingline Loan bearing interest at the rate provided in Section 2.6(a).
"Acceptance Fee" shall mean a fee payable in C$ by the Canadian
Borrowers to a C$ Lender with respect to the acceptance or purchase of a B/A by
such Canadian Lender, calculated on the face amount of such B/A at a rate per
annum equal to the Applicable Margin with respect to B/A Loans on the basis of
the number of days in the applicable Contract Period (inclusive of the first day
and exclusive of the last day) and a year of 365 days (it being agreed that the
Applicable Margin in respect of a B/A Equivalent Note is equivalent to the
Applicable Margin otherwise applicable to a B/A having the same face amount and
Contract Period as the subject B/A Equivalent Note).
"Account Party" shall have the meaning assigned to such term in Section
2.3(d).
"Acquisition" shall have the meaning set forth in the recitals hereto.
"Acquisition Transactions" shall have the meaning set forth in the
recitals hereto.
"Adjusted Interest Expense" shall mean, as to the Credit Parties on a
consolidated basis and for any period, Interest Expense less any non cash
Interest Expense.
"Administrative Agent" shall mean JPMorgan Chase Bank, acting in the
manner and to the extent described in Article 9, and any successor to JPMorgan
Chase Bank acting in such manner.
"Advance Notice" shall mean written or telecopy notice (with telephonic
confirmation in the case of telecopy notice), which in each case shall be
irrevocable, from the applicable Borrowers to be received by the Administrative
Agent (or the Canadian Administrative Agent (with a copy to the Administrative
Agent) in the case of any Borrowing, conversion, continuation or prepayment of
Canadian Loans) before 1:00 pm. (New York, New York time) (or 12:00 p.m. (noon)
New York, New York time in the case of any Borrowing of ABR Loans or B/A Loans
and 11:00 a.m. New York, New York time in the case of any Borrowing of Canadian
Prime Rate Loans), by the number of Business Days in advance of any Borrowing,
conversion, continuation or prepayment of any Loan or Loans pursuant to this
Agreement as respectively indicated below:
(a) LIBOR Loans - 3 Business Days;
(b) ABR Loans - Same Business Day;
(c) Canadian Prime Rate Loans equal to or less than C$10,000,000 - Same
Business Day;
(d) Canadian Prime Rate Loans greater than C$10,000,000 - One Business
Day; and
(e) B/A Loans - One Business Day.
For the purpose of determining the applicable period of Advance Notice
in the case of the conversion from one Type of Loan into another, the Loans into
which there is to be a conversion shall control. The Administrative Agent, the
Canadian Administrative Agent, each Issuing Bank and each Lender are entitled to
rely upon and act upon telecopy notice made or purportedly made by the
Borrowers, and the Borrowers hereby waive the right to dispute the authenticity
and validity of any such transaction once the Administrative Agent, the Canadian
Administrative Agent or any Lender has advanced funds or any Issuing Bank has
issued Letters of Credit, absent manifest error.
"Affiliate" shall mean (a) any Person controlling, controlled by or
under common control with any other Person, (b) with respect to any Person, any
other Person who is an officer, director, managing member, partner, trustee or
beneficiary of such Person, and (c) any Person who is a spouse, sibling, parent,
grandparent, child or grandchild of a Person described in clauses (a) or (b)
preceding. For purposes of this definition, "control" (including "controlled by"
and "under common control with") shall mean the possession, directly or
indirectly, of the power to either (a) vote 10% or more of the Voting Stock of
such Person or (b) direct or cause the direction of the management and policies
of such Person, whether through the ownership of voting securities, by contract
or otherwise.
"Agent" shall mean any of the Administrative Agent, the Canadian
Administrative Agent or the Documentation Agent, and "Agents" means all such
Agents collectively.
"Aggregate Canadian Revolving Credit Exposure" shall mean the sum of
all of the Canadian Lenders' Canadian Revolving Credit Exposures.
"Aggregate Revolving Credit Exposure" shall mean the sum of all of the
Revolving Lenders' Revolving Credit Exposures.
"Aggregate SOFA Exposure" shall mean the sum of all of the SOFA
Lenders' SOFA Exposures.
"Aggregate US Revolving Credit Exposure" shall mean the sum of all of
the US Lenders' US Revolving Credit Exposures.
"Agreement" shall mean this Amended and Restated Credit Agreement, as
further amended, modified or supplemented from time to time.
"Applicable Commitment Fee Percentage" shall mean, on any day, the
applicable per annum percentage set forth at the appropriate intersection in the
table shown below, based on the Minimum Excess Availability for the most
recently ended Fiscal Quarter:
---------------------------------------------------- ---------------------------
Minimum Excess Availability Applicable Commitment
Fee Percentage
---------------------------------------------------- ---------------------------
Less than or equal to $20,000,000 0.5000%
---------------------------------------------------- ---------------------------
Greater than $20,000,000 but less than or equal to 0.5000%
$50,000,000
---------------------------------------------------- ---------------------------
Greater than $50,000,000 but less than or equal to 0.4375%
$80,000,000
---------------------------------------------------- ---------------------------
Greater than $80,000,000 0.3750%
---------------------------------------------------- ---------------------------
Each change in the Applicable Commitment Fee Percentage shall be effective as of
the first day of the third month of each applicable Fiscal Quarter based on the
Minimum Excess Availability during the immediately preceding Fiscal Quarter.
Notwithstanding the foregoing, for the period from the Closing Date through
March 1, 2003, the Applicable Commitment Fee Percentage will be 0.5000%.
"Applicable Margin" shall mean, on any day and with respect to any Loan
other than Term Loans, SOFA Loans, the applicable per annum percentage set forth
at the appropriate intersection in the table shown below, based on the Minimum
Excess Availability for the most recently ended Fiscal Quarter.
--------------------- ------------ ------------- ------------ ------------------
Minimum Excess LIBOR Loan B/A Loan ABR Loan Canadian Prime
Availability Applicable Applicable Applicable Rate Loan
Margin Margin Margin Applicable Margin
Percentage Percentage Percentage Percentage
--------------------- ------------ ------------- ------------ ------------------
Less than or equal 3.00% 3.00% 1.00% 1.75%
to $20,000,000
--------------------- ------------ ------------- ------------ ------------------
Greater than 2.75% 2.75% 0.75% 1.50%
$20,000,000
but less than or
equal to
$50,000,000
--------------------- ------------ ------------- ------------ ------------------
Greater than 2.50% 2.50% 0.50% 1.25%
$50,000,000
but less than or
equal to
$80,000,000
--------------------- ------------ ------------- ------------ ------------------
Greater than
$80,000,000 2.25% 2.25% 0.25% 1.00%
--------------------- ------------ ------------- ------------ ------------------
Each change in the Applicable Margin shall be effective as of the first day of
the third month of each applicable Fiscal Quarter based on the Minimum Excess
Availability for the immediately preceding Fiscal Quarter. Notwithstanding the
foregoing, for the period from the Closing Date through March 1, 2003, the
initial LIBOR Loan Applicable Margin and B/A Loan Applicable Margin (other than
with respect to Term Loans and SOFA Loans) will be 2.75%, the initial ABR Loan
Applicable Margin shall be 0.75% and the initial Canadian Prime Rate Loan
Applicable Margin shall be 1.50%. The Applicable Margin with respect to Term
Loans shall be as set forth in the Term Lender Joinder Agreement. Prior to the
SOFA Conversion Date, the Applicable Margin with respect to SOFA Loans shall be
3.00% for LIBOR Loans and 2.00% for ABR Loans. From and after the SOFA
Conversion Date, the Applicable Margin with respect to SOFA Loans shall be 4.00%
for LIBOR Loans and 3.00% for ABR Loans.
"Applicable Percentage" shall mean, (a) with respect to any US
Revolving Lender, such US Revolving Lender's US Revolving Credit Percentage, (b)
with respect to any Term Lender, such Term Lender's Term Loan Percentage, (c)
with respect to any Canadian Lender, such Canadian Lender's Canadian Revolving
Credit Percentage, and (d) with respect to any SOFA Lender, such SOFA Lender's
SOFA Percentage, as applicable.
"Application" shall mean an "Application and Agreement for Letters of
Credit," or similar instruments or agreements, entered into between a Borrower
and an Issuing Bank in connection with any Letter of Credit.
"Assessment Rate" shall mean, for any day, the annual assessment rate
in effect on such day that is payable by a member of the Bank Insurance Fund
classified as "well-capitalized" and within supervisory subgroup "B" (or a
comparable successor risk classification) within the meaning of 12 C.F.R. Part
327 (or any successor provision) to the Federal Deposit Insurance Corporation
for insurance by such corporation of time deposits made in dollars at the
offices of such member in the United States; provided that if, as a result of
any change in any law, rule or regulation, it is no longer possible to determine
the Assessment Rate as aforesaid, then the Assessment Rate shall be such annual
rate as shall be determined in good faith by the Administrative Agent to be
representative of the cost of such insurance to the Lenders.
"Assignment and Acceptance" shall have the meaning provided in Section
10.7.
"Availability Reserves" shall mean, as of any date of determination,
such amounts as the Administrative Agent may from time to time establish and
revise in its sole but reasonable discretion reducing the US Borrowing Base
and/or the Canadian Borrowing Base which would otherwise be available to the
Borrowers under the lending formulas provided for herein: (a) to reflect general
eligibility criteria, events, conditions, contingencies or risks which, as
determined by the Administrative Agent in its reasonable discretion, do or may
affect either (i) any component of the US Borrowing Base or the Canadian
Borrowing Base or their value, (ii) the assets, business or prospects of any
Credit Party, or (iii) the security interests and other rights of the
Administrative Agent and the Canadian Administrative Agent in the Collateral
(including the enforceability, perfection and priority thereof), or (b) to
reflect the Administrative Agent's customary practice or its belief that any
collateral report or financial information furnished by or on behalf of any
Borrower to any Agent or any Lender is or may have been incomplete, inaccurate
or misleading in any material respect, or (c) in respect of any state of facts
which the Administrative Agent determines constitutes a Default or an Event of
Default. Without limiting the foregoing, the Administrative Agent may establish
and/or increase Availability Reserves in respect of (x) liabilities of any
Credit Party under any Cash Management Agreements, Swap Agreement or any other
swap, cap, floor, collar, futures contract or option designed to hedge against
fluctuations in commodity prices, securities prices or other financial market
conditions, (y) statutory claims, deemed trusts or inventory subject to rights
of suppliers under Section 81.1 of Bankruptcy and Insolvency Act (Canada), or
(z) employee related liabilities. Without limiting the foregoing, the Initial
Reserve will be established as an Availability Reserve with respect to the US
Borrowing Base from the Closing Date until April 1, 2003.
"B/A" shall mean a non-interest bearing ▇▇▇▇ of exchange denominated in
C$, drawn by the Canadian Borrowers and accepted by a Canadian Lender in
accordance with this Agreement, provided that with respect to a Canadian Lender
that is not a chartered bank under the Bank Act (Canada) or that has notified
the Administrative Agent that it is otherwise unable to accept such bills of
exchange, it shall mean a B/A Equivalent Note.
"B/A Cover" when required by this Agreement for B/A Loans, shall be
effected by paying to the Canadian Administrative Agent, in immediately
available funds, to be collaterally assigned as security pursuant to the
Financing Documents, an amount equal to the aggregate amount of all outstanding
B/A Loans. Such amount shall be retained by the Canadian Administrative Agent
and applied to repay the principal of each B/A Loan upon the maturity thereof
until all such B/A Loans have been fully satisfied.
"B/A Equivalent Note" shall have the meaning given such term in Section
2.8(g) hereto.
"B/A Loan" shall mean a Borrowing comprised of B/As.
"Bailee" shall mean any Person who is in possession of any inventory of
any Borrower on behalf of such Borrower.
"Bailee's Letter" shall mean a letter in form and substance acceptable
to the Administrative Agent executed by any Person who is in possession of
inventory on behalf of any Borrower pursuant to which such Person acknowledges
the Administrative Agent's Lien or the Canadian Administrative Agent's Lien, as
applicable, with respect thereto.
"Bankruptcy Code" shall have the meaning provided in Section 8.8.
"Base CD Rate" shall mean the sum of (a) the Three-Month Secondary CD
Rate multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"Blocked Account" shall mean one or more demand deposit accounts
established by the Canadian Borrowers with the Canadian Lockbox Bank and the US
Borrowers with the Administrative Agent which (a) the applicable Borrowers and
the Administrative Agent or the Canadian Lockbox Bank, as applicable, jointly
designate as a "Blocked Account," (b) into which all cash receipts of the
applicable Borrowers from whatever source (including, without limitation, all
currency, checks and drafts representing proceeds of the Collateral and further
including any of the foregoing received in the Lockbox) shall be deposited
pursuant to Section 4.3 and Section 4.4 hereof and pursuant to the Security
Documents, and (c) which are subject to the provisions of Section 4.5 and
Section 4.6 hereof.
"Board" shall mean the Board of Governors of the Federal Reserve System
of the United States.
"Borrower" and "Borrowers" shall have the meanings set forth in the
initial paragraph hereof.
"Borrowing" shall mean a borrowing pursuant to a Borrowing Request, a
borrowing pursuant to Section 2.2(c) or a continuation or a conversion pursuant
to Section 2.12 consisting, in each case, of the same Type of Loans having, in
the case of LIBOR Loans or B/A Loans, the same Interest Period or Contract
Period (except as otherwise provided in Section 2.15 and Section 2.16) and made
previously or being made concurrently by all of the Lenders.
"Borrowing Base Report" shall mean the report of each of the US
Borrowers and the Canadian Borrowers concerning the amount of the US Borrowing
Base or the Canadian Borrowing Base, as applicable, to be delivered pursuant to
Section 6.10, substantially in the form attached as Exhibit A-1 or A-2
(depending on which Borrowing Base is being computed).
"Borrowing Request" shall mean a request for a Borrowing pursuant to
Section 2.2, substantially in the form attached as Exhibit B-1 through B-5
hereof (depending on the type of Loan with respect to which such Borrowing
Request is being submitted).
"Business Day" shall mean any day excluding Saturday, Sunday and any
other day on which banks are required or authorized to close in Dallas, Texas or
New York, New York and, if the applicable Business Day relates to LIBOR Loans,
on which trading is carried on by and between banks in Dollar deposits in the
London interbank market and, if the applicable Business Day relates to Canadian
Revolving Credit Loans, including B/A Loans, or the Dollar Equivalent of any
amount denominated in C$, shall also exclude any other day on which banks are
required or authorized to close in ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
"C&P" shall have the meaning set forth in the initial paragraph hereto.
"C$" shall mean lawful money of Canada.
"C$ Denominated Loan" shall mean Canadian Revolving Credit Loans which
are denominated in C$.
"Canadian Administrative Agent" shall mean CIT Business Credit Canada
Inc., acting in the manner and to the extent described in Article 9 and any
successor to CIT Business Credit Canada Inc. acting in such capacity.
"Canadian Blocked Account" means a Blocked Account established by the
Canadian Borrowers with the Canadian Lockbox Bank.
"Canadian Borrowers" shall have the meaning set forth in the initial
paragraph hereof.
"Canadian Borrowing Base" shall mean, only with respect to the Canadian
Borrowers, the amount equal to the sum of:
(a) the Eligible Account Advance Percentage of the Canadian Borrowers'
Eligible Accounts, plus
(b) the lesser of (i) the sum of (A) the Eligible Inventory Advance
Percentage of the Canadian Borrowers' Eligible Inventory (other than work in
process) and Eligible Bailee Inventory (other than work in process) plus, (B)
the lesser of (1) the Eligible Inventory Advance Percentage of the Canadian
Borrowers' Eligible Inventory consisting of work in process and Eligible Bailee
Inventory consisting of work in process, and (2) Canadian WIP Limit, plus (C)
the lesser of (1) the Eligible Inventory Advance Percentage of the Canadian
Borrowers' Eligible Included-In-Transit Inventory and (2) Canadian
Included-in-Transit Limit, or (ii) the Canadian Inventory Limit, plus
(c) the Canadian Equipment Component in effect as of the date for which
the Canadian Borrowing Base is being calculated;
provided, that, in no event will the component of the Canadian
Borrowing Base determined pursuant to clause (b) exceed 60% of the total
Canadian Borrowing Base (but solely for purposes of this calculation, the
Canadian Equipment Component shall remain constant at the amount in effect
as the Closing Date without giving effect to any subsequent reductions in
the Canadian Equipment Component pursuant to the definition of such term).
The Canadian Borrowing Base in effect under this Agreement at any time
shall be the Canadian Borrowing Base reflected on the most recent Canadian
Borrowing Base Report delivered to the Canadian Administrative Agent and
the Administrative Agent pursuant to Section 6.10(g) hereof, subject to (a)
the right of the Canadian Administrative Agent, the Administrative Agent or
the Required Lenders to contest any components thereof or the calculation
thereof, and (b) immediate adjustment as result of (i) establishment of
Availability Reserves, (ii) reductions in advance rates permitted herein,
(iii) scheduled reductions in the Canadian Equipment Component, (iv) more
frequent reporting of certain components of the Canadian Borrowing Base to
the extent required in accordance with Section 6.10(g), and (v) any changes
in eligibility standards required by the Administrative Agent.
"Canadian Credit Party" shall mean the Canadian Borrowers and each
other Credit Party which is formed or organized under the federal laws of Canada
or under the laws of any province or territory in Canada.
"Canadian Equipment Component" shall mean $9,545,455 on the Closing
Date; provided that the Canadian Equipment Component shall be reduced (a) by
$151,515 on the first day of each month commencing with January 1, 2003 and
continuing on the first day of each month thereafter throughout the term of this
Agreement, and (b) on April 1 of each calendar year commencing April 1, 2003, by
the Canadian Excess Cash Flow Amount for the Fiscal Year most recently ended.
"Canadian Excess Availability" shall mean, as of any date, the
remainder of (a) the remainder of (i) the Canadian Borrowing Base as of such
date, minus (ii) the sum of (A) the Availability Reserves with respect to the
Canadian Borrowing Base as of such date, plus (B) Canadian Priority Claims
Reserve as of the day the Canadian Borrowing Base is calculated, plus (C) the
portion of the Swap Reserves, the Cash Management Reserves, the Processing
Reserves and Storage/Handling Reserves applicable to the Canadian Borrowers as
of the last day of the month for which the Canadian Borrowing Base is being
calculated, less (b) the aggregate outstanding balance of the Canadian Lender
Indebtedness as of such date.
"Canadian Excess Cash Flow Amount" shall mean, with respect to any
Fiscal Year, the lesser of (a) $1,666,500 and (b) 40% of the Excess Cash Flow of
the Canadian Borrowers for such Fiscal Year. The Canadian Excess Cash Flow
Amount shall be determined for any Fiscal Year by the Administrative Agent
following the delivery of the Company's audited consolidated financial
statements for such Fiscal Year pursuant to Section 6.10(a) hereof; provided,
that, if the Company shall fail to deliver its audited consolidated financial
statements for any Fiscal Year on or before the date required pursuant to
Section 6.10(a) hereof, $1,666,500 shall be the Canadian Excess Cash Flow Amount
for such Fiscal Year.
"Canadian Fee Letter" shall mean the letter agreement dated March 28,
2002, regarding fees executed by CIT Business Credit Canada, Inc. and accepted
by the Canadian Borrowers.
"Canadian Included-in-Transit Limit" shall mean the amount of the
Included-in-Transit Limit which the Canadian Borrowers designate as the
"Canadian Included-in-Transit Limit" on the Canadian Borrowing Base Report from
which the Canadian Borrowing Base is being calculated; provided, that, for any
date on which the Borrowing Bases are being reported, in no event shall the sum
of the Canadian Included-in-Transit Limit and the US Included-in-Transit Limit
ever exceed the Included-in-Transit Limit.
"Canadian Inventory Limit" shall mean the amount of the Inventory Limit
which the Canadian Borrowers designate as the "Canadian Inventory Limit" on the
Canadian Borrowing Base Report from which the Canadian Borrowing Base is being
calculated; provided, that, in no event shall the sum of the Canadian Inventory
Limit and the US Inventory Limit ever exceed the Inventory Limit.
"Canadian Lender" shall mean a Lender with a Canadian Revolving Credit
Commitment.
"Canadian Lender Indebtedness" shall mean any and all amounts owing or
to be owing by any Canadian Credit Party to the Administrative Agent, the
Canadian Administrative Agent, the Issuing Banks or the Lenders with respect to
or in connection with the Canadian Loans, any Canadian Letter of Credit
Liabilities, the Notes, any Swap Agreement between any of the Canadian Borrowers
and JPMorgan or any of its Secured Affiliates, any Cash Management Agreement
between any of the Canadian Borrowers and a Canadian Lender or its Cash
Management Affiliate, this Agreement, or any other Financing Document and, as to
Swap Agreements with JPMorgan or any of its Secured Affiliates or any Cash
Management Agreement with any Lender or any Lender or its Cash Management
Affiliate, any and all amounts owing or to be owing by any Canadian Credit Party
thereunder to JPMorgan or any of its Secured Affiliates or Cash Management
Affiliate, respectively.
"Canadian Letter of Credit" and "Canadian Letters of Credit" shall have
the meanings assigned to such terms in Section 2.3(b).
"Canadian Letter of Credit Liabilities" shall mean, at any time and in
respect of any Canadian Letter of Credit, the Dollar Equivalent at such time of
the sum of (a) the amount available for drawings under such Canadian Letter of
Credit as of the date of determination plus (b) the aggregate unpaid amount of
all Reimbursement Obligations due and payable as of the date of determination in
respect of previous drawings made under such Canadian Letter of Credit.
"Canadian Loans" shall mean the Canadian Revolving Credit Loans.
"Canadian Lockbox" shall mean any lock box to be established and
operated pursuant to Section 4.4 hereof and the Canadian Lockbox Agreement.
"Canadian Lockbox Agreement" shall mean an agreement between the
Canadian Borrowers and the Canadian Lockbox Bank governing the Canadian Lockbox.
"Canadian Lockbox Bank" shall mean Royal Bank of Canada or any other
financial institution designated by the Canadian Administrative Agent and
approved by the Administrative Agent to act as the Canadian Lockbox Bank and
consented to in writing by the Canadian Borrowers (which consent shall not be
unreasonably withheld) and which has entered into the Canadian Lockbox
Agreement.
"Canadian Maximum Available Amount" shall mean, at any date, an amount
equal to the lesser of (a) the aggregate Canadian Revolving Credit Commitments
as of such date, and (b) the remainder of (i) the Canadian Borrowing Base as of
such date, minus (ii) the sum of (A) the Availability Reserves with respect to
the Canadian Borrowing Base as of such date, plus (B) Canadian Priority Claims
Reserve as of the day the Canadian Borrowing Base is calculated, plus (C) the
portion of the Swap Reserves, the Cash Management Reserves, the Processing
Reserves and Storage/Handling Reserves applicable to the Canadian Borrowers as
of the last day of the month for which the Canadian Borrowing Base is being
calculated.
"Canadian Prime Rate" shall mean on any day, the annual rate of
interest (rounded upwards, if necessary, to the nearest 1/16 of 1%) equal to the
greater of: (a) the annual rate of interest announced from time to time by
JPMorgan Canada as its prime rate in effect at its principal office in ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ on such day being the reference rate used by JPMorgan Canada for
determining interest rates on C$ denominated commercial loans to its customers
in Canada; and (b) the annual rate of interest equal to the sum of (i) the CDOR
Rate in effect on such day, and (ii) 1%.
"Canadian Prime Rate Loans" shall mean C$ Denominated Loans which bear
interest at a rate based upon the Canadian Prime Rate.
"Canadian Priority Claims Reserve" shall mean, as of the last day of
each month, the aggregate amount of all claims that Governmental Authorities
have against the Canadian Borrowers on such date, which if asserted could have
priority over the Canadian Lender Indebtedness pursuant to applicable Canadian
federal, provincial or territorial laws and shall include, without limitation,
claims with respect to accrued salaries and wages, accrued vacation payable,
Revenue Canada employment taxes, employment post-retirement health and dental
insurance, goods and services, taxes and provincial sales taxes.
"Canadian Real Estate Mortgage" shall mean a Mortgage and an Assignment
of Leases and Rents substantially in the form of Exhibits C-1 and C-2 and in
each case with such changes thereto as the Canadian Administrative Agent shall
deem necessary or appropriate to comply with provincial and local Governmental
Requirements.
"Canadian Revolving Credit Commitment" shall have the meaning assigned
to such term in Section 2.1(d).
"Canadian Revolving Credit Exposure" shall mean, at any time and as to
each Canadian Lender, the Dollar Equivalent sum of (a) the aggregate principal
amount of the Canadian Revolving Credit Loans made by such Canadian Lender
outstanding as of such date plus (b) the accrued and unpaid interest on the
Canadian Revolving Credit Loans made by such Canadian Lender outstanding as of
such date plus (c) such Canadian Lender's Canadian Revolving Credit Percentage
of the aggregate amount of all Canadian Letter of Credit Liabilities as of such
date.
"Canadian Revolving Credit Loan" shall have the meaning provided in
Section 2.1(a).
"Canadian Revolving Credit Note" shall mean a promissory note of the
Canadian Borrowers described in Section 2.5(b) payable to any Canadian Lender
and being substantially in the form of Exhibit D, evidencing the aggregate
Indebtedness of the Canadian Borrowers to such Canadian Lender resulting from
Canadian Revolving Credit Loans made by such Lender.
"Canadian Revolving Credit Percentage" shall mean as to any Canadian
Lender, the percentage of the aggregate Canadian Revolving Credit Commitments
constituted by its Canadian Revolving Credit Commitment (or, if the Canadian
Revolving Credit Commitments have terminated or expired, the percentage which
such Canadian Lender's Canadian Revolving Credit Exposure at such time
constitutes of the Aggregate Canadian Revolving Credit Exposure at such time).
"Canadian Security Agreement" shall mean that certain Canadian Security
Agreement dated as of March 28, 2002 and executed by each Canadian Credit Party,
as amended, modified, renewed, supplemented or restated from time to time.
"Canadian WIP Limit" shall mean the amount of the WIP Limit which the
Canadian Borrowers designate as the "Canadian WIP Limit" on the Canadian
Borrowing Base Report from which the Canadian Borrowing Base is being
calculated; provided, that, in no event shall the sum of the Canadian WIP Limit
and the US WIP Limit ever exceed the WIP Limit.
"Capital Expenditures" shall mean, as to any Person for any period, all
expenditures (whether paid in cash or accrued as a liability, including the
portion of Capital Lease Obligations originally incurred during such period that
are capitalized on the consolidated balance sheet of the Company) by such Person
and its Subsidiaries during such period, that, in conformity with GAAP, are
included in "capital expenditures," "additions to property, plant or equipment"
or comparable items in the consolidated financial statements of such Person, but
excluding expenditures for the restoration, repair or replacement of any fixed
or capital asset that was destroyed or damaged, in whole or in part, in an
amount equal to any insurance proceeds received in connection with such
destruction or damage.
"Capital Lease Obligations" shall mean, as to any Person, the
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) real and/or personal property which
obligations are required to be classified and accounted for as a liability for a
capital lease on a balance sheet of such Person and, for purposes of this
Agreement, the amount of such obligations shall be the capitalized amount
thereof.
"Cash Management Affiliate" shall mean any Affiliate of any Lender that
has entered into a Cash Management Agreement with a Credit Party with the
obligations of such Credit Party thereunder being secured by one or more
Security Instruments.
"Cash Management Agreement" shall mean any document, instrument,
agreement, arrangements or transactions with respect to cash management services
and includes, without limitation, any of the foregoing related to deposit
accounts, overdraft protection or automated clearing house transactions.
"Cash Management Reserves" shall mean, an amount (reflected in Dollars)
calculated as of the last day of each month and separately for the US Borrowers
and the Canadian Borrowers, equal to such Borrowers' liability under the Cash
Management Agreements to which such Borrowers are a party and any exposure of
the Lenders or Cash Management Affiliates with respect to such Cash Management
Agreements and the services performed thereunder on behalf of such Borrowers.
"CDOR Rate" shall mean on any date, the annual rate of interest which
is the rate based on an average rate applicable to Canadian B/As for a term of
30 days appearing on the "Reuters Screen CDOR Page" (as defined in the
International Swaps and Derivatives Association, Inc. definitions, as modified
and amended from time to time) at approximately 10:00 a.m. (Toronto, Ontario
Canada time), on such date, or if such date is not a Business Day, then on the
immediately preceding Business Day, provided that, if such rate does not appear
on the Reuters Screen CDOR Page as contemplated, then the CDOR Rate on any date
shall be calculated as the rate for the term referred to above applicable to
Canadian B/As quoted by JPMorgan Canada as of 10:00 a.m. (Toronto, Ontario
Canada time) on such date or, if such date is not a Business Day, then on the
immediately preceding Business Day.
"Certificate of Effectiveness" shall mean a Certificate of
Effectiveness in the form of Exhibit R attached hereto to be executed by the
Borrowers and the Administrative Agent upon the satisfaction of each of the
conditions precedent contained in Section 3.1 hereof.
"Change of Control" shall be deemed to occur at any time when any of
the following occurs: (a) any Unrelated Person or any Unrelated Persons, acting
together, which would constitute a Group together with any Affiliates or Related
Persons thereof (in each case also constituting Unrelated Persons) shall at any
time either (1) Beneficially Own more than 30% of the aggregate voting power of
all classes of Voting Stock of the Company, or (2) succeed in having a
sufficient number of its or their nominees elected to the Board of Directors of
the Company such that such nominees, when added to any existing director
remaining on the Board of Directors of the Company after such election who is an
Affiliate or Related Person of such Person or Group, shall constitute a majority
of the Board of Directors of the Company, or (b) the Company ceasing to directly
or indirectly own 100% of the issued and outstanding Equity of each other Credit
Party on a fully diluted basis. As used herein (1) "Beneficially Own" means
"beneficially own" as defined in Rule 13d-3 of the Securities Exchange Act of
1934, as amended, or any successor provision thereto; provided, however, that,
for purposes of this definition, a Person shall not be deemed to Beneficially
Own securities tendered pursuant to a tender or exchange offer made by or on
behalf of such Person or any of such Person's Affiliates until such tendered
securities are accepted for purchase or exchange; (2) "Group" means a "group"
for purposes of Section 13(d) of the Securities Exchange Act of 1934, as
amended; (3) "Unrelated Person" means at any time any Person other than the
Company; and (4) "Related Person" of any Person means any other Person owning
(A) 10% or more of the outstanding common stock of such Person or (B) 10% or
more of the Voting Stock of such Person.
"Closing Date" shall mean the "as of" date of this Agreement set forth
in the first paragraph hereof.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
any successor statute.
"Collateral" shall mean the Credit Parties' Properties described in and
subject to the Liens, privileges, priorities and security interests purported to
be created by any Security Instrument.
"Combined Revolving Credit Commitment" shall mean, for any Revolving
Lender, the aggregate amount of such Revolving Lender's US and Canadian
Revolving Credit Commitments, and for purposes of this definition, a Revolving
Lender and its Related Affiliate shall be deemed to be one and the same
Revolving Lender.
"Commitment" means any US Revolving Credit Commitment, US Swingline
Commitment, Term Commitment, Canadian Revolving Credit Commitment, or SOFA
Commitment and "Commitments" means all such Commitments collectively.
"Company" shall have the meaning set forth in the initial paragraph
hereof.
"Contract Period" shall mean the term of a B/A selected by the Canadian
Borrowers in accordance with Section 2.8 or Section 2.12 commencing on the date
of such Borrowing or any rollover date, as applicable, of such B/A (which shall
be a Business Day) and expiring on a Business Day which shall be either one
month, two months, three months, or with the consent of the Canadian Lenders,
six months later; provided that no Contract Period shall extend beyond the
Maturity Date. Notwithstanding the foregoing, whenever the last day of any
Contract Period would otherwise occur on a day which is not a Business Day, the
last day of such Contract Period shall occur on the next succeeding Business Day
and such extension of time shall in such case be included in computing the
Acceptance Fee in respect of the relevant B/A.
"Credit Parties" shall mean the Company, and each of its Subsidiaries
collectively, and "Credit Party" shall mean any such Person individually.
"Credit Percentage" means, for each Lender, the percentage obtained by
dividing (a) the sum of the Revolving Credit Exposure of such Lender and the
outstanding principal balance of any Term Loans held by such Lender, by (b) the
sum of the Aggregate Revolving Credit Exposure, plus the aggregate outstanding
principal balance of all Term Loans.
"Current Information" shall mean, as of any day, the financial
statements and other related information for any applicable period most recently
required to be delivered to the Administrative Agent pursuant to Section
6.10(a), Section 6.10(b), and Section 6.10(c).
"Dated Assets" has the meaning assigned to such term in Section 2.25(c)
hereof.
"Dated Liabilities" has the meaning assigned to such term in Section
2.25(c) hereof.
"Default" shall mean an Event of Default or any condition or event
which, with notice or lapse of time or both, would constitute an Event of
Default.
"Dilution" shall mean a reduction as determined by the Administrative
Agent in the value of accounts caused by returns, allowances, discounts,
credits, and/or any other offsets asserted by customers or granted by the
Borrowers having the effect of reducing the collections of accounts.
"Dilution Percentage" shall mean, with respect to either the US
Borrowers or the Canadian Borrowers, the ratio as reasonably determined by the
Administrative Agent of Dilution to the total sales of such Borrowers.
"Disbursement Account" has the meaning assigned to such term in Section
2.4(a).
"Discount Proceeds" shall mean for any B/A, an amount (rounded to the
nearest whole cent, and with one-half of one cent being rounded upwards)
calculated on the applicable date of the Borrowing of which such B/A is a part
or any rollover date for such Borrowing by multiplying: (a) the face amount of
the B/A; by (b) the quotient of one divided by the sum of one plus the product
of: (1) the Discount Rate (expressed as a decimal) applicable to such B/A, and
(2) a fraction, the numerator of which is the Contract Period of the B/A and the
denominator of which is 365, with the such quotient being rounded up or down to
the fifth decimal place, and .000005 being rounded up.
"Discount Rate" shall mean the percentage discount rate (expressed to
two decimal places and rounded upward, if necessary, to the nearest 0.01%)
quoted by JPMorgan Canada as the percentage discount rate at which JPMorgan
Canada would, in accordance with its normal practices, at or about 10:00 a.m.,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ time, on such date, be prepared to purchase bankers'
acceptances accepted by JPMorgan Canada having a face amount and term comparable
to the face amount and term of such B/A.
"Disposition" shall mean the sale by the applicable US Borrower of
either of the following: (a) the Real Property located in Longview, Washington
and described on Schedule 5.24 hereto, and (b) the Real Property located in
▇▇▇▇▇▇▇, Arkansas described on Schedule 5.24 hereto, to the extent subject to a
purchase option pursuant to Article 22 of that certain Lease Agreement dated
January 10, 2001 between the Company and Commercial Resins Company, Inc.
"Documentary Letter of Credit" shall mean a Letter of Credit issued
pursuant to the Existing Credit Agreement or this Agreement that supports
payment or performance for a single identified purchase or exchange of products
in the ordinary course of business of the Borrowers.
"Documentation Agent" shall mean General Electric Capital Corporation,
acting in the manner and to the extent described in Article 9, and any successor
to General Electric Capital Corporation acting in such manner
"Dollar" and the sign "$," without the letter "C" before it, shall mean
lawful money of the United States of America.
"Dollar Denominated Loans" shall mean US Revolving Credit Loans and any
Canadian Revolving Credit Loans which are denominated in Dollars and Dollars
Denominated Loans shall include all Term Loans.
"Dollar Equivalent" shall mean, on any date of determination, with
respect to any amount expressed in C$, the amount of Dollars that may be
purchased with such amount of C$ at the Spot Exchange Rate on such date.
"EBITDA" shall mean, as to the Company for any period, without
duplication, the amount equal to the following calculated for the Company and
its wholly owned consolidated Subsidiaries on a consolidated basis; net income
determined in accordance with GAAP, plus to the extent deducted from net income,
Interest Expense, depreciation, amortization, other non-cash expenses, and
income and franchise tax expenses; provided, that, extraordinary gains or losses
for any such period, including but not limited to gains or losses on the
disposition of assets, shall not be included in EBITDA.
"Eligible Account" shall mean at any time with respect to any Person
the invoice amount, net of all goods and services, harmonized and sales taxes,
(which shall be the Dollar Equivalent at such time of any amount denominated in
C$) owing on each account (which shall mean (a) any "account" as such term is
defined in Section 9-102(a)(2) of the UCC and (b) any "chattel paper" as such
term is defined in Section 9-102(a)(11) of the UCC) of such Person (net of any
credit balance, returns, trade discounts, unapplied cash, unbilled amounts or
retention or finance charges) which meet such standards of eligibility as the
Administrative Agent shall establish from time to time in its sole reasonable
discretion; provided, that, no account shall be deemed an Eligible Account
unless each of the following statements is accurate and complete (and the Person
by including such account in any computation of the applicable Borrowing Base
shall be deemed to represent and warrant to the Administrative Agent, each
Issuing Bank and the Lenders the accuracy and completeness of such statements;
provided, that, such Person will not be deemed to have represented or warranted
to the Administrative Agent's general satisfaction with the credit standing of
any obligor (as provided in clause (12) hereof) or with letters of credit or
export/input insurance (as provided in clause (13) hereof)):
(1) Said account is a binding and valid obligation of the obligor
thereon in full force and effect;
(2) Said account is evidenced by an invoice;
(3) Said account is genuine as appearing on its face or as represented
in the books and records of the Person;
(4) Said account is free from claims regarding rescission, cancellation
or avoidance, whether by operation of law or otherwise;
(5) Payment of said account is less than 90 days past the original
invoice date thereof, other than accounts of up to three (3) obligors owed to
the Canadian Borrowers that have been extended 60 day terms by a Canadian
Borrower so long as payment of said accounts of such obligors are less than 120
days past the original invoice date thereof;
(6) Said account is net of concessions, offset, deduction, contras,
chargebacks or understandings with the obligor thereon that in any way could
reasonably be expected to adversely affect the payment of, or the amount of,
said account;
(7) The Administrative Agent, or the Canadian Administrative Agent, as
the case may be, on behalf of the applicable Lenders, the Cash Management
Affiliates and the Secured Affiliates, has a first-priority perfected Lien
covering said account and said account is, and at all times will be, free and
clear of all other Liens other than Permitted Liens;
(8) The obligor on said account is not (a) an Affiliate of any of the
Borrowers, or (b) an employee of any of the Borrowers;
(9) Said account arose in the ordinary course of business of the
Person;
(10) Said account is not payable by an obligor who is more than 90 days
past the original invoice date thereof with regard to 50% or more of the total
aggregate accounts owed to the Person by such obligor and all of its Affiliates;
(11) All consents, licenses, approvals or authorizations of, or
registrations or declarations with, any Governmental Authority required to be
obtained, effected or given in connection with the execution, delivery and
performance of said account by each party obligated thereunder have been duly
obtained, effected or given and are in full force and effect;
(12) The obligor on said account is not the subject of any bankruptcy
or insolvency proceeding, has not had a trustee or receiver appointed for all or
a substantial part of its property, has not made an assignment for the benefit
of creditors, admitted its inability to pay its debts as they mature or
suspended its business, and the Administrative Agent, in its reasonable
discretion, is otherwise satisfied with the credit standing of such obligor;
(13) The obligor of said account is organized and existing under the
laws of the United States of America or a State thereof or the federal laws of
Canada, a province or territory thereof, or if the obligor is not so organized
and existing, said account is covered under letters of credit or export/import
insurance reasonably satisfactory to the Administrative Agent;
(14) The obligor of said account is not a state, commonwealth,
provincial, federal, foreign, territorial, or other court or governmental
department, commission, board, bureau, agency or instrumentality other than the
federal government of the United States of America, the federal government of
Canada or the government of any province or territory of Canada or political
subdivision thereof, and then only to the extent that such Person has complied
in all respects with the relevant provisions of the Federal Assignment of Claims
Act of 1940 (for a US Borrower) or the Financial Administration Act (Canada) or
similar provincial or territorial legislation or municipal ordinance of similar
purpose (for a Canadian Borrower);
(15) In the case of the sale of goods, the subject goods have been sold
and shipped or delivered to an obligor on a true sale basis on open account, or
subject to contract, and not on consignment, on approval, on a "sale or return"
basis, or on a "▇▇▇▇ and hold" or "pre-sale" basis or subject to any other
repurchase or return agreement, no material part of the subject goods has been
returned, rejected, lost or damaged, and said account is not evidenced by
chattel paper or an instrument of any kind;
(16) Each of the representations and warranties set forth herein and in
the Security Instruments with respect to said account is true and correct on
such date; and
(17) The obligor of said account is not an individual or individual
proprietorship which does not transact with the Borrower in the ordinary course
of business of the Borrower;
provided, that, if any Eligible Account, when added to all other accounts that
are obligations of the same obligor and its Affiliates, results in a total sum
that exceeds 20% of the total balance then due on all Eligible Accounts owed to
the Borrowers (without giving effect to any reduction in Eligible Accounts
pursuant to this proviso), unless the accounts of such obligors or group of
Affiliated obligors are insured pursuant to credit insurance acceptable to the
Administrative Agent which has been assigned to the Administrative Agent or the
Canadian Administrative Agent (as applicable), the amount of said accounts in
excess of 20% of such total balance then due shall be excluded from Eligible
Accounts of the Borrowers to whom said accounts are owed; provided, that, if
said accounts of such obligor (or group of Affiliated obligors) are owed to both
the US Borrowers and the Canadian Borrowers, such excess amount shall be
excluded from the Eligible Accounts of the Canadian Borrowers and the US
Borrowers in the same proportion as all amounts from such obligor are owed to
the Canadian Borrowers and the US Borrowers.
"Eligible Account Advance Percentage" shall mean 85%; provided, that,
the Administrative Agent may, in its sole discretion lower such percentage to
such lesser percentage as it deems appropriate in its sole discretion at any
time the applicable Borrowers' Dilution Percentage exceeds five percent (5%).
"Eligible Bailee Inventory" shall mean all "inventory" (as such term is
defined in Section 9-102(a)(48) of the UCC) of the Borrowers which would be
"Eligible Inventory" but for the requirement set forth in clause (2) of the
definition of Eligible Inventory because such inventory is located on Real
Property that is not owned or leased by the Borrowers, and with respect to which
the Administrative Agent shall have received a Bailee's Letter in a form and
substance satisfactory to the Administrative Agent in its sole discretion.
"Eligible ▇▇▇▇ and Hold Accounts" shall mean any "account" (as such
term is defined in Section 9-102(a)(2) of the UCC) and any "chattel paper" (as
such term is defined in Section 9-102(a)(11) of the UCC) of any US Borrower
which would be an "Eligible Account" but for the requirement set forth in clause
(15) of the definition of Eligible Account because it is a "▇▇▇▇ and hold"
account, and with respect to which, (i) such account is less than 60 days from
its original invoice date and (ii) the Administrative Agent shall have received
an agreement from the obligor thereof confirming its unconditional obligation to
pay such "▇▇▇▇ and hold" accounts in form and substance satisfactory to the
Administrative Agent in its sole discretion.
"Eligible Included-in-Transit Inventory" shall mean Included-In-Transit
Inventory which would be "Eligible Inventory" but for the requirement set forth
in clause (2) of the definition of Eligible Inventory.
"Eligible Inventory" shall mean, at any time with respect to any
Person, all "inventory" (as such term is defined in Section 9-102(a)(48) of the
UCC) of such Person valued in Dollars on a lower of cost (on a FIFO basis and
excluding any component of cost representing intercompany profit in the case of
inventory acquired from an Affiliate) or market basis in accordance with GAAP
with detailed calculations of lower of cost or market to occur on at least a
quarterly basis (until such time as Excess Availability is less than $20,000,000
at which time such calculations will be required on a monthly basis until Excess
Availability has exceeded $20,000,000 for ninety (90) consecutive days) for
which each of the following statements is accurate and complete (and such Person
by including such inventory in any computation of the applicable Borrowing Base
shall be deemed to represent and warrant to the Administrative Agent, each
Issuing Bank and each Lender the accuracy and completeness of such statements
(subject to Permitted Borrowing Base Adjustments)):
(1) Said inventory is in good condition, meets all standards imposed by
any Governmental Authority having regulatory authority over it or its use and/or
sale and is not obsolete and is either currently usable or currently salable in
the normal course of business of such Person;
(2) Said inventory is either (i) inventory the payment for which has
been provided for by the issuance of a Documentary Letter of Credit hereunder,
or (ii) is in possession of such Person and (1) located on Real Property owned
or leased by such Person and described in Schedule 5.24 hereto, and (2) within
the United States or Canada; provided, that, if said inventory is located on
Real Property leased by such Person, the landlord of such Real Property shall
have executed a Landlord Waiver Agreement;
(3) Each of the representations and warranties set forth in the
Security Instruments with respect to said inventory is true and correct on such
date;
(4) The Administrative Agent or the Canadian Administrative Agent, as
the case may be, on behalf of the applicable Lenders, has a first-priority
perfected Lien covering said inventory, other than Permitted Liens, and said
inventory is, and at all times will be, free and clear of all Liens except for
Permitted Liens;
(5) Said inventory does not include goods that are not owned by such
Person, that are held by such Person pursuant to a consignment agreement or
which have been sold by such Person on a ▇▇▇▇ and hold basis to the extent such
inventory has been paid for or has given rise to an Eligible ▇▇▇▇ and Hold
Account;
(6) Said inventory is not subject to repossession under the Bankruptcy
and Insolvency Act (Canada) except to the extent the applicable vendor has
entered into an agreement with the Canadian Administrative Agent waiving its
right to repossession, which agreement shall be acceptable to the Canadian
Administrative Agent; and
(7) Said inventory does not consist of spools, store room materials,
supplies or parts.
Standards of eligibility for inventory may be fixed and revised
prospectively from time to time solely by the Administrative Agent in its sole
reasonable judgment.
"Eligible Inventory Advance Percentage" shall mean (a) for Eligible
Inventory, Eligible Included-in-Transit Inventory and Eligible Bailee Inventory
consisting of steel coil raw material and electrical conduit finished goods,
60%, and (b) for all other Eligible Inventory, Eligible Included-in-Transit
Inventory and Eligible Bailee Inventory, 47%; provided, that, the percentage in
effect pursuant to this clause (b) shall reduce by 0.5% on the first day of each
month commencing on January 1, 2003 and continuing until it reaches 45%;
provided, further, the Eligible Inventory Advance Percentages in effect pursuant
to clause (a) and (b) preceding are subject to reduction by the Administrative
Agent in its reasonable discretion based on the results of inventory appraisals
provided to the Agents and the Lenders from time to time pursuant to Section
6.10(o) hereof.
"Environmental Laws" shall mean any and all laws, statutes, ordinances,
rules, regulations, orders, or determinations of any Governmental Authority
pertaining to health or the environment in effect in any and all jurisdictions
in which any Credit Party is conducting or at any time has conducted business,
or where any Property of any Credit Party is located, or where any hazardous
substances generated by or disposed of by any of the Credit Parties are located,
including but not limited to the Oil Pollution Act of 1990 ("OPA"), the Clean
Air Act, as amended, the Comprehensive Environmental, Response, Compensation,
and Liability Act of 1980 ("CERCLA"), as amended, the Federal Water Pollution
Control Act, as amended, the Occupational Safety and Health Act of 1970, as
amended, the Resource Conservation and Recovery Act of 1976 ("RCRA"), as
amended, the Safe Drinking Water Act, as amended, the Toxic Substances Control
Act, as amended, the Superfund Amendments and Reauthorization Act of 1986, as
amended, and other environmental conservation or protection laws. The term "oil"
shall have the meaning specified in OPA; the terms "hazardous substance,"
"release" and "threatened release" have the meanings specified in CERCLA, and
the terms "solid waste" and "disposal" (or "disposed") have the meanings
specified in RCRA; provided, however, in the event either CERCLA or RCRA is
amended so as to change the meaning of any term defined thereby, such changed
meaning shall apply subsequent to the effective date of such amendment, and
provided, further, that, to the extent the laws of the state in which any
Property of any Credit Party is located establish a meaning for "oil,"
"hazardous substance," "release," "solid waste" or "disposal" which is broader
than that specified in either OPA, CERCLA or RCRA, such broader meaning shall
apply.
"Equity" shall mean shares of capital stock or a partnership, profits,
capital or member interest, or options, warrants or any other right to
substitute for or otherwise acquire the capital stock or a partnership, profits,
capital or member interest of any Credit Party and shall expressly include all
"stock appreciation rights", "phantom stock" "profit participations" and other
similar interests.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, and any successor statute.
"ERISA Affiliate" shall mean each trade or business (whether or not
incorporated) which together with any Borrower would be deemed to be a "single
employer" within the meaning of Section 4001(b)(1) of ERISA or Subsections
414(b), (c), (m) or (o) of the Code.
"ERISA Termination Event" shall mean (a) a "Reportable Event" described
in Section 4043 of ERISA and the regulations issued thereunder (other than a
"Reportable Event" not subject to the provision for 30-day notice to the PBGC
pursuant to regulations under Section 4043 of ERISA, (b) the withdrawal of any
Credit Party or any ERISA Affiliate from a Plan during a plan year in which it
was a "substantial employer" as defined in Section 4001(a)(2) of ERISA, (c) the
filing of a notice of intent to terminate a Plan or the treatment of a Plan
amendment as a termination under Section 4041(c) of ERISA, (d) the institution
of proceedings to terminate a Plan by the PBGC, or (e) any other event or
condition which could reasonably be expected to constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan.
"Event of Default" shall have the meaning provided in Article 8.
"Excess Availability" shall mean, as of any date, the sum of (a) the
Canadian Excess Availability as of such date and (b) the US Excess Availability
as of such date.
"Excess Cash Flow" shall mean, as to either the US Borrowers or the
Canadian Borrowers, (a) Funds Flow from Operations for the US Borrowers or the
Canadian Borrowers, as applicable, for any Fiscal Year, minus (b) for each such
Fiscal Year and for the US Borrowers or the Canadian Borrowers, as applicable,
the sum of (x) the sum of each of the following, to the extent actually paid:
(1) the principal portion of scheduled payments under Capital Lease Obligations,
(2) Non-Financed Capital Expenditures, plus (y) all scheduled reductions in the
Canadian Equipment Component and the US Equipment Component occurring during
such period.
"Excess Net Cash Proceeds" shall mean, with respect to any Disposition,
the amount by which Net Cash Proceeds received by the applicable US Borrower in
such Disposition exceeds (i) in the case of the Longview, Washington Real
Property, $3,250,000 and (ii) in the case of the ▇▇▇▇▇▇▇, Arkansas Real
Property, $550,000.
"Exchangeco" shall have the meaning set forth in the initial paragraph
hereof.
"Excluded Taxes" shall mean, with respect to the Administrative Agent,
any Lender, any Issuing Bank or any other recipient of any payment to be made by
or on account of any obligation of any Borrower hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income by the United States
of America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which the Company is located, and (c) in the case
of a Foreign Lender any withholding tax that is imposed on amounts payable to
such Foreign Lender at the time such Foreign Lender becomes a party to this
Agreement (or designates a new lending office) or is attributable to such
Foreign Lender's failure to comply with Section 2.21(f), except to the extent
that such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from the Borrowers with respect to such withholding tax pursuant to
Section 2.21(a). Notwithstanding the foregoing, "Excluded Taxes" shall not
include withholding taxes attributable to any amount payable by any US Credit
Party in respect of Canadian Lender Indebtedness pursuant to the Guaranty and
Security Agreement or any other Financing Document.
"Existing Borrowers" shall have the meaning given such term in the
recitals hereto.
"Existing Credit Agreement" shall have the meaning given such term in
the recitals hereto.
"Existing Financing Documents" shall have the meaning given such term
in the initial operative paragraph hereof.
"Existing Indebtedness" shall mean all Funded Indebtedness of the
Credit Parties on the Closing Date, but excluding Loans and Letter of Credit
Liabilities.
"Federal Funds Effective Rate" shall mean, for any day, the per annum
rate equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a Business Day, the
average of the quotations for such day on such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.
"Fee Letter" shall mean one or more letter agreements regarding fees,
executed by JPMorgan and/or certain of its Affiliates and accepted and agreed to
by the Company as the same have been or may hereafter be amended from time to
time.
"Financial Statements" shall mean (a) the audited consolidated
financial statements of the Company for the Fiscal Years ended December 31,
1999, 2000, and 2001, and the unaudited consolidated financial statements of the
Company for the months ended January 31, 2002 through October 31, 2002, and (b)
the audited consolidated financial statement of Sellers (with respect to the
Acquired Assets only) for their fiscal years ending December 31, 2000 and 2001
and the audited consolidated financial statements of Sellers (with respect to
the Acquired Assets only) for the nine (9) months ended September 30, 2002.
"Financing Documents" shall mean this Agreement, the Notes, the
Security Instruments, the Applications, Borrowing Requests, Borrowing Base
Reports, the Cash Collateral Account Agreements, the Canadian Fee Letter, the
Fee Letter, and the other documents, instruments or agreements described in
Section 3.1 and Section 3.2, together with any other document, instrument or
agreement (other than participation, agency or similar agreements among the
Lenders or between any Lender and any other bank or creditor with respect to any
indebtedness or obligations of the Company or its Subsidiaries hereunder or
thereunder) now or hereafter entered into in connection with the Loans, the
Lender Indebtedness or the Collateral, as such documents, instruments or
agreements may be amended, modified or supplemented from time to time.
"Fiscal Quarter" shall mean the fiscal quarter of the Company and each
of the Borrowers, ending on the last day of each March, June, September and
December of each year.
"Fiscal Year" shall mean the fiscal year of the Company and each of the
Borrowers, ending on the last day of December of each year.
"Fixed Charge Coverage Ratio" shall mean, as to the Company and its
Subsidiaries on a consolidated basis, determined for any period, the ratio of
(a) EBITDA for such period minus the sum of (1) Non Financed Capital
Expenditures made during such period, plus (2) cash taxes paid during such
period, plus (3) cash distributions or dividends actually paid during such
period by the Company to its stockholders and all amounts paid by the Company to
repurchase Equity from its stockholders during such period, to (b) the sum of
(1) scheduled principal payments on Funded Indebtedness during such period
(including scheduled reductions in the Canadian Equipment Component and the US
Equipment Component assuming that such reduction commenced on April 1, 2002),
plus (2) Adjusted Interest Expense for such period.
"Foreign Lender" shall mean, as to the US Borrowers, any US Lender that
is organized under the laws of a jurisdiction other than that in which the US
Borrowers are located. For purposes of this definition, the United States of
America, each State thereof and the District of Columbia shall be deemed to
constitute a single jurisdiction.
"Funded Indebtedness" shall mean, as to any Person, without
duplication, all Indebtedness for borrowed money, all obligations evidenced by
bonds, debentures, notes, or other similar instruments, all Capital Lease
Obligations, and all guaranties of Funded Indebtedness of other Persons.
"Funds Flow from Operations" shall mean, as to the Company for any
period, without duplication, the amount equal to net income for the Company and
its Subsidiaries determined on a consolidated basis in accordance with GAAP,
plus to the extent deducted from net income, depreciation, amortization,
non-cash Interest Expense and any other non-cash expense; provided, however,
that the results of operations of all Affiliates of the Company (other than
wholly owned Subsidiaries of the Company) shall only be included in Funds Flow
from Operations to the extent the Company or one of its wholly owned
Subsidiaries actually receives cash distributions or dividends in respect of its
ownership interest in such Affiliate during the period for which Funds Flow from
Operations is being calculated.
"GAAP" shall mean generally accepted accounting principles in effect in
the United States as applied in accordance with Section 1.2 as of the date
hereof consistently applied.
"Governmental Authority" shall mean any (domestic or foreign) federal,
state, province, territory, county, city, municipal or other political
subdivision or government, department, commission, board, bureau, court, agency
or any other instrumentality of any of them, which exercises jurisdiction over
any Credit Party or any Property (including, but not limited to, the use and/or
sale thereof) of any Credit Party or any Plan.
"Governmental Requirement" shall mean any law, statute, code,
ordinance, order, rule, regulation, judgment, decree, injunction, franchise,
permit, certificate, license, authorization or other direction or requirement
(including but not limited to any of the foregoing which relate to Environmental
Laws, energy regulations and occupational, safety and health standards or
controls) of any Governmental Authority.
"GP Inc." shall have the meaning set forth in the initial paragraph
hereto.
"GP LLC" shall have the meaning set forth in the initial paragraph
hereto.
"Guaranty and Security Agreement" shall mean that certain Guaranty and
Security Agreement dated as of March 28, 2002 and executed by each US Credit
Party, as amended, modified, renewed, supplemented or restated from time to
time.
"Highest Lawful Rate" shall mean, with respect to each Lender, the
maximum non-usurious interest rate, if any, that at any time or from time to
time may be contracted for, taken, reserved, charged or received on the Notes or
on other Lender Indebtedness, as the case may be, owed to it under the law of
any jurisdiction whose laws may be mandatorily applicable to such Lender
notwithstanding other provisions of this Agreement, or law of the United States
of America, Canada, or any other jurisdiction applicable to such Lender and the
Transactions, which would permit such Lender to contract for, charge, take,
reserve or receive a greater amount of interest than under such jurisdiction's
law.
"Holding" shall have the meaning set forth in the initial paragraph
hereto. "Included-In-Transit Inventory" means inventory which (a) has been
placed with a common carrier for shipment to a Borrower, (b) has been inspected
and approved by a Borrower or an agent of a Borrower, (c) is the subject of a
▇▇▇▇ of lading or other document of title, all counterparts which, to the extent
the Administrative Agent or the Canadian Administrative Agent has requested, are
in the possession of the Administrative Agent or the Canadian Administrative
Agent, as applicable, vesting title to such inventory in a Borrower, and (d) has
been insured pursuant to one or more policies of insurance meeting the
requirements of Section 6.5 hereof.
"Included-in-Transit Limit" shall mean $20,000,000.
"Indebtedness" of any Person shall mean:
(a) all obligations of such Person for borrowed money and obligations
evidenced by bonds, debentures, notes or other similar instruments;
(b) all obligations of such Person (whether contingent or otherwise) in
respect of bankers' acceptances, letters of credit, surety or other bonds and
similar instruments;
(c) all obligations of such Person to pay the deferred purchase price
of Property or services (other than for borrowed money);
(d) all Capital Lease Obligations in respect of which such Person is
liable, contingently or otherwise, as obligor, guarantor or otherwise, or in
respect of which obligations such Person otherwise assures a creditor against
loss;
(e) all guaranties (direct or indirect), and other contingent
obligations of such Person in respect of, or obligations to purchase or
otherwise acquire or to assure payment of, Indebtedness or other obligations of
other Persons;
(f) Indebtedness of others secured by any Lien upon Property owned by
such Person, whether or not assumed;
(g) all obligations or undertakings of such Person to maintain or cause
to be maintained the financial position or financial covenants of other Persons;
(h) obligations to deliver goods or services in consideration of
advance payments, excluding such obligations incurred in the ordinary course of
business as conducted by the Borrowers as of the Closing Date;
(i) the net amount of obligations of such Person under agreements of
the types described in the definition of Swap Agreements; and
(j) any "synthetic lease", "tax retained operating lease" or similar
lease financing arrangements under which the tenant is treated as the owner of
property for tax purposes but such lease is treated as an operating lease in
accordance with GAAP.
"Indemnified Taxes" shall mean Taxes other than Excluded Taxes.
"Interest Expense" shall mean, as to any Person for any period, without
duplication, total interest expenses, whether paid or accrued as liabilities
(including the interest component of Capital Lease Obligations), with respect to
all outstanding Indebtedness, including, without limitation, all commissions,
discounts and other fees and charges owed with respect to any financing or
letters of credit and net costs under any Swap Agreement to the extent that such
costs are included within interest expense in the Company's financial statements
prepared in accordance with GAAP.
"Interest Period" shall mean, with respect to each Borrowing of LIBOR
Loans, an interest period complying with the terms and provisions of Section
2.7.
"Initial Reserve" shall mean an Availability Reserve in the amount of
$5,000,000 established with respect to the US Borrowing Base and which shall
expire on the first anniversary of the Closing Date.
"Inventory Limit" shall mean $100,000,000.
"Investment" shall have the meaning set forth in the initial paragraph
hereof.
"Issuing Bank" shall mean (a) for each US Letter of Credit, JPMorgan,
as the issuing bank for such US Letter of Credit and (b) for each Canadian
Letter of Credit, JPMorgan Canada (or any other Lender designated by the
Canadian Borrowers and approved in writing by the Canadian Administrative Agent
such approval not to be unreasonably withheld), as the issuing bank for such
Canadian Letter of Credit.
"JPMorgan" shall mean JPMorgan Chase Bank, in its individual capacity
or as an Issuing Bank, as the case may be, and not as the Administrative Agent.
"JPMorgan Canada" shall mean ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ Branch.
"Landlord Consent and Subordination Agreement" shall mean an agreement
executed and delivered by each landlord of Real Property leased by any Credit
Party and subject to a Real Estate Mortgage pursuant to which such landlord (a)
consents to the execution and delivery of a Real Estate Mortgage by such Credit
Party in favor of the Administrative Agent or the Canadian Administrative Agent,
as applicable with respect to the leased Real Property, and (b) subordinates all
of its Liens to the Liens of the Administrative Agent or the Canadian
Administrative Agent, as applicable, in the Property of such Credit Party
located on the leased Real Property.
"Landlord Waiver Agreement" shall mean an agreement executed and
delivered by each landlord of Real Property leased by any Borrower pursuant to
which such landlord subordinates or waives all of its Liens to the Liens of the
Administrative Agent or the Canadian Administrative Agent (as applicable) in the
Property of such Borrower located on the leased Real Property.
"L/C Cover" when required by this Agreement for Letter of Credit
Liabilities of an Account Party, shall be effected by paying to the
Administrative Agent in the case of US Letter of Credit Liabilities or the
Canadian Administrative Agent in the case of Canadian Letter of Credit
Liabilities in immediately available funds, to be held by the Administrative
Agent or the Canadian Administrative Agent, as applicable, in a collateral
account maintained by the Administrative Agent or the Canadian Administrative
Agent, as applicable, and which accounts may be Blocked Accounts maintained with
the Administrative Agent or the Canadian Administrative Agent, as applicable,
and collaterally assigned as security pursuant to the Financing Documents, an
amount equal to the maximum amount of each applicable Letter of Credit issued
for the account of such account party which is available for drawing at any
time. Such amount shall be retained by the Administrative Agent or the Canadian
Administrative Agent, as applicable, in such collateral account until such time
as the applicable Letter of Credit shall have expired and the Reimbursement
Obligations, if any, with respect thereto shall have been fully satisfied.
"Lender" and "Lenders" shall have the meanings set forth in the opening
paragraph hereof but shall include any Term Lender hereafter made a party to
this Agreement pursuant to a Term Lender Joinder Agreement.
"Lender Indebtedness" shall mean any and all amounts owing or to be
owing by any Credit Party to the Administrative Agent, the Canadian
Administrative Agent, the Issuing Banks or the Lenders with respect to or in
connection with the Loans, any Overadvance Loans, any Letter of Credit
Liabilities, the Notes, any Swap Agreement between a Credit Party and JPMorgan
or one of its Secured Affiliates, any Cash Management Agreement between a Credit
Party and any Lender or one of its Cash Management Affiliates, this Agreement,
or any other Financing Document and, as to Swap Agreements and Cash Management
Agreements, any and all amounts owing or to be owing by any Credit Party
thereunder to JPMorgan or any of its Secured Affiliates or any Lender or its
Cash Management Affiliates, as applicable.
"Lending Office" shall mean for each Lender the office specified
opposite such Lender's name on the signature pages hereof, or in the Assignment
and Acceptance pursuant to which it became a Lender, with respect to each Type
of Loan, or such other office as such Lender may designate in writing from time
to time to the Company and the Administrative Agent with respect to such Type of
Loan; provided that Lending Offices for Canadian Lenders shall be in Canada and
for US Lenders shall be in the United States.
"Letter of Credit" shall mean any Canadian Letter of Credit or US
Letter of Credit, and "Letters of Credit" shall mean Canadian Letters of Credit
and US Letters of Credit, collectively.
"Letter of Credit Liabilities" shall mean the US Letter of Credit
Liabilities and Canadian Letter of Credit Liabilities, collectively.
"LIBOR Loan" shall mean a US Revolving Credit Loan, a Canadian
Revolving Credit Loan or a Term Loan that is a Dollar Denominated Loan bearing
interest at the rate provided in Section 2.6(b).
"LIBOR Rate" shall mean, with respect to any Borrowing of LIBOR Loans
for any Interest Period, the product of (a) (1) the interest rate per annum
shown on page 3750 of the Dow ▇▇▇▇▇ & Company Telerate screen or any successor
page as the composite offered rate for London interbank deposits with a period
comparable to the Interest Period for such LIBOR Loan, as shown under the
heading "USD" at 11:00 A.M. (London time) two Business Days prior to the first
day of such Interest Period or (2) if the rate in clause (1) of this definition
is not shown for any particular day, the average interest rate per annum
(rounded upwards, if necessary, to the next 1/16th of 1%) offered to the
Administrative Agent in the London interbank market for Dollar deposits of
amounts in funds comparable to the principal amount of the LIBOR Loan to which
such LIBOR Rate is to be applicable with maturities comparable to the Interest
Period for which such LIBOR Rate will apply as of approximately 10:00 a.m. (New
York, New York time) two Business Days prior to the commencement of such
Interest Period, times (b) Statutory Reserves, if any.
"Lien" shall mean any interest in Property securing an obligation owed
to, or a claim by, a Person other than the owner of the Property, whether such
interest is based on contract, constitutional, common, or statutory law, and
including but not limited to the lien or security interest arising from a
mortgage, encumbrance, pledge, security agreement, conditional sale or trust
receipt or a lease, consignment or bailment for security purposes. The term
"Lien" shall include reservations, exceptions, encroachments, easements, rights
of way, covenants, conditions, restrictions, liens and other statutory,
constitutional, or common law rights of landlords, leases and other title
exceptions and encumbrances affecting Property. For the purposes of this
Agreement, any Borrower shall be deemed to be the owner of any Property which it
has acquired or holds subject to a conditional sale agreement, financing lease
or other arrangement pursuant to which title to the Property has been retained
by or vested in some other Person for security purposes.
"Loan" shall mean a Revolving Credit Loan, a Term Loan, a US Swingline
Loan or a SOFA Loan and "Loans" shall mean the Revolving Credit Loans, the Term
Loans, the US Swingline Loans and the SOFA Loans or one or more of them as
provided herein.
"Lockbox" shall mean any lockbox to be established and operated
pursuant to Section 4.3 hereof and the Lockbox Agreement.
"Lockbox Agreement" shall mean one or more lockbox agreements,
tri-party agreements, or similar documents to be entered into between the
Borrowers (or any of them) and the Administrative Agent or the Canadian Lockbox
Bank on the Administrative Agent's or the Canadian Lockbox Bank's standard form
(with such modifications thereto as the Administrative Agent, the Canadian
Administrative Agent or the Canadian Lockbox Bank shall reasonably require)
setting forth certain terms applicable to the establishment and operation of the
applicable Lockbox.
"Maturity Date" shall mean March 31, 2006.
"Margin Stock" shall have the meaning provided in Regulations U and X.
"Material Adverse Effect" shall mean any material and adverse effect on
(a) the business, operations, assets, liabilities, condition (financial or
otherwise), prospects, or results of operations of (i) the US Borrowers taken as
a whole, or (ii) the Canadian Borrowers taken as a whole, (b) the validity or
enforceability of any of the Financing Documents or the rights and remedies of
the Administrative Agent, the Canadian Administrative Agent or the Lenders
thereunder, or (c) the perfection or priority of any Liens securing the Canadian
Lender Indebtedness or the Lender Indebtedness.
"Maverick International" shall mean Maverick Tube International, Inc.,
a Barbados foreign sales corporation.
"Minimum Excess Availability" shall mean, for any period, the lowest
amount of Excess Availability at the opening of business on any Business Day in
such period; provided, that for purposes of determining Minimum Excess
Availability, the Initial Reserve shall be disregarded.
"Mellon Account" shall mean account number 11216 maintained by C&P at
Mellon Bank.
"Mortgaged Real Property" shall mean the Real Property of the Borrowers
described on Part I of Schedule 5.24 hereto and all other Real Property which
may hereafter be mortgaged to the Administrative Agent or the Canadian
Administrative Agent pursuant to a Real Estate Mortgage.
"Net Cash Proceeds" shall mean the remainder of (a) the gross proceeds
received by any US Borrower from any Disposition less (b) commissions, broker's
fees, legal and other professional fees and expenses and other usual and
customary transaction costs, in each case only to the extent paid or payable by
a US Borrower in cash and related to such Disposition.
"New Subsidiary" has the meaning assigned to such term in Section 6.9
hereof.
"Non Financed Capital Expenditures" shall mean Capital Expenditures
made by any Credit Party which are not financed pursuant to the incurrence of
Indebtedness, the issuance of Equity or receipt of an equity contribution, a
Capitalized Lease Obligation or a Loan.
"Notes" shall mean the Revolving Credit Notes, the Term Notes, the US
Swingline Note and the SOFA Notes.
"Obligated Party" shall mean any Borrower and any other Person who is a
Party to a Financing Document for purposes of guaranteeing or securing the
Lender Indebtedness or any part thereof; provided, that, Obligated Parties do
not include any Bailee, suppliers, landlords or account debtors of any Borrower
that have executed Bailee Letters, Landlord Consents and Subordination
Agreements, Landlord Waiver Agreements, ▇▇▇▇-and-hold agreements or waivers of
repossession rights under Bankruptcy and Insolvency Act (Canada).
"Other Taxes" shall mean any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement.
"Overadvance" shall have the meaning assigned such term in Section
2.11(a) hereof.
"Payment Office" shall mean (a) with respect to US Loans, the
Administrative Agent's office located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (or such other office or individual as the Administrative Agent
may hereafter designate in writing to the other parties hereto), and (b) with
respect to Canadian Loans, the Canadian Administrative Agent's office located at
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Perfection Certificates" shall mean that certain Perfection
Certificate dated December 31, 2002, executed by each Borrower and addressed to
the Administrative Agent.
"Perfection Certificate Update" shall mean a Certificate from a
Responsible Officer of the Company in the form of Exhibit E hereto to be
delivered to the Administrative Agent monthly pursuant to Section 6.10(g) hereof
and setting forth all changes that would be required to be made to the
Perfection Certificates (as updated pursuant to any prior Perfection Certificate
Updates) to cause the Perfection Certificates to be accurate and complete if
reissued as of the last day of the month immediately preceding the month in
which the Perfection Certificate is required to be delivered pursuant to Section
6.10(g) hereof.
"Permitted Borrowing Base Adjustments" means adjustments to the
Canadian Borrowing Base or US Borrowing Base reflected on any Borrowing Base
Report delivered pursuant to Section 6.10(g) (a) made within ten (10) days after
delivery of such Borrowing Base Report, (b) solely to eliminate any intercompany
profit reflected in the cost of inventory acquired by any Borrower from an
Affiliate, and (c) which does not result in a reduction in the US Borrowing Base
and the Canadian Borrowing Base (considered in the aggregate) of greater than
$500,000.
"Permitted Liens" shall have the meaning assigned in Section 7.3
hereof.
"Person" shall mean any individual, partnership (including, but not
limited to, Tube) firm, corporation (including, but not limited to, all
Borrowers (other than Tube)), limited liability companies, association, joint
venture, trust or other entity, or any government or political subdivision or
agency, department or instrumentality thereof; provided, however, for the
purpose of the definition of "Change of Control," "Person" shall mean a "person"
or group of persons within the meaning of Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended.
"Plan" shall mean any employee pension benefit plan, as defined in
Section 3(2) of ERISA (including, but not limited to, an employee pension
benefit plan, such as a foreign plan, which is not subject to the provisions of
ERISA), which (a) is currently or hereafter sponsored, maintained or contributed
to by any Credit Party or an ERISA Affiliate, or (b) was at any time during the
six preceding Fiscal Years sponsored, maintained or contributed to by any Credit
Party or an ERISA Affiliate.
"Precision" shall have the meaning set forth in the initial paragraph
hereof.
"Precision Canada" shall have the meaning set forth in the initial
paragraph hereof.
"Precision International" shall mean Precision Tube Technology
International, Inc., a United States Virgin Islands foreign sales corporation.
"Precision Purchase Documents" shall have the meaning set forth in
Section 5.28 hereto.
"Precision Scotland" shall mean Precision Tube Technology, Ltd., a
Scottish limited liability company.
"Precision Sellers" shall have the meaning set forth in Section 5.28
hereto.
"Prime Rate" shall mean the rate which the Administrative Agent
announces from time to time as its prime rate, effective as of the date
announced as the effective date of any change in such prime rate. Without notice
to the Company or any other Person, the Prime Rate shall change automatically
from time to time as and in the amount by which such prime rate shall fluctuate.
The Prime Rate is a reference rate and does not necessarily represent the lowest
or best rate actually charged to any customer. The Administrative Agent may make
commercial loans or other loans at rates of interest at, above or below the
Prime Rate.
"Processing Reserves" shall mean the aggregate of all amounts due from
any Borrower to a Bailee at the end of each month in respect of any processing
of such Borrower's inventory performed by such Bailee. The Processing Reserves
shall be calculated separately for the US Borrowers and the Canadian Borrowers
and shall be the Dollar Equivalent of any amounts otherwise expressed in
Canadian Dollars.
"Projections" shall mean the projections of the results of operations
and financial condition of the Company and its consolidated Subsidiaries for
Fiscal Year ending on December 31, 2003, a copy of which have been provided to
the Administrative Agent and the Lenders and is attached hereto as Schedule 1.3.
"Property" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Prudential" shall have the meaning set forth in the initial paragraph
hereof.
"Purchase Agreement" shall have the meaning set forth in the recitals
hereto.
"Purchase Documents" shall have the meaning set forth in Section 5.27
hereto.
"Quarterly Dates" shall mean the first day of each April, July, October
and January in each year.
"Real Estate Mortgage" shall mean a Canadian Real Estate Mortgage or a
US Real Estate Mortgage, as the case may be.
"Real Property" shall mean any right, title or interest in and to real
property, including any fee interest, leasehold interest, easement, or license
and any other right to use or occupy real property, including any right arising
by contract.
"Register" shall have the meaning assigned in Section 10.7(c).
"Regulation D", "Regulations U and X" shall mean, respectively,
Regulation D under the Securities Act of 1933, as amended or modified from time
to time, and Regulation U and Regulation X of the Board of Governors of the
Federal Reserve System, as such regulations are from time to time in effect and
any successor regulations thereto.
"Reimbursement Obligations" shall mean, at any date, the obligation of
the Canadian Borrowers then outstanding in respect of Canadian Letters of Credit
and the obligation of the US Borrowers then outstanding in respect of US Letters
of Credit, to reimburse the Administrative Agent or the Canadian Administrative
Agent, as applicable, for the account of the Issuing Bank for the amount paid by
the Issuing Bank in respect of any drawings under such Letters of Credit.
"Related Affiliate" shall mean (a) with respect to any US Lender, such
Lender's Affiliate which is a Canadian Lender hereunder if any, and (b) with
respect to any Canadian Lender, such Lender's Affiliate which is a US Lender
hereunder if any.
"Required Lenders" shall mean: (a) at any time that no Term Loans are
outstanding, the Required Revolving Lenders; (b) at any time that Term Loans are
outstanding but no Revolving Credit Commitments are in effect and no Revolving
Credit Exposure is outstanding, the Required Term Lenders, and (c) at all other
times (i) that the Revolving Credit Commitments remain in effect, the Lenders
with aggregate Revolving Credit Commitments and the Lenders holding Term Loans
in an aggregate amount equal to or in excess of 66?% of the sum of all Revolving
Credit Commitments plus the aggregate principal amount of Term Loans then
outstanding, and (ii) after the Revolving Credit Commitments have terminated,
the Lenders having Revolving Credit Exposure and the Lenders holding Term Loans
in an aggregate amount equal to or in excess of 66?% of the sum of the Aggregate
Revolving Credit Exposure plus the aggregate principal amount of Term Loans then
outstanding.
"Required Revolving Lenders" shall mean the Lenders having 66?% or more
of the combined aggregate amount at such time of the Revolving Credit
Commitments, until terminated, and thereafter, the Lenders having 66?% or more
of the Aggregate Revolving Credit Exposure.
"Required SOFA Lenders" shall mean the SOFA Lenders holding 66?% or
more of the aggregate principal balance of SOFA Loans then outstanding.
"Required Term Lenders" shall mean the Term Lenders holding 66?% or
more of the aggregate principal balance of Term Loans then outstanding.
"Responsible Officer" shall mean, with respect to any corporation, the
chairman of the board, the president, any vice president, the chief executive
officer or the chief operating officer, or any equivalent officer (regardless of
his or her title), and, in respect of financial or accounting matters, the chief
financial officer, the vice president of finance, the treasurer, the controller,
or any equivalent officer (regardless of his or her title). Unless otherwise
specified, all references to a Responsible Officer herein shall mean a
Responsible Officer of all Borrowers.
"Restricted Account Agreement" shall mean a letter agreement in
substantially the form of Exhibit Q hereto to be entered into between the
Administrative Agent and the applicable depository banks with respect to the
Mellon Account.
"Revolving Credit Commitments" shall mean collectively, the US
Revolving Credit Commitments and the Canadian Revolving Credit Commitments.
"Revolving Credit Exposure" shall mean, at any time for each Revolving
Lender, the sum of such Lender's US Revolving Credit Exposure and Canadian
Revolving Credit Exposure at such time.
"Revolving Credit Loan" shall mean, collectively, the US Revolving
Credit Loans and the Canadian Revolving Credit Loans.
"Revolving Credit Notes" shall mean, collectively, the US Revolving
Credit Notes and the Canadian Revolving Credit Notes.
"Revolving Lenders" shall mean, collectively, the US Revolving Lenders
and the Canadian Lenders.
"Rolling Period" shall mean any period of four consecutive Fiscal
Quarters.
"Secured Affiliate" shall mean any Affiliate of JPMorgan that has
entered into a Swap Agreement with any Credit Party with the obligations of such
Credit Party thereunder being secured by one or more Security Instruments.
"Security Instruments" shall mean any and all agreements or instruments
now or hereafter executed and delivered by any Credit Party or any other Person
as security for the payment or performance of the Lender Indebtedness or the
Canadian Lender Indebtedness, as any of the foregoing may be amended, modified
or supplemented.
"Sellers" shall have the meaning set forth in the recitals hereof.
"Settlement Date " shall mean the date, weekly, and more frequently, at
the discretion of the Canadian Administrative Agent, upon the occurrence of an
Event of Default or a continuing decline or increase of the Canadian Revolving
Credit Loans, that the Canadian Administrative Agent and the Canadian Lenders
shall settle amongst themselves so that (a) the Canadian Administrative Agent
shall not have, as the agent for the Canadian Lenders, any money at risk, and
(b) on such Settlement Date the Canadian Lenders shall have their respective
Canadian Revolving Credit Percentage of the Aggregate Canadian Revolving Credit
Exposure; provided that each Settlement Date for a Canadian Lender shall be a
Business Day on which such Canadian Lender and its bank are open for business,
as applicable; provided, further, each Canadian Lender shall have at least one
Business Day's notice of a Settlement Date and the amount owed by such Canadian
Lender on that date.
"SOFA Borrowing Base" shall mean, with respect to the Borrowers, the
amount equal to the sum of (A) 5% of the Borrowers' Eligible Account and (B) 5%
of the Borrowers' Eligible Inventory.
"SOFA Commitment" shall have the meaning assigned to such term in
Section 2.1(f).
"SOFA Commitment Termination Date" shall mean the earlier of March 31,
2003 and the date on which all of the Revolving Loan Commitments are terminated
in full and/or reduced to zero pursuant to the terms of this Agreement.
"SOFA Exposure" shall mean, at any time as to each SOFA Lender, the sum
of (a) the aggregate principal amount of SOFA Loans made by such SOFA Lender
outstanding as of such date plus (b) the accrued and unpaid interest on SOFA
Loans made by such SOFA Lender outstanding as of such date. "SOFA Lender" shall
mean a Lender with a SOFA Commitment.
"SOFA Loan" shall have the meaning assigned to such term in Section
2.1(c)(A).
"SOFA Conversion Date" shall mean April 30, 2003.
"SOFA Maturity Date" shall mean December 31, 2003.
"SOFA Maximum Available Amount" shall mean, at any date, the lesser of
(i) the SOFA Commitments, or (ii) the SOFA Borrowing Base in effect at such
date.
"SOFA Note" shall mean a promissory note of the US Borrowers described
in payable to any SOFA Lender and being substantially in the Form of Exhibit S,
evidencing the aggregate Indebtedness of the US Borrowers to such SOFA Lender
resulting from SOFA Loans made by such Lender.
"SOFA Percentage" shall means as to any SOFA Lender, the percentage of
the aggregate SOFA Commitments constituted by its SOFA Commitment (or, if the
SOFA Commitments have terminated or expired, the percentage which such SOFA
Lender's SOFA Exposure at such time constitutes of the Aggregate SOFA Exposure
at such time).
"SOFA Term Amount" shall have the meaning assigned to such term in
Section 2.11(a).
"Solvent" shall mean with respect to any Person on a particular date,
the condition that, on such date, (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b) the present fair salable
value of the assets of such Person is not less than the amount that will be
required to pay the probable liabilities of such Person on its debts as they
become absolute and matured, (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay as such debts and liabilities mature, and (d) such Person is not engaged in
business or a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute an unreasonably
small amount of capital.
"Spot Exchange Rate" shall mean, on any day, the spot rate at which
Dollars are offered on such day by JPMorgan Canada in ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
for C$ at approximately 11:00 a.m. (Toronto, Ontario Canada time).
"Standby Letter of Credit" shall mean a letter of credit that (a) is
used in lieu or in support of performance guarantees or performance, surety or
other similar bonds (but expressly excluding stay and appeal bonds) arising in
the ordinary course of business, (b) is used in lieu or in support of stay or
appeal bonds, (c) supports the payment of insurance premiums for reasonably
necessary casualty insurance carried by any of the Borrowers, or (d) supports
payment or performance for identified purchases or exchanges of products or
services in the ordinary course of business.
"Statutory Reserves" shall mean a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum applicable reserve percentages,
including any marginal, special, emergency or supplemental reserves (expressed
as a decimal) established by the Board and any other banking authority to which
the Lenders are subject for Eurocurrency Liabilities (as defined in Regulation
D) or any other category of deposits or liabilities by reference to which the
LIBOR Rate is determined. Such reserve percentages shall include those imposed
pursuant to Regulation D. LIBOR Loans shall be deemed to constitute Eurocurrency
Liabilities and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under such Regulation D. Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"Storage/Handling Reserves" shall mean an amount, calculated as of the
last day of each month and calculated separately for the US Borrowers and the
Canadian Borrowers, equal to the aggregate of all amounts for storage, handling
and other services (other than amounts for processing work) charged by each
Bailee to such Borrowers for the three month period then ended; provided,
however, such amounts charged by Bailees who are no longer Bailees at end of the
period for which Storage/Handling Reserves are being calculated shall be
excluded in calculating Storage/Handling Reserves for such period; provided,
further, if a Bailee at the end of any period for which Storage/Handling
Reserves are being calculated has not been a Bailee for all of such period, all
such amounts paid to such Bailee shall be included in the Storage/Handling
Reserves on a pro forma basis as if such Bailee had been a Bailee since the
beginning of such period.
"Subsidiary" of any Person shall mean a corporation, limited liability
company, partnership or other entity of which a majority of the outstanding
shares of stock of each class having ordinary voting power or other equity
interests is owned by such Person, by one or more Subsidiaries of such Person,
or by such Person and one or more of its Subsidiaries.
"Swap Agreement" shall mean any interest rate, currency or commodity
swap, cap, floor, collar, forward agreement, futures contract or other
protection agreement or option with respect to any such transaction, designed to
hedge against fluctuations in interest rates, currency exchange rates or
commodity prices.
"Swap Reserves" shall mean, an amount (reflected in Dollars) calculated
as of the last day of each month and separately for the US Borrowers and the
Canadian Borrowers, equal to such Borrowers' net liability under the Swap
Agreements to which such Borrowers are a party, calculated in accordance with
GAAP, with such calculation subject to review and approval by the Administrative
Agent.
"Taxes" shall mean any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Temporary Lockbox Institutions" shall mean Mellon Bank.
"Term Commitment" shall have the meaning set forth in Section
2.1(a)(ii.
"Term Lender" shall mean a Lender which holds Term Loans in its
capacity as such.
"Term Lender Joinder Agreement" means a Term Lender Joinder Agreement
substantially in the form of Exhibit F attached hereto to be executed by a Term
Lender, the US Borrowers and the Administrative Agent, pursuant to which such
Term Lender (a) becomes a party to this Agreement as Term Lender, and (b)
evidences such Term Lender's Term Commitment.
"Term Loans" shall mean term loans made by the Term Lenders pursuant to
Section 2.1(a)(2) hereof and pursuant to such Term Lenders' Term Lender Joinder
Agreements.
"Term Note" shall mean a promissory note of the US Borrowers described
in Section 2.5(d) payable to any Term Lender and being substantially in the form
of Exhibit G, evidencing the Term Loans held by such Term Lender.
"Term Percentage" shall mean as to any Term Lender, the percentage
which the outstanding principal balance of the Term Loans held by such Term
Lender at such time constitutes of the aggregate outstanding principal balance
of Term Loans at such time.
"Three-Month Secondary CD Rate" shall mean, for any day, the secondary
market rate for three-month certificates of deposit reported as being in effect
on such day (or, if such day is not a Business Day, the next preceding Business
Day) by the Board through the public information telephone line of the Federal
Reserve Bank of New York (which rate will, under the current practices of the
Board, be published in Federal Reserve Statistical Release H.15(519) during the
week following such day) or, if such rate is not so reported on such day or such
next preceding Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New York City
received at approximately 12:00 noon, New York City time, on such day (or, if
such day is not a Business Day, on the next preceding Business Day) by the
Administrative Agent from three negotiable certificate of deposit dealers of
recognized standing selected by it.
"Transactions" shall mean the transactions provided for in and
contemplated by this Agreement and the other Financing Documents.
"Tri-Party Agreement" means a Tri-Party Agreement among the applicable
Borrower, the Administrative Agent and a Temporary Lockbox Institution pursuant
to which, among other things, such Temporary Lockbox Institution agrees to
forward on a daily basis to the Administrative Agent all such Borrower's funds
in the lockbox maintained with such Temporary Lockbox Institution.
"True-Up Loans" shall have the meaning set for in the second paragraph
of the agreements herein.
"Tube" shall have the meaning set forth in the initial paragraph
hereof.
"Tube Canada" shall have the meaning set forth in the initial paragraph
hereof.
"Type" of Loan shall mean an ABR Loan, a LIBOR Loan, a Canadian Prime
Rate Loan, or a B/A Loan and shall also refer to a C$ Denominated Loan or a
Dollar Denominated Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in
effect in the State of New York or, where applicable as to specific Credit Party
or Collateral, any other relevant state. In addition, "UCC" shall mean with
respect to the Canadian Credit Parties or any Property of the Canadian Credit
Parties subject thereto, the Personal Property Security Act or similar
legislation as from time to time in effect in the Province of Alberta or, where
applicable as to any specific Canadian Credit Party or Collateral, any other
relevant province or territory.
"US Base Rate" shall mean the rate of interest for Dollar denominated
loans publicly announced by JPMorgan Canada from time to time as its US Base
Rate in effect at its principal office in Toronto, Ontario for commercial loans
made in Canada.
"US Blocked Account" means a Blocked Account established by the US
Borrowers with the Administrative Agent.
"US Borrowers" shall have the meaning set forth in the initial
paragraph hereof.
"US Borrowing Base" shall mean, only with respect to the US Borrowers,
the amount equal to the sum of:
(a) the Eligible Account Advance Percentage of the US Borrowers'
Eligible Accounts, plus
(b) the lesser of (i) the sum of (A) the Eligible Inventory Advance
Percentage of the US Borrowers' Eligible Inventory (other than work in process)
and Eligible Bailee Inventory (other than work in process), plus (B) the lesser
of (1) the Eligible Inventory Advance Percentage of the US Borrowers' Eligible
Inventory consisting of work in process and Eligible Bailee Inventory consisting
of work in process and (2) US WIP Limit, plus (C) the lesser of (1) the Eligible
Inventory Advance Percentage of the US Borrowers' Eligible Included-In-Transit
Inventory and (2) US Included-In-Transit Limit, or (ii) the US Inventory Limit,
plus
(c) the US Equipment Component in effect as of the date for which the
US Borrowing Base is being calculated; plus
(d) the lesser of (i) the Eligible Account Advance Percentage of US
Borrowers' Eligible ▇▇▇▇ and Hold Accounts and (ii) $10,000,000.
provided, that, in no event will the component of the US Borrowing Base
determined pursuant to clause (b) exceed 60% of the total US Borrowing Base (but
solely for purposes of this calculation, the US Equipment Component shall remain
constant at the amount in effect on the Closing Date without giving effect to
any subsequent reductions in the US Equipment Component pursuant to the
definition of such term). The US Borrowing Base in effect under this Agreement
at any time shall be the US Borrowing Base reflected on the most recent US
Borrowing Base Report delivered to the Administrative Agent and the Canadian
Administrative Agent pursuant to Section 6.10(g) hereof subject to (a) the right
of the Administrative Agent, the Canadian Administrative Agent or the Required
Lenders to contest any components thereof or the calculation thereof, and (b)
immediate adjustment as result of (i) establishment of Availability Reserves,
(ii) reductions in advance rates permitted hereunder, (iii) scheduled reductions
in the US Equipment Component, (iv) more frequent reporting of certain
components of the US Borrowing Base to the extent required in accordance with
Section 6.10(g), (v) any changes in eligibility standards required by the
Administrative Agent, and (vi) the occurrence of any Disposition.
"US Credit Party" shall mean the US Borrowers and any other Credit
Party which is organized or formed under the laws of any state of the United
States or any political subdivision thereof.
"US Equipment Component" shall mean $29,090,910 on the Closing Date;
provided that the US Equipment Component shall be reduced (a) by $303,030 on
January 1, 2003, (b) by $454,545 on the first day of each month commencing with
February 1, 2003 and continuing on the first day of each month thereafter
throughout the term of this Agreement, (c) on April 1 of each calendar year
commencing April 1, 2003, by the US Excess Cash Flow Amount for the Fiscal Year
most recently ended, and (d) on the date of any Disposition, by the amount of
the Excess Net Cash Proceeds received by the US Borrowers in such Disposition.
"US Excess Availability" shall mean, as of any date, the remainder of
(a) the remainder of (i) the US Borrowing Base as of such date, minus (ii) the
sum of (A) the Availability Reserves with respect to the US Borrowing Base as of
such date, plus (B) the portion of the Swap Reserves, the Cash Management
Reserves, Processing Reserves and Storage/Handling Reserves applicable to the US
Borrowers as of the last day of the month for which the US Borrowing Base is
being calculated, less (b) the aggregate outstanding balance of the US Lender
Indebtedness as of such date.
"US Excess Cash Flow Amount" shall mean, with respect to (a) the Fiscal
Year ending December 31, 2002, the lesser of (i) $3,333,500 and (ii) 40% of the
Excess Cash Flow of the US Borrowers for such Fiscal Year, and (b) any Fiscal
Year thereafter, the lesser of (x) $5,000,150 and (y) 40% of the Excess Cash
Flow of the US Borrowers for such Fiscal Year. The US Excess Cash Flow Amount
shall be determined for any Fiscal Year by the Administrative Agent following
the delivery of the Company's audited consolidated financial statements for such
Fiscal Year pursuant to Section 6.10(a) hereof; provided, that, if the Company
shall fail to deliver its audited consolidated financial statements for (1) the
Fiscal Year ending December 31, 2002 on or before the date required pursuant to
Section 6.10(a) hereof, $3,333,500 shall be the US Excess Cash Flow Amount for
such Fiscal Year, and (2) any Fiscal Year thereafter on or before the date
required pursuant to Section 6.10(a) hereof, $5,000,150 shall be the US Excess
Cash Flow Amount for such Fiscal Year.
"US Funding Amount" shall have the meaning set forth in Section 2.2(c).
"US Included-in-Transit Limit" shall mean the amount of the
Included-in-Transit Limit which the US Borrowers designate as the "US
Included-in-Transit Limit" on the US Borrowing Base Report from which the US
Borrowing Base is being calculated; provided, that, for any date on which the
Borrowing Bases are being reported, in no event shall the sum of the US
Included-in-Transit Limit and the Canadian Included-in-Transit Limit ever exceed
the Included-in-Transit Limit.
"US Inventory Limit" shall mean the amount of the Inventory Limit which
the US Borrowers designate as the "US Inventory Limit" on the US Borrowing Base
Report from which the US Borrowing Base is being calculated; provided, that, in
no event shall the sum of the Canadian Inventory Limit and the US Inventory
Limit ever exceed the Inventory Limit.
"US Lender" shall mean a US Revolving Lender, a Term Lender or a SOFA
Lender and "US Lenders" means all US Revolving Lenders, Term Lenders and SOFA
Lenders, collectively.
"US Lender Indebtedness" shall mean any and all amounts owing or to be
owing by any US Credit Party to the Administrative Agent, the Canadian
Administrative Agent, the Issuing Banks or the Lenders with respect to or in
connection with the US Loans, any US Letter of Credit Liabilities, the US
Revolving Credit Notes and Term Notes, any Swap Agreement between any of the US
Borrowers and JPMorgan or any Secured Affiliate thereof, any Cash Management
Agreement between any of the US Borrowers and Lender or its Cash Management
Affiliate, this Agreement, or any other Financing Document and, as to Swap
Agreements or any Cash Management Agreement, any and all amounts owing or to be
owing by any US Credit Party thereunder to JPMorgan or any of its Secured
Affiliates or any Lender or any of its Cash Management Affiliates, respectively.
"US Letter of Credit" and "US Letters of Credit" shall have the
meanings assigned to such terms in Section 2.3(a).
"US Letter of Credit Liabilities" shall mean, at any time and in
respect of any US Letter of Credit, the sum of (a) the amount available for
drawings under such US Letter of Credit as of the date of determination plus (b)
the aggregate unpaid amount of all Reimbursement Obligations due and payable as
of the date of determination in respect of previous drawings made under such US
Letter of Credit.
"US Lockbox" shall mean any lockbox to be established and operated
pursuant to Section 4.3 hereof and the US Lockbox Agreement.
"US Lockbox Agreement" shall mean an agreement between the US Borrowers
and the Administrative Agent governing the US Lockbox.
"US Loans" shall mean the US Revolving Credit Loans, the Term Loans,
the US Swingline Loans and the SOFA Loans.
"US Maximum Available Amount" shall mean, at any date, an amount equal
to the the lesser of (a) the aggregate US Revolving Credit Commitments as of
such date, and (b) the remainder of (i) the US Borrowing Base as of such date,
minus (ii) the sum of (A) the Availability Reserves with respect to the US
Borrowing Base as of such date, plus (B) the portion of the Swap Reserves, the
Cash Management Reserves, Processing Reserves and Storage/Handling Reserves
applicable to the US Borrowers as of the last day of the month for which the US
Borrowing Base is being calculated.
"US Real Estate Mortgage" shall mean a Mortgage, Deed of Trust,
Security Agreement, Assignment and Financing Statement (or similarly titled
agreement) substantially in the form of Exhibit H and in each case with such
changes thereto as the Administrative Agent shall deem necessary or appropriate
to comply with state and local Governmental Requirements.
"US Revolving Credit Commitment" shall have the meaning assigned to
such term in Section 2.1(c).
"US Revolving Credit Exposure" shall mean, at any time and as to each
US Revolving Lender, the sum of (a) the aggregate principal amount of US
Revolving Credit Loans made by such US Revolving Lender outstanding as of such
date plus (b) the accrued and unpaid interest on US Revolving Credit Loans made
by such US Revolving Lender outstanding as of such date plus (c) such US
Revolving Lender's US Revolving Credit Percentage of the aggregate amount of all
US Letter of Credit Liabilities as of such date plus (d) such US Revolving
Lender's US Revolving Credit Percentage of the US Swingline Exposure as of such
date.
"US Revolving Credit Loan" shall have the meaning provided in Section
2.1(a); the US Revolving Credit Loans shall not include any US Letter of Credit
Liabilities.
"US Revolving Credit Note" shall mean a promissory note of the US
Borrowers described in Section 2.5(a) payable to any US Revolving Lender and
being substantially in the form of Exhibit I, evidencing the aggregate
Indebtedness of the US Borrowers to such US Revolving Lender resulting from US
Revolving Credit Loans made by such US Lender.
"US Revolving Credit Percentage" shall mean as to any US Revolving
Lender, the percentage of the aggregate US Revolving Credit Commitments
constituted by its US Revolving Credit Commitment (or, if the US Revolving
Credit Commitments have terminated or expired, the percentage which such US
Revolving Lender's Revolving Credit Exposure at such time constitutes of the
Aggregate US Revolving Credit Exposure at such time).
"US Revolving Lender" shall mean a Lender with a US Revolving Credit
Commitment.
"US Swingline Availability" shall mean, on any date, an amount equal to
the remainder of (a) the US Swingline Commitment minus (b) the US Swingline
Exposure on such date.
"US Swingline Commitment" shall have the meaning assigned to such term
in Section 2.1(e).
"US Swingline Exposure" shall mean, at any time, the aggregate
principal amount of all US Swingline Loans made to the US Borrowers outstanding
at such time.
"US Swingline Lender" shall mean JPMorgan, in its capacity as lender of
US Swingline Loans hereunder.
"US Swingline Loans" shall have the meaning assigned to such term in
Section 2.1(a).
"US Swingline Note" shall mean a promissory note of the US Borrowers
described in Section 2.5(c) payable to the US Swingline Lender and being
substantially in the form of Exhibit J, evidencing the aggregate Indebtedness of
the US Borrowers to the US Swingline Lender resulting from US Swingline Loans
made by the US Swingline Lender.
"US WIP Limit" shall mean the amount of the WIP Limit which the US
Borrowers designate as the "US WIP Limit" on the US Borrowing Base Report from
which the US Borrowing Base is being calculated; provided, that, in no event
shall the sum of the Canadian WIP Limit and the US WIP Limit ever exceed the WIP
Limit.
"Voting Stock" of any Person shall mean Equity of such Person which
ordinarily has voting power for the election of directors (or persons performing
similar functions) of such Person, whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.
"WIP Limit" shall mean $10,000,000.
Section 1.2. Accounting Terms and Determinations. Unless otherwise
defined or specified herein, all accounting terms shall be construed herein, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with GAAP
applied on a basis consistent with the Financial Statements.
Section 1.3. Other Definitional Terms. The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement, and article, section, schedule, exhibit and like references are to
this Agreement unless otherwise specified.
Article 2. AMOUNT AND TERMS OF LOANS
Section 2.1. Loans and Commitments.
(a) Loans.
(1) Subject to the terms and conditions and relying on the
representations and warranties contained herein, (A) on any Business
Day from and after the Closing Date, but prior to the Maturity Date,
each US Revolving Lender severally agrees to make revolving credit
loans in Dollars (each a "US Revolving Credit Loan") to the US
Borrowers, (B) on any Business Day from and after the Closing Date,
but prior to the Maturity Date, each Canadian Lender severally agrees
to make revolving credit loans in either Dollars or C$ and including
by means of B/As (each a "Canadian Revolving Credit Loan") to the
Canadian Borrowers, (C) on any Business Day from and after the Closing
Date, but prior to the Maturity Date, the US Swingline Lender agrees
to make revolving swingline loans in Dollars (each a "US Swingline
Loan") to the US Borrowers, and (D) on any Business Day from and after
the Closing Date, but prior to the SOFA Commitment Termination Date,
each SOFA Lender severally agrees to make revolving credit loans in
Dollars (each a "SOFA Loan") to the US Borrowers.
From and after the date of this Agreement but prior to the
Maturity Date, at the request of the US Borrowers and subject to the
approval of the Administrative Agent and the Required Revolving
Lenders, one or more Persons may agree to become a party to this
Agreement as a Term Lender hereunder and make Dollar Denominated term
loans ("Term Loans") to the US Borrowers hereunder. Any such agreement
shall be evidenced by the execution and delivery by the US Borrowers,
such Term Lender(s) and the Administrative Agent of a Term Lender
Joinder Agreement setting forth (A) the commitment of such Term
Lender(s) to make Term Loans, including the amount thereof (for each
Term Lender, its "Term Commitment"), (B) the Applicable Margin
applicable to Term Loans held by such Term Lender (which may be a
floating margin in accordance with a pricing grid), and (C) the date
on which the proceeds of such Term Loans are to be made available to
the US Borrowers. Upon the execution and delivery of any Term Lender
Joinder Agreement, the US Borrowers shall issue to each Term Lender
party thereto Term Notes to evidence the Term Loans made by such Term
Lender pursuant to its Term Commitment.
(b) Types of Loans. (1) The Dollar Denominated Loans made pursuant
hereto shall, at the option of the US Borrowers or the Canadian Borrowers, as
applicable, be either ABR Loans or LIBOR Loans and may be continued or converted
pursuant to Section 2.12; provided, that, all Term Loans shall be ABR Loans, (2)
the C$ Denominated Loans made pursuant hereto shall, at the option of the
Canadian Borrowers, be either Canadian Prime Rate Loans or B/A Loans and may be
continued or converted pursuant to Section 2.12, and (3) the Dollar Denominated
US Swingline Loans made pursuant hereto shall be ABR Loans; provided, that,
except as otherwise specifically provided herein, all Loans made pursuant to the
same Borrowing shall be of the same Type.
(c) US Revolving Credit Commitments. Each US Revolving Lender's US
Revolving Credit Exposure shall not exceed at any one time the amount set forth
opposite such US Revolving Lender's name on Annex I under the caption "US
Revolving Credit Commitment" (as the same may be reduced pursuant to Section
2.10 or otherwise from time to time modified pursuant to Section 10.7), its "US
Revolving Credit Commitment," and collectively for all US Revolving Lenders, the
"US Revolving Credit Commitments"; the term "US Revolving Credit Commitments"
includes the requirements of the US Revolving Lenders to purchase participations
in the US Swingline Loans pursuant to Section 2.26 hereof; provided, however,
that, the Aggregate US Revolving Credit Exposure at any one time outstanding
shall not exceed the US Maximum Available Amount in effect at such time. Within
the foregoing limits and subject to the conditions set forth in Article 3, the
US Borrowers may obtain Borrowings of US Revolving Credit Loans, repay or prepay
such US Revolving Credit Loans, and reborrow such US Revolving Credit Loans.
(d) Canadian Revolving Credit Commitments. Subject to Section 2.9(i)
hereof, the Dollar Equivalent of each Canadian Lender's Canadian Revolving
Credit Exposure shall not exceed at any one time the amount set forth opposite
such Canadian Lender's name on Annex I under the caption "Canadian Revolving
Credit Commitment" (as the same may be reduced pursuant to Section 2.10 or
otherwise from time to time modified pursuant to Section 10.7, its "Canadian
Revolving Credit Commitment," and collectively for all Canadian Lenders, the
"Canadian Revolving Credit Commitments"; provided, however, that, the Dollar
Equivalent of the Aggregate Canadian Revolving Credit Exposure at any one time
outstanding shall not exceed the Canadian Maximum Available Amount in effect at
such time. Within the foregoing limits and subject to the conditions set forth
in Article 3, the Canadian Borrowers may obtain Borrowings of Canadian Revolving
Credit Loans, repay or prepay such Canadian Revolving Credit Loans, and reborrow
such Canadian Revolving Credit Loans.
(e) US Swingline Loans. The US Swingline Lender's US Swingline Exposure
shall not exceed at any one time the amount set forth opposite the US Swingline
Lender's name on Annex I under the caption "US Swingline Loan Commitment" (the
"US Swingline Commitment"); provided, however, the Aggregate US Revolving Credit
Exposure at any one time outstanding shall not exceed the US Maximum Available
Amount in effect at such time. Within the foregoing limits set forth in Article
3, the US Borrowers may obtain Borrowings of US Swingline Loans, repay or prepay
such US Swingline Loans, and reborrow such US Swingline Loans.
(f) SOFA Loans. Each SOFA Lender's SOFA Exposure shall not exceed at
any one time the amount set forth opposite such SOFA Lender's name on Annex I
under the caption "SOFA Commitment" (its "SOFA Commitment", and collectively for
all SOFA Lenders, the "SOFA Commitments"); provided, however, that, the SOFA
Exposure at any one time outstanding shall not exceed the SOFA Maximum Available
Amount. Notwithstanding the foregoing, SOFA Loans may not be borrowed (i) on the
Closing Date if Excess Availability is greater than $40,000,000 on the Closing
Date after giving effect to all Borrowings of Revolving Credit Loans and
Swingline Loans and the issuance of all Letters of Credit to be borrowed and
issued on the Closing Date, and (ii) at any time after the Closing Date if
Excess Availability is greater than $30,000,000 at the time of such Borrowing
after giving effect to all Borrowings of Revolving Credit Loans and Swingline
Loans and the issuance of all Letters of Credit to be borrowed and issued on
such date. Within the foregoing limits and subject to the conditions set forth
in Article 3 and Section 2.11(k) hereof, the US Borrowers may obtain Borrowings
of SOFA Loans, repay or prepay such SOFA Loans, and reborrow such SOFA Loans.
(g) Amounts of Borrowings, etc. The aggregate principal amount of each
Borrowing (1) of LIBOR Loans shall be (A) in an amount sufficient to cause each
Lender's share thereof to be not less than $500,000, and (B) in an integral
multiple of $100,000, (2) of US Revolving Credit Loans which are ABR Loans shall
be in minimum amount of $1,000,000 and shall be in an integral multiple of
$100,000 (other than Borrowings of the US Funding Amount, which shall be in the
amount required for the US Funding Amount), (3) of Canadian Revolving Credit
Loans which are ABR Loans shall be not less than $100,000 and shall be in an
integral multiple of $50,000 (other than Borrowings of the Canadian Funding
Amount, which shall be in the amount required for the Canadian Funding Amount),
of Canadian Prime Rate Loans shall be not less than C$100,000 and shall be in an
integral multiple of C$50,000, (5) of B/A Loans shall be not less than C$500,000
and shall be in an integral multiple of C$100,000, (6) of US Swingline Loans
shall be in any amount. Borrowings of more than one Type may be outstanding at
the same time, and (7) of SOFA Loans which are ABR Loans shall be in any amount;
provided, however, that, the Borrowers shall not be entitled to request any
Borrowing that, if made, would result in an aggregate of more than five separate
Borrowings of LIBOR Loans or five separate B/A Loans being outstanding at any
one time. For purposes of the foregoing, Borrowings having different Interest
Periods or Contract Periods, regardless of whether they commence on the same
date, shall be considered separate Borrowings.
Section 2.2. Borrowing Requests.
(a) Borrowing Requests. Whenever any of the Borrowers desires to make a
Borrowing hereunder, they shall give Advance Notice to the Administrative Agent
(in the case of any Borrowing of US Revolving Credit Loans, US Swingline Loans
or SOFA Loans) or the Canadian Administrative Agent (with a simultaneous copy to
the Administrative Agent (in the case of any Borrowing of Canadian Loans)) in
the form of a Borrowing Request, specifying, subject to the provisions hereof,
(1) the aggregate principal amount of the Loan to be made pursuant to such
Borrowing, (2) whether such Loan is a US Revolving Credit Loan, Canadian
Revolving Credit Loan, US Swingline Loan or SOFA Loan, (3) in the case of a
Canadian Revolving Credit Loan, whether such Loan is to be a Dollar Denominated
Loan or a C$ Denominated Loan, (4) the date of Borrowing (which shall be a
Business Day), (5) whether the Dollar Denominated Loans being made pursuant to
such Borrowing are to be ABR Loans or LIBOR Loans, whether the C$ Dollar
Denominated Loans being made pursuant thereto are to be Canadian Prime Rate
Loans or B/A Loans, and (7) in the case of LIBOR Loans or B/A Loans, the
Interest Period or Contract Period, respectively, to be applicable thereto.
(b) Notice by the Administrative Agent. Subject to Section 2.9(i) with
respect to Canadian Revolving Credit Loans, the Administrative Agent or the
Canadian Administrative Agent (as applicable) shall promptly give the Canadian
Administrative Agent and each applicable Lender telecopy or telephonic notice
(and, in the case of telephonic notices, confirmed by telecopy or otherwise in
writing) of the proposed Borrowing (other than Borrowings of US Swingline Loans
in which case notice shall only be given the US Swingline Lender), of such
Lender's Applicable Percentage thereof and of the other matters covered by the
Advance Notice. The Borrowers hereby waive the right to dispute the
Administrative Agent's record of the terms of such telephonic notice, absent
manifest error.
(c) Automatic Funding to US Disbursement Accounts. Notwithstanding
Section 2.2(a) and Section 2.2(b), on each Business Day, the US Borrowers will
be deemed to have requested pursuant to a Borrowing Request a Borrowing to be
made on such day in an amount (the "US Funding Amount") equal to the amount of
all checks, drafts and other items submitted for payment from the US Borrowers'
Disbursement Account on such Business Day. Such Borrowing shall be a Borrowing
of US Swingline Loans to the extent of the remaining US Swingline Availability
and, thereafter, such Borrowings shall be US Revolving Credit Loans, unless the
US Borrowers expressly request SOFA Loans in writing and such SOFA Loans are
available pursuant to the terms hereof, in which case such Borrowings shall be
SOFA Loans, which in either event shall be ABR Loans. Subject to the
satisfaction of the conditions precedent set forth in Article 3, any US Funding
Amount made from Swingline Loans and/or US Revolving Credit Loans shall be
deposited into the US Borrower's Disbursement Account. Subject to the
satisfaction of the conditions precedent set forth in Article 3, any US Funding
Amount made from SOFA Loans shall be deposited into the US Borrower's account
no. 801-799112 held at JPMorgan Chase Bank and applied to reduce the balance of
the US Revolving Credit Loans.
Section 2.3. Letters of Credit.
(a) Issuance of US Letters of Credit. Subject to the terms and
conditions hereof, the US Borrowers shall have the right, in addition to US
Revolving Credit Loans provided for in Section 2.1, to utilize the US Revolving
Credit Commitments from time to time prior to the Maturity Date by obtaining the
issuance of either Documentary Letters of Credit or Standby Letters of Credit
for the accounts of any of the US Borrowers by an Issuing Bank if the US
Borrowers shall so request in the notice referred to in Section 2.3(d)(1) (each
such letter of credit being referred to as a "US Letter of Credit", and
collectively referred to as the "US Letters of Credit"); provided, however, that
the Aggregate US Revolving Credit Exposure at any one time outstanding shall not
exceed the US Maximum Available Amount in effect at such time and the aggregate
of all US Letter of Credit Liabilities and Canadian Letter of Credit Liabilities
at any one time outstanding shall not exceed $10,000,000. US Letters of Credit
shall be denominated in Dollars and may be issued to support the obligations of
the US Borrowers only. Upon the date of the issuance of a US Letter of Credit,
the applicable Issuing Bank shall be deemed, without further action by any party
hereto, to have sold to each US Revolving Lender, and each US Revolving Lender
shall be deemed, without further action by any party hereto, to have purchased
from such Issuing Bank, a participation, to the extent of such applicable
Lender's US Revolving Credit Percentage, in such US Letter of Credit and the
related US Letter of Credit Liabilities.
(b) Issuance of Canadian Letters of Credit. Subject to the terms and
conditions hereof, the Canadian Borrowers shall have the right, in addition to
Canadian Revolving Credit Loans provided for in Section 2.1, to utilize the
Canadian Revolving Credit Commitments from time to time prior to the Maturity
Date by obtaining the issuance of either Documentary Letters of Credit or
Standby Letters of Credit for the account of any of the Canadian Borrowers by an
Issuing Bank if the Canadian Borrowers shall so request in the notice referred
to in Section 2.3(d)(1) (each such letter of credit being referred to as a
"Canadian Letter of Credit", and collectively referred to as the "Canadian
Letters of Credit"); provided, however, that, the Dollar Equivalent of the
Aggregate Canadian Revolving Credit Exposure at any one time outstanding shall
not exceed the Canadian Maximum Available Amount in effect at such time and the
Dollar Equivalent of the aggregate of all Canadian Letter of Credit Liabilities
and US Letter of Credit Liabilities at any one time outstanding shall not exceed
$10,000,000. Canadian Letters of Credit shall be denominated in Dollars or C$ as
the Canadian Borrowers shall elect and may be issued to support the obligations
of the Canadian Borrowers only. Upon the date of the issuance of a Canadian
Letter of Credit, the applicable Issuing Bank shall be deemed, without further
action by any party hereto, to have sold to each Canadian Lender, and each
Canadian Lender shall be deemed, without further action by any party hereto, to
have purchased from such Issuing Bank, a participation, to the extent of such
applicable Lender's Canadian Revolving Credit Percentage, in such Canadian
Letter of Credit and the related Canadian Letter of Credit Liabilities.
(c) Certain Limitation on Letters of Credit. No Letter of Credit issued
pursuant to this Agreement shall have an expiry date beyond the earlier of one
year after the date of issuance or sixty (60) days prior to the Maturity Date.
Any Letter of Credit may give the beneficiary thereof the right to draw upon the
Letter of Credit upon its expiry date to the extent not extended. No Letter of
Credit shall be issued within sixty (60) days of the Maturity Date.
(d) Additional Letter of Credit Provisions. The following additional
provisions shall apply to each Letter of Credit:
(1) Any of the Borrowers which desires an Issuing Bank to issue a
Letter of Credit for its account (an "Account Party") shall give the
Administrative Agent (or the Canadian Administrative Agent in the
event such Letter of Credit is a Canadian Letter of Credit) and the
Issuing Bank at least five (5) Business Days' prior notice in the form
of a Borrowing Request (effective upon receipt), or in each case, such
shorter period as may be agreed to by the Administrative Agent (or the
Canadian Administrative Agent, as applicable) and such Issuing Bank,
specifying the date such Letter of Credit is to be issued (which shall
be a Business Day) and describing: (A) the face amount of the Letter
of Credit and, in the case of any Canadian Letter of Credit, the type
of currency (Dollars or C$) in which such Letter of Credit is to be
denominated, (B) the expiration date of the Letter of Credit, (C) the
name and address of the beneficiary, (D) information concerning the
transaction proposed to be supported by such Letter of Credit as the
Administrative Agent (or the Canadian Administrative Agent, as
applicable) or such Issuing Bank may reasonably request, (E) such
other information and documents relating to the Letter of Credit as
the Administrative Agent (or the Canadian Administrative Agent, as
applicable) or such Issuing Bank may reasonably request, and (F) a
precise description of documents and the verbatim text of any
certificate to be presented by the beneficiary, which, if presented
prior to the expiry date of the Letter of Credit, would require such
Issuing Bank to make payment under the Letter of Credit; provided that
such Issuing Bank, in its reasonable judgment, may require reasonable
changes in such documents and certificates; and provided further that
such Issuing Bank shall not be required to issue any Letter of Credit
that on its terms requires payment thereunder prior to the next
Business Day following receipt by such Issuing Bank of such documents
and certificates. Each such notice shall be accompanied by the
applicable Issuing Bank's Application and by a certificate executed by
a Responsible Officer setting forth calculations evidencing
availability for such Letter of Credit pursuant to Section 2.3(d)(2)
and stating that all conditions precedent to such issuance have been
satisfied. Each Letter of Credit shall, to the extent not inconsistent
with the express terms hereof or the applicable Application, be
subject to the Uniform Customs and Practice for Documentary Credits
(1993 Revision), International Chamber of Commerce Publication No. 500
(together with any subsequent revisions thereof approved by a Congress
of the International Chamber of Commerce, the "UCP"), and shall, as to
matters not governed by the UCP, be governed by, and construed and
interpreted in accordance with, the laws of the State of New York.
(2) No US Letter of Credit or Canadian Letter of Credit may be
issued if after giving effect thereto the Aggregate US Revolving
Credit Exposure or the Aggregate Canadian Revolving Credit Exposure
would exceed the US Maximum Available Amount or the Canadian Maximum
Available Amount, respectively. On each day during the period
commencing with the issuance of any Letter of Credit and until such
Letter of Credit shall have expired or have been terminated, the US
Revolving Credit Commitment or Canadian Revolving Credit Commitment
(as applicable) of each Lender shall be deemed to be utilized for all
purposes hereof in an amount equal to such Lender's Revolving Credit
Percentage of the amount of the Letter of Credit Liabilities related
to such Letter of Credit.
(3) Upon receipt from the beneficiary of any Letter of Credit of
any demand for payment thereunder, the Issuing Bank shall promptly
notify the Account Party for whose account such Letter of Credit was
issued and the Administrative Agent (or the Canadian Administrative
Agent if such Letter of Credit is a Canadian Letter of Credit) of such
demand (provided that the failure of an the Issuing Bank to give such
notice shall not affect the Reimbursement Obligations of the Account
Party hereunder) and the Account Party shall immediately, and in any
event no later than 10:00 a.m. (New York, New York time) on the date
of such drawing, reimburse the Administrative Agent (or the Canadian
Administrative Agent, as applicable) for the account of the applicable
Issuing Bank for any amount paid by the Issuing Bank upon any drawing
under such Letter of Credit, without presentment, demand, protest or
other formalities of any kind in an amount, in same day funds, equal
to the amount of such drawing. Unless prior to 10:00 a.m. (New York,
New York time) on the date of such drawing, the Account Party shall
have either notified the Issuing Bank and the Administrative Agent (or
the Canadian Administrative Agent, as applicable) that the Account
Party intends to reimburse the Administrative Agent (or the Canadian
Administrative Agent, as applicable) for the account of the applicable
Issuing Bank for the amount of such drawing with funds other than the
proceeds of Loans or delivered to the Administrative Agent (or the
Canadian Administrative Agent, as applicable) a Borrowing Request for
Loans in an amount equal to such drawing, the Account Party will be
deemed to have given a Borrowing Request to the Administrative Agent
(or the Canadian Administrative Agent, as applicable) requesting that
the Lenders make Revolving Credit Loans on the date on which such
drawing is honored in an amount equal to the amount of such drawing.
Any Loans made pursuant to the preceding sentence shall be (A) US
Revolving Credit Loans which are ABR Loans if the underlying Letter of
Credit was a US Letter of Credit, (B) Canadian Revolving Credit Loans
if the underlying Letter of Credit was a Canadian Letter of Credit,
and (C) (i) Dollar Denominated Loans and ABR Loans if the underlying
Letter of Credit was denominated in Dollars, and (ii) C$ Denominated
Loans and Canadian Prime Rate Loans if the underlying Letter of Credit
was denominated in C$. The obligation of Lenders to make Revolving
Credit Loans pursuant to this Section 2.3 (but not the participation
obligations of the Lenders pursuant to Section 2.3(d)(4) below) shall
be subject to a) the satisfaction of the conditions in Article 3 and
b) the existence of availability of the US Maximum Available Amount or
Canadian Maximum Available Amount (as applicable) pursuant to Section
2.1(c) or Section 2.1(d) hereof (after giving effect to repayment of
the applicable Reimbursement Obligations with the proceeds of the
proposed Revolving Credit Loans). Subject to the preceding sentence,
if so requested by the Administrative Agent (or the Canadian
Administrative Agent, as applicable), each of the US Revolving Lenders
or the Canadian Lenders (as applicable) shall, on the date of such
drawing, make such Revolving Credit Loans in an amount equal to such
Lender's US Revolving Credit Percentage or Canadian Revolving Credit
Percentage (as applicable) of such drawing or the full amount of the
unused US or Maximum Available Amount pursuant to Section 2.1(c) or
Section 2.1(d) as applicable, the proceeds of which shall be applied
directly by the Administrative Agent (or the Canadian Administrative
Agent, as applicable) to reimburse the applicable Issuing Bank to the
extent of such proceeds.
(4) If the appropriate Account Party fails to reimburse the
applicable Issuing Bank as provided in Section 2.3(d)(3) above for any
reason, including, but not limited to, failure to satisfy the
conditions in Article 3 or insufficient availability under the Maximum
Available Amount pursuant to Section 2.1(c) or Section 2.1(d) such
Issuing Bank shall promptly notify the Administrative Agent (or the
Canadian Administrative Agent, as applicable) and the Administrative
Agent (or the Canadian Administrative Agent, as applicable) shall
notify each US Revolving Lender or Canadian Lender (as applicable) of
the unreimbursed amount of such drawing and of such Lender's
respective participation therein based on such Lender's US or Canadian
Revolving Credit Percentage (as applicable). Each such Lender will pay
to the Administrative Agent (or the Canadian Administrative Agent, as
applicable) for the account of the applicable Issuing Bank on the date
of such notice an amount equal to such Lender's US or Canadian
Revolving Credit Percentage (as applicable) of such unreimbursed
drawing (or, if such notice is made after 1:00 p.m. (New York, New
York time) on such date, on the next succeeding Business Day). If any
Lender fails to make available to such Issuing Bank the amount of such
Lender's participation in such Letter of Credit as provided in this
Section 2.3(d)(4), such Issuing Bank shall be entitled to recover such
amount on demand from such Lender together with interest at the
Federal Funds Effective Rate for one Business Day and thereafter at
the ABR. Nothing in this Section 2.3(d)(4) shall be deemed to
prejudice the right of any Lender to recover from such Issuing Bank
any amounts made available by such Lender to such Issuing Bank
pursuant to this Section 2.3(d)(4) if it is determined by a court of
competent jurisdiction that the payment with respect to a Letter of
Credit by such Issuing Bank was wrongful and such wrongful payment was
the result of gross negligence or willful misconduct on the part of
such Issuing Bank. The applicable Issuing Bank shall pay to the
Administrative Agent (or the Canadian Administrative Agent, as
applicable) and the Administrative Agent (or the Canadian
Administrative Agent, as applicable) shall pay to each Lender such
Lender's US Revolving Credit Percentage or Canadian Revolving Credit
Percentage (as applicable) of all amounts received from the Account
Party for payment, in whole or in part, of the Reimbursement
Obligation in respect of any Letter of Credit, but only to the extent
such Lender has made payment to such Issuing Bank in respect of such
Letter of Credit pursuant to this Section 2.3(d)(4).
(5) The issuance by the applicable Issuing Bank of each Letter of
Credit shall, in addition to the conditions precedent set forth in
Article 3, be subject to the conditions precedent that such Letter of
Credit shall be in the form and contain such terms as shall be
reasonably satisfactory to such Issuing Bank, and that the Account
Party shall have executed and delivered such other instruments and
agreements relating to the Letter of Credit as such Issuing Bank shall
have reasonably requested and that are not inconsistent with the terms
of this Agreement including the applicable Issuing Bank's Application
therefor. In the event of a conflict between the terms of this
Agreement and the terms of any Application, the terms of this
Agreement shall control.
(6) As between any Account Party and any Issuing Bank, the
Account Party assumes all risks of the acts and omissions of or misuse
of the Letters of Credit issued by such Issuing Bank by the respective
beneficiaries of such Letters of Credit. In furtherance and not in
limitation of the foregoing, such Issuing Bank shall not be
responsible: (A) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any Person in
connection with the application for or issuance of such Letters of
Credit, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged; (B) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in
part, which may prove to be invalid or ineffective for any reason; (C)
for errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they are in cipher; (D) for errors in
interpretation of technical terms; (E) for any loss or delay in the
transmission or otherwise of any document required in order to make a
drawing under any such Letter of Credit or of the proceeds thereof;
(F) for the misapplication by the beneficiary of any such Letter of
Credit of the proceeds of any drawing under such Letter of Credit; and
(G) for any consequences arising from causes beyond the control of
such Issuing Bank, including, without limitation, the actions of any
governmental authority. None of the above shall affect, impair, or
prevent the vesting of any of such Issuing Bank's rights or powers
hereunder. Notwithstanding anything to the contrary contained in this
Section 2.3(d)(6), no Account Party shall assume any risk, and shall
have no obligation to indemnify any Issuing Bank, in respect of any
liability incurred by such Issuing Bank arising primarily out of the
gross negligence or willful misconduct of such Issuing Bank, as
finally determined by a court of competent jurisdiction.
(7) Each Issuing Bank will send to the applicable Account Party
and the Administrative Agent (or the Canadian Administrative Agent, as
applicable) immediately upon issuance of any Letter of Credit, or an
amendment thereto, a true and complete copy of such Letter of Credit,
or such amendment thereto. Upon issuance of any Letter of Credit or an
amendment thereto, the Administrative Agent (or the Canadian
Administrative Agent, as applicable) shall promptly notify each Lender
of the terms of such Letter of Credit or amendment thereto, and of
such Lender's US Revolving Credit Percentage or Canadian Revolving
Credit Percentage (as applicable) of the amount of such Letter of
Credit or amendment thereto, and the Administrative Agent (or the
Canadian Administrative Agent, as applicable) shall provide to each
Lender a copy of such Letter of Credit or such amendment thereto. Upon
cancellation or termination of any Letter of Credit, the applicable
Issuing Bank shall promptly notify the Administrative Agent (or the
Canadian Administrative Agent, as applicable) and the applicable
Account Party, and the Administrative Agent (or the Canadian
Administrative Agent, as applicable) will then promptly notify each
Lender, of such cancellation or termination.
(8) The obligation of each Account Party to reimburse each
Issuing Bank for Reimbursement Obligations with regard to the Letters
of Credit issued by such Issuing Bank for such Account Party and the
obligations of the US Revolving Lenders and the Canadian Lenders under
Section 2.3(d)(4) shall be unconditional and irrevocable and shall be
paid strictly in accordance with the terms of this Agreement and under
all circumstances including, without limitation, the following
circumstances:
(A) any lack of validity or enforceability of any Letter of
Credit;
(B) the existence of any claim, set-off, defense or other right
that any of the Borrowers may have at any time against a beneficiary
or any transferee of any Letter of Credit (or any Persons for whom any
such transferee may be acting), any Lender or any other Person,
whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction (including any
underlying transaction between the Account Party and the beneficiary
for which the Letter of Credit was procured) other than a defense
based on the gross negligence (as opposed to ordinary negligence) or
willful misconduct of such Issuing Bank, as determined by a court of
competent jurisdiction;
(C) any draft, demand, certificate or any other document
presented under any Letter of Credit is proved to be forged,
fraudulent, invalid or insufficient in any respect or any statement
therein is untrue or inaccurate in any respect;
(D) any adverse change in the condition (financial or otherwise)
of any Credit Party;
(E) any breach of this Agreement or any other Financing Document
by any of the Borrowers, the Administrative Agent, the Canadian
Administrative Agent or any Lender (other than the applicable Issuing
Bank);
(F) any other circumstance or happening whatsoever which is
similar to any of the foregoing; provided that such other occurrence
or happening is not the result of the gross negligence (as opposed to
ordinary negligence) or willful misconduct of such Issuing Bank, as
determined by a court of competent jurisdiction; or
(G) the fact that a Default shall have occurred and be
continuing.
Section 2.4 Disbursement of Funds.
(a) Availability. Subject to Section 2.2(c), and, with respect to the
Canadian Lenders, Section 2.9(i), no later than 11:00 a.m. (or, in the case of
ABR Loans or Canadian Prime Rate Loans, 1:00 p.m.) (New York, New York time) on
the date of each Borrowing (other than Borrowings consisting of US Swingline
Loans), each US Revolving Lender (in the case of any Borrowing of US Revolving
Credit Loans), each Canadian Lender (in the case of any Borrowing of Canadian
Loans) and each SOFA Lender (in the case of any Borrowing of SOFA Loans) will
make available to the Administrative Agent (or the Canadian Administrative
Agent, in the case of a Borrowing of Canadian Loans) such Lender's Applicable
Percentage of the principal amount of the Borrowing requested to be made on such
date reduced by the principal amount of Revolving Credit Loans (if any) or SOFA
Loans (if any), as applicable, of such Lender maturing on such date (provided,
that no Borrowing comprised of Canadian Revolving Credit Loans shall be reduced
in respect of US Loans maturing on such date and no SOFA Loans shall be repaid
to the extent repayment of SOFA Loans is prohibited under Section 2.11(k) hereof
at such time) in immediately available funds at the Payment Office (unless such
Borrowing is to be made under the Canadian Revolving Credit Facility and the
Canadian Borrowers have requested a Borrowing in C$, in which case such funds
shall be C$). The Administrative Agent (or the Canadian Administrative Agent, in
the case of a Borrowing of Canadian Loans) will make available to the applicable
Borrowers at the Payment Office of such Agent the aggregate of the amounts (if
any) so made available by the Lenders by either (1) depositing such amounts, in
immediately available funds, to the account of such Borrower at the
Administrative Agent or the Canadian Administrative Agent (as applicable)
designated by the applicable Borrowers for such purpose (for each of the
Borrowers, its "Disbursement Account"), or (2) disbursing such amounts in
accordance with such other lawful instructions of such Borrowers as such
Borrowers shall specify in the applicable Borrowing Request. To the extent that
any Loans mature or Reimbursement Obligations are due and owing on the date of a
requested Borrowing of Revolving Credit Loans or SOFA Loans, as applicable, the
Lenders shall apply the proceeds of the Revolving Credit Loans and/or SOFA Loans
then being made, to the extent thereof, to the repayment of such maturing Loans
or Reimbursement Obligations, such Loans or Reimbursement Obligations and
repayments intended to be a contemporaneous exchange (provided, that the
proceeds of any Borrowing comprised of Canadian Revolving Credit Loans shall not
be applied to pay US Revolving Credit Loans maturing on such date and no SOFA
Loans shall be repaid to the extent repayment of SOFA Loans is prohibited under
Section 2.11(k) hereof at such time). In respect of US Swingline Loans, the US
Swingline Lender will make available to the applicable US Borrowers (or, in the
case of a US Swingline Loan made to pay Reimbursement Obligations of such US
Borrowers, by remittance to the applicable Issuing Bank) the proceeds of such US
Swingline Loan in accordance with this Section 2.4(a) on or before 3:00 p.m.
(New York, New York time) on the date requested for such Borrowing or as
provided in Section 2.2(c).
(b) Funds to the Administrative Agent or the Canadian Administrative
Agent. Unless the Administrative Agent or the Canadian Administrative Agent
shall have been notified by any Lender prior to the date of a Borrowing (other
than a Borrowing consisting of US Swingline Loans) that such Lender does not
intend to make available to the Administrative Agent or the Canadian
Administrative Agent (as applicable) such Lender's US Revolving Credit
Percentage, Canadian Revolving Credit Percentage or SOFA Percentage (as
applicable) of the Borrowing to be made on such date, subject to Section 2.9(i)
with respect to Canadian Revolving Credit Loans, the Administrative Agent or the
Canadian Administrative Agent (as applicable) may assume that such Lender has
made such amount available to the Administrative Agent or the Canadian
Administrative Agent (as applicable) on such date, and the Administrative Agent
or the Canadian Administrative Agent (as applicable) may make available to or
for the account of the applicable Borrowers a corresponding amount. If such
corresponding amount is not in fact made available to the Administrative Agent
or the Canadian Administrative Agent (as applicable) by such Lender on the date
of a Borrowing, the Administrative Agent or the Canadian Administrative Agent
(as applicable) shall be entitled to recover such corresponding amount on demand
from such Lender together with interest at such Agent's cost of funds (as
determined by such Agent). If such Lender does not pay such corresponding amount
forthwith upon the Administrative Agent's or the Canadian Administrative Agent's
(as applicable) demand therefor, the Administrative Agent or the Canadian
Administrative Agent (as applicable) shall promptly notify the applicable
Borrowers and the applicable Borrowers shall immediately pay such corresponding
amount to the Administrative Agent or the Canadian Administrative Agent (as
applicable) together with interest at the rate specified for the Borrowing which
includes such amount paid. Nothing in this Section 2.4 shall be deemed to
relieve any Lender from its obligation to fulfill its Revolving Credit
Commitments and/or SOFA Commitments hereunder or to prejudice any rights which
the Borrowers may have against any Lender as a result of any default by such
Lender hereunder.
(c) Lenders' Responsibilities. No Lender shall be responsible for any
default by any other Lender in its obligation to make Loans hereunder, and each
Lender shall be obligated to make only such Loans provided to be made by it
hereunder, regardless of the failure of any other Lender to fulfill its
Commitment hereunder.
Section 2.5 Notes and Maturity.
(a) US Revolving Credit Notes. The US Borrowers' obligations to pay the
principal of, and interest on, the US Revolving Credit Loans made by each US
Lender shall be further evidenced by the US Borrowers issuance, execution and
delivery of a US Revolving Credit Note payable to the order of each such US
Lender in the amount of such US Lender's US Revolving Credit Commitment and
shall be dated as of the date of issuance of such US Revolving Credit Note. The
principal amount of each US Revolving Credit Note shall be payable on or before
the Maturity Date.
(b) Canadian Revolving Credit Notes. The Canadian Borrowers'
obligations to pay the principal of, and interest on, the Canadian Revolving
Credit Loans made by each Canadian Lender shall be further evidenced by the
Canadian Borrowers issuance, execution and delivery of a Canadian Revolving
Credit Note payable to the order of each such Canadian Lender in the amount of
such Canadian Lender's Canadian Revolving Credit Commitment and shall be dated
as of the date of issuance of such Canadian Revolving Credit Note. The principal
amount of each Canadian Revolving Credit Note shall be payable on or before
Maturity Date.
(c) US Swingline Notes. The US Borrowers' obligations to pay the
principal of, and interest on, the US Swingline Loans made by the US Swingline
Lender shall be further evidenced by the US Borrowers issuance, execution and
delivery of a US Swingline Note payable to the order of the US Swingline Lender
in the amount of the US Swingline Commitment and shall be dated as of the date
of issuance of such US Swingline Note. All US Swingline Loans shall mature on
the last Business Day of the month in which such US Swingline Loans are
borrowed; provided, however, in the event such US Swingline Loans are borrowed
on the last Business Day of any month, such US Swingline Loans shall mature on
the first Business Day of the next succeeding month; provided, further, that the
principal amount of the US Swingline Note and all outstanding US Swingline Loans
shall be payable on or before the Maturity Date.
(d) Term Notes. The US Borrowers' obligations to pay the principal of,
and interest on, the Term Loans made by each Term Lender shall be further
evidenced by the US Borrowers issuance, execution and delivery of a Term Note
payable to the order of each such Term Lender in the amount of such Term
Lender's Term Commitment and shall be dated as of the date of issuance of such
Term Note. The principal amount of each Term Note shall be payable on or before
the Maturity Date. Any part of the Term Loans which are repaid may not be
re-borrowed.
(e) SOFA Notes. The US Borrowers' obligations to pay the principal of,
and interest on, the SOFA Loans made by each SOFA Lender shall be further
evidenced by the US Borrowers issuance, execution and delivery of a SOFA Note
payable to the order of each such SOFA Lender in the amount of such SOFA
Lender's SOFA Commitment and shall be dated as of the date of issuance of such
SOFA Note. The principal amount of each SOFA Note shall be payable in full on
the SOFA Maturity Date and shall be payable prior to the SOFA Maturity Date in
the amounts and to the extent provided in Section 2.11 hereof. Any part of the
SOFA Loans repaid after the SOFA Commitment Termination Date may not be
reborrowed.
Section 2.6 Interest. In all cases subject to Section 10.13:
(a) ABR Loans. Subject to Section 2.6(d), each of the Borrowers agrees
to pay interest in respect of the unpaid principal amount of each ABR Loan made
to such Borrowers from the date thereof until payment in full thereof at a rate
per annum which shall be, for any day, equal to the sum of the Applicable Margin
plus the ABR in effect on such day, but in no event to exceed the Highest Lawful
Rate; provided, that, the rate of interest in effect pursuant to this Section
2.6(a) with respect to the Term Loans shall be subject to such maximum and
minimum interest rates as may be specified in the Term Lender Joinder Agreement
pertaining to such Term Loans (to the extent such maximum and minimum interest
rates are set forth therein). The term "ABR" shall mean, for any day (1) for any
US Loan and US Swingline Loan which is an ABR Loan, the highest of (A) the Prime
Rate in effect on such day, (B) one-half of one percent (1/2%) plus the Federal
Funds Effective Rate in effect for such day (rounded upwards, if necessary, to
the nearest 1/16th of 1%), and (C) one percent (1%) plus the Base CD Rate
(rounded upwards, if necessary, to the nearest 1/16th of 1%), but in no event to
exceed the Highest Lawful Rate, and (2) for any Canadian Loan which is an ABR
Loan the highest of (A) the US Base Rate in effect on such day, or (B) one half
of one percent (1/2%) plus the Federal Funds Effective Rate in effect for such
day (rounded upwards in necessary, to the nearest 1/16th of 1%), but in no event
to exceed the Highest Lawful Rate. For purposes of this Agreement, any change in
the ABR due to a change in the Federal Funds Effective Rate, the Prime Rate, the
US Base Rate or the Base CD Rate shall be effective as of the opening of
business on the effective date of such change in the Federal Funds Effective
Rate, the Prime Rate, the US Base Rate or the Base CD Rate, as the case may be.
(b) LIBOR Loans. Subject to Section 2.6(d), each of the Borrowers
agrees to pay interest in respect of the unpaid principal amount of each LIBOR
Loan made to such Borrowers from the date thereof until payment in full thereof
at a rate per annum which shall be the sum of the relevant Applicable Margin
plus the LIBOR Rate, but in no event to exceed the Highest Lawful Rate.
(c) Canadian Prime Rate Loans. Subject to Section 2.6(d), the Canadian
Borrowers agree to pay interest in respect of the unpaid principal amount of
each Canadian Prime Rate Loan from the date thereof until payment in full
thereof at a rate per annum which shall be, for any day, equal to the sum of the
Applicable Margin plus the Canadian Prime Rate in effect on such day, but in no
event to exceed the Highest Lawful Rate.
(d) Default Interest. After the occurrence and during the continuance
of any Default or Event of Default, the US Borrowers shall, on demand from time
to time, pay interest, to the extent permitted by law, on the outstanding US
Lender Indebtedness, and the Canadian Borrowers shall, on demand from time to
time, pay interest, to the extent permitted by law, on the Canadian Lender
Indebtedness (after as well as before judgment) at a rate per annum equal to (1)
in the case of any LIBOR Loan, the rate that would be applicable under Section
2.6(b) to such LIBOR Loan, plus 2% per annum, (2) in the case of any Canadian
Prime Rate Loan, the rate that would be applicable under Section 2.6(c) to such
Canadian Prime Rate Loan, plus 2% per annum, and (3) in the case of any other
amount, the rate that would be applicable under Section 2.6(a) to an ABR Loan,
plus 2% per annum, but in no event to exceed the Highest Lawful Rate.
(e) Interest Payment Dates. Interest on each ABR Loan, LIBOR Loan and
Canadian Prime Rate Loan shall accrue from and including the date of such Loan
to but excluding the date of payment in full thereof. Interest on each LIBOR
Loan shall be payable on the last Business Day of each Interest Period
applicable thereto and, in the case of an Interest Period in excess of three
months, on each day which occurs at three month intervals of the initial date of
such Interest Period (unless such day is not a Business Day in which event such
payment shall be made on the next succeeding Business Day), and on any
prepayment (on the amount prepaid), at maturity (whether by acceleration or
otherwise) and, after maturity, on demand. Interest on each ABR Loan and
Canadian Prime Rate Loan shall be payable on the first Business Day of each
calendar month, commencing on the first of such days to occur after such Loan is
made, at maturity (whether by acceleration or otherwise) and, after maturity, on
demand.
(f) Notice by the Administrative Agent. The Administrative Agent or the
Canadian Administrative Agent, upon determining the LIBOR Rate for any Interest
Period and the Discount Rate for any Contract Period, shall promptly notify by
telecopy or telephone (in the case of telephonic notices, confirmed by telecopy
or otherwise in writing) or in writing to the Borrowers and the Lenders.
Section 2.7 Interest Periods. In connection with each Borrowing of
LIBOR Loans, the applicable Borrowers shall elect an Interest Period to be
applicable to such Borrowing, which Interest Period shall begin on and include,
as the case may be, the date selected by such Borrowers pursuant to Section
2.2(a), the conversion date or the date of expiration of the then current
Interest Period applicable thereto, and end on but exclude the date which is
either one, two, three or six months thereafter, as selected by such Borrowers;
provided, that, the US Borrowers shall be permitted to obtain a 15-day Interest
Period once during the term of this Agreement; provided further:
(a) Business Days. If any Interest Period would otherwise expire on a
day which is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, provided, further, that if any Interest Period (other
than in respect of a Borrowing of LIBOR Loans the Interest Period of which is
expiring pursuant to Section 2.16(b) hereof) would otherwise expire on a day
which is not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall expire on the next
preceding Business Day;
(b) Month End. Any Interest Period which begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall, subject to Section 2.7(c) below, end on the last Business Day of a
calendar month;
(c) Payment Limitations. No Interest Period shall extend beyond any
date that any principal payment or prepayment is scheduled to be due unless the
aggregate principal amount of Borrowings which are Borrowings of ABR Loans or
which are Borrowings of LIBOR Loans which have Interest Periods which will
expire on or before such date, less the aggregate amount of any other principal
payments or prepayments due during such Interest Period, is equal to or in
excess of the amount of such principal payment or prepayment; and
(d) Maturity Dates. No Interest Period applicable to the SOFA Loans
outstanding prior to the SOFA Conversion Date shall extend beyond the SOFA
Conversion Date. No Interest Period applicable to the SOFA Loans outstanding
after the SOFA Conversion Date shall extend beyond the SOFA Maturity Date. In
connection with all other Loans, no Interest Period shall extend beyond the
Maturity Date.
Section 2.8 Bankers' Acceptances.
(a) Subject to the terms and conditions of this Agreement, the Canadian
Borrowers may request Borrowings of Canadian Revolving Credit Loans by
presenting drafts for acceptance and purchase as B/As by the Canadian Lenders.
(b) To facilitate availment of B/A Borrowings, the Canadian Borrowers
hereby appoint each Canadian Lender as their attorney to sign and endorse on
their behalf, in handwriting or by facsimile or mechanical signature as and when
deemed necessary by such Canadian Lender, blank forms of B/As in the form
requested by such Canadian Lender. In this respect, it is each Canadian Lender's
responsibility to maintain an adequate supply of blank forms of B/As for
acceptance under this Agreement. The Canadian Borrowers recognize and agree that
all B/As signed and/or endorsed on its behalf by a Canadian Lender shall jointly
and severally bind the Canadian Borrowers as fully and effectually as if signed
in the handwriting of and duly issued by the proper signing officers of each
Canadian Borrower. Each Canadian Lender is hereby authorized to issue such B/As
endorsed in blank in such face amounts as may be determined by such Canadian
Lender, provided that the aggregate amount thereof is equal to the aggregate
amount of B/As required to be accepted and purchased by such Canadian Lender. No
Canadian Lender or any Affiliate thereof shall be liable for any damage, loss or
other claim arising by reason of any loss or improper use of any such instrument
except the gross negligence or willful misconduct of such Canadian Lender or its
Affiliate, as applicable, or its officers, employees, agents or representatives.
Each Canadian Lender shall maintain a record with respect to B/As (1) received
by it in blank hereunder, (2) voided by it for any reason, (3) accepted and
purchased by it hereunder and (4) canceled at their respective maturities. Each
Canadian Lender further agrees to retain such records in the manner and for the
statutory periods provided in the various provincial or federal statutes and
regulations which apply to such Canadian Lender. Each Canadian Lender agrees to
provide a copy of such records to the Canadian Borrowers at the Canadian
Borrowers' expense upon request. On request by or on behalf of the Canadian
Borrowers, a Canadian Lender shall cancel all forms of B/As which have been
pre-signed or pre-endorsed on behalf of the Canadian Borrowers and which are
held by such Canadian Lender and are not required to be issued in accordance
with the Canadian Borrowers' irrevocable notice. The Canadian Borrowers agree
that, at the request of the Canadian Administrative Agent, they shall deliver to
the Canadian Administrative Agent a "depository note" which complies with the
requirements of the Depository Bills and Notes Act (Canada) and consents to the
deposit of any such depository note in the book-based clearance system
maintained by the Canadian Depository for Securities.
(c) Drafts of the Canadian Borrowers to be accepted as B/As hereunder
shall be signed as set forth in this Section 2.8. Notwithstanding that any
person whose signature appears on any B/A may no longer be an authorized
signatory for any Canadian Lender or the Canadian Borrowers at the date of
issuance of a B/A, such signature shall nevertheless be valid and sufficient for
all purposes as if such authority had remained in force at the time of such
issuance and any such B/A so signed shall be binding on the Canadian Borrowers.
(d) Promptly following receipt of a Borrowing Request or notice of
rollover pursuant to this Section 2.8 or Section 2.12 by way of B/As, the
Canadian Administrative Agent shall so advise the Canadian Lenders and shall
advise each Canadian Lender of the aggregate face amount of the B/As to be
accepted by it and the applicable Contract Period (which shall be identical for
all Canadian Lenders). The aggregate face amount of the B/As to be accepted by
the Canadian Lenders in respect of any Borrowing or rollover of B/A Loans shall
be not less than C$500,000 and shall be in an integral multiple of C$100,000.
(e) Upon acceptance of a B/A by a Canadian Lender, such Canadian Lender
shall purchase, or arrange the purchase of, such B/A from the Canadian Borrowers
at the Discount Rate for such Canadian Lender applicable to such B/A accepted by
it and provide to Canadian Administrative Agent the Discount Proceeds for the
account of the Canadian Borrowers in which event an Acceptance Fee shall be
payable by the Canadian Borrowers to such Canadian Lender in respect of such B/A
and shall be set off against the Discount Proceeds payable by such Canadian
Lender under this Section 2.8(e).
(f) Each Canadian Lender may at any time and from time to time hold,
sell, rediscount or otherwise dispose of any or all B/As accepted and purchased
by it.
(g) If a Canadian Lender is not a chartered bank under the Bank Act
(Canada) or if a Canadian Lender notifies the Administrative Agent in writing
that it is otherwise unable or unwilling to accept B/As, such Canadian Lender
will, instead of accepting and purchasing B/As, purchase from the Canadian
Borrowers a non-interest bearing note denominated in C$ (a "B/A Equivalent
Note"), in the form of Exhibit K, issued by the Canadian Borrowers in the amount
and for the same term as the draft which such Canadian Lender would otherwise
have been required to accept and purchase hereunder. Each such Canadian Lender
will provide to the Canadian Administrative Agent the Discount Proceeds of such
B/A Equivalent Loan for the account of any Canadian Borrower. Each such B/A
Equivalent Loan will bear interest at the same rate which would result if such
Canadian Lender had accepted (and been paid an Acceptance Fee) and purchased (on
a discounted basis) a B/A for the relevant Contract Period (it being the
intention of the parties that each such B/A Equivalent Loan shall have the same
economic consequences for the Canadian Lenders and any Canadian Borrower as the
B/A which such B/A Equivalent Loan replaces). All such interest shall be paid in
advance on the date such B/A Loan is made, and will be deducted from the
principal amount of such B/A Equivalent Loan in the same manner in which the
Discount Proceeds of a B/A would be deducted from the face amount of the B/A.
Subject to repayment requirements, on the last day of the relevant Contract
Period for such B/A Equivalent Loan, any Canadian Borrower shall be entitled to
convert each such B/A Equivalent Loan into another type of Loan, or to roll over
each such B/A Equivalent Loan into another B/A Equivalent Loan, all in
accordance with the applicable provisions of this Agreement.
(h) The Canadian Borrowers waive presentment for payment and any other
defense to payment of any amounts due to a Canadian Lender in respect of a B/A
accepted and purchased by it pursuant to this Agreement which might exist solely
by reason of such B/A being held, at the maturity thereof, by such Canadian
Lender in its own right and the Canadian Borrowers agree not to claim any days
of grace if such Canadian Lender as holder sues the Canadian Borrowers on the
B/A for payment of the amount payable by the Canadian Borrowers thereunder. On
the specified maturity date of a B/A, or such earlier date as may be required or
permitted pursuant to the provisions of this Agreement, the Canadian Borrowers
shall jointly and severally pay, through the Canadian Administrative Agent, the
Canadian Lender that has accepted and purchased such B/A the full face amount of
such B/A and after such payment, the Canadian Borrowers shall have no further
liability in respect of such B/A and such Canadian Lender shall be entitled to
all benefits of, and be responsible for all payments due to third parties under,
such B/A.
(i) If a Canadian Lender grants a participation in a portion of its
rights under this Agreement to a participant under Section 10.6, then in respect
of any B/A Borrowing, a portion thereof may, at the option of such Canadian
Lender, be by way of B/A accepted by such participant. In such event, the
Canadian Borrowers shall upon request of the Canadian Administrative Agent or
the Canadian Lender granting the participation execute and deliver a form of B/A
indemnity in favor of such participant for delivery to such participant.
(j) Notwithstanding anything herein to the contrary, no B/A may be
prepaid prior to the maturity date thereof, except as provided in Article 8.
Section 2.9 Repayment of Loans.
(a) The US Borrowers hereby unconditionally, jointly and severally
promise to pay to the Administrative Agent for the account of each US Revolving
Lender, (1) the then unpaid principal amount of each US Revolving Credit Loan of
such Lender on the Maturity Date (or such earlier date on which the Revolving
Credit Loans become due and payable pursuant to Article 8); and (2) the amounts
specified in Section 2.11 on the dates specified in Section 2.11. The US
Borrowers hereby unconditionally, jointly and severally promise to pay to the
Administrative Agent for the account of each Term Lender the then unpaid
principal amount of each Term Loan on the Maturity Date (or on such earlier date
on which the Term Loans come due and payable pursuant to Article 8). The US
Borrowers hereby unconditionally, jointly and severally promise to pay to the US
Swingline Lender the then-unpaid principal amount of each US Swingline Loan on
the date on which such US Swingline Loan becomes due and payable as provided in
Section 2.5(c) hereof (or such earlier date on which such US Swingline Loans
become due and payable pursuant to Article 8). The US Borrowers hereby
unconditionally, jointly, and severally promise to pay to the Administrative
Agent for the account of each SOFA Lender the then unpaid principal amount of
each SOFA Loan on the SOFA Maturity Date (or on such earlier date on which the
SOFA Loans come due and payable pursuant to Section 2.11hereof and Article 8).
The US Borrowers hereby further agree to jointly and severally pay interest on
the unpaid principal amount of the Loans and the US Swingline Loans made to the
US Borrowers, from time to time outstanding from the date hereof until payment
in full thereof at the rates per annum, and on the dates, set forth in Section
2.6.
(b) The Canadian Borrowers hereby jointly, severally and
unconditionally promise to pay to the Canadian Administrative Agent for the
account of each Canadian Lender, (1) the then unpaid principal amount of each
Canadian Revolving Credit Loan of such Lender on the Maturity Date (or such
earlier date on which the Revolving Credit Loans become due and payable pursuant
to Article 8); and (2) the amounts specified in Section 2.11 on the dates
specified in Section 2.11. The Canadian Borrowers hereby further jointly and
severally agree to pay interest on the unpaid principal amount of the Loans made
to the Canadian Borrowers from time to time outstanding from the date hereof
until payment in full thereof at the rates per annum, and on the dates, set
forth in Section 2.6.
(c) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing indebtedness of the Borrowers to such Lender
resulting from each Loan of such Lender from time to time, including, without
limitation, the amounts of principal and interest payable and paid to such
Lender from time to time under this Agreement.
(d) The Administrative Agent shall maintain the Register pursuant to
Section 10.7(c), and a subaccount therein for each US Lender, in which shall be
recorded (1) the amount of each US Loan made hereunder, the Type thereof and
each Interest Period, if any, applicable thereto, (2) the amount of any
principal or interest due and payable or to become due and payable from the US
Borrowers to each US Lender hereunder, and (3) both the amount of any sum
received by the Administrative Agent hereunder from the US Borrowers and each US
Lender's Applicable Percentage thereof. The Administrative Agent shall maintain
a separate register with respect to the US Swingline Loans which Register shall
contain the same information as the Register with respect to the US Loans.
(e) The Canadian Administrative Agent shall maintain the Register
pursuant to Section 10.7(c), and a subaccount therein for each Canadian Lender,
in which shall be recorded (1) the amount of each Canadian Loan made hereunder,
the Type thereof and each Interest Period or Contract Period, if any, applicable
thereto, (2) the amount of any principal or interest due and payable or to
become due and payable from the Canadian Borrowers to each Canadian Lender
hereunder, and (3) both the amount of any sum received by the Canadian
Administrative Agent hereunder from the Borrowers and each Canadian Lender's
Applicable Percentage thereof.
(f) The entries made in the Registers and the accounts of each Lender
maintained pursuant to Section 2.9(d) and Section 2.9(e) shall, absent manifest
error, to the extent permitted by applicable law, be prima facie evidence of the
existence and amounts of the obligations of the Borrowers therein recorded;
provided, however, that the failure of any Lender or Agent to maintain a
Register or any such account, or any error therein, shall not in any manner
affect the obligations of each Borrower to repay (with applicable interest) the
Loans made to such Borrower by such Lender in accordance with the terms of this
Agreement.
(g) The Administrative Agent shall render to the US Borrowers each
month a statement of the US Borrowers' account setting forth the following
information for the period from the date of the most recent preceding statement:
the aggregate principal amount of new US Revolving Credit Loans, US Swingline
Loans and SOFA Loans (if any) made to the US Borrowers, the aggregate amount of
new Reimbursement Obligations which have not been reimbursed, the aggregate face
amount of new US Letters of Credit issued for the accounts of the US Borrowers,
the amount of remittances and payments actually collected and applied by the
Administrative Agent to reduce the outstanding principal balance of the US
Swingline Loans, US Revolving Credit Loans, Term Loans and SOFA Loans, to
reimburse Reimbursement Obligations and establish L/C Cover during such period
and the outstanding principal balances of the US Swingline Loans, US Revolving
Credit Loans, Term Loans and SOFA Loans, and the aggregate US Letter of Credit
Liabilities outstanding at the end of such period. Such statement shall be
deemed to be correct and accepted by and be binding upon the US Borrowers unless
the Administrative Agent receives a written statement of the US Borrowers'
exceptions to such account statement within twenty (20) days after such
statement was rendered to the US Borrowers.
(h) The Canadian Administrative Agent shall render to the Canadian
Borrowers each month a statement of the Canadian Borrowers' account setting
forth the following information for the period from the date of the most recent
preceding statement: the aggregate principal amount of new Canadian Revolving
Credit Loans made to the Canadian Borrowers, the aggregate amount of new
Reimbursement Obligations which have not been reimbursed, the aggregate face
amount of new Canadian Letters of Credit issued for the accounts of the Canadian
Borrowers, the amount of remittances and payments actually collected and applied
by the Canadian Administrative Agent to reduce the outstanding principal balance
of the Canadian Revolving Credit Loans, to reimburse Reimbursement Obligations
during such period and establish L/C Cover and the outstanding principal
balances of the Canadian Revolving Credit Loans and the aggregate Canadian
Letter of Credit Liabilities outstanding at the end of such period. Such
statement shall be deemed to be correct and accepted by and be binding upon the
Canadian Borrowers unless the Canadian Administrative Agent receives a written
statement of the Canadian Borrowers' exceptions to such account statement within
twenty (20) days after such statement was rendered to the Canadian Borrowers.
(i) The Canadian Administrative Agent shall on any Settlement Date, and
upon notice given by the Canadian Administrative Agent no later than 12:00 noon
Toronto, Canada time, request each Canadian Lender to make and each Canadian
Lender hereby agrees to make, a Canadian Revolving Credit Loan in an amount
equal to such Canadian Lender's Canadian Revolving Credit Percentage of the
aggregate amount of the Canadian Revolving Credit Loans made by the Canadian
Administrative Agent from the preceding Settlement Date to the date of such
notice. Each Canadian Lender's obligation to make the Canadian Revolving Credit
Loans referred to in this Section 2.9(i) and to make the settlements pursuant to
this Section 2.9(i) shall not be affected by any circumstance, including,
without limitation, (i) any set-off, counterclaim, recoupment, defence or other
right which any such Canadian Lender or the Canadian Borrowers may have against
the Canadian Administrative Agent, any Canadian Borrower, any Canadian Lender or
any other Person for any reason whatsoever; (ii) any adverse change in the
condition (financial or otherwise) of the Canadian Borrowers; or (iii) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing. Without limiting the liability and obligation of each Canadian
Lender to make such advances, the Canadian Borrowers authorize the Canadian
Administrative Agent to charge the Canadian Borrower's account to the extent
amounts received from the Canadian Lenders are not sufficient to repay in full
the amount of any such deficiency. On the Settlement Date, the Canadian
Administrative Agent and the Canadian Lenders shall each remit to the other, in
immediately available funds, all amounts necessary so as to ensure that, as of
the Settlement Date, the Canadian Lenders shall have their respective Canadian
Revolving Credit Percentage of all outstanding Canadian Revolving Credit
Exposure. The Canadian Lenders acknowledge and agree that the Canadian Revolving
Credit Exposure of the Canadian Administrative Agent may exceed the amount of
its Canadian Revolving Credit Commitment (the "Canadian Administrative Agent
Overline") solely as a result of the Canadian Administrative Agent making
advances on behalf of the other Canadian Lenders pending settlement pursuant to
this Section 2.9(i), but that such Canadian Administrative Agent Overline shall
in no way affect, limit or modify in any respect the other Canadian Lenders'
obligations to settle with the Canadian Administrative Agent provided in this
Section 2.9(i). The Canadian Administrative Agent shall, after receipt of any
interest and fees earned under this Agreement, promptly remit to the Canadian
Lenders their pro rata portion (based on their respective Canadian Revolving
Credit Commitments) of any (i) fees they are entitled to receive, and (ii)
interest computed at the rate and as provided for in Section 2.6 of this
Agreement on all outstanding amounts advanced by the Canadian Lenders on each
Settlement Date, prior to adjustment for such settlement, which fees and
interest are subsequent to the last remittance by the Canadian Administrative
Agent to the Canadian Lenders of such interest amounts, provided, however, that
the Canadian Lenders (other than the Canadian Administrative Agent in its role
as the agent for and on behalf of the Canadian Lenders) shall not share in any
of the fees provided for in the Canadian Fee Letter. The Canadian Administrative
Agent shall not be permitted to make any B/A Loans or LIBOR Loans on behalf of
the other Canadian Lenders.
(j) The US Borrowers agree, that solely for purposes of computing the
charges under this Agreement (including interest), all items of payment shall be
deemed applied by the Administrative Agent one Business Day after receipt by the
Administrative Agent of funds which have been finally credited to the US Loans
whether such funds are received directly from the US Borrowers or from the US
Blocked Account.
(k) The Canadian Borrowers agree, that for purposes of computing the
interest charges under this Agreement (including interest), all items of payment
shall be deemed applied by the Canadian Administrative Agent one Business Day
after receipt by the Canadian Administrative Agent of funds which have been
finally credited to the Canadian Loans, whether such funds are received directly
from the Canadian Borrowers or from the Canadian Lockbox Bank or from the
Canadian Blocked Account.
Section 2.10 Voluntary Termination or Reduction of Revolving Credit Commitments;
Mandatory Termination of SOFA Commitments.
(a) Each of the Borrowers may, upon at least five Business Days' notice
to the Administrative Agent and Canadian Administrative Agent, terminate
entirely at any time, or partially reduce from time to time by an aggregate
amount of $1,000,000 or any larger multiple of $100,000, the unused portions of
the US Revolving Credit Commitment, the Canadian Revolving Credit Commitment or
the SOFA Commitment, provided, that, (a) any such reduction shall apply
proportionately to the US Revolving Credit Commitment, the Canadian Revolving
Credit Commitment or the SOFA Commitment, as applicable, of each Lender, and (b)
the Borrowers shall not be permitted to reduce any portion of the Revolving
Credit Commitments until the SOFA Commitment has been terminated in its
entirety. The US Swingline Commitment may not be partially terminated by the US
Borrowers and may only be entirely terminated by the US Borrowers in connection
with the entire termination of the Commitments. If the US Revolving Credit
Commitments or the Canadian Revolving Credit Commitments are terminated in their
entirety, in addition to the termination fee described in Section 2.13(f)
hereof, all accrued commitment fees with respect thereto shall be payable on the
effective date of such termination. Upon termination of the US Revolving Credit
Commitments and the Canadian Revolving Credit Commitments in full, the
commitments of the US Swingline Lender to make US Swingline Loans shall
terminate as well.
(b) The SOFA Commitments shall terminate in their entirety on the SOFA
Commitment Termination Date. Thereafter no SOFA Loans shall be available to the
Borrowers hereunder.
Section 2.11 Mandatory Prepayments; Voluntary Prepayments; Order of
Application.
(a) Mandatory Prepayments of US Revolving Credit Loans and SOFA Loans.
Subject to the last sentence of this Section 2.11(a), if at any time the
Aggregate US Revolving Credit Exposure is in excess of the US Maximum Available
Amount, the US Borrowers shall immediately jointly and severally pay to the
Administrative Agent, for the account of the US Revolving Lenders, the amount of
such excess to be applied (1) as a prepayment of the US Revolving Credit Loans
and Reimbursement Obligations with respect to US Letters of Credit, and (2)
after payment in full of the US Revolving Credit Loans and Reimbursement
Obligations, as L/C Cover for the US Letter of Credit Liabilities in an amount
of such remaining excess; provided, however, to the extent any mandatory
prepayment under this Section 2.11(a) is required as result of a reduction in
the US Borrowing Base resulting from any (i) establishment of additional, or
modification of existing, eligibility standards for any component of the US
Borrowing Base, (ii) reduction of the advance rate for any component of the US
Borrowing Base, or (iii) establishment of Availability Reserves against the US
Borrowing Base, then such required mandatory prepayment shall be due and payable
within three (3) Business Days of the date on which such US Borrowing Base
reductions are effective. If at any time the principal balance of the SOFA Loans
outstanding is in excess of the SOFA Maximum Available Amount, the US Borrowers
shall immediately jointly and severally pay to the Administrative Agent, for the
account of the SOFA Lenders, the amount of such excess to be applied to the
repayment of outstanding SOFA Loans. In the event payments are due under each of
the preceding sentences on the same date, such payments shall be made first in
accordance with the first sentence of this Section 2.11(a) (to reduce the
Aggregate US Revolving Credit Exposure to the US Maximum Available Amount) and
then in accordance with the second sentence of this Section 2.11(a) (to reduce
the Aggregate SOFA Exposure to the SOFA Maximum Available Amount). Each US
Revolving Lender acknowledges and agrees that notwithstanding anything to the
contrary set forth in this Agreement, the Administrative Agent, in its sole
discretion, may, for the account and credit risk of the US Revolving Credit
Lenders, (a) make or permit to remain outstanding US Swingline Loans, and/or (b)
cause each US Revolving Lenders to make, or permit to remain outstanding US
Revolving Credit Loans, or issue, or permit to remain outstanding, US Letters of
Credit, which in any case results in the Aggregate US Revolving Credit Exposure
exceeding the US Maximum Available Amount (collectively "Overadvances");
provided, however, (a) no Overadvance may cause the Aggregate US Revolving
Credit Exposure to exceed the total US Revolving Credit Commitments of all US
Revolving Lenders, (b) the aggregate amount of all Overadvances outstanding at
any time shall be not exceed $5,000,000, (c) no Overadvance shall be outstanding
for more than 30 consecutive days and (d) there can only be one Overadvance
during any 180-day period. On the SOFA Conversion Date, the US Borrowers shall
make a mandatory prepayment of principal on the SOFA Loans in an aggregate
amount equal to the lesser of (i) the outstanding principal balance of the SOFA
Loans and (ii) the remainder of (A) the amount of the Excess Availability on
such date, minus (B) $25,000,000. The aggregate principal balance of the SOFA
Loans remaining unpaid, if any, after giving effect to the prepayment required
on the SOFA Conversion Date (the "SOFA Term Amount") shall be repaid in equal
monthly installments commencing on May 31, 2003 and continuing on the last day
of each calendar month thereafter until the SOFA Maturity Date, at which time
the entire outstanding principal balance of the SOFA Loans and all accrued but
unpaid interest thereon shall be due and payable in full. Each monthly
installment of principal required pursuant to the preceding sentence shall be in
an amount of 12.5% of the SOFA Term Amount.
(b) Mandatory Prepayment of Canadian Revolving Credit Loans. If at any
time the Dollar Equivalent of the Aggregate Canadian Revolving Credit Exposure
is in excess of the Canadian Maximum Available Amount, the Canadian Borrowers
shall immediately jointly and severally pay to the Canadian Administrative
Agent, for the account of the Canadian Lenders, the amount of such excess to be
applied (1) as a prepayment of the Canadian Revolving Credit Loans (other than
B/A Loans) and Reimbursement Obligations with respect to Canadian Letters of
Credit, (2) after payment in full of the Canadian Revolving Credit Loans (other
than B/A Loans) and Reimbursement Obligations, as B/A Cover for B/A Loans, and
(3) after B/A Cover has been effected for all outstanding B/A Loans, as L/C
Cover for the Canadian Letter of Credit Liabilities in an amount of such
remaining excess; provided, however, to the extent any mandatory prepayment
under this Section 2.11(b) is required as result of a reduction in the Canadian
Borrowing Base resulting from any (i) establishment of additional, or
modification of existing, eligibility standards for any component of the
Canadian Borrowing Base, (ii) reduction of the advance rate for any component of
the Canadian Borrowing Base, or (iii) establishment of Availability Reserves
against the Canadian Borrowing Base, then such required mandatory prepayment
shall be due and payable within three (3) Business Days of the date on which
such Canadian Borrowing Base reductions are effective.
(c) Application of Proceeds from US Blocked Account. On or before 11:00
a.m. (New York, New York time) on each Business Day, the Administrative Agent
shall disburse to the appropriate Agent or Lenders for application in accordance
with Section 2.11(f), Section 2.11(h) and Section 2.11(k), all amounts then on
deposit in the US Blocked Account which the Administrative Agent shall have
determined constitute "collected funds" in accordance with the policies of the
Administrative Agent then in effect.
(d) Application of Proceeds from Canadian Blocked Account. Subject to
Section 2.9(i), on or before 11:00 a.m. (New York, New York time) on each
Business Day, the Canadian Administrative Agent shall disburse (or cause
Canadian Lockbox Bank to disburse) to the appropriate Agent or Lenders for
application in accordance with Section 2.11(g) and Section 2.11(i) hereof all
amounts then on deposit in the Canadian Blocked Account which the Canadian
Administrative Agent shall have determined constitute "collected funds" in
accordance with the policies of the Canadian Administrative Agent then in
effect.
(e) Voluntary Prepayments. Subject to Section 2.11(f), Section 2.11(j)
and Section 2.11(k) hereof, each of the Borrowers may, at their option, at any
time and from time to time, prepay the Loans (other than B/A Loans) and the
Reimbursement Obligations, in whole or in part, without premium or penalty
except for breakage costs with respect to LIBOR Loans as provided in Section
2.19 and the fees set forth in Section 2.13(f), in the event of a prepayment in
full of the Revolving Credit Loans and termination of the Revolving Credit
Commitments, upon giving, in the case of any LIBOR Loan, five Business Days'
prior written notice to the Administrative Agent, and, in the case of any ABR
Loan or Canadian Prime Rate Loan, prior written notice on the same Business Day
to the Administrative Agent (in the case of prepayment of US Loans) or the
Canadian Administrative Agent (in the case of a prepayment of Canadian Loans).
Such notice shall specify (1) in the case of any prepayment of Loans, the date
and amount of prepayment and whether the prepayment is (i) of US Revolving
Credit Loans, Canadian Revolving Credit Loans, US Swingline Loans and (subject
to the limitations on prepayment of the SOFA Loans and the Term Loans set forth
herein) Term Loans or SOFA Loans, or a combination thereof and (ii) of LIBOR
Loans, ABR Loans or Canadian Prime Rate Loans, or a combination thereof, and, in
each case if a combination thereof, the principal amount allocable to each; and
ii) in the case of any prepayment of Reimbursement Obligations, the date and
amount of prepayment, the identity of the applicable Letter of Credit or Letters
of Credit and the amount allocable to each of such Reimbursement Obligations.
Upon receipt of such notice, the Administrative Agent or the Canadian
Administrative Agent (as applicable) shall promptly notify each Lender of the
contents thereof and of such Lender's Applicable Percentage of such prepayment.
If any such notice is given, the amount specified in such notice shall be due
and payable on the date specified therein, together with (if a LIBOR Loan is
prepaid other than at the end of the Interest Period applicable thereto) any
amounts payable pursuant to Section 2.19. Each prepayment of US Revolving Credit
Loans, Term Loans and SOFA Loans which are ABR Loans may be in any amount; each
prepayment of Canadian Revolving Credit Loans which are ABR Loans shall be in a
minimum principal amount of $100,000 and shall be in an integral multiple of
$50,000, each prepayment of Canadian Prime Rate Loans shall be in the minimum
principal amount of C$100,000 and in integral multiple of $50,000; each
prepayment of LIBOR Loans shall be in the minimum principal amount of $500,000
and in integral multiples of $100,000 or, in the case of any of ABR Loans, LIBOR
Loans, or Canadian Prime Rate Loans, the aggregate principal balance outstanding
on such Loans.
(f) Order of Payments Prior to Default (US Borrowers). Subject to
Section 2.11(j) and Section 2.11(k) hereof, unless an Event of Default has
occurred and is continuing, (1) any voluntary prepayments of the US Loans made
pursuant to Section 2.11(e) above shall be applied to the US Loans specified to
be prepaid in the notice of prepayment delivered by the US Borrowers pursuant to
Section 2.11(e), and (2) any other payments by any of the US Borrowers
(including, without limitation, any application of the proceeds of Collateral of
the US Borrowers) in respect of the Lender Indebtedness, including, without
limitation, amounts applied pursuant to Section 2.11(c), shall be applied to the
Lender Indebtedness in the following order (i) first, to the payment in full of
all costs, expenses and other charges (but not fees) of the Administrative Agent
then due and payable by the Borrowers under the Financing Documents, (ii)
second, to the payment in full of all costs, expenses and other charges (but not
fees) of the US Revolving Lenders payable by the Borrowers under the Financing
Agreements and all indemnities payable by the Borrowers under the Financing
Agreements then due to any US Revolving Lender, (iii) third, to the payment in
full of all fees payable by the Borrowers to the Administrative Agent in its
capacity as such, (iv) fourth, to the payment in full of all interest then due
and payable in respect of the US Swingline Loans, (v) fifth, to the payment in
full of all interest then due and payable in respect of the US Revolving Credit
Loans, (vi) sixth, to the payment in full of all interest then due and payable
in respect of the SOFA Loans, (vii) seventh, to the payment of principal of SOFA
Loans then due and payable under Section 2.5(e) and Section 2.11(a) hereof,
(viii) eighth, to the payment in full of all fees then due and payable to the US
Revolving Lenders pursuant to Section 2.13(a) hereof, (ix) ninth, to the payment
in full of all principal then due and payable under Section 2.11(a) above (for
application first to the US Swingline Loans to the extent necessary to pay the
US Swingline Loans in full, and then to the US Revolving Credit Loans), (x)
tenth, to the payment of any interest then due and payable in respect of the
Term Loans, (xi) eleventh, to the payment of principal of the US Swingline
Loans, (xii) twelfth, to the payment of principal of the US Revolving Credit
Loans, (xiii) thirteenth, to the payment of principal of the SOFA Loans other
than payments made under Section 2.11(f)(2)(vii), (xiv) fourteenth, to any other
Lender Indebtedness to the extent then due and payable, and (xv) fifteenth,
after giving effect to the payment in full of all amounts due and payable
pursuant to clauses (i) through (xiv) preceding, to the US Borrowers by
depositing the net amount thereof in the Disbursement Account for the US
Borrowers.
(g) Order of Payments Prior to Default (Canadian Borrowers). Unless an
Event of Default has occurred and is continuing, (1) any voluntary prepayments
of the Canadian Loans made pursuant to Section 2.11(e) above shall be applied to
the Canadian Loans specified to be prepaid in the notice of prepayment delivered
by the Canadian Borrowers pursuant to Section 2.11(e), (2) any other payments by
any of the Canadian Borrowers (including, without limitation, any application of
the proceeds of Collateral of the Canadian Borrowers) in respect of the Canadian
Lender Indebtedness, including, without limitation, amounts applied pursuant to
Section 2.11(d), shall be applied to the Canadian Lender Indebtedness in the
following order (i) first, to the payment in full of all costs, expenses and
other charges (but not fees) of the Canadian Administrative Agent then due and
payable by the Canadian Borrowers under the Financing Documents, (ii) second, to
the payment in full of all costs, expenses and other charges (but not fees) of
the Canadian Lenders payable by the Canadian Borrowers under the Financing
Agreements and all indemnities payable by the Canadian Borrowers under the
Financing Agreements then due to any Lender, (iii) third, to the payment in full
of all fees payable by the Canadian Borrowers to the Canadian Administrative
Agent in its capacity as such, (iv) fourth, to the payment in full of all
interest then due and payable in respect of the Canadian Revolving Credit Loans,
(v) fifth, to the payment in full of all fees then due and payable to the
Canadian Lenders pursuant to Section 2.13(b) hereof, (vi) sixth, to the payment
in full of all principal then due and payable under Section 2.11(b) above, (vii)
seventh, to the re-payment of principal of the Canadian Revolving Credit Loans,
(viii) eighth, to any other Canadian Lender Indebtedness to the extent then due
and payable, and (ix) ninth, after giving effect to the payment in full of all
amounts due and payable pursuant to clauses (i) through (viii) preceding, to the
Canadian Borrowers by depositing the net amount thereof in the Disbursement
Account for the Canadian Borrowers.
(h) Order of Payments During Default (US Borrowers). During the
existence of any Event of Default, any payments in respect of the Lender
Indebtedness by or for the account of any of the US Borrowers or in respect of
any of the proceeds of Collateral of the US Borrowers, including, without
limitation, amounts applied pursuant to Section 2.11(c), shall be applied to the
Lender Indebtedness (1) first, to the payment in full of all costs, expenses and
other charges (but not fees) of the Administrative Agent or the Canadian
Administrative Agent incurred in connection with the collection and enforcement
of the Lender Indebtedness and for the protection, preservation or sale,
disposition or other realization upon the Collateral, including all expenses,
liabilities and advances incurred or made by or on behalf of the Administrative
Agent or the Canadian Administrative Agent in their capacity as such, including
attorneys' fees and legal expenses, (2) second, to the remaining Lender
Indebtedness (including to establish L/C Cover for all outstanding Letters of
Credit) in such order as the Administrative Agent shall determine in its sole
discretion, but expressly excluding any amounts to be paid pursuant to clause
(3), (4) or (5) of this Section 2.11(h), (3) third, to any Lender Indebtedness
consisting of amounts owed by any Credit Party in respect of SOFA Loans
(including principal and accrued interest thereon) and other amounts owing to
the SOFA Lenders in their capacity as such, including, without limitation,
expenses, fees, indemnity obligations and other amounts owing to the SOFA
Lenders, (4) fourth, to any Lender Indebtedness consisting of amounts owed by
any Credit Party in respect of any Swap Agreement or Cash Management Agreement
that are in excess of the Swap Reserves and Cash Management Reserves,
respectively, (set forth in the most recent US Borrowing Base Report (or
Availability Reserves established with respect to such liabilities), and (5)
fifth, after giving effect to the payment in full of all amounts required
pursuant to clauses (1), (2), (3) and (4) preceding, to the repayment of the
Term Loans (including principal and accrued interest thereon) and other amounts
owing to the Term Lenders in their capacity as such, including, without
limitation, expenses, fees, indemnity obligations and other amounts owing to the
Term Lenders.
(i) Order of Payment During Default (Canadian Borrowers). During the
existence of any Event of Default, any payments in respect of the Lender
Indebtedness by or for the account of any of the Canadian Borrowers or in
respect of any of the proceeds of Collateral of the Canadian Borrowers,
including, without limitation, amounts applied pursuant to Section 2.11(d) shall
be applied to the Canadian Lender Indebtedness (1) first, to the payment in full
of all costs, expenses and other charges (but not fees) of the Canadian
Administrative Agent incurred in connection with the collection and enforcement
of the Canadian Lender Indebtedness and for the protection, preservation or
sale, disposition or other realization upon the Collateral provided by the
Canadian Borrowers, including all expenses, liabilities and advances incurred or
made by or on behalf of the Canadian Administrative Agent in its capacity as
such, including attorneys' fees and legal expenses, and (2) then to the
remaining Canadian Lender Indebtedness (including to establish L/C Cover for all
outstanding Canadian Letters of Credit) in such order as the Canadian
Administrative Agent shall determine in its sole discretion provided, that, any
Canadian Lender Indebtedness consisting of amounts owed by any Credit Party in
respect of any Swap Agreement or Cash Management Agreement that are in excess of
the Swap Reserves and Cash Management Reserves, respectively, (set forth in the
most recent Canadian Borrowing Base Report (or Availability Reserves established
with respect to such liabilities) shall only be paid in full after payment in
full of all other Canadian Lender Indebtedness to be paid pursuant to this
clause (2).
(j) Restrictions on Payment of Term Loans. Except as expressly provided
in this clause (j) no payment of the Term Loans and no other payment to the Term
Lenders in their capacity as such, including, without limitation, any payment of
expenses, fees, indemnity obligations and other amounts owing to the Term
Lenders, shall be made at any time that any other Lender Indebtedness is
outstanding hereunder or any Revolving Credit Commitment or SOFA Commitment
remains in effect. Notwithstanding the foregoing, so long as no Default has
occurred which is continuing, the US Borrowers shall be permitted to (1) pay
regularly scheduled payments of interest on the Term Loans when due, and (2)
prepay the Term Loans in whole or in part; provided, that no prepayment of Term
Loans shall be permitted pursuant to this clause (2) (i) unless the US Borrowers
shall have provided each Agent and Lender with written notice of their intention
to make such prepayment not less than 10 Business Days prior to the effective
date of such prepayment setting forth the amount to be prepaid and the scheduled
date for prepayment (which shall not be accelerated), (ii) unless US Excess
Availability has been equal to or greater than $40,000,000 for each day during
the thirty (30) day period prior to the date of such prepayment assuming that
such repayment occurred on the first day of such period, and (iii) unless US
Excess Availability will be equal to or greater than $40,000,000 after giving
effect to such prepayment. In the event any Term Lender shall receive any
payment or prepayment of any type which it is prohibited from receiving pursuant
to this Section 2.11(j), it shall hold such payment in trust and promptly (and
in all events within one Business Days following demand by the Administrative
Agent therefore) deliver the same over to the Administrative Agent for
application to the Lender Indebtedness in the order provided by this Section
2.11.
(k) Restrictions of Voluntary Prepayments of SOFA Loans. Prior to the
SOFA Conversion Date, no voluntary prepayment of SOFA Loans shall be made
pursuant to Section 2.11(e) hereof at any time that the Excess Availability is
less than $25,000,000. After the SOFA Conversion Date, no voluntary prepayment
of SOFA Loans shall be made pursuant to Section 2.11(e) hereof at any time that
the Excess Availability is less than $30,000,000.
Section 2.12 Continuation and Conversion Options.
(a) Continuation. The Borrowers may elect to continue all or any part
of any Borrowing of LIBOR Loans beyond the expiration of the then current
Interest Period relating thereto by giving Advance Notice (which shall be
irrevocable to the Administrative Agent or the Canadian Administrative Agent)
(with a simultaneous copy to the Administrative Agent) (as applicable) of such
election, specifying the LIBOR Loans or portion thereof to be continued and the
Interest Period therefor. In the absence of such a timely and proper election
with regard to LIBOR Loans, the Borrowers shall be deemed to have elected to
convert such LIBOR Loans to ABR Loans pursuant to Section 2.12(d).
(b) Amount of Continuations. All or part of any LIBOR Loans may be
continued as provided herein, provided that any continuation of such Loans shall
not be (as to each Borrowing of such Loans as continued for an applicable
Interest Period) less than $500,000 for each Lender and shall be in an integral
multiple of $100,000.
(c) Continuation or Conversion Upon Default. If no Default shall have
occurred and be continuing, each LIBOR Loan may be continued or converted as
provided in this Section. If a Default shall have occurred and be continuing,
the Borrowers shall not have the option to elect to continue any such LIBOR Loan
pursuant to Section 2.12(a) or to convert ABR Loans to LIBOR Loans pursuant to
Section 2.12(e).
(d) Conversion to ABR. The Borrowers may elect to convert any LIBOR
Loan on the last day of the then current Interest Period relating thereto to an
ABR Loan by giving Advance Notice to the Administrative Agent of such election.
(e) Conversion to LIBOR Rate. The Borrowers may elect to convert any
ABR Loan at any time or from time to time to a LIBOR Loan by giving Advance
Notice (which shall be irrevocable to the Administrative Agent of such election,
specifying each Interest Period therefor.
(f) Amounts of Conversions. All or any part of the outstanding Loans
may be converted as provided herein, provided that any conversion of such Loans
to a LIBOR Loan shall result in a Borrowing of LIBOR Loans in an amount not less
than $500,000 for each Lender and in an integral multiple of $100,000.
(g) Rollover of B/A Loans. With respect to each B/A Borrowing, at or
before 12:00 p.m. (noon), ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ time, three Business Days
before the maturity date of such B/As, the Canadian Borrowers shall notify in
writing the Canadian Administrative Agent, if the Canadian Borrowers intend to
issue B/As on such maturity date to provide for the payment of such maturing
B/As. If the Canadian Borrowers fail to notify the Canadian Administrative Agent
of their intention to issue B/As on such maturity the Canadian Borrowers shall
provide payment to the Canadian Administrative Agent for the account of the
Canadian Lenders of an amount equal to the aggregate face amount of such B/As on
the maturity date of such B/As. If the Canadian Borrowers fail to make such
payment, such maturing B/As shall be deemed to have been converted on their
maturity date into a Canadian Prime Rate Loan in an aggregate principal amount
equal to the aggregate face amounts of such B/As and the Canadian Borrowers
shall on demand jointly and severally pay any losses, costs or penalties that
may have been incurred by the Canadian Administrative Agent or any Canadian
Lender due to the failure of the Canadian Borrowers to make such payment. No B/A
may be rolled over when any Default has occurred and is continuing and the
Canadian Administrative Agent has or the Canadian Lenders have determined in its
or their sole discretion that such conversion is not appropriate.
(h) Conversion into B/A Loans. Subject to the provisions of this
Agreement, the Canadian Borrowers may, prior to the Maturity Date, effective on
any Business Day, convert in whole or part, Canadian Prime Rate Loans into B/As
or vice versa (but only on the last day of a Contract Period in the case of
conversions of B/As) upon giving to the Canadian Administrative Agent Advance
Notice, provided that: (1) no Canadian Prime Rate Loan may be converted into a
B/A when any Default has occurred and is continuing and the Canadian
Administrative Agent has or the Canadian Lenders have determined in its or their
sole reasonable discretion that such conversion is not appropriate; and (2) each
conversion pursuant to this paragraph shall be not be less than C$500,000 and
shall in an integral multiple of C$100,000. In the case of conversions of
Canadian Prime Rate Loans into B/As, the Canadian Borrowers shall jointly and
severally pay to the Administrative Agent, for the account of the Canadian
Lender accepting such B/A, on the date of such conversion an amount equal to (A)
the difference between the principal amount of the converted Canadian Prime Rate
Loan less the Discount Proceeds plus (B) the Acceptance Fee to which such
Canadian Lender is entitled upon acceptance of such B/A. If the Canadian
Borrowers shall not have delivered a Borrowing Request in accordance with this
Section 2.12(h) prior to the maturity date then in effect for any B/A Borrowing
requesting that such Borrowing be refinanced with another B/A Borrowing or
converted to a Canadian Prime Borrowing, then the Canadian Borrowers shall
(unless the Canadian Borrowers have notified the Administrative Agent, before
11:00 a.m., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ time, not less than one Business Day prior
to such maturity date, that such Borrowing is to be repaid on such maturity
date) be deemed to have delivered a Borrowing Request requesting that such
Borrowing be refinanced with a new Borrowing of the same amount, and such new
Borrowing shall be a Canadian Prime Borrowing.
Section 2.13 Fees.
(a) US Revolving Credit Commitments. The US Borrowers shall jointly and
severally pay to the Administrative Agent for the account of and distribution to
each US Revolving Lender in accordance with its US Revolving Credit Percentage a
commitment fee for the period commencing on the Closing Date, to and including
the Maturity Date (or such earlier date as the US Revolving Credit Commitments
shall have been terminated entirely) computed at a rate per annum equal to the
Applicable Commitment Fee Percentage on the average daily excess amount of the
US Revolving Credit Commitments over the US Revolving Credit Exposure. The
commitment fees on the US Revolving Credit Commitments earned from and after the
Closing Date shall be payable in arrears on the Quarterly Date, commencing on
January 1, 2003.
(b) Canadian Revolving Credit Commitments. The Canadian Borrowers shall
jointly and severally pay to the Canadian Administrative Agent for the account
of and distribution to each Canadian Lender in accordance with its Canadian
Revolving Credit Percentage a commitment fee for the period commencing on the
Closing Date, to and including the Maturity Date (or such earlier date as the
Canadian Revolving Credit Commitments shall have been terminated entirely)
computed at a rate per annum equal to the Applicable Commitment Fee Percentage
on the average daily excess amount of the Canadian Revolving Credit Commitments
over the Canadian Revolving Credit Exposure. The commitment fees on the Canadian
Revolving Credit Commitments earned from and after the Closing Date shall be
payable in arrears on the Quarterly Date, commencing on January 1, 2003.
(c) SOFA Commitments. The US Borrowers shall jointly and severally pay
to the Administrative Agent for the account of the distribution to each SOFA
Lender in accordance with its SOFA Percentage a commitment fee for the period
commencing on the Closing Date, to and including the SOFA Commitment Termination
Date (or such earlier date as the SOFA Commitments shall have been terminated
entirely) computed at a rate of 1.00% per annum on the average daily excess
amount of the SOFA Commitments over the SOFA Exposure. The commitment fees on
the SOFA Commitments earned from and after the Closing Date shall be payable in
arrears on the Quarterly Date, commencing January 1, 2003.
(d) US Letters of Credit.
(1) As consideration for acting as the Issuing Bank with respect to any
US Letter of Credit, the US Borrowers will jointly and severally pay to the
applicable Issuing Bank a fee computed at a rate per annum equal to 0.25% on the
daily average amount available for drawing on the applicable Letter of Credit,
payable in arrears on the last Business Day of each calendar month. The US
Borrowers shall jointly and severally pay to the applicable Issuing Bank, with
respect to any issuance, amendment, transfer, or cancellation prior to
expiration of any US Letter of Credit and for each drawing made thereunder,
documentary and processing charges in accordance with such Issuing Bank's
standard schedule for such charges in effect at the time of, and payable at the
time of, such issuance, amendment, transfer, cancellation or drawing, as the
case may be. All fees payable pursuant to this Section 2.13(d)(1) shall be
retained by the applicable Issuing Bank.
(2) The US Borrowers will jointly and severally pay to the
Administrative Agent for the account of and pro rata distribution to each US
Revolving Lender a fee on the daily average amount available for drawings under
each US Letter of Credit, in each case for the period from and including the
date of issuance of such US Letter of Credit to and excluding the date of
expiration or termination thereof computed at a per annum rate for each day
equal to the Applicable Margin for US Revolving Credit Loans that are LIBOR
Loans in effect on such day. Such fees shall be payable in arrears on the first
day of each month.
(e) Canadian Letters of Credit.
(1) As consideration for acting as the Issuing Bank with respect to any
Canadian Letter of Credit, the Canadian Borrowers will pay to the applicable
Issuing Bank a fee computed at a rate per annum equal to 0.25% on the daily
average amount available for drawing on the applicable Letter of Credit, payable
in arrears on the last Business Day of each calendar month. The Canadian
Borrowers shall jointly and severally pay to the applicable Issuing Bank, with
respect to any issuance, amendment, transfer, or cancellation prior to
expiration of any Canadian Letter of Credit and for each drawing made
thereunder, documentary and processing charges in accordance with such Issuing
Bank's standard schedule for such charges in effect at the time of, and payable
at the time of, such issuance, amendment, transfer, cancellation or drawing, as
the case may be. All fees payable pursuant to this Section 2.13(e)(1) shall be
retained by the applicable Issuing Bank.
(2) The Canadian Borrowers will jointly and severally pay to the
Canadian Administrative Agent for the account of and pro rata distribution to
each Canadian Lender a fee on the daily average amount available for drawings
under each Canadian Letter of Credit, in each case for the period from and
including the date of issuance of such Canadian Letter of Credit to and
excluding the date of expiration or termination thereof computed at a per annum
rate for each day equal to the Applicable Margin for Canadian Revolving Credit
Loans that are LIBOR Loans in effect on such day. Such fees shall be payable in
arrears on the first day of each month.
(f) Termination Fee. In the event all Revolving Credit Commitments are
terminated in their entirety on or before March 28, 2004 (including, without
limitation, a termination pursuant to Article 8 hereof), (1) the Canadian
Borrowers shall pay to the Canadian Administrative Agent for distribution to the
Canadian Lenders in accordance with their respective Applicable Percentages, a
termination fee in the amount of $275,000, and (2) the US Borrowers shall pay to
the Administrative Agent for distribution to the US Revolving Lenders in
accordance with their respective Applicable Percentages a termination fee in the
amount of $475,000. The termination fees provided for herein shall be due and
payable on the effective date of such termination.
(g) Fee Letters. The US Borrowers shall jointly and severally pay to
the Administrative Agent such fees as are set forth in the Fee Letter, as the
same has been or may be hereafter amended or supplemented, on the dates and in
the manner specified therein, and the Canadian Borrower shall jointly and
severally pay to the Canadian Administrative Agent such fees as are set forth in
the Canadian Fee Letter as the same has been or may hereafter be amended or
supplemented, on the dates and in the manner set forth therein.
Section 2.14 Payments, etc.
(a) Without Setoff, etc. Except as otherwise specifically provided
herein, all payments under this Agreement shall be made to the Administrative
Agent (if such payment is made on or in respect of US Loans or US Commitments)
or to the Canadian Administrative Agent (if such payment is made on or in
respect of Canadian Loans or Canadian Commitments) for the account of the
appropriate Lenders without defense, set-off or counterclaim not later than
11:00 a.m. New York, New York time on the date when due and shall be made in
Dollars (unless such payment is a payment of principal or interest on C$
Denominated Loans or Reimbursement Obligations with respect to Canadian Letters
of Credit denominated in C$, in which case such payments shall be in C$) in
immediately available funds at the Payment Office of the appropriate Agent. The
Administrative Agent or the Canadian Administrative Agent will promptly
thereafter distribute funds in the form received relating to the payment of
principal or interest or commitment fees ratably to the appropriate Lenders for
the account of their respective Lending Offices, and funds in the form received
relating to the payment of any other amount payable to any Lender to such Lender
for the account of its applicable Lending Office.
(b) Non-Business Days. Whenever any payment to be made hereunder or
under any Note shall be stated to be due on a day which is not a Business Day,
the due date thereof shall be extended to the next succeeding Business Day
(except as otherwise provided in Section 2.7 hereof) and, with respect to
payments of principal, interest thereon shall be payable at the applicable rate
during such extension.
(c) Computations. All computations of interest shall be made on the
basis of a year of 360 days (unless such calculation would result in a usurious
rate, in which case interest shall be calculated on the basis of a year of 365
or 366 days, as the case may be) for the actual number of days (including the
first day but excluding the last day) occurring in the period for which such
interest or fees are payable. Each determination by the Administrative Agent or
the Canadian Administrative Agent of an interest rate or fee hereunder shall,
except for manifest error, be final, conclusive and binding for all purposes,
provided that such determination shall be made in good faith in a manner
generally consistent with the Administrative Agent's or the Canadian
Administrative Agent's standard practice. If the Administrative Agent or the
Canadian Administrative Agent and the Borrowers determine that manifest error
exists, said parties shall correct such error by way of an adjustment to the
next payment due hereunder. For the purposes of the Interest Act (Canada) and
disclosure thereunder, whenever any interest or any fee to be paid hereunder or
in connection herewith is to be calculated on the basis of any period of time
that is less than a calendar year, the yearly rate of interest to which the rate
used in such calculation is equivalent is the rate so used multiplied by the
actual number of days in the calendar year in which the same is to be
ascertained and divided by 360. The rates of interest under this Agreement are
nominal rates, and not effective rates or yields. The principle of deemed
reinvestment of interest does not apply to any interest calculation under this
Agreement.
Section 2.15 Interest Rate Not Ascertainable, etc. In the event that
the Administrative Agent shall have determined (which determination shall be
reasonably exercised and shall, absent manifest error, be final, conclusive and
binding upon all parties) that on any date for determining the LIBOR Rate for
any Interest Period, by reason of any changes arising after the date of this
Agreement affecting the London interbank LIBOR market, or any Lender's position
in such market, adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in the definition of LIBOR
Rate, then, and in any such event, the Administrative Agent shall forthwith give
notice (by telephone confirmed in writing) to the Borrowers and to the Lenders
of such determination. Until the Administrative Agent notifies the Borrowers
that the circumstances giving rise to the suspension described herein no longer
exist, the obligations of the Lenders to make LIBOR Loans shall be immediately
suspended; any Borrowing of LIBOR Loans that is requested (by continuation,
conversion or otherwise) shall instead be made as a Borrowing of ABR Loans, and
any outstanding LIBOR Loan shall be converted, on the last day of the then
current Interest Period applicable thereto, to a ABR Loan.
Section 2.16 Illegality.
(a) Determinations of Illegality of LIBOR Loan. In the event that any
Lender shall have determined (which determination shall be reasonably exercised
and shall, absent manifest error, be final, conclusive and binding upon all
parties) at any time that the making or continuance of any LIBOR Loan has become
unlawful as a result of compliance by such Lender in good faith with any
applicable law, governmental rule, regulation, guideline or order (whether or
not having the force of law and whether or not failure to comply therewith would
be unlawful), then, in any such event, the Lender shall give prompt notice (by
telephone confirmed in writing) to the Borrowers and to the Administrative Agent
of such determination (which notice the Administrative Agent shall promptly
transmit to the other Lenders).
(b) LIBOR Loans Suspended. Upon the giving of the notice to the
Borrowers referred to in Section 2.16(a) above, (1) the Borrowers' right to
request (by continuation, conversion or otherwise) and such Lender's obligation
to make LIBOR Loans shall be immediately suspended, and thereafter, any
requested Borrowing of LIBOR Loans shall, as to such Lender only, be deemed to
be a request for a ABR Loan, and (2) if the affected LIBOR Loan or Loans are
then outstanding, the Borrowers shall immediately, or if permitted by applicable
law, no later than the date permitted thereby, upon at least one Business Day's
written notice to the Administrative Agent and the affected Lender, convert each
such LIBOR Loan into a ABR Loan, provided that if more than one Lender is
affected at any time, then all affected Lenders must be treated the same
pursuant to this subsection.
(c) Determinations of Illegality of Dollar Denominated Loans. In the
event that any Canadian Lender shall have determined (which determination shall
be reasonably exercised and shall, absent manifest error, be final, conclusive
and binding upon all parties) at any time that the making or continuance of any
Dollar Denominated Loan has become unlawful as a result of compliance by such
Canadian Lender in good faith with any applicable law, governmental rule,
regulation, guideline or order (whether or not having the force of law and
whether or not failure to comply therewith would be unlawful), then, in any such
event, the Canadian Lender shall give prompt notice (by telephone confirmed in
writing) to the Canadian Borrowers and to the Canadian Administrative Agent of
such determination (which notice the Canadian Administrative Agent shall
promptly transmit to the other Canadian Lenders).
(d) Dollar Denominated Loan Suspended. Upon the giving of the notice to
the Canadian Borrowers referred to in Section 2.16(c) above, (1) the Canadian
Borrowers' right to request (by continuation, conversion or otherwise) and such
Canadian Lender's obligation to make Dollar Denominated Loans shall be
immediately suspended, and thereafter, any requested Borrowing of Dollar
Denominated Loans shall, as to such Canadian Lender only, be deemed to be a
request for a Canadian Revolving Credit Loan, and (2) if the affected Dollar
Denominated Loan or Loans are then outstanding, the Canadian Borrowers shall
immediately, or if permitted by applicable law, no later than the date permitted
thereby, upon at least one Business Day's written notice to the Canadian
Administrative Agent and the affected Canadian Lender, convert each such Dollar
Denominated Loan which is a LIBOR Loan into a B/A Loan and convert each such
Dollar Denominated Loan which is a ABR Loan into a Canadian Prime Rate Loan,
provided that if more than one Lender is affected at any time, then all affected
Lenders must be treated the same pursuant to this subsection.
Section 2.17 Increased Costs.
(a) LIBOR Regulations, etc. If, by reason of (x) the introduction of or
any change after the date hereof (including, but not limited to, any change by
way of imposition or increase of reserve requirements) in or in the
interpretation of any law or regulation, or (y) the compliance with any
guideline or request issued after the date hereof by any central bank or other
governmental authority or quasi-governmental authority exercising control over
banks or financial institutions generally (whether or not having the force of
law):
(1) any Lender (or its applicable Lending Office) shall be
subject to any tax, duty or other charge with respect to its LIBOR
Loans or its obligation to make LIBOR Loans, or shall change the basis
of taxation of payments to any Lender of the principal of or interest
on its LIBOR Loans or its obligation to make LIBOR Loans (except for
changes in the rate of tax on the overall net income or gross receipts
of such Lender or its applicable Lending Office imposed by the
jurisdiction in which such Lender's principal executive office or
applicable Lending Office is located); or
(2) any reserve (including, but not limited to, any imposed by
the Board of Governors of the Federal Reserve System, but excluding
any such reserve requirement that is reflected in the LIBOR Rate),
special deposit or similar requirement against assets of, deposits
with or for the account of, or credit extended by, any Lender or its
applicable Lending Office shall be imposed or deemed applicable or any
other condition affecting its LIBOR Loans or its obligations to make
LIBOR Loans shall be imposed on any Lender or its applicable Lending
Office or the interbank LIBOR market or the secondary certificate of
deposit market;
and as a result thereof there shall be any increase in the cost to such Lender
of agreeing to make or making, funding or maintaining LIBOR Loans (except to the
extent already included in the determination of the applicable LIBOR Rate) or
there shall be a reduction in the amount received or receivable by such Lender
or its applicable Lending Office, then the applicable Borrowers shall from time
to time, upon written notice from and demand by such Lender (with a copy of such
notice and demand to the Administrative Agent), pay to such Lender on demand
additional amounts determined by such Lender in a reasonable manner to be
sufficient to indemnify such Lender against such increased cost; provided that,
the Borrowers shall not be required to compensate any Lender pursuant to this
Section 2.17(a) for any amounts incurred more than six months prior to the date
that such Lender notifies such Borrowers of such Lender's intention to claim
compensation therefor; and provided further that (A) if the circumstances giving
rise to such claim have a retroactive effect, then such six-month period shall
be extended to include the period of such retroactive effect, and (B) the
limitation set forth in this proviso shall not apply to amounts already included
in the determination of the applicable LIBOR Rate. A certificate as to the
amount of such increased cost and the calculation thereof, submitted to the
Borrowers and the Administrative Agent by such Lender, shall, except for
manifest error, be final, conclusive and binding for all purposes.
(b) Costs. If any Lender shall advise the Administrative Agent or the
Canadian Administrative Agent that at any time, because of the circumstances
described in clauses (x) or (y) in Section 2.17(a) or any other circumstances
affecting such Lender or the London interbank market or such Lender's position
in such market, the LIBOR Rate, as determined in good faith by the
Administrative Agent or the Canadian Administrative Agent, will not adequately
and fairly reflect the cost to such Lender of funding its LIBOR Loans, then, and
in any such event:
(1) the Administrative Agent or the Canadian Administrative Agent
shall forthwith give notice (by telephone confirmed in writing) to the
Borrowers and to the Lenders of such advice;
(2) the Borrowers' right to request a Borrowing of LIBOR Loans
from such Lender and such Lender's obligation to make LIBOR Loans
shall be immediately suspended, any such Borrowing of LIBOR Loans that
is requested (by continuation, conversion or otherwise) shall, as to
such Lender only, be deemed to be a request for a ABR Loan, and any
such outstanding LIBOR Loan from such Lender shall be converted, on
the last day of the then current Interest Period applicable thereto,
to a ABR Loan.
(c) Capital Adequacy. If by reason of (1) the introduction of or any
change after the date hereof (including, but not limited to, any change by way
of imposition or increase of reserve requirements) in or in the interpretation
of any law or regulation, or (2) the compliance with any guideline or request
issued by any central bank or other governmental authority or quasi-governmental
authority exercising control over banks or financial institutions generally
(whether or not having the force of law), affects or would affect the amount of
capital required to be maintained by any Lender or any corporation controlling
such Lender, and the amount of such capital is increased by or based upon the
existence of such Lender's Loans or such Lender's Commitment hereunder and other
commitments to lend or of the Letters of Credit (or similar contingent
obligations), then, upon written request therefor by such Lender (with a copy of
such request to the Administrative Agent), the applicable Borrowers shall pay to
such Lender, from time to time as specified by such Lender, additional amounts
sufficient to compensate such Lender for the increased cost of such additional
capital in light of such circumstances, to the extent that such Lender
reasonably determines such increase in capital to be allocable to the existence
of such Lender's Loans or such Lender's commitment to lend hereunder or to the
issuance or maintenance of the Letters of Credit and such Lender is generally
charging such costs to other similarly situated borrowers under similar credit
facilities; provided, that, the Borrowers shall not be required to compensate
any Lender pursuant to this Section 2.17(c) for any amounts incurred more than
six months prior to the date that such Lender notifies such Borrowers of such
Lender's intention to claim compensation therefor; and provided, further, that,
if the circumstances giving rise to such claim have a retroactive effect, then
such six-month period shall be extended to include the period of such
retroactive effect. A certificate as to such amounts and the calculation
thereof, submitted to the Borrowers and the Administrative Agent by such Lender,
shall be conclusive and binding for all purposes, absent manifest error.
(d) Issuing Bank. The rights and benefits of the Lenders under this
Section 2.17 shall also apply to any Issuing Bank in its capacity as such.
Section 2.18 Change of Lending Office. Each Lender agrees that it will
use reasonable efforts to designate an alternate Lending Office with respect to
any of its LIBOR Loans affected by the matters or circumstances described in
Section 2.15, Section 2.16 or Section 2.17 to reduce the liability of the
Borrowers or avoid the results provided thereunder, so long as such designation
is not disadvantageous to such Lender as determined by such Lender in its sole
discretion; provided, that, such Lender shall have no obligation to so designate
an alternate Lending Office located in the United States.
Section 2.19 Funding Losses. Each of the Borrowers shall compensate
each Lender, upon its written request (which request shall set forth the basis
for requesting such amounts and shall, absent manifest error, be final,
conclusive and binding upon all of the parties hereto), for all losses, expenses
and liabilities (including, but not limited to, any interest paid by such Lender
to lenders of funds borrowed by it to make or carry its LIBOR Loans or B/A Loans
to such Borrowers to the extent not recovered by the Lender in connection with
the re-employment of such funds) ("losses"), which the Lender may sustain: (a)
if for any reason (other than a default by such Lender) a Borrowing of LIBOR
Loans or B/A Loans does not occur on the date specified therefor in a Borrowing
Request (whether or not withdrawn), including, but not limited to a failure by
the applicable Borrowers to fulfill on the date of any Borrowing of LIBOR Loans
or B/A Loans the conditions set forth in Article 3, or to convert, continue any
LIBOR Loan or B/A Loan hereunder after irrevocable notice of such conversion or
continuation has been given pursuant to Section 2.12; (b) if any payment,
prepayment or conversion of any of its LIBOR Loans or B/A Loans required or
permitted by any other provision of this Agreement or otherwise, or any
assignment of a LIBOR Loan or B/A Loan pursuant to Section 2.23, in each case is
made or deemed made on a date which is not the last day of the Interest Period
applicable thereto; or (c) if, for any reason, either of the Borrowers defaults
in their obligation to repay its LIBOR Loans or B/A Loans or roll over or
interest accrued thereon as and when due and payable (at the due date thereof,
whether at scheduled maturity, by acceleration, irrevocable notice of prepayment
or otherwise). Notwithstanding the foregoing, the Canadian Borrowers shall not
be required to compensate any US Lender in respect of losses arising with
respect to US Loans.
Section 2.20 Sharing of Payments, etc.(a) (i) If any US Revolving
Lender shall obtain any payment or reduction (including, but not limited to, any
amounts received as adequate protection of a deposit treated as cash collateral
under the Bankruptcy Code) of any obligations of the US Borrowers hereunder
(whether voluntary, involuntary, through the exercise of any right of set-off,
or otherwise) in excess of its ratable share of payments or reductions on
account of such obligations obtained by all the US Revolving Lenders, such US
Revolving Lender shall forthwith (1) notify each of the other US Revolving
Lenders and the Administrative Agent of such receipt, and (2) purchase from the
other US Revolving Lenders such participations in the affected obligations as
shall be necessary to cause such purchasing US Revolving Lender to share the
excess payment or reduction, net of costs incurred in connection therewith,
ratably with each of them, provided, that, if all or any portion of such excess
payment or reduction is thereafter recovered from such purchasing US Revolving
Lender or additional costs are incurred, the purchase shall be rescinded and the
purchase price restored to the extent of such recovery or such additional costs,
but without interest. The US Borrowers agree that any US Revolving Lender so
purchasing a participation from another US Revolving Lender pursuant to this
Section may, to the fullest extent permitted by law, exercise all its rights of
payment (including the right of set-off) with respect to such participation as
fully as if such US Revolving Lender were the direct creditor of the US
Borrowers in the amount of such participation.
(ii) If any Term Lender shall obtain any payment or reduction
(including, but not limited to, any amounts received as adequate protection of a
deposit treated as cash collateral under the Bankruptcy Code) of any obligations
of the US Borrowers hereunder (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise) in excess of its ratable share
of payments or reductions on account of such obligations obtained by all the
Term Lenders, such Term Lender shall forthwith (1) notify each of the other Term
Lenders and the Administrative Agent of such receipt, and (2) purchase from the
other Term Lenders such participations in the affected obligations as shall be
necessary to cause such purchasing Term Lender to share the excess payment or
reduction, net of costs incurred in connection therewith, ratably with each of
them, provided, that, if all or any portion of such excess payment or reduction
is thereafter recovered from such purchasing Term Lender or additional costs are
incurred, the purchase shall be rescinded and the purchase price restored to the
extent of such recovery or such additional costs, but without interest. The US
Borrowers agree that any Term Lender so purchasing a participation from another
Term Lender pursuant to this Section may, to the fullest extent permitted by
law, exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Term Lender were the direct
creditor of the US Borrowers in the amount of such participation.
(iii) If any SOFA Lender shall obtain any payment or reduction
(including, but not limited to, any amounts received as adequate protection of a
deposit treated as cash collateral under the Bankruptcy Code) of any obligations
of the US Borrowers hereunder (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise) in excess of its ratable share
of payments or reductions on account of such obligations obtained by all the
SOFA Lenders, such SOFA Lender shall forthwith (1) notify each of the other SOFA
Lenders and the Administrative Agent of such receipt, and (2) purchase from the
other SOFA Lenders such participations in the affected obligations as shall be
necessary to cause such purchasing SOFA Lender to share the excess payment or
reduction, net of costs incurred in connection therewith, ratably with each of
them, provided, that, if all or any portion of such excess payment or reduction
is thereafter recovered from such purchasing SOFA Lender or additional costs are
incurred, the purchase shall be rescinded and the purchase price restored to the
extent of such recovery or such additional costs, but without interest. The US
Borrowers agree that any SOFA Lender so purchasing a participation from another
SOFA Lender pursuant to this Section may, to the fullest extent permitted by
law, exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such SOFA Lender were the direct
creditor of the US Borrowers in the amount of such participation.
(b) If any Canadian Lender shall obtain any payment or reduction of any
obligation of the Canadian Borrowers hereunder (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise) in excess of its
ratable share of payments or reductions on account of such obligations obtained
by all the Canadian Lenders, such Canadian Lender shall forthwith (1) notify
each of the other Canadian Lenders and the Canadian Administrative Agent of such
receipt, and (2) purchase from the other Canadian Lenders such Participations in
the affected obligations as shall be necessary to cause such purchasing Canadian
Lender to share the excess payment or reduction, net of costs incurred in
connection therewith, ratably with each of them, provided, that, if all or any
portion of such excess payment or reduction is thereafter recovered from such
purchasing Canadian Lender or additional costs are incurred, the purchase shall
be rescinded and the purchase price restored to the extent of such recovery or
such additional costs, but without interest. The Canadian Borrowers agree that
any Canadian Lender so purchasing a participation from another Canadian Lender
pursuant to this Section may, to the fullest extent permitted by law, exercise
all its rights of payment (including the right of set-off) with respect to such
participation as fully as if such Canadian Lender were the direct creditor of
the Canadian Borrowers in the amount of such participation.
Section 2.21 Taxes.
(a) Payments Free and Clear. Any and all payments by or on account of
any obligation of any of the Borrowers hereunder shall be made free and clear of
and without deduction for any Indemnified Taxes or Other Taxes; provided, that,
if any of the Borrowers shall be required to deduct any Indemnified Taxes or
Other Taxes from such payments, then (1) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.21) the
Administrative Agent, the Canadian Administrative Agent, the Lenders or the
Issuing Banks (as the case may be) receive an amount equal to the sum they would
have received had no such deductions been made, (2) the applicable Borrowers
shall make such deductions, and (3) such Borrowers shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law.
(b) Other Taxes. In addition, the applicable Borrowers shall pay any
Other Taxes to the relevant Governmental Authority in accordance with applicable
law.
(c) Indemnification. Each of the Borrowers shall indemnify the
Administrative Agent, the Canadian Administrative Agent, each Lender and each
Issuing Bank, upon written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Administrative Agent, the Canadian
Administrative Agent, such Lender or such Issuing Bank, as the case may be, on
or with respect to any payment by or on account of any obligation of such
Borrowers hereunder (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section 2.21) and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to the
applicable Borrowers by US Revolving Lender or an Issuing Bank, or by the
Administrative Agent or the Canadian Administrative Agent, as applicable, on its
own behalf or on behalf of US Revolving Lender or an Issuing Bank, shall be
conclusive absent manifest error. Notwithstanding the foregoing, the Canadian
Borrowers shall not be required to indemnify any US Lender in respect of any
Indemnified Taxes or Other Taxes arising with respect to US Loans.
(d) Receipts. As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by any of the Borrowers to a Governmental Authority, such
Borrowers shall deliver to the Administrative Agent or the Canadian
Administrative Agent, as applicable, the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Survival. Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this Section 2.21
shall survive the payment in full of principal and interest hereunder.
(f) Lender Representations and Agreements. Any Foreign Lender that is
entitled to an exemption from or reduction of withholding tax under the law of
the jurisdiction in which any Borrower is located, or any treaty to which such
jurisdiction is a party, with respect to payments under this Agreement shall
deliver to the US Borrowers (with a copy to the Administrative Agent), at the
time or times prescribed by applicable law, such properly completed and executed
documentation prescribed by applicable law or reasonably requested by the US
Borrowers as will permit such payments to be made without withholding or at a
reduced rate.
(g) Refunds. If any Borrower pays any additional amount under this
Section 2.21 to a Lender and such Lender determines in its sole discretion that
it has actually received or realized in connection therewith any refund or any
reduction of, or credit against, its Tax liabilities in or with respect to the
taxable year in which the additional amount is paid (a "Tax Benefit"), such
Lender shall pay to such Borrower an amount that the Lender shall, in its sole
discretion, determine is equal to the net benefit, after tax, which was obtained
by the Lender in such year as a consequence of such Tax Benefit; provided,
however, that (i) any Lender may determine, in its sole discretion consistent
with the policies of such Lender, whether to seek a Tax Benefit; (ii) any Taxes
that are imposed on a Lender as a result of a disallowance or reduction
(including through the expiration of any tax credit carryover or carryback of
such Lender that otherwise would not have expired) of any Tax Benefit with
respect to which such Lender has made a payment to such Borrower pursuant to
this Section 2.21 shall be treated as a tax for which such Borrower is obligated
to indemnify such Lender pursuant to this Section 2.21 without any exclusions or
defenses; and (iii) nothing in this Section 2.21(g) shall require the Lender to
disclose any confidential information to any Borrower (including, without
limitation, its tax returns).
Section 2.22 Pro Rata Treatment. Subject to Section 2.4(b) each
Borrowing of US Revolving Credit Loans shall be made, each payment on account of
any commitment fee in respect of the US Revolving Credit Commitments hereunder
shall be allocated by the Administrative Agent, and any reduction of the US
Revolving Credit Commitments of the US Revolving Lenders shall be allocated by
the Administrative Agent, pro rata according to the relevant US Revolving Credit
Percentages of the US Revolving Lenders. Subject to Section 2.4(b), each payment
(including each prepayment) on account of principal of and interest on any US
Revolving Credit Loans shall be allocated by the Administrative Agent pro rata
according to the respective outstanding principal amounts of such US Revolving
Credit Loans then held by the US Revolving Lenders. Subject to Section 2.4(b),
each payment (including each prepayment) on account of principal of and interest
on any Term Loans shall be allocated by the Administrative Agent pro rata
according to the respective outstanding principal amounts of such Term Loans
then held by the Term Lenders. Subject to Section 2.4(b), each Borrowing of
Canadian Revolving Credit Loans shall be made, each payment on account of any
commitment fee in respect of the Canadian Revolving Credit Commitments hereunder
shall be allocated by the Canadian Administrative Agent, and any reduction of
the Canadian Revolving Credit Commitments of the Canadian Lenders shall be
allocated by the Canadian Administrative Agent, pro rata according to the
relevant Canadian Revolving Credit Percentages of the Canadian Lenders. Subject
to Section 2.4(b), each payment (including each prepayment) on account of
principal of and interest on any Canadian Revolving Credit Loans shall be
allocated by the Canadian Administrative Agent pro rata according to the
respective outstanding principal amounts of such Canadian Revolving Credit Loans
then held by the Canadian Lenders. Subject to Section 2.4(b), each Borrowing of
SOFA Loans shall be made, each payment on account of any commitment fee in
respect of the SOFA Commitments hereunder shall be allocated by the
Administrative Agent, and any reduction of the SOFA Commitments of the SOFA
Lenders shall be allocated by the Administrative Agent, pro rata according to
the relevant SOFA Percentages of the SOFA Lenders. Subject to Section 2.4(b),
each payment (including each prepayment) on account of principal of and interest
on any SOFA Loans shall be allocated by the Administrative Agent pro rata
according to the respective outstanding principal amounts of such SOFA Loans
then held by the SOFA Lenders.
Section 2.23 Replacement of Lenders. If any Lender does not make a
LIBOR Loan pursuant to Section 2.16, seeks indemnification for increased costs
pursuant to Section 2.17, fails to designate an alternate Lending Office
pursuant to Section 2.18, or is owed or reasonably anticipates being owed
additional amounts pursuant to Section 2.21, the Borrowers shall have the right,
if no Default then exists, to replace such Lender with another bank or financial
institution with the consent of the Administrative Agent and the Canadian
Administrative Agent, which consent shall not be unreasonably withheld, provided
that (a) the obligations of the Borrowers owing hereunder or under any other
Financing Document to the Lender being replaced (including such increased costs)
that are not being assigned to the replacement lender shall be paid in full to
the Lender being replaced concurrently with such replacement lender, (b) the
replacement lender shall execute an Assignment and Acceptance pursuant to which
it shall become a party hereto as provided in Section 10.7, and (c) upon
compliance with the provisions for assignment provided in Section 10.7 and the
payment of amounts referred to in clause (a), the replacement lender shall
constitute a "Lender" hereunder and the Lender being so replaced shall no longer
constitute a "Lender" hereunder.
Section 2.24 Advances of Revolving Credit Loans to Satisfy Lender
Indebtedness. Each of the Borrowers and each Lender hereby agree with the
Administrative Agent, the Canadian Administrative Agent and each other Lender
that, on each date on which any payment of interest, fees, principal or other
amounts are due and owing hereunder or under any of the other Financing
Documents, the Administrative Agent or the Canadian Administrative Agent may, in
its sole discretion, but without any obligation to do so and subject to all
other terms of this Agreement (other than any request for delivery of a
Borrowing Request hereunder) cause a Borrowing of (a) US Swingline Loans to the
extent of the remaining US Swingline Availability, and thereafter such
Borrowings shall be US Revolving Credit Loans which shall be ABR Loans, or (b)
Dollar Denominated Canadian Revolving Credit Loans which shall be ABR Loans,
each to be made on such date in an amount sufficient to satisfy in full all such
payments of interest, fees or other amounts which are then due hereunder and,
subject to Section 2.9(i) with respect to the Canadian Lenders, the
Administrative Agent or the Canadian Administrative Agent shall disburse the
proceeds of such Borrowing to each other Agent and Lender to satisfy all such
obligations and liabilities which are then due and the Administrative Agent or
the Canadian Administrative Agent shall give the Borrowers prompt notice of any
such Advances, or (c) in the event that (i) there is no remaining US Swingline
Availability, (ii) the Aggregate US Revolving Credit Exposure is equal to or
greater than the US Maximum Available Amount and (iii) the Aggregate Canadian
Revolving Credit Exposure is equal or greater to the Canadian Maximum Available
Amount, SOFA Loans which shall be ABR Loans. Notwithstanding the foregoing,
neither the Administrative Agent nor the Canadian Administrative Agent shall be
permitted to cause a Borrowing of Canadian Revolving Credit Loans to satisfy any
Lender Indebtedness which is not Canadian Lender Indebtedness.
Section 2.25 Joint and Several Liability of US Borrowers; Rights of Contribution
among US Borrowers.
(a) Each US Borrower states and acknowledges that: (1) pursuant to this
Agreement, the US Borrowers desire to utilize their borrowing potential on a
consolidated basis to the same extent possible if they were merged into a single
corporate entity; (2) each US Borrower has determined that it will benefit
specifically and materially from the advances of credit contemplated by this
Agreement; (3) it is both a condition precedent to the obligations of the
Administrative Agent, the Canadian Administrative Agent and Lenders hereunder
and a desire of each US Borrower that each US Borrower execute and deliver to
Lender this Agreement; and (4) each US Borrower has requested and bargained for
the structure and terms of and security for the advances contemplated by this
Agreement.
(b) Each US Borrower hereby irrevocably and unconditionally: (i) agrees
that it is jointly and severally liable to the Administrative Agent and the
Lenders for the full and prompt payment and performance of the obligations of
each Borrower under this Agreement and each other Financing Document that may
specify that a particular Borrower is responsible for a given payment or
performance; (ii) agrees to fully and promptly perform all of its obligations
hereunder with respect to each advance of credit hereunder as if such advance
had been made directly to it; and (iii) agrees as a primary obligation to
indemnify the Administrative Agent, the Canadian Administrative Agent and each
Lender, on demand for and against any loss incurred by the Administrative Agent,
the Canadian Administrative or any Lender as a result of any of the obligations
of any Borrower (the "subject Borrower") being or becoming void, voidable,
unenforceable or ineffective for any reason whatsoever, whether or not known to
the subject Borrower or any Person, the amount of such loss being the amount
which the Administrative Agent, the Canadian Administrative Agent or the Lenders
(or any of them) would otherwise have been entitled to recover from the
Borrower.
(c) It is the intent of each US Borrower that the indebtedness,
obligations and liabilities hereunder of no one of them be subject to challenge
on any basis related to any federal or state law dealing with fraudulent
conveyances or any other law related to transfers for less than fair or
reasonably equivalent value. Accordingly, as of the date hereof, the liability
of each US Borrower under this Section 2.25 together with all of its other
liabilities to all persons as of the date hereof and as of any other date on
which a transfer is deemed to occur by virtue of this Agreement, calculated in
amount sufficient to pay its probable net liabilities on its existing
indebtedness as the same become absolute and matured ("Dated Liabilities") is
and is to be, less than the amount of the aggregate of a fair valuation of its
property as of such corresponding date ("Dated Assets"). To this end, each US
Borrower under this Section 2.25 (i) grants to and recognizes in each other US
Borrower ratably, rights of subrogation and contribution in the amount, if any,
by which the Dated Assets of such US Borrower, but for the aggregate rights of
subrogation and contribution in its favor recognized herein, would exceed the
Dated Liabilities of such US Borrower or, as the case may be, and (ii)
acknowledges receipt of and recognizes its right to subrogation and contribution
ratably from the other US Borrowers in the amount, if any, by which the Dated
Liabilities of such US Borrower, but for the aggregate of subrogation and
contribution in its favor recognized herein, would exceed the Dated Assets of
such US Borrower under this Section 2.25. In recognizing the value of the Dated
Assets and the Dated Liabilities, it is understood that each US Borrower will
recognize, to at least the same extent of their aggregate recognition of
liabilities hereunder, their rights to subrogation and contribution hereunder.
It is a material objective of this Section 2.25 that each US Borrower recognizes
rights to subrogation and contribution rather than be deemed to be insolvent (or
in contemplation thereof) by reason of an arbitrary interpretation of its joint
and several obligations hereunder.
(d) Each US Borrower agrees and acknowledges that the present structure
of the credit facilities detailed in this Agreement is based in part upon the
financial and other information presently known to the Administrative Agent, the
Canadian Administrative Agent and the Lenders regarding each Borrower, the
corporate structure of the Borrowers, and the present financial condition of
each Borrower. Upon or after the occurrence of an Event of Default under Section
8.1 or Section 8.2 and so long as it is continuing, each US Borrower hereby
agrees that the Required Lenders shall have the right, in their sole credit
judgment, to require that any or all of the following changes be made to these
credit facilities: (1) further restrict loans and advances between the
Borrowers, (2) establish separate lockbox and Blocked Accounts for each US
Borrower, (3) separate the US Swingline Loans and US Revolving Credit Loans into
separate revolving credit loans to each of the US Borrowers as shall be
determined by the Required Lenders, and (4) establish such other procedures as
shall be reasonably deemed by the Required Lenders to be useful in tracking
where Loans are made under this Agreement and the source of payments received by
the Lenders on such Loans.
Section 2.26 Participations in US Swingline Loans. The US Swingline
Lender may by written notice given to the Administrative Agent not later than
10:00 a.m. (New York, New York time), on any Business Day require the US
Revolving Lenders to acquire participations within one (1) Business Day in all
or a portion of the US Swingline Loans outstanding. Such notice to the
Administrative Agent shall specify the aggregate amount of US Swingline Loans in
which the US Revolving Lenders will participate. Promptly upon receipt of such
notice, the Administrative Agent will give notice thereof to each US Revolving
Lender, specifying in such notice such US Revolving Lender's Revolving Credit
Percentage of such US Swingline Loan or Loans. Each US Revolving Lender hereby
absolutely and unconditionally agrees, upon receipt of notice as provided above
in this paragraph, to pay to the Administrative Agent, for account of the US
Swingline Lender, such US Revolving Lender's US Revolving Credit Percentage of
such US Swingline Loan or Loans. Each US Revolving Lender acknowledges and
agrees that its obligation to acquire participations in US Swingline Loans
pursuant to this paragraph is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including the occurrence and
continuance of a Default or Event of Default or reduction or termination of the
Aggregate US Revolving Credit Commitments, and that each such payment shall be
made without any offset, abatement, withholding or reduction whatsoever. Each US
Revolving Lender shall comply with its obligation under this paragraph by wire
transfer of immediately available funds, in the same manner as provided in
Section 2.4(a) with respect to Loans made by such US Revolving Lender (and
Section 2.4(a) shall apply, mutatis mutandis, to the payment obligations of the
US Revolving Lenders), and the Administrative Agent shall promptly pay to the US
Swingline Lender the amounts so received by it from the US Revolving Lenders.
The Administrative Agent shall notify the US Borrowers of any participations in
any US Swingline Loan acquired pursuant to this paragraph, and thereafter
payments in respect of such US Swingline Loan shall be made to the
Administrative Agent and not to the US Swingline Lender. Any amounts received by
the US Swingline Lender from the US Borrower (or other party on behalf of the US
Borrower) in respect of a US Swingline Loan after receipt by the US Swingline
Lender of the proceeds of a sale of participations therein shall be promptly
remitted to the Administrative Agent; any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the US Lenders that shall have made their payments pursuant to this paragraph
and to the US Swingline Lender, as their interests may appear. The purchase of
participations in a US Swingline Loan pursuant to this paragraph shall not
relieve the US Borrowers of any default in the payment thereof.
Article 3 CONDITIONS TO BORROWINGS
Section 3.1 Closing. The amendment and restatement of the Existing
Credit Agreement on the terms set forth herein, and the obligation of each
Lender to make Loans and each Issuing Bank to issue Letters of Credit contingent
upon such amendment and restatement hereunder (including, without limitation,
the True-Up Loans) is subject to (x) receipt by the Administrative Agent or the
Canadian Administrative Agent, as applicable, of the following items which are
to be delivered, in form and substance satisfactory to each Lender, with a copy
(except for the Notes and this Agreement) for each Lender and (y) the
satisfaction of the following conditions prior to or substantially
simultaneously with such amendment and restatement and the making of such
initial Loan and the issuance of such initial Letter of Credit contingent upon
such amendment and restatement hereunder (including, without limitation, the
True-Up Loans) as evidenced by the execution and delivery of the Certificate of
Effectiveness:
(a) US Revolving Credit Notes. A duly completed and executed US
Revolving Credit Note for each US Lender and in each case dated as of the
Closing Date, and payable to the order of such US Lender.
(b) Canadian Revolving Credit Notes. A duly completed and executed
Canadian Revolving Credit Note for each Canadian Lender and in each case dated
as of the Closing Date, and payable to the order of such Canadian Lender.
(c) US Swingline Note. A duly completed and executed US Swingline Note
dated as of the Closing Date and payable to the order of the US Swingline
Lender.
(d) SOFA Notes. A duly completed and executed SOFA Note for each SOFA
Lender and in each case dated as of the Closing Date, and payable to the order
of such SOFA Lender.
(e) Resolutions and Incumbency Certificates.
(1) certified copies of the resolutions of the Board of Directors of
each Credit Party dated as of the Closing Date and approving, as appropriate,
the Loans, the Notes, this Agreement and the other Financing Documents, and all
other documents, if any, to which each Credit Party is a party and evidencing
corporate authorization with respect to such documents;
(2) a certificate of the Secretary or an Assistant Secretary of each
Credit Party dated as of the Closing Date and certifying (A) the name, title and
true signature of each officer of such Person authorized to execute the Notes,
this Agreement, Applications and the other Financing Documents to which it is a
party, (B) the name, title and true signature of each officer of such Person
authorized to provide the certifications required pursuant to this Agreement
including, but not limited to, certifications required pursuant to Section 6.10,
Borrowing Requests, and Borrowing Base Reports, and (C) that attached hereto is
a true and complete copy of the certificate of incorporation, certificate of
organization, certificate of formation or certificate of limited partnership, as
applicable, certified by the appropriate Governmental Authority of the
jurisdiction of incorporation or organization of each Credit Party and the
bylaws, limited partnership agreement, operating agreement or limited liability
company agreement, as applicable, of each Credit Party, each as amended to date,
recent good standing certificates and/or certificates of existence for each
Credit Party and certificates of foreign qualification for each Credit Party in
such jurisdictions as the Administrative Agent shall require; provided, that,
with respect to clause (C) preceding, each Existing Borrower may deliver a
certificate stating that there have been no amendments to, recessions of, or
changes to its organizational documents which were delivered to the Lenders by a
certificate of the Secretary or an Assistant Secretary of such Existing Borrower
as of March 28, 2002; and
(3) certain letter agreements certifying to the names and signatures of
officers of the Borrowers authorized to issue Borrowing Requests, issue
Borrowing Base Reports, initiate wire transfers and take other actions with
respect to the credit facilities contemplated hereby.
(f) Opinions of Counsel.
(1) An opinion of Gallop, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C., counsel to each
Credit Party dated as of the Closing Date addressed to the Administrative Agent,
the Issuing Banks and the Lenders and covering such matters as the
Administrative Agent, the Issuing Banks or the Lenders may reasonably request;
(2) An opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, Canadian counsel to the
Canadian Borrowers dated as of the Closing Date addressed to the Administrative
Agent, the Canadian Administrative Agent, the Issuing Banks and the Lenders and
covering such matters as the Administrative Agent, the Canadian Administrative
Agent, the Issuing Banks or the Lenders may reasonably request; and
(3) An opinions of counsel to the US Credit Parties in Georgia,
Michigan, Ohio and Tennessee dated as of the Closing Date addressed to the
Administrative Agent, the Issuing Banks and the Lenders and covering such
matters as the Administrative Agent, the Issuing Banks or the Lenders may
reasonably request.
(g) The Security Instruments.
(1) an Assumption Agreement (pursuant to which C&P shall become an
additional grantor under the Guaranty and Security Agreement) dated as of the
Closing Date and duly executed by C&P (A) guaranteeing the repayment of the
Canadian Lender Indebtedness by each such US Borrower and (B) granting to the
Administrative Agent a first priority security interest in all of the personal
property of C&P, as security for the Lender Indebtedness;
(2) completed UCC-1 financing statements necessary to perfect the
security interests granted by C&P and created by the Assumption Agreement and
the Real Estate Mortgages required by clause (4) below;
(3) in addition to the UCC-1 financing statement required by clause (2)
preceding, such other documents, instruments and agreements as the
Administrative Agent or the Canadian Administrative Agent shall reasonably
request to fully evidence and perfect the Liens created by the Security
Instruments;
(4) Real Estate Mortgages dated as of the Closing Date and duly
executed by C&P granting to the Administrative Agent a first priority perfected
lien in and to all Mortgaged Real Property owned by C&P as of the Closing Date
subject to Permitted Liens;
(5) amendments to the existing Real Estate Mortgages dated as of the
Closing Date and duly executed by the applicable parties, each in form and
substance satisfactory to the Administrative Agent;
(6) original stock certificates of C&P and duly executed corresponding
stock powers to perfect the Administrative Agent's security in the equity of C&P
pledged by the Guaranty and Security Agreement; and
(7) all Property in which the Administrative Agent or the Canadian
Administrative Agent shall, at such time, be entitled to have a Lien pursuant to
this Agreement or any other Financing Document shall have been physically
delivered to the possession of the Administrative Agent or the Canadian
Administrative Agent to the extent that such possession is necessary for the
purpose of perfecting the Administrative Agent's or the Canadian Administrative
Agent's Lien in such Collateral.
(h) The Consummation of the Acquisition Transactions. The Company shall
have completed the Acquisition for the purchase price and on the other terms and
conditions set forth in the Purchase Agreement and otherwise on terms and
conditions acceptable to each Agent and Lender, and the Acquired Assets shall be
free and clear of all Liens, claims and encumbrances other than Permitted Liens.
(i) Insurance. Copies of all insurance binders together with a
certificate of insurance coverage, dated as of the Closing Date evidencing that
the Borrowers maintain insurance in accordance with Section 6.5 hereof.
(j) Financial Statements and Projections. The financial condition of
the Borrowers reflected in the Financial Statements and the other financial
information and Projections of the Borrowers shall not be changed as of the
Closing Date in such a way as cause or result in a Material Adverse Effect
(after giving effect to the Acquisition Transactions).
(k) Borrowing Base Report. A Borrowing Base Report prepared as of
December 26, 2002 and setting forth the US Borrowing Base and the Canadian
Borrowing Base to be in effect under this Agreement on the Closing Date and,
after giving effect to the consummation of the transactions contemplated herein,
including the Acquisition Transactions and the initial Loans hereunder, the sum
of (1) the US Excess Availability and (2) the Canadian Excess Availability shall
not be less than $40,000,000; provided, that, in calculating the US Excess
Availability for purposes of this condition, the Initial Reserve shall be
disregarded. It is understood that this condition contemplates that all Existing
Indebtedness not permitted to remain outstanding under Section 7.2 has been
prepaid, and debts and obligations are current, and that all accounts payable
are being handled in the normal course of the Borrowers' business consistent
with its past practices.
(l) Certificate of Chief Financial Officer. A certificate of the Chief
Financial Officer of each of the Borrowers dated as of the Closing Date and
certifying, before and after giving effect to the Acquisition Transaction and
before and after the making of the initial Loans and the issuance of the initial
Letter of Credit, that (1) each Borrower is Solvent, (2) no Default then, or
thereafter would, exist, (3) each of the conditions to Closing have been
satisfied, and (4) each representation and warranty of the Borrowers contained
herein is true and correct in all material respects.
(m) Corporate Structure. Each Lender shall be satisfied in its sole
judgment with the corporate, capital, legal and management structure and tax
liabilities of each Borrower and the flow of funds among the Borrowers including
without limitation those necessary for the consummation of the Acquisition.
(n) Lien Searches. Lien searches reflecting no prior Liens on the
Acquired Assets other than Permitted Liens.
(o) Inventory Appraisals. The Administrative Agent shall have received
an inventory appraisal by ▇▇▇▇▇ Systems for all inventory comprising part of the
Acquired Assets which indicate values which support the proposed advance rates
as determined by Administrative Agent and which is otherwise satisfactory to the
Administrative Agent.
(p) OLV and Real Estate Appraisals. The Administrative Agent shall have
received (1) an orderly liquidation value appraisal by Dove Bid of unencumbered
machinery and equipment acquired under the Purchase Agreement and (2) fair
market value appraisals by ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ for all owned real estate
acquired under the Purchase Agreement, which appraisals collectively reflect an
aggregate appraised value of not less than $13,500,000.
(q) Fees and Expenses. Payment and/or reimbursement of (1) the
Administrative Agent's and the Canadian Administrative Agent's counsel's fees
and expenses incurred through the Closing Date, to the extent invoiced, and (2)
any fees or expenses required to be paid pursuant to the Fee Letter.
(r) SOFA Facility Fee. Payment of an upfront fee in the amount of
$150,000 payable to the Administrative Agent for the ratable benefit of the SOFA
Lenders.
(s) Documentation. The Administrative Agent shall have received such
other documents as the Administrative Agent (or any Lender acting through the
Administrative Agent) may reasonably request, all in form and substance
reasonably satisfactory to the Administrative Agent.
(t) Repayment of Indebtedness. All Existing Indebtedness of the Credit
Parties other than the Indebtedness permitted pursuant to Section 7.2 shall have
been paid in full and all Liens securing payment of such Indebtedness shall have
been canceled or released.
(u) Environmental Review. The Administrative Agent and its counsel
shall have completed a review of environmental conditions and environmental
compliance with respect to the Borrowers' operations and Properties. To the
extent the results of such review reflect that remedial action is required with
respect to the real property comprising the Acquired Assets and that the cost
estimate for such remedial action (as determined in the manner set forth in the
Purchase Agreement) exceeds $2,000,000, then the Sellers shall have established
all escrows required by Section 10.2 of the Purchase Agreement and such other
escrow requirements as the Administrative Agent shall deem necessary in its sole
discretion.
(v) Surveys. Surveys in form and substance acceptable to the
Administrative Agent with respect to all Mortgaged Real Property.
(w) Title Commitment. A Commitment for a Mortgagee's Policy of Title
Insurance in form and substance satisfactory to the Administrative Agent with
respect to the Mortgaged Real Property comprising the Acquired Assets, together
with evidence satisfactory to the Administrative Agent that Mortgagees's
Policies of Title Insurance will be issued pursuant to each such commitment and
all premiums therefore have been paid.
(x) Title Endorsements. A Commitment for a Title Endorsement in form
and substance satisfactory to the Administrative Agent with respect to each
existing Real Estate Mortgage, together with evidence satisfactory to the
Administrative Agent that such endorsements will be issued pursuant to each such
commitment and all premiums therefore have been paid.
(y) Bailee's Letters. Bailee's Letters duly executed and delivered by
any Person who is in possession of inventory on behalf of any Borrower.
(z) Cash Management Arrangements. The Administrative Agent and the
Canadian Administrative shall be satisfied in their sole discretion with all
aspects of the Borrowers' cash management arrangements. Without limiting the
foregoing, each Temporary Lockbox Institution shall have executed and delivered
to the Administrative Agent, a Tri-Party Agreement in form and substance
acceptable to the Administrative Agent in its sole discretion.
(aa) The Company and/or the applicable Subsidiary of the Company shall
have entered into collective bargaining agreements with the unions representing
the employees to be employed by the Company and/or its Subsidiaries with respect
to the Acquisition Assets which collective bargaining agreements shall be in
form and substance acceptable to the Lenders.
(bb) Acquisition Transactions. Subject only to the disbursement and
application of the initial Borrowing after giving effect to the amendment and
restatement of the Existing Credit Agreement in the form of this Agreement, the
Acquisition Transactions shall have occurred and been consummated (or the
Administrative Agent shall be satisfied that such transactions shall occur
concurrently with the execution and delivery of the Certificate of
Effectiveness).
Upon satisfaction of each of the conditions set forth in Section 3.1,
the Borrowers and the Administrative Agent shall execute the Certificate of
Effectiveness. Upon the execution and delivery of the Certificate of
Effectiveness, the Existing Credit Agreement shall automatically and completely
be amended and restated on the terms set forth herein. Until execution and
delivery of the Certificate of Effectiveness, the Existing Credit Agreement
shall remain in full force and effect in accordance with its terms. Each Lender
hereby authorizes the Administrative Agent to execute the Certificate of
Effectiveness on its behalf and acknowledges and agrees that the execution of
the Certificate of Effectiveness by the Administrative Agent shall be binding on
each such Lender.
Section 3.2 Conditions Precedent to All Loans and Letters of Credit.
The obligation of each Lender to make each Loan hereunder (including the initial
Loan) and the obligation of each Issuing Bank to issue each Letter of Credit
(including the initial Letter of Credit) is subject to fulfillment of the
following conditions immediately prior to or contemporaneously with each such
Loan or issuance:
(a) Representations and Warranties. All representations and warranties
contained herein and in the other Financing Documents executed and delivered on
or after the Closing Date shall be true and correct in all material respects
with the same effect as though such representations and warranties had been made
on and as of the date of such Loan (unless such representation and warranty is
expressly limited to an earlier date).
(b) No Default. There shall not exist a Default or Event of Default
hereunder.
(c) Maximum Available Amount. The Aggregate US Revolving Credit
Exposure and the Aggregate Canadian Revolving Credit Exposure, after giving
effect to such proposed Loan or Letter of Credit shall not exceed the US Maximum
Available Amount and Canadian Maximum Available Amount, respectively, then in
effect.
(d) Borrowing Requests. Except in the case of any Borrowing pursuant to
Section 2.2(c), the applicable Borrowers shall have provided Advance Notice of
the requested Borrowing by completion, execution and delivery of a Borrowing
Request.
Section 3.3 Post Closing Conditions. The Borrowers shall deliver, or
cause to be delivered to the appropriate Agent, each document, instrument or
agreement, and take each action, or cause to be taken, each action set forth on
Schedule 3.3 hereto, in each case on or prior to the date specified on such
Schedule.
Article 4 SECURITY
Section 4.1 Security Granted by US Credit Parties. The Lender
Indebtedness shall be secured by perfected, first priority Liens in and
encumbering all assets of each US Credit Party, whether now owned or hereafter
acquired and wherever located; provided, that, only 65% of the Voting Stock of
any Person that is organized under the laws of a jurisdiction other than the
United States of America, a State thereof or the District of Columbia, shall be
pledged to secure the US Lender Indebtedness. In furtherance of the foregoing,
the US Borrowers have executed the Guaranty and Security Agreement and shall
hereafter execute and deliver (and to cause each other US Credit Party and any
other appropriate Person to execute and deliver) to the Administrative Agent for
the benefit of US Lenders, promptly upon request by the Administrative Agent,
such Security Documents and other documents, instruments, agreements and
certificates, as the Administrative Agent shall deem necessary or appropriate in
its sole discretion to create, evidence and perfect the Liens contemplated by
this Section 4.1.
Section 4.2 Security Granted by Canadian Credit Parties. The Canadian
Lender Indebtedness shall be secured by perfected, first priority Liens in and
encumbering all assets of each Canadian Credit Party, whether now owned or
hereafter acquired and wherever located. In furtherance of the foregoing, the
Canadian Borrowers have executed the Canadian Security Agreement and shall
hereafter execute and deliver (and to cause each other Canadian Credit Party and
any other appropriate Person to execute and deliver) to the Canadian
Administrative Agent for the benefit of the Canadian Lenders, promptly upon
request by the Canadian Administrative Agent, such Security Documents and other
documents, instruments, agreements and certificates, as Canadian Administrative
Agent shall deem necessary or appropriate in its sole discretion to create,
evidence and perfect the Liens contemplated by this Section 4.2.
Section 4.3 Establishment of US Lockbox. The Existing Borrowers have
entered into the Lockbox Agreement with the Administrative Agent pursuant to
which each US Credit Party has established a US Lockbox to be operated by the
Administrative Agent. Each US Credit Party not already party to the Lockbox
Agreement with the Administrative Agent shall enter into such Lockbox Agreement.
At all times from and after the Closing Date, each US Credit Party shall direct
all account debtors with respect to such US Credit Party's accounts and all
other Persons obligated to make payments of any type to any US Credit Party in
respect of the Collateral to direct such payments to the US Lockbox. All
invoices issued by any US Credit Party after the Closing Date shall contain a
notation requiring the accounts evidenced by such invoice to be paid to the US
Lockbox. The Administrative Agent shall have sole and exclusive access to the US
Lockbox. All monies, checks and other drafts received in the US Lockbox shall be
endorsed in accordance with the Lockbox Agreement and deposited by the
Administrative Agent each Business Day in the US Blocked Account.
Section 4.4 Establishment of Canadian Lockbox. The Canadian Borrowers
have entered into the Lockbox Agreement with the Canadian Administrative Agent
and the Canadian Lockbox Bank pursuant to which each Canadian Credit Party has
established a Canadian Lockbox to be operated by the Canadian Lockbox Bank. Each
Canadian Credit Party not already a party to the Lockbox Agreement with the
Canadian Administrative Agent shall enter into such Lockbox Agreement. At all
times from and after the Closing Date, each Canadian Credit Party after the
Closing Date shall direct all account debtors with respect to such Canadian
Credit Party's accounts and all other Persons obligated to make payments of any
type to any Canadian Credit Party to direct such payments to the Canadian
Lockbox. All invoices issued by any Canadian Credit Party shall contain a
notation requiring the Accounts evidenced by such invoice to be paid to the
Canadian Lockbox. Canadian Lockbox Bank, for the benefit of the Canadian
Administrative Agent, shall have sole and exclusive access to the Canadian
Lockbox. All monies, checks and other drafts received in the Canadian Lockbox
shall be endorsed in accordance with the Lockbox Agreement and deposited by
Canadian Lockbox Bank each Business Day in the Canadian Blocked Account.
Section 4.5 Establishment of US Blocked Account. As of March 28, 2002
and so long as this Agreement is in effect or any Lender Indebtedness shall be
outstanding, the US Borrowers acknowledge and agree that all funds received by
any US Credit Party from any source, have been and shall continue to be
deposited in the US Blocked Account not later than one Business Day following
the date of receipt. Such deposit shall be made in the exact form received
subject only to any necessary endorsements. The US Borrowers hereby acknowledge
and agree (a) that none of them nor the other Credit Parties have any power of
withdrawal over the funds in the US Blocked Account, (b) that each US Credit
Party has granted a Lien on and pledged to Administrative Agent as additional
collateral security for the US Lender Indebtedness, in the US Blocked Account
and all funds on deposit therein and "control" has been established with respect
to such US Blocked Account as defined in Section 9.104 of the UCC, (c) no US
Credit Party may unilaterally terminate the US Blocked Account, and (d) the US
Blocked Account and all funds on deposit therein shall be subject to the
absolute dominion and control of Administrative Agent. Each of US Borrowers and
the Administrative Agent agree that the US Blocked Account is a "deposit
account" within the meaning of 9-102(a)(29) of the UCC and that for purposes of
Section 9-304 of this UCC, the State of New York shall be the jurisdiction of
the Administrative Agent.
Section 4.6 Establishment of Canadian Blocked Account. As of March 28,
2002 and so long as this Agreement is in effect or any Canadian Lender
Indebtedness shall be outstanding, the Canadian Borrowers acknowledge and agree
that all funds received by any Canadian Credit Party from any source (including
without limitation items of payment and other amounts deposited in the Canadian
Lockbox) have been and shall continue to be deposited in the Canadian Blocked
Account not later than one Business Day following the date of receipt. The
Canadian Borrowers hereby acknowledge and agree (a) that none of them nor the
other Credit Parties have any power of withdrawal over the funds in the Canadian
Blocked Account, (b) that each Canadian Credit Party has granted a Lien on and
pledged to the Canadian Administrative Agent as additional collateral security
for the Canadian Lender Indebtedness, the Canadian Blocked Account and all funds
on deposit therein, (c) no Canadian Credit Party may unilaterally terminate the
Canadian Blocked Account, and (d) the Canadian Blocked Account and all funds on
deposit therein shall be subject to the absolute dominion and control of the
Canadian Administrative Agent.
Section 4.7 Application of Proceeds of US Blocked Account. All funds
received by the Administrative Agent in the US Blocked Account shall be applied
to the Lender Indebtedness in the manner set forth in Section 2.11(c) herein.
Section 4.8 Application of Proceeds of Canadian Blocked Account. All
funds received by Canadian Administrative Agent from the Canadian Blocked
Account or otherwise from the Canadian Lockbox Bank shall be applied to the
Canadian Lender Indebtedness in the manner set forth in Section 2.11(d) herein.
Article 5 REPRESENTATIONS AND WARRANTIES
In order to induce the Agents and the Lenders to enter into this
Agreement, each Borrower hereby represents and warrants to each Agent and each
Lender that each statement set forth in this Article 5 is true and correct on
the date hereof and will be true and correct on the date each Borrowing and each
Letter of Credit is requested hereunder and on the date each Borrowing is
disbursed and each Letter of Credit is issued hereunder; provided, that, each
Canadian Borrower is only making such representations and warranties in regard
to itself and each other Canadian Borrower and only to the Canadian
Administrative Agent on behalf of the Canadian Lenders; provided, that, the
breach of any representations and warranties which pertain to the US Borrowers
in any material respect (even though not made by the Canadian Borrowers) will
give rise to an Event of Default and will result in the Canadian Administrative
Agent, the Administrative Agent and the Canadian Lenders having the right to
exercise all rights and remedies applicable upon an Event of Default, including,
without limitation, rights and remedies with respect to the Canadian Borrowers
and their assets. Except to the extent expressly provided otherwise herein, to
the extent such representations and warranties are made prior to the
consummation of the Acquisition Transactions, such representations and
warranties shall be deemed to be made as if the Acquisition Transactions had
occurred immediately prior to giving effect thereto. Each such representation
and warranty shall survive the execution and delivery of this Agreement and any
Borrowing or issuance of any Letter of Credit hereunder and shall not be
qualified or limited by any investigation undertaken by any Agent or any Lender
or any actual or constructive knowledge any Agent or any Lender may have or be
charged with indicating that any such representation or warranty is inaccurate
or incomplete in any respect.
Section 5.1 Corporate Existence. Each Credit Party is duly organized,
legally existing and in good standing under the laws of the jurisdictions in
which it is organized and is duly qualified to transact business and in good
standing in all jurisdictions wherein the Property owned or the business
transacted by it makes such qualification necessary, except where the failure to
be so qualified could not reasonably be expected to have a Material Adverse
Effect.
Section 5.2 Corporate Power and Authorization. Each Borrower is
authorized and empowered to create and issue the Notes; each Obligated Party is
duly authorized and empowered to execute, deliver and perform the Financing
Documents, including this Agreement, to which it is a party; and all corporate,
partnership or other action on any Obligated Party's part requisite for the due
creation and issuance of the Notes and for the due execution, delivery and
performance of the Financing Documents, including this Agreement, to which the
Obligated Parties (or any of them) are parties has been duly and effectively
taken.
Section 5.3 Binding Obligations. This Agreement does, and the Notes and
other Financing Documents to which any Obligated Party is a party will, when
issued and delivered under this Agreement, constitute legal, valid and binding
obligations of each Obligated Party that is a party thereto, and will be
enforceable in accordance with their respective terms (except that enforcement
may be subject to any applicable bankruptcy, insolvency or similar laws
generally affecting the enforcement of creditors' rights and subject to the
availability of equitable remedies).
Section 5.4 No Legal Bar or Resultant Lien. The execution, delivery and
performance of the Notes and the other Financing Documents, including this
Agreement, to which the Obligated Parties (or any of them) are parties do not
and will not violate or create a default under any provisions of the articles or
certificate of incorporation, bylaws, partnership agreement or other
organizational documents of any Obligated Party, or any contract, agreement,
instrument or Governmental Requirement to which any Obligated Party is subject
which violation or default could have a Material Adverse Effect, or result in
the creation or imposition of any Lien upon any Properties of any Obligated
Party.
Section 5.5 No Consent. Each Obligated Party's execution, delivery and
performance of the Notes and the other Financing Documents, including this
Agreement, to which such Obligated Party (or any of them) is a party, and the
consummation of the Acquisition Transaction do not require notice to or filing
or registration with, or the authorization, consent or approval of or other
action by any other Person, including, but not limited to, any Governmental
Authority, except those obtained or made or where the failure to do so could not
reasonably be expected to have a Material Adverse Effect.
Section 5.6 Financial Information.
(a) Financial Statements. The Financial Statements and the Current
Financials were prepared in accordance with GAAP and fairly present the
consolidated financial condition and results of operations of each of the
Company and Sellers as of the dates and for the periods reflected therein.
(b) [Intentionally Deleted].
(c) Pro-Forma Consolidating Balance Sheets. The pro forma consolidating
balance sheets of C&P as of November 30, 2002 fairly present in conformity with
GAAP the consolidating financial condition of C&P as of such date adjusted to
give effect to the Acquisition Transactions and the incurrence of the Lender
Indebtedness to be incurred on the Closing Date (and allocating such Lender
Indebtedness to C&P as set forth in such pro forma consolidating balance
sheets).
(d) Projections. The Projections set forth the Company's reasonable
best estimate as of the date hereof of the Company's consolidated financial
condition and results of operations as of the dates and for the periods covered
thereby. The Projections were prepared in good faith in accordance with sound
financial planning practices on the basis of the assumptions stated therein,
which assumptions were believed by the Company to be reasonable at the time made
and which the Company continues to believe are reasonable on the date hereof.
(e) No Material Adverse Effect. Since December 31, 2001, there has been
no event, condition or occurrence that has had or could reasonably be expected
to have a Material Adverse Effect.
Section 5.7 Litigation. There is no action, suit, claim, grievance or
proceeding, or any governmental investigation or any arbitration proceeding, in
each case pending (including any unsatisfied settlement, judgment decree or
order) or, to the knowledge of any Borrower, threatened against any Credit Party
or any Property of any Credit Party before any court or arbitrator or any
Governmental Authority, or pursuant to any collective bargaining agreement,
which (a) challenges the validity of this Agreement, any Note, any Application,
any Security Instrument or any of the other Financing Documents or (b) could
reasonably be expected to have a Material Adverse Effect. As of the Closing
Date, except as set forth in Schedule 5.7, there is no material action, suit or
proceeding, or any governmental investigation or any arbitration, in each case
pending or, to the knowledge of the Company or any Borrower, threatened against
any Credit Party or any Property thereof before any court or arbitrator or any
Governmental Authority.
Section 5.8 Use of Proceeds. The Borrowers will use the proceeds of the
Loans only for the purposes specified in the Recitals to this Agreement. The
Letters of Credit will be used only for the purposes provided in Section 2.3. No
Credit Party is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose, whether immediate, incidental
or ultimate, of buying or carrying Margin Stock (within the meaning of
Regulation U or X) and no part of the proceeds of any Loan hereunder will be
used to buy or carry any Margin Stock in violation of Regulation U or X. No
Credit Party nor any Person acting on behalf of any Credit Party has taken or
will take any action which could reasonably be expected to cause the Notes or
any of the Financing Documents, including this Agreement, to violate Regulations
U or X or any other regulation of the Board, in each case as now in effect or as
the same may hereinafter be in effect.
Section 5.9 US Employee Benefits.
(a) (1) Each US Credit Party and each ERISA Affiliate have complied in
all material respects with all applicable laws regarding each Plan; (A) each
Plan is, and has been, maintained and administered in substantial compliance
with its terms, applicable collective bargaining agreements, and all applicable
laws; and (B) no act, omission or transaction has occurred which could result in
an imposition on any US Credit Party or any ERISA Affiliate (whether directly or
indirectly) of (C) either a civil penalty assessed pursuant to Subsections (c),
(i) or (l) of Section 502 of ERISA or a tax imposed pursuant to Chapter 43 of
Subtitle D of the Code or (D) breach of fiduciary duty liability damages under
Section 409 of ERISA which could reasonably be expected to have a Material
Adverse Effect.
(b) There exists no outstanding liability of any US Credit Party or any
ERISA Affiliate with respect to any Plan that has been terminated. No material
liability to the PBGC (other than for the payment of current premiums which are
not past due) by any US Credit Party or any ERISA Affiliate has been or is
expected by any US Credit Party or any ERISA Affiliate to be incurred with
respect to any Plan. No ERISA Termination Event with respect to any Plan has
occurred or is reasonably expected to occur.
(c) Full payment when due has been made of all amounts which any US
Credit Party or any ERISA Affiliate is required under the terms of each Plan or
applicable law to have paid as contributions to such Plan (excluding any
nonpayment involving an amount that is not material), and no accumulated funding
deficiency (as defined in Section 302 of ERISA and Section 412 of the Code),
whether or not waived, exists with respect to any Plan.
(d) Except as set forth on Schedule 5.9 hereto, the actuarial present
value of the benefit liabilities (computed on an accumulated benefit obligation
basis in accordance with GAAP) under all Plans in the aggregate that are subject
to Title IV of ERISA does not, as of the end of the most recently ended fiscal
year of such Plans, exceed the current value of the assets of all Plans in the
aggregate that are allocable to such benefit liabilities. The term "actuarial
present value of the benefit liabilities" shall have the meaning specified in
Section 4041 of ERISA.
(e) Neither any US Credit Party nor any ERISA Affiliate sponsors,
maintains or contributes to, or has at any time sponsored, maintained or
contributed to, any "multiemployer plan" (as defined in Section 3(37) or
4001(a)(3) of ERISA).
(f) Neither any US Credit Party nor any ERISA Affiliate is required to
provide security to a Plan pursuant to Section 401(a)(29) of the Code.
Section 5.10 Canadian Employee Benefits.
(a) Except as could not reasonably be expected to have a Material
Adverse Effect (1) each Canadian Credit Party has complied in all material
respects with all applicable laws regarding each Plan (including, where
applicable, the Employment Pension Plans Act (Alberta) and the Income Tax Act
(Canada)); or (2) each Plan is, and has been, maintained and administered in
substantial compliance with its terms, applicable collective bargaining
agreements, and all applicable laws (including, where applicable, the Employment
Pension Plans Act (Alberta) and the Income Tax Act (Canada)).
(b) There exists no material outstanding liability of any Canadian
Credit Party with respect to any Plan that has been terminated.
(c) Except for the funding deficiency in the Prudential Steel, Ltd.
Hourly Plan which was $2,158,000 at December 31, 2001, full payment when due has
been made of all amounts which any Canadian Credit Party is required under the
terms of each Plan or applicable law to have paid as contributions to such Plan
(excluding any nonpayment involving an amount that is not material), and no
accumulated funding deficiency, whether or not waived, resulting from the action
or inaction of any Canadian Credit Party exists with respect to any Plan.
(d) Each Plan relating to a Canadian Credit Party is fully funded, on a
going concern basis, in accordance with its terms and regulatory requirements as
outlined by the Employment Pension Plans Act (Alberta), administrative
requirements of the Superintendent of Pensions of Alberta and the most recent
actuarial report filed with the Superintendent of Pensions of Alberta in respect
of such Plan, as and to the extent applicable, except to the extent any failure
to do so could not reasonably be expected to have a Material Adverse Effect.
(e) No Canadian Credit Party sponsors, maintains or contributes to, or
has at any time sponsored, maintained or contributed to any "specified
multi-employer plan" (as defined in the Employment Pension Plans Act (Alberta).
Section 5.11 Taxes; Governmental Charges. Each Credit Party has filed
all tax returns and reports required to be filed and has paid all taxes,
assessments, fees and other governmental charges levied upon any of them or upon
any of their respective Properties or income which are due and payable after all
available extension periods, including interest and penalties or have except to
the extent being diligently contested in good faith by appropriate proceedings
and with respect to which such Credit Party has provided adequate reserves for
the payment thereof if required in accordance with GAAP.
Section 5.12 Titles, etc. Each Credit Party has good and indefeasible
title to its respective Properties, and with respect to leased Properties, good
and indefeasible title to the leasehold estate with respect thereto, pursuant to
valid and enforceable leases, free and clear of all Liens except Liens otherwise
permitted or contemplated by this Agreement or the other Financing Documents.
Section 5.13 Defaults. No Credit Party is in default nor has any event
or circumstance occurred which, but for the passage of time or the giving of
notice, or both, would constitute a default (in any respect that could
individually or in the aggregate, have a Material Adverse Effect) under any loan
or credit agreement, indenture, mortgage, deed of trust, security agreement or
other instrument or agreement evidencing or pertaining to any Indebtedness of
any Credit Party, or under any agreement or instrument to which any Credit Party
is a party or by which any Credit Party is bound. No Default hereunder has
occurred and is continuing.
Section 5.14 Casualties; Taking of Properties. Neither the business nor
the Properties of any Credit Party has been affected in a manner that has or
could have a Material Adverse Effect as a result of any fire, explosion,
earthquake, flood, drought, windstorm, accident, strike or other labor
disturbance, embargo, requisition or taking of Property or cancellation of
contracts, permits or concessions by any domestic or foreign government or any
agency thereof, riot, activities of armed forces or acts of God or of any public
enemy.
Section 5.15 Compliance with the Law. Except as set forth in Schedule
5.15, no Credit Party:
(a) is in violation of any Governmental Requirement; or
(b) has failed to obtain any license, permit, right-of-way, franchise
or other right or governmental authorization necessary to the ownership of any
of their respective Properties or the conduct of their respective business;
which violation or failure could, individually or in the aggregate, have (in the
event that such a violation or failure were asserted by any Person through
appropriate action) a Material Adverse Effect.
Section 5.16 No Material Misstatements. No written information,
exhibit, schedule or report prepared by or on behalf of any Borrower and
furnished to the Administrative Agent or the Lenders by or at the direction of
any Borrower in connection with the negotiation of this Agreement contained any
material misstatement of fact or, when such statement is considered with all
other written statements furnished to the Lenders in that connection, omitted to
state a material fact or any fact necessary to make the statement contained
therein not misleading; provided, that, except as provided in Section 5.6(d) no
representation or warranty is made with respect to the Projections.
Section 5.17 Investment Company Act. No Borrower is an "investment
company" or a company "controlled" by an "investment company" that is
incorporated in or organized under the laws of the United States or any "State,"
as those terms are defined in the Investment Company Act of 1940, as amended.
The execution and delivery by the Obligated Parties of this Agreement and the
other Financing Documents to which they respectively are parties and their
respective performance of the obligations provided for therein, will not result
in a violation of the Investment Company Act of 1940, as amended.
Section 5.18 Public Utility Holding Company Act. No Borrower is a
"holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company," or a "public utility" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
Section 5.19 Capital Structure. Schedule 5.19 hereto accurately
reflects, as of the date hereof (a) the jurisdiction of incorporation or
organization of each Credit Party, (b) each jurisdiction in which each Credit
Party is qualified to transact business as a foreign corporation, foreign
partnership or foreign limited liability company, (c) the authorized, issued and
outstanding Equity of each Credit Party, including the names of (and number of
shares or other Equity interest held by) the record and beneficial owners of
such securities (other than with respect to the Company). Except as set forth in
Schedule 5.19 hereto, there are no outstanding shareholders agreements, voting
agreements or other agreements of any nature which in any way restrict or effect
the transfer, pledge or voting of any of the Equity securities of any Credit
Party or subject any of such securities to any put, call, redemption obligation
or similar right or obligation of any nature.
Section 5.20 Insurance. All policies of fire, liability, workmen's
compensation, casualty, flood, business interruption and other forms of
insurance owned or held by each Credit Party are sufficient for compliance with
all requirements of law and of all agreements to which each Credit Party is a
party; are valid, outstanding and enforceable policies; provide adequate
insurance coverage in at least such amounts and against at least such risks (but
including in any event public liability) as are usually insured against in the
same general area by companies engaged in the same or a similar business for the
assets and operations of the Credit Parties; and will not in any way be affected
by, or terminate or lapse by reason of, the transactions contemplated by this
Agreement. All such policies are in full force and effect, all premiums with
respect thereto have been paid in accordance with their respective terms, and no
notice of cancellation or termination has been received with respect to any such
policy. Except as provided on Schedule 5.20 hereto, no Credit Party maintains
any formalized self-insurance program with respect to its assets or operations
or risks with respect thereto. The certificate of insurance delivered to the
Lenders pursuant to Section 3.1(g) contains an accurate and complete description
of all policies of insurance owned or held by each Credit Party on the Closing
Date.
Section 5.21 Environmental Matters.
(a) Environmental Laws, etc. Except as disclosed on Schedule 5.21
hereto, neither any Property of any Credit Party nor the operations conducted
thereon violate any applicable order of any court or Governmental Authority or
Environmental Laws, which violation could reasonably be expected to have a
Material Adverse Effect or which could reasonably be expected to result in
remedial obligations having a Material Adverse Effect assuming disclosure to the
applicable Governmental Authority of all relevant facts, conditions and
circumstances, if any, pertaining to the relevant Property.
(b) No Litigation. Except as disclosed on Schedule 5.21 hereto, no
Property of any Credit Party nor the operations currently conducted thereon or
by any prior owner or operator of such Property or operation, are subject to any
existing, pending or, to the knowledge of the Company and each Borrower,
threatened action, suit, investigation, inquiry or proceeding by or before any
court or Governmental Authority or to any remedial obligations under
Environmental Laws.
(c) Notices, Permits, etc. Except as disclosed on Schedule 5.21 hereto,
all notices, permits, licenses or similar authorizations, if any, required to be
obtained or filed by any Credit Party in connection with the operation or use of
any and all Property of the Credit Parties, including but not limited to past or
present treatment, storage, disposal or release of a hazardous substance or
solid waste into the environment, have been duly obtained or filed except for
those notices, permits, licenses or authorizations the failure of which to
obtain could not reasonably be expected to have a Material Adverse Effect
assuming disclosure to the applicable Governmental Authority of all relevant
facts, conditions and circumstances, if any, pertaining to such operations or
use.
(d) Hazardous Substances Carriers. Except as disclosed on Schedule 5.21
hereto, all hazardous substances or solid waste generated at any and all
Property of any Credit Party have in the past been transported, treated and
disposed of only by carriers maintaining valid permits under RCRA (or comparable
legislative provisions in Canada for the Canadian Borrowers) and any other
Environmental Law, and only at treatment, storage and disposal facilities
maintaining valid permits under RCRA and any other Environmental Law, which
carriers and facilities have been and are operating in compliance with such
permits.
(e) Hazardous Substances Disposal. Each Credit Party has taken all
reasonable steps necessary to determine and has determined that no hazardous
substances or solid waste has been disposed of or otherwise released and there
has been no threatened release of any hazardous substances on or to any Property
of any Credit Party except in compliance with Environmental Laws.
(f) No Contingent Liability. The Credit Parties have no contingent
liability in connection with any release or threatened release of any hazardous
substance or solid waste into the environment other than such contingent
liabilities at any one time and from time to time which could not reasonably be
expected to exceed $1,000,000.
Section 5.22 Solvency. Each Credit Party is Solvent, both before and
after giving affect to the Acquisition Transactions and the incurrence of all
Lender Indebtedness to be incurred in connection therewith.
Section 5.23 Employee Matters. Except as disclosed on Schedule 5.23, no
Credit Party, nor any of their respective employees, is subject to any
collective bargaining agreement. There are no strikes, slowdowns, work
stoppages, union organizing campaigns or representation petitions, unfair labor
practices or labor disputes pending or, to the best knowledge of the Borrowers,
threatened against any Credit Party, or their respective employees, which could
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect. As of the Closing Date, except as set forth in Schedule
5.23, no employees are subject to an employment contract or other arrangement
obligating a Credit Party to pay an employee an amount in excess of such
employee's regular salary, wages or benefits (whether or not such payment is
based on a contingent event including but not limited to termination of
employment or change of control of a Credit Party).
Section 5.24 Real Property. Schedule 5.24 hereto accurately reflects,
as of the date hereof, all Real Property in which any Credit Party holds any
right, title or interest including any leasehold interest. Schedule 5.24 further
accurately reflects, in respect of each parcel of Real Property described
thereon, the name of the Credit Party which is the owner and holder of record
title thereto, the nature of the interest of the Credit Parties therein (fee,
leasehold or other), and, in the case of any leasehold interest described
therein, the name of the landlord under such lease and a description of such
lease, including all amendments thereto. No Credit Party is in monetary default
or in default of any other material obligation under any such Lease, and, to
each Borrower's knowledge, no landlord under any such lease is in default of any
material obligation of such landlord thereunder. No Credit Party has received
any written notice alleging any default or any written notice of actual or
threatened termination or cancellation of any such lease.
Section 5.25 Perfection Certificate; Schedules to other Financing
Documents. All information in each Perfection Certificate and all information
set forth in all disclosure schedules to each of the other Financing Documents
is true, correct and complete.
Section 5.26 Existing Indebtedness. Schedule 5.26 hereto contains an
accurate and complete list and description of all Existing Indebtedness of the
Credit Parties on the Closing Date prior to giving effect to the repayment of
any such Indebtedness to be repaid on the Closing Date, and including, with
respect to each such item of Existing Indebtedness: (a) the current lender or
holder of such Indebtedness, (b) the principal amount of such Indebtedness on
the Closing Date, (c) a description of the material loan agreements, promissory
notes and other documents evidencing, governing or otherwise pertaining to such
Indebtedness, and (d) a description of all property which stands as security for
such Indebtedness.
Section 5.27 Purchase Documents. The Borrowers have provided to the
Administrative Agent a true and correct copy of the Purchase Agreement and all
other material documents, instruments and agreements entered into by and between
or among any Credit Party and the Sellers related to the Acquisition, including
all amendments and modifications thereto (whether characterized as an amendment,
modification, waiver, consent or similar document) (collectively, the "Purchase
Documents"). No material rights or obligations of any party to any of the
Purchase Documents have been waived and no party to any of the Purchase
Documents is in default of its obligations or in breach of any representations
or warranties made thereunder. Each of the Purchase Documents is a valid,
binding and enforceable obligation of each party thereto in accordance with its
terms and is in full force and effect. Each representation and warranty made by
each party in the Purchase Documents is true and correct on the date hereof and
will be true and correct on the Closing Date.
Section 5.28 Precision Purchase Documents. The Borrowers have provided
to the Administrative Agent a true and correct copy of the Stock Purchase
Agreement dated as if February 15, 2002 by and among the Company, Holding and
the then existing stockholders of Holding (such stockholders are referred to
herein as the "Precision Sellers") and all other material documents, instruments
and agreements entered into by and between or among any Credit Party and the
Precision Sellers related to the purchase of all of the issued and outstanding
capital stock of Holding of every class, including all amendments and
modifications thereto (whether characterized as an amendment, modification,
waiver, consent or similar document) (collectively, the "Precision Purchase
Documents"). No material rights or obligations of any party to any of the
Precision Purchase Documents have been waived and no party to any of the
Precision Purchase Documents is in default of its obligations or in breach of
any representations or warranties made thereunder. Each of the Precision
Purchase Documents is a valid, binding and enforceable obligation of each party
thereto in accordance with its terms and is in full force and effect. Each
representation and warranty made by each party in the Precision Purchase
Documents is true and correct on the date hereof and will be true and correct on
the Closing Date.
Section 5.29 Representations With Respect to Certain Credit Parties.
None of Precision International, Maverick International or Exchangeco (a)
conducts any business or operations, (b) owns, leases, licenses or otherwise has
the right to use any Property (other than Exchangeco's ownership of all of the
issued and outstanding Equity of Tube Canada), (c) has any liabilities or
obligations to any Person, or (d) has any employees.
Section 5.30 Accounts. Other than the accounts specifically permitted
by Section 7.18 hereof, none of the Borrowers maintains any account with any
bank or other depository institution into which any cash or cash equivalents are
deposited or cash or cash equivalents or maintained.
Article 6 AFFIRMATIVE COVENANTS
So long as any Lender has any Commitment hereunder or any Loan remains
unpaid or any Revolving Credit Exposure remains outstanding, each Borrower will
at all times comply with the following covenants; provided, that,
notwithstanding anything to the contrary set forth in any Section of this
Article 6, no Canadian Borrower will be obligated to cause anyone other than
other Canadian Borrowers to comply with the covenants of this Article 6 or be
obligated in regard to any such covenants to the extent they do not relate to
the Canadian Borrowers or any of them; provided, that the non-performance of
such covenants with respect to the US Borrowers (even though the Canadian
Borrowers are not obligated to ensure compliance with such covenants) will,
subject to Article 8, give rise to Events of Default and will result in the
Canadian Administrative Agent, the Administrative Agent and the Canadian Lenders
having the right to exercise all rights and remedies applicable upon an Event of
Default, including, without limitation, rights and remedies with respect to the
Canadian Borrowers and their assets.
Section 6.1 Maintenance and Compliance, etc. Each Borrower will and
will cause each other Credit Party to (a) observe and comply with all
Governmental Requirements, except where failure to do so could not reasonably be
expected to have a Material Adverse Effect, and (b) preserve and maintain its
corporate existence. Notwithstanding the foregoing, the Precision Transactions
shall be expressly permitted hereunder.
Section 6.2 Payment of Taxes and Claims, etc. Each Borrower will pay,
and cause each other Credit Party to pay, (a) all material taxes, assessments
and governmental charges imposed upon it or upon its Property, and (b) all
material claims (including, but not limited to, claims for labor, materials,
supplies or services) which could reasonably be expected, if unpaid, to become a
Lien upon its Property, unless, in each case, the validity or amount thereof is
being contested in good faith by appropriate action or proceedings and the
Borrowers have made adequate reserves for the payment thereof if required in
accordance with GAAP.
Section 6.3 Further Assurances. Each Borrower will and will cause each
other Obligated Party to cure promptly any defects in the creation and issuance
of the Notes, and the execution and delivery of the Financing Documents,
including this Agreement. Each Borrower at its expense will, as promptly as
practical, execute and deliver to the Administrative Agent or the applicable
Issuing Bank upon request all such other and further documents, agreements and
instruments (or cause any of the other Obligated Parties to take such action) in
compliance with or performance of the covenants and agreements of the Borrowers
in the Financing Documents, including this Agreement, or to further evidence and
more fully describe the Collateral, or to correct any omissions in the Financing
Documents, or more fully to state the security obligations set out herein or in
any of the Financing Documents, or to perfect, protect or preserve any Liens
created pursuant to any of the Financing Documents, or to make any recordings,
to file any notices, or obtain any consents, all as may be necessary or
appropriate in connection therewith.
Section 6.4 Performance of Obligations. Each Borrower will pay or cause
to be paid, the Notes with respect to which it is a maker or guarantor according
to the reading, tenor and effect thereof; and each Borrower will do and perform
every act and discharge all of the obligations provided to be performed and
discharged by it under the Financing Documents, including this Agreement, at the
time or times and in the manner specified, and cause each other Credit Party to
take such action with respect to their obligations to be performed and
discharged under the Financing Documents to which they respectively are parties.
Section 6.5 Insurance. Each Borrower will and will cause each of the
other Credit Parties to maintain or cause to be maintained, with financially
sound and reputable insurers, insurance with respect to their respective
Properties and business against such liabilities, casualties, risks and
contingencies and in such types (including business interruption insurance,
marine insurance insuring all Included-In-Transit Inventory, and flood
insurance) and amounts as the Administrative Agent shall require and as shall be
required in accordance with any Governmental Requirement. Each Borrower will
obtain endorsements to the policies naming the Administrative Agent or the
Canadian Administrative Agent, as applicable, as a loss payee and as an
additional insured, as applicable, and containing provisions that such policies
will not be canceled without 30 days prior written notice having been given by
the insurance company to the Administrative Agent or the Canadian Administrative
Agent, as applicable.
Section 6.6 Accounts and Records. Each Borrower will keep and will
cause each of the other Credit Parties to keep proper books of record and
account in accordance with GAAP.
Section 6.7 Right of Inspection. Each Borrower will permit and will
cause each of the other Credit Parties to permit any officer, employee or agent
of the Administrative Agent or any Lender to visit and inspect any of the
Properties of the Credit Parties, examine any Credit Party's books of record and
accounts, take copies and extracts therefrom, and discuss the affairs, finances
and accounts of the Credit Parties with any Credit Party's executive officers,
accountants and auditors, as often and all at such reasonable times during
normal business hours and upon reasonable advance notice all as may be
reasonably requested by the Administrative Agent or the Required Lenders;
provided, that, such inspection rights shall not be limited or conditioned by
reasonable prior notice or reasonable times during the existence of a Default or
Event of Default without limiting the foregoing, the Borrowers agree to hold a
meeting with all Lenders at least once a year to discuss the business and
affairs of the Borrowers.
Section 6.8 Operation and Maintenance of Property. Each Borrower will,
and will cause each other Credit Party to, operate its Properties or cause its
Properties to be operated and maintained (a) in accordance with prudent industry
practice in all material respects and in compliance in all material respects
with the terms and provisions of all applicable leases, contracts and agreements
and (b) in compliance with all applicable laws of the jurisdiction in which such
Properties may be situated, and all applicable laws, rules and regulations of
every other Governmental Authority from time to time constituted to regulate the
ownership and operation of such Properties, except where the noncompliance
therewith could not reasonably be expected to cause or result in a Material
Adverse Effect.
Section 6.9 New Subsidiaries; Additional Liens.
(a) If at any time after the Closing Date, any Borrower creates or
acquires (subject to Section 7.6, Section 7.16, and Section 7.17) any one or
more Subsidiaries (a "New Subsidiary") each Borrower shall cause such New
Subsidiary to execute and deliver, at the time of such Subsidiary's creation or
acquisition, to (1) the Administrative Agent a Borrower Joinder Agreement (a
"Borrower Joinder Agreement") in the form of Exhibit L, attached hereto pursuant
to which such Subsidiary becomes a party to this Agreement and a US Borrower or
a Canadian Borrower hereunder as applicable, (2) the Administrative Agent, if
such New Subsidiary is a US Credit Party, for the benefit of the Administrative
Agent, the Lenders and the Issuing Banks, (i) an Addendum to the Guaranty and
Security Agreement in the manner contemplated by Section 8.13 of the Guaranty
and Security Agreement, and (ii) other appropriate Security Instruments covering
such New Subsidiary's Property as security for the Lender Indebtedness, in form
and substance acceptable to the Administrative Agent, and (3) the Canadian
Administrative Agent, if such New Subsidiary is a Canadian Credit Party, for the
benefit of the Canadian Administrative Agent, the Lenders and the Issuing Banks,
(i) an Addendum to the Canadian Security Agreement in the manner contemplated by
Section 7.13 of the Canadian Security Agreement, and (ii) other appropriate
Security Instruments covering such New Subsidiary's Property as security for the
Canadian Lender Indebtedness, in form and substance acceptable to the Canadian
Administrative Agent.
(b) In connection with the execution and delivery of any Borrower
Joinder Agreement, Addendum or Security Document pursuant to this Section 6.9,
the Borrowers shall, or shall cause the relevant New Subsidiary to, deliver to
the Administrative Agent or the Canadian Administrative Agent, as applicable,
for the benefit of the Lenders, resolutions, member or partner consents,
certificates, legal opinions and such other related documents as shall be
reasonably requested by the Administrative Agent and the Canadian Administrative
Agent and consistent with the relevant forms and types thereof delivered on the
Closing Date or as shall be otherwise reasonably acceptable to the Required
Lenders. Each Security Instrument delivered pursuant to this Section 6.9 shall
be deemed to be a Security Instrument from and after the date of execution
thereof.
Section 6.10 Reporting Covenants. So long as any Lender has any
Commitment hereunder or any Loan remains unpaid or any Revolving Credit Exposure
remains outstanding, the Company and the Borrowers will furnish the following to
each of the Lenders:
(a) Annual Financial Statements. As soon as available and in any event
within 90 days after the end of each Fiscal Year, consolidating and consolidated
balance sheets of the Company and its Subsidiaries as at the end of such year
and the related consolidating and consolidated statements of income, retained
earnings and cash flows of the Company and its Subsidiaries for such Fiscal
Year, setting forth in each case in comparative form the figures for the
previous Fiscal Year, all in reasonable detail and accompanied by the
unqualified report thereon of independent public accountants of recognized
national standing, which report shall state that such consolidated financial
statements present fairly the consolidated financial condition as at the end of
such Fiscal Year, and the consolidated results of operations and cash flows for
such Fiscal Year, of the Company and its Subsidiaries in accordance with GAAP,
applied on a consistent basis; provided, that, the consolidating balance sheets
and consolidating statements of income, retained earnings and cash flow of the
Company and its Subsidiaries are not required to be audited.
(b) Monthly Financial Statements. As soon as available and in any event
within 30 days after the end of each calendar month of the Company,
consolidating and consolidated balance sheet of the Company and its Subsidiaries
as at the end of such month and the related consolidating and consolidated
statements of income, retained earnings and cash flows of the Company and its
Subsidiaries for such calendar month and for the portion of the Company's Fiscal
Year ended at the end of such month, setting forth in each case in comparative
form the figures for the corresponding month and the corresponding portion of
the Company's previous Fiscal Year, all in reasonable detail and certified by a
Responsible Officer that such financial statements are complete and correct and
fairly present the consolidated financial condition as at the end of such
calendar month, and the consolidating and consolidated results of operations and
cash flows for such calendar month and such portion of the Company's Fiscal
Year, of the Company and its Subsidiaries in accordance with GAAP (subject to
normal, year-end adjustments and the absence of footnotes).
(c) No Default/Compliance Certificate. Together with the financial
statements required pursuant to Section 6.10(a) and Section 6.10(b) above, a
certificate of the Company, which shall be substantially in the form of Exhibit
M hereto and signed by a Responsible Officer (1) stating that a review of such
financial statements during the period covered thereby and of the activities of
the Company and its Subsidiaries has been made under such Responsible Officer's
supervision with a view to determining whether the Company and its Subsidiaries
have fulfilled in all material respects all of their obligations under this
Agreement, the other Financing Documents, and the Notes; (2) stating that the
Company and its Subsidiaries have fulfilled in all material respects their
obligations under such instruments and that all representations made in this
Agreement continue to be true and correct in all material respects (or
specifying the nature of any change), or if there shall be a Default or Event of
Default, specifying the nature and status thereof and the Company's proposed
response thereto; (3) demonstrating in reasonable detail compliance (including,
but not limited to, showing all material calculations) as at the end of such
Fiscal Year or such Fiscal Quarter with Section 7.1(a), Section 7.2(f), Section
7.2(g), Section 7.2(h), and Section 7.15; (4) containing or accompanied by such
financial or other details, information and material as the Administrative Agent
may reasonably request to evidence such compliance; and (5) stating that no
event has occurred or condition exists that has had or reasonably could be
expected to have a Material Adverse Effect.
(d) Management Letters. Together with the financial statements required
pursuant to Section 6.10(a) above, copies of each management letter, if any,
issued to the Company by such accountants promptly following consideration or
review by the Board of Directors of the Company, or any committee thereof
(together with any response thereto prepared by the Company).
(e) Title Information. Within a reasonable time after a request by the
Administrative Agent, additional title information in form and substance
acceptable to the Required Lenders as is reasonably necessary covering the
Collateral so that the Lenders shall have received, together with the title
information previously received by the Lenders, satisfactory title information
covering all of the Collateral.
(f) Events or Circumstances with respect to Collateral. Promptly after
the occurrence of any event or circumstance concerning or changing any of the
Collateral that could have a Material Adverse Effect, notice of such event or
circumstance in reasonable detail.
(g) Borrowing Base Reports; Perfection Certificate Update. As soon as
available, and in any event on or before the 20th day of each calendar month (or
the next succeeding Business Day if such day is not a Business Day), (1) a
Canadian Borrowing Base Report and a US Borrowing Base Report, dated and
reflecting the US Borrowing Base and US Maximum Available Amount and the
Canadian Borrowing Base and Canadian Maximum Available Amount as of the close of
business on the last Business Day of the preceding calendar month (subject to
Borrower's rights to make Permitted Borrowing Base Adjustments), (2) a
Perfection Certificate Update prepared as of the close of business on the last
Business Day of the preceding calendar month, (3) an accounts receivable aging,
payables aging and inventory aging prepared as of the close of business on the
last Business Day of the preceding calendar month, and (4) a summary of all Swap
Agreements to which any Borrower is subject as of the last Business Day of the
preceding calendar month, in form, substance and detail acceptable to the
Administrative Agent; provided, however, (x) at any time that Excess
Availability shall be below $30,000,000, the Administrative Agent, in its
discretion, may require the delivery of reports setting forth the Eligible
Accounts and Eligible ▇▇▇▇ and Hold Accounts components of the US Borrowing Base
and Canadian Borrowing Base more frequently than monthly (including daily) in
which event the US Borrowing Base and Canadian Borrowing Base (as applicable)
would be adjusted immediately upon delivery of such reports based on the
Eligible Accounts and Eligible ▇▇▇▇ and Hold Accounts reflected in such reports,
and (y) at any time that Excess Availability shall be below $15,000,000, the
Administrative Agent, in its discretion, may require the delivery of reports
setting forth the Eligible Inventory, Eligible Included-in-Transit Inventory,
Eligible WIP Inventory, and Eligible Bailee Inventory on a weekly basis, in
which event the Eligible Inventory, Eligible Included-in-Transit Inventory,
Eligible WIP Inventory, and Eligible Bailee Inventory, components of the US
Borrowing Base and Canadian Borrowing Base (as applicable) would be adjusted
immediately upon delivery of such reports. In the event more frequent reporting
of the accounts and inventory components of the US Borrowing Base and the
Canadian Borrowing Base is required pursuant to this Section 6.10(g), such
reports shall be in the form of the Interim Account Reports attached hereto as
Exhibits N-1 and N-2, as applicable, and the Inventory Designation Reports
attached hereto as Exhibits O-1 and O-2, as applicable.
(h) Notice of Certain Events. Promptly after any Borrower learns of the
receipt or occurrence of any of the following, a certificate of the Borrowers,
signed by a Responsible Officer specifying (1) any official notice of any
violation, possible violation, non-compliance or possible non-compliance, or
claim made by any Governmental Authority pertaining to all or any part of the
Properties of any Credit Party which could reasonably be expected to have a
Material Adverse Effect; (2) any event which constitutes a Default or Event of
Default, together with a detailed statement specifying the nature thereof and
the steps being taken to cure such Default or Event of Default; (3) the receipt
of any notice from, or the taking of any other action by, the holder of any
promissory note, debenture or other evidence of Indebtedness in excess of
$1,000,000 of any Credit Party with respect to a claimed default, together with
a detailed statement specifying the notice given or other action taken by such
holder and the nature of the claimed default and what action the Borrowers are
taking or propose to take with respect thereto; (4) any default or noncompliance
of any party to any of the Financing Documents with any of the terms and
conditions thereof or any notice of termination or other proceedings or actions
which could reasonably be expected to adversely affect any of the Financing
Documents; (5) the creation, dissolution, merger or acquisition of any Credit
Party; (6) any event or condition not previously disclosed to the Administrative
Agent, which violates any Environmental Law or which could reasonably be
expected to have a Material Adverse Effect; (7) any material amendment to,
termination of, or default under any material contract or any execution of, or
material amendment to, termination of, or material default under, any material
collective bargaining agreement; or (8) any event or condition which may
reasonably be expected to have a Material Adverse Effect.
(i) Shareholder Communications, Filings. Promptly upon the mailing,
filing, or making thereof, copies of all registration statements, periodic
reports and other documents (excluding the related exhibits except to the extent
expressly requested by the Administrative Agent) filed by any Credit Party with
the Securities and Exchange Commission (or any successor thereto) or any
national or Canadian regional securities exchange or provincial securities
commission.
(j) Litigation. Promptly after the occurrence thereof, notice of the
institution of or any material adverse development in any action, suit, claim,
grievance or proceeding or any governmental investigation or any arbitration,
before any arbitrator or any Governmental Authority, or pursuant to any
collective bargaining agreement against any Credit Party or any material
Property of any thereof, in which the amount involved is material and is not
covered by insurance or which, if adversely determined, would have a Material
Adverse Effect.
(k) ERISA. Promptly after (1) any Credit Party obtaining knowledge of
the occurrence thereof, notice that an ERISA Termination Event or a "prohibited
transaction," as such term is defined in Section 406 of ERISA or Section 4975 of
the Code, with respect to any Plan has occurred (for which there is no
exemption), which such notice shall specify the nature thereof, the Borrowers'
proposed response thereto (and, if applicable, the proposed response thereto of
any Subsidiary of the Borrowers and of any ERISA Affiliate) and, where known,
any action taken or proposed by the Internal Revenue Service, the Department of
Labor or the PBGC with respect thereto, (2) any Credit Party's obtaining
knowledge thereof, copies of any notice of the PBGC's intention to terminate or
to have a trustee appointed to administer any Plan, and (3) the filing thereof
with any Governmental Authority copies of each annual and other report
(including applicable schedules) with respect to each Plan or any trust created
thereunder (if requested by the Administrative Agent).
(l) Borrowing Base Audit. Two times during any Fiscal Year, as of a
date to be designated by the Administrative Agent, but at the cost of the
Borrowers, a report of a collateral field examiner approved by the
Administrative Agent in writing and reasonably acceptable to the Borrowers
(which may be the Administrative Agent or an affiliate thereof) with respect to
the Eligible Accounts, Eligible Included-In-Transit Inventory, Eligible Bailee
Inventory and Eligible Inventory components for each of the Borrowers included
in the US Borrowing Base and the Canadian Borrowing Base and such other matters
regarding the Credit Parties or the Collateral as the Administrative Agent or
the Canadian Administrative Agent shall reasonably require, and after the
occurrence and during the continuance of a Default or if Excess Availability
shall fall below $15,000,000, the Administrative Agent shall have the option to
receive at the cost of the Borrowers such additional reports as the
Administrative Agent or the Required Lenders shall reasonably request.
(m) Annual Budget. As soon as available and in any event not later than
30 days prior to the end of each Fiscal Year, a budget of the Credit Parties on
a consolidating and consolidated basis for the succeeding Fiscal Year (prepared
on a quarterly basis), reviewed by the Board of Directors of the Company,
setting forth in reasonable detail, the projected revenues and expenses of the
Company for such Fiscal Years.
(n) Excess Cash Flow Certificate. Not later than March 31, of each
year, beginning March 31, 2003 the Company's calculation of its consolidated US
Excess Cash Flow and Canadian Excess Cash Flow for the Fiscal Year ending the
immediately preceding December 31.
(o) Inventory Appraisals. Once during any Fiscal Year, the
Administrative Agent may require, at the cost of the Borrowers, an appraisal of
the Borrower's inventory in scope and detail and prepared by an independent
appraisal firm acceptable to the Administrative Agent; provided, that, after the
occurrence and during the continuance of a Default or if Excess Availability
shall fall below $30,000,000, the Administrative Agent shall have the option to
receive at the cost of the Borrowers such additional inventory appraisals as the
Administrative Agent or the Required Lenders shall reasonably request. If an
Event of Default exists, the Administrative Agent shall require an inventory
appraisal if the most recently conducted inventory appraisal is more than one
year old.
(p) Other Information. With reasonable promptness, such other
information about the business and affairs and financial condition of any Credit
Party as the Administrative Agent may reasonably request from time to time,
including, without limitation, monthly accounts receivable aging and
reconciliation, accounts payable aging and reconciliation, sales reports and
inventory designations.
Article 7 NEGATIVE COVENANTS
Notwithstanding anything to the contrary set forth in any Section of
this Article 7, no Canadian Borrower will be obligated to cause anyone other
than other Canadian Borrowers to comply with the covenants of this Article 7 or
be obligated in regard to any such covenants to the extent they do not relate to
the Canadian Borrowers or any of them; provided, that the non-performance of
such covenants with respect to the US Borrowers (even though the Canadian
Borrowers are not obligated to ensure compliance with such covenants) will,
subject to Article 8, give rise to Events of Default and will result in the
Canadian Administrative Agent, the Administrative Agent and the Canadian Lenders
having the right to exercise all rights and remedies applicable upon an Event of
Default, including, without limitation, rights and remedies with respect to the
Canadian Borrowers and their assets. So long as any Lender has any Commitment
hereunder or any Loan remains unpaid or any Revolving Credit Exposure remains
outstanding, neither the Company nor the Borrowers will:
Section 7.1 Financial Covenants. Permit the Fixed Charge Coverage Ratio
for any period of to be less than the ratio for the period indicated below:
Period Ratio
------ -----
Nine months ending December 31, 2002 1.10 to 1.00
Twelve months ending March 31, 2003 1.10 to 1.00
Each Rolling Period ending during the
period beginning with the Rolling Period
ending June 30, 2003 and continuing
through and including the Rolling Period
ending March 31, 2004 1.15 to 1.00
Each Rolling Period ending thereafter 1.25 to 1.00
provided, however, Borrowers' obligation to comply with this Section 7.1 shall
be suspended for any period for which the Fixed Charge Coverage Ratio is to be
tested to the extent that Excess Availability (for this purpose calculated with
out giving effect to the Initial Reserve) at all times during the final Fiscal
Quarter in such period was never less than $30,000,000.
Section 7.2 Indebtedness. Create, incur, assume or suffer to exist, any
Indebtedness, other than:
(a) the Lender Indebtedness;
(b) Indebtedness outstanding on the date hereof which is set forth on
Schedule 7.2 but expressly excluding any refinancings, refundings, renewals or
extensions thereof;
(c) trade or accounts payable (for the deferred purchase price of
Property or services) from time to time incurred in the ordinary course of
business and guaranties by the US Borrowers given in the ordinary course of
business of any such obligations incurred or accrued by any other US Borrower
and guaranties by the Canadian Borrowers given in the ordinary course of
business of any such obligations incurred or accrued by any other Canadian
Borrowers ;
(d) obligations for current taxes, assessments and other governmental
charges and taxes, assessments or other governmental charges which are not yet
due or are being contested in good faith by appropriate action or proceeding
promptly initiated and diligently conducted, if reserves required pursuant to
Section 6.2 hereof have been established with respect thereto;
(e) Indebtedness owing pursuant to Swap Agreements entered into in the
ordinary course of business for the purpose of hedging against risks actually
incurred by the Borrowers with respect to interest rates, $/C$ exchange rates
and commodity prices;
(f) in addition to the Indebtedness permitted by Section 7.2(b) above,
Indebtedness in respect of Capital Lease Obligations and purchase money
Indebtedness in an aggregate amount not in excess of $4,000,000 outstanding at
any time;
(g) advances made by any US Borrower to any other US Borrower and by
any Canadian Borrower to any other Canadian Borrower;
(h) other unsecured Indebtedness in an aggregate amount not in excess
of $1,000,000 outstanding at any time.
Section 7.3 Liens. Create, incur, assume or suffer to exist, any Lien
on any of its Property now owned or hereafter acquired to secure any
Indebtedness of any Credit Party or any other Person, other than (collectively,
the "Permitted Liens"):
(a) Liens existing on the date hereof and set forth on Schedule 7.3;
(b) Liens securing the Lender Indebtedness;
(c) Liens for taxes, assessments or other governmental charges or
levies not yet due or which are being contested in good faith by appropriate
action or proceedings and with respect to which reserves required by Section 6.2
hereof are maintained;
(d) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen, repairmen, workmen, and other Liens imposed by law
created in the ordinary course of business for amounts which are not past due
for more than 30 days or which are being contested in good faith by appropriate
action or proceedings and with respect to which reserves required by Section 6.2
are maintained;
(e) Liens incurred or deposits or pledges made in the ordinary course
of business in connection with workers' compensation, unemployment insurance and
other types of social security, old age or other similar obligations, or to
secure the performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, performance and return-of-money bonds
and other similar obligations (exclusive of obligations for the payment of
borrowed money) but not exceeding an aggregate amount outstanding at any time of
$1,000,000;
(f) minor irregularities in title, easements, rights-of-way,
restrictions, servitudes, permits, reservations, exceptions, conditions,
covenants and other similar charges or encumbrances not materially interfering
with the occupation, use and enjoyment by any Borrower of any of their
respective Properties in the normal course of business or materially impairing
the value thereof;
(g) any obligations or duties affecting any of the Property of any
Credit Party to any municipality or public authority with respect to any
franchise, grant, license or permit which do not materially impair the use of
such Property for the purposes for which it is held;
(h) Liens securing Indebtedness permitted by Section 7.2(f) provided
that (1) such Liens relate only to the Property being leased or acquired, (2)
the creation of such Lien or the incurrence of the Indebtedness secured by such
Lien does not violate this Agreement or any of the other Financing Documents and
(3) the principal amount of the Indebtedness being secured does not exceed 80%
of the total purchase price of the Property being leased or acquired; and
(i) exceptions, qualifications and reservations in respect of title to
Real Property under applicable federal, state, provincial, territorial,
municipal and local statutes, regulations, laws, by-laws and ordinances but only
to the extent of the general application of such matters and not arising as a
result of the failure of Borrowers to comply with such matters;
provided, however, that the foregoing list of Permitted Liens is not intended
to, and shall not be construed as, subordinating or postponing, or as an
agreement to subordinate or postpone, any Lien created by any of the Financing
Documents to any such permitted Lien.
Section 7.4 Mergers, Sales, etc. Merge into or with or consolidate or
amalgamate with, or permit any other Credit Party to merge into or with or
consolidate or amalgamate with, any other Person, or sell, lease or otherwise
dispose of, or permit any other Credit Party to sell, lease or otherwise dispose
of (whether in one transaction or in a series of transactions) all or any part
of its Property to any other Person. Notwithstanding the foregoing limitation
(a) the Credit Parties may sell inventory in the ordinary course of business,
(b) any Credit Party may sell, redeem or trade cash equivalent investments
permitted under Section 7.6 hereof, (c) any US Borrower shall be permitted to
consolidate or merge with any other US Borrower (provided, that, in the case of
any merger involving the Company, the Company shall be the surviving entity),
(d) any Canadian Borrower shall be permitted to consolidate, amalgamate or merge
with any other Canadian Borrower, (e) any Borrower shall be permitted to sell,
assign or convey all or any part of its Property to any US Borrower, (f) any
Canadian Borrower shall be permitted to sell, assign or convey all or any part
of its Property to any other Canadian Borrower, (g) the Precision Transactions
shall be expressly permitted hereunder, (h) the Borrowers may sell assets not
material to the operations and business of the Borrowers so long as the
aggregate sale price for all assets sold in any Fiscal Year does not exceed
$1,000,000, and (i) the US Borrowers may enter into a Lay Down Real Estate Lease
with Stone & ▇▇▇▇▇▇▇ Construction, Inc., a Louisiana corporation for
approximately five acres and certain improvements of the US Borrowers' Longview,
Washington facility.
Section 7.5 Dividends, etc. Declare or pay any dividend on its Equity,
make any payment to purchase, redeem, retire or otherwise acquire any of its
Equity now or hereafter outstanding, return any capital to its stockholders,
partners or members, make any distribution of its assets, Equity, obligations or
securities to its stockholders, partners or members (an "equity distribution"),
except (a) that any Credit Party may make equity distributions to any US
Borrower, (b) any Canadian Borrower may make equity distributions to other
Canadian Borrowers, (c) the Company may purchase, redeem, retire or otherwise
acquire its outstanding Equity (a "Stock Repurchase") so long as (1) Excess
Availability was not less than $40,000,000 at any time during the thirty (30)
day period ending on the date of such Stock Repurchase assuming that such Stock
Repurchase occurred on the first day of such period, (2) Excess Availability
will be not less than $40,000,000 immediately after giving effect to such Stock
Repurchase, (3) no Default exists or will exist after giving effect to such
Stock Repurchase, (4) the aggregate amount paid for all such Stock Repurchases
does not exceed $20,000,000 during the period beginning on March 28, 2002 and
running through the term of this Agreement, and (d) the Company may pay
dividends on its outstanding Equity so long as (i) Excess Availability was not
less than $40,000,000 at any time during the thirty (30) day period ending on
the date such dividends are paid assuming that such dividends were paid in the
first day of such period, (ii) Excess Availability will be not less than
$40,000,000 immediately after giving effect to the payment of such dividends,
(iii) no Default exists or will exist after giving effect to the payment of such
dividend, (iv) the aggregate amount of all dividends paid does not exceed (1)
$5,000,000 in any period of twelve consecutive months, or (2) $10,000,000 during
the term of this Agreement.
Section 7.6 Investments, Loans, etc. Make, permit or hold any loans to
or investments in any Person, or permit any other Credit Party to make, permit
or hold any loans to or investments in any Person, other than:
(a) investments, loans or advances, the material details of which have
been set forth on Schedule 7.6;
(b) investments in direct obligations of, or obligations the principal
of and interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed by
the full faith and credit of the United States of America), in each case
maturing within one year from the date of acquisition thereof;
(c) investments in certificates of deposit of maturities less than one
year, issued by commercial banks in the United States having capital and surplus
in excess of $500,000,000 and having short-term credit ratings of at least A1
and P1 by Standard & Poor's Ratings Group and ▇▇▇▇▇'▇ Investors Service, Inc.,
respectively;
(d) investments in commercial paper of maturities of not more than 180
days rated the highest credit rating obtainable from Standard & Poor's Ratings
Group and ▇▇▇▇▇'▇ Investors Service, Inc.;
(e) investments in securities that are obligations of the United States
government purchased by any Credit Party under fully collateralized repurchase
agreements pursuant to which arrangements are made with selling financial
institutions (being a financial institution having unimpaired capital and
surplus of not less than $5,000,000,000 and with short-term credit ratings of at
least A1 and P1 by Standard & Poor's Ratings Group and ▇▇▇▇▇'▇ Investors
Service, Inc., respectively) for such financial institutions to repurchase such
securities within 30 days from the date of purchase by any Credit Party, and
other similar short-term investments made in connection with any Credit Party's
cash management practices;
(f) investments in money market mutual funds having assets in excess of
$2,000,000,000;
(g) investments and loans by any US Borrower to or in any other US
Borrower and investments and loans by any Canadian Borrower to or in any
Canadian Borrower;
(h) (1) investments in direct obligations of, or obligations the
principal of and interest on which are unconditionally guaranteed by, the
Government of Canada or of any Canadian province (or by any agency thereof to
the extent such obligations are backed by the full faith and credit of the
Government of Canada or of such Canadian province), in each case maturing within
one year from the date of acquisition thereof; (2) investments in commercial
paper maturing within 180 days from the date of acquisition thereof and having,
at such date of acquisition, the highest credit rating obtainable from CBRS
Inc., Dominion Bond Rating Service, ▇▇▇▇▇'▇ Investor Service, Inc. or Standard
and Poor's Corporation; (3) investments in certificates of deposit, banker's
acceptances and time deposits maturing within 180 days from the date of
acquisition thereof issued or guaranteed by or placed with, and money market
deposit accounts issued or offered by, any domestic office of any commercial
bank organized under the laws of Canada or of any Canadian province which has a
combined capital surplus and undivided profits of not less than C$250,000,000;
and (4) investments in fully collateralized repurchase agreements with a term of
not more than 30 days for securities described in clause (1) above and entered
into with a financial institution satisfying the criteria described in clause
(3) above; and
(i) other investments not to exceed an aggregate of $1,000,000 of
investments made during the term of this Agreement.
Notwithstanding the foregoing, investments of the type described in
clauses (b), (c), (d), (e), (f) and (h) shall not be permitted to be made or
maintained (1) by any Canadian Borrower at any time that the outstanding
principal balance of all Canadian Loans is US$5,000,000 or greater (based on the
Dollar Equivalent of any C$ Denominated Loans on the date of determination), or
(2) by any US Borrower at any time that the aggregate outstanding principal
balance of all US Loans is US$5,000,000 or greater.
Section 7.7 Sales and Leasebacks. Enter into, any arrangement, directly
or indirectly, with any Person whereby any Credit Party shall sell or transfer
any Property, whether now owned or hereafter acquired, and whereby any Credit
Party shall then or thereafter rent or lease as lessee such Property or any part
thereof or other Property which a Credit Party intends to use for substantially
the same purpose or purposes as the Property sold or transferred.
Section 7.8 Nature of Business. Engage in, or permit any other Credit
Party to engage in, any business other than the businesses in which they are
engaged as of the Closing Date or that are directly related thereto, which
businesses in which the Company and each Borrower are currently involved are
described in Schedule 7.8 hereto.
Section 7.9 ERISA Compliance.
(a) Engage in, or permit any ERISA Affiliate to engage in, any
transaction in connection with which any US Credit Party or any ERISA Affiliate
could be subjected to either a civil penalty assessed pursuant to Sections
502(c), (i) or (l) of ERISA or a tax imposed by Chapter 43 of Subtitle D of the
Code which could reasonably be expected to have a Material Adverse Effect;
(b) Terminate, or permit any other US Credit Party or any ERISA
Affiliate to terminate, any Plan in a manner, or take any other action with
respect to any Plan, which could reasonably be expected to result in any
material liability of any US Credit Party or any ERISA Affiliate to the PBGC or
any other Governmental Authority;
(c) Fail to make, or permit any other US Credit Party or any ERISA
Affiliate to fail to make, full payment when due of all amounts which, under the
provisions of any Plan, agreement relating thereto or applicable law, any US
Credit Party or any ERISA Affiliate is required to pay as contributions thereto;
(d) Permit to exist, or allow any other US Credit Party or any ERISA
Affiliate to permit to exist, any accumulated funding deficiency within the
meaning of Section 302 of ERISA or Section 412 of the Code, whether or not
waived, with respect to any Plan;
(e) Contribute to or assume an obligation to contribute to, or permit
any US Credit Party or any ERISA Affiliate to contribute to or assume an
obligation to contribute to, any "multiemployer plan" as such term is defined in
Section 3(37) or 4001(a)(3) of ERISA;
(f) Acquire, or permit any other US Credit Party or any ERISA Affiliate
to acquire, an interest in any Person that causes such Person to become an ERISA
Affiliate with respect to any US Credit Party or with respect to any ERISA
Affiliate of any US Credit Party if such Person sponsors, maintains or
contributes to, or at any time preceding such acquisition has sponsored,
maintained, or contributed to, any "multiemployer plan" as such term is defined
in Section 3(37) or 4001(a)(3) of ERISA;
(g) Fail to pay, or cause to be paid, to the PBGC in a timely manner,
and without incurring any late payment or underpayment charge or penalty, all
premiums required pursuant to Sections 4006 and 4007 of ERISA;
(h) Amend, or permit any other US Credit Party or any ERISA Affiliate
to amend, a Plan resulting in an increase in current liability such that any US
Credit Party or any ERISA Affiliate is required to provide security to such Plan
under Section 401(a)(29) of the Code;
(i) Incur, or permit any other US Credit Party or any ERISA Affiliate
to incur, a material liability to or on account of a Plan under Sections 515,
4062, 4063, 4064, 4201 or 4204 of ERISA; or
(j) Permit, or allow any other US Credit Party or any ERISA Affiliate
to permit, the actuarial present value of the benefit liabilities (computed on
an accumulated benefit obligation basis in accordance with GAAP) under all Plans
in the aggregate to exceed the current value of the assets of all Plans in the
aggregate that are allocable to such benefit liabilities.
(k) Canadian Plan Compliance. As regards to any Canadian Party:
(1) Terminate, or permit to terminate, any Plan in a manner, or take
any other action with respect to any Plan, which could reasonably be expected to
result in any material liability of such Canadian Credit Party to any
Governmental Authority;
(2) Fail to make, or permit any other Canadian Credit Party to fail to
make, full payment when due of all amounts which, under the provisions of any
Plan, agreement relating thereto or applicable law, such Canadian Credit Party
is required to pay as contributions thereto, except where the failure to make
such payments could not reasonably be expected to have Material Adverse Effect;
(3) Permit to exist, or allow any other Canadian Credit Party to permit
to exist, any accumulated funding deficiency, whether or not waived, with
respect to any Plan in an amount which could reasonably be expected to cause a
Material Adverse Effect;
(4) Contribute to or assume an obligation to contribute to, or permit
any other Canadian Credit Party to contribute to or assume an obligation to
contribute to, any "specified multi-employer plan" as such term is defined in
the Employment Pensions Plans Act (Alberta);
(5) Acquire, or permit any other Canadian Credit Party to acquire, an
interest in any Person if such Person sponsors, maintains or contributes to, or
at any time preceding such acquisition has sponsored, maintained, or contributed
to any "specified multi-employer plan" as such term is defined in the Employment
Pension Plans Act (Alberta);
(6) Permit, or allow any other Canadian Credit Party to permit, the
actuarial present value of the benefit liabilities (computed on an accumulated
benefit obligation basis in accordance with GAAP) under all Plans in the
aggregate to exceed the current value of the assets of all Plans in the
aggregate that are allocable to such benefit liabilities, in each case only to
the extent such liabilities and assets relate to benefits to be paid to
employees of such Canadian Credit Party, by an amount that could reasonably be
expected to cause a Material Adverse Effect.
Section 7.10 Sale or Discount of Receivables. Sell, or allow any other
Credit Party to sell, with or without recourse, for discount or otherwise, any
notes or accounts receivable.
Section 7.11 Negative Pledge Agreements. Create, incur, assume or
suffer to exist, any contract, agreement or understanding which in any way
prohibits or restricts the granting, conveying, creation or imposition of any
Lien on any Property of any Credit Party, or which requires the consent of or
notice to other Persons in connection therewith, other than (a) this Agreement
and the other Financing Documents and (b) any agreements governing any purchase
money Liens or Capital Lease Obligations otherwise permitted hereby provided
that any such prohibition or limitation is only effective against the Property
financed thereby.
Section 7.12 Transactions with Affiliates. Except to the extent
otherwise specifically permitted herein, enter into any transaction or series of
transactions, with Affiliates of any Credit Party which involve an outflow of
money or other Property from any Credit Party to an Affiliate of any Credit
Party, including but not limited to repayment of Indebtedness, management fees,
compensation, salaries, asset purchase payments or any other type of fees or
payments similar in nature except for those which are in the ordinary course of
business of the Credit Parties and are on fair and reasonable terms no less
favorable than would be obtained in a comparable arm's length transaction with a
Person not an Affiliate.
Section 7.13 Unconditional Purchase Obligations. Enter into or be a
party to, or permit any other Credit Party to enter into or be a party to, any
material contract for the purchase of materials, supplies or other property or
services, if such contract requires that payment be made by it regardless of
whether or not delivery is ever made of such materials, supplies or other
property or services.
Section 7.14 Equity. Authorize or issue, or permit any other Credit
Party to authorize or issue (a) Equity to any Person other than (1) issuances of
Equity of the Company if no Change of Control results therefrom, and (2)
issuance by any other Credit Party to any of the Borrowers, or (b) any preferred
stock or other equity securities providing for the payment of dividends or other
distributions on a current basis or a mandatory redemption right existing with
regard thereto.
Section 7.15 Capital Expenditures. Make Capital Expenditures in any
Fiscal Year in excess of $30,000,000 in the aggregate for all Borrowers;
provided that no Capital Expenditures shall be made (and no Borrower shall enter
into any commitment to make any Capital Expenditure) if, before or after giving
effect to the making of such Capital Expenditure (or entering into such
Commitment), a Default exists or would result therefrom.
Section 7.16 Intercompany Transactions. Create or otherwise cause or
permit to exist or become effective, except as may be expressly permitted or
required by the Financing Documents, any consensual encumbrance or restriction
of any kind on the ability of any Credit Party to (a) pay dividends or make any
other distribution in respect of such Credit Party's Equity or with respect to
any other interest or participation in, or measured by, its profits, (b) pay any
indebtedness owed any Credit Party, (c) make any loan or advance to any Credit
Party, or (d) sell, lease or transfer any of its Property to any Credit Party.
Section 7.17 Acquisitions; Creation of Subsidiaries. Other than the
Acquisition Transactions, create or acquire any Subsidiary or any asset or
operating division of any other Person other than the purchase of inventory in
the ordinary course of business and the purchase of capital assets expressly
permitted hereunder.
Section 7.18 Accounts. The Borrowers will not maintain accounts with
any bank or other depository institution or otherwise maintain cash or cash
equivalents other than (a) as permitted by Section 7.6 hereof, (b) the
Disbursement Accounts and Blocked Accounts maintained with the Administrative
Agent and the Canadian Lockbox Bank, (c) a payroll account maintained by Tube at
a local bank in ▇▇▇▇▇▇▇, Arkansas for the purpose of funding payroll at Tube's
▇▇▇▇▇▇▇, Arkansas facility, (d) payroll accounts maintained with Canadian
Lockbox Bank and the Administrative Agent for the limited purpose of funding
payroll, and (e) lockbox accounts at the Temporary Lockbox Institutions provided
that such lockbox accounts shall be closed as soon as reasonably practical
following the Closing Date, but not later than February 28, 2003 and provided,
further, that such Temporary Lockbox Institutions shall have entered into
Tri-Party Agreements with Administrative Agent. In no event will Borrowers
maintain in any payroll account permitted pursuant to this Section 7.18 funds in
an amount in excess of the aggregate payroll for one pay period for the
employees of such Borrowers paid from such accounts.
Section 7.19 Modifications to Indebtedness Agreements.
(a) Amend, modify, or waive any covenant contained then in any
instrument, document or agreement governing the Indebtedness of the Credit
Parties set forth on Schedule 7.2 hereto or any other Indebtedness permitted by
Section 7.2 hereof if the effect of such amendment, modification, or waiver
would be to make the terms of such Indebtedness materially more onerous to any
Credit Party;
(b) Amend, modify, or waive any provision of any instrument, document
or agreement governing the Indebtedness of the Credit Parties set forth on
Schedule 7.2 hereto or any other Indebtedness permitted by Section 7.2 hereof if
the effect of such amendment, modification or waiver (1) subjects any Credit
Party to any additional material obligation, (2) increases the principal
thereunder, or (3) accelerates the date fixed for any payment of principal or
interest on such Indebtedness.
(c) Make any voluntary prepayment of, or optionally redeem, or make any
payment in defeasance of, any part of the Indebtedness of the Credit Parties set
forth on Schedule 7.2 hereto or any other Indebtedness permitted by Section 7.2
hereof.
Section 7.20 Fiscal Year. Change its Fiscal Year.
Section 7.21 Modification of Purchase Documents. Amend, modify or waive
any provision of any of the Purchase Documents.
Section 7.22 Modification of Precision Purchase Documents. Amend,
modify or waive any provision of any of the Precision Purchase Documents.
Section 7.23 Negative Covenants With Respect to Certain Credit Parties.
Permit, allow or cause any of Precision International, Maverick International or
Exchangeco to (a) conduct any business or operations, (b) own, lease, license or
otherwise have the right to use any Property (other than Exchangeco's ownership
of all of the issued and outstanding Equity of Tube Canada), (c) incur any
liabilities or obligations to any Person, or (d) employ any employees.
Article 8 EVENTS OF DEFAULT
Upon the occurrence and during the continuance of any of the following
specified events (each an "Event of Default"):
Section 8.1 Payments.
(a) Any of the Borrowers shall fail to pay when due (including, but not
limited to, any mandatory prepayment required pursuant to Section 2.11) any
principal of any Loan or any Note, or any Reimbursement Obligation or any fee or
any other amount payable hereunder or under the Fee Letter or any other
Financing Document; or
(b) any of the Borrowers shall fail to pay when due any interest on any
Loan or any Note and such failure to pay shall continue unremedied for a period
of three days.
Section 8.2 Covenants Without Notice. Any of the Borrowers shall fail
to observe or perform any covenant or agreement contained in Article 4, Section
6.1, Section 6.5, Section 6.7, Section 6.10 or Article 7.
Section 8.3 Other Covenants. Any Borrower shall fail to observe or
perform any covenant or agreement contained in this Agreement, other than those
referred to in Section 8.1 or Section 8.2 and, if capable of being remedied,
such failure shall remain unremedied for 20 days after the earlier of (a) any
Credit Party's obtaining knowledge thereof, or (b) written notice thereof shall
have been given to the Company or any Borrower by any Lender, any Issuing Bank,
the Canadian Administrative Agent or the Administrative Agent.
Section 8.4 Other Financing Document Obligations. Default is made in
the due observance or performance by any Borrower or any other Obligated Party
of any of the covenants or agreements contained in any Financing Document other
than this Agreement, and such default continues unremedied beyond the expiration
of any applicable grace period which may be expressly allowed under such
Financing Document.
Section 8.5 Representations. Any representation, warranty or statement
made or deemed to be made by any Borrower or any other Obligated Party or any of
any Borrower's or any other Obligated Party's officers herein or in any other
Financing Document, or in any certificate, request or other document furnished
pursuant to or under this Agreement or any other Financing Document, shall have
been incorrect in any material respect as of the date when made or deemed to be
made.
Section 8.6 Non-Payments of Other Indebtedness. Any Credit Party shall
fail to make any payment or payments of principal of or interest on any
Indebtedness of such Credit Party which Indebtedness is in an aggregate amount
of $1,000,000 or greater after giving effect to any applicable grace period.
Section 8.7 Defaults Under Other Agreements. Any Credit Party shall
fail to observe or perform any covenant or agreement contained in any
agreement(s) or instrument(s) relating to Indebtedness of any Credit Party of
$1,000,000 or more in the aggregate within any applicable grace period, or any
other event shall occur, if the effect of such failure or other event is to
accelerate, or to permit the holder of such Indebtedness or any other Person to
accelerate, the maturity of $1,000,000 or more in the aggregate of such
Indebtedness; or $1,000,000 or more in the aggregate of any such Indebtedness
shall be, or if as a result of such failure or other event may be, required to
be prepaid (other than prepayments resulting from excess cash flow) in whole or
in part prior to its stated maturity.
Section 8.8 Bankruptcy Under US Law. Any Obligated Party (which for the
purposes of this Section 8.8 shall not include any Canadian Borrower) shall
commence a voluntary case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy" as now or hereafter in effect, or any successor
thereto (the "Bankruptcy Code"); or an involuntary case is commenced against any
Obligated Party shall commence and the petition is not controverted within ten
days, or is not stayed or dismissed within 60 days, after commencement of the
case; or a custodian (as defined in the Bankruptcy Code) is appointed for, or
takes charge of, all or any substantial part of the property of any Obligated
Party; or any Obligated Party commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to any Obligated Party or there is commenced
against any Obligated Party any such proceeding which remains unstayed or
undismissed for a period of 60 days; or any Obligated Party is adjudicated
insolvent or bankrupt; or any order of relief or other order approving any such
case or proceeding is entered; or any Obligated Party suffers any appointment of
any custodian or the like for it or any substantial part of its Property to
continue undischarged or unstayed for a period of 60 days; or any Obligated
Party makes a general assignment for the benefit of creditors; or any Obligated
Party shall fail to pay, or shall state in writing that it is unable to pay, or
shall be unable to pay, its debts generally as they become due; or any Obligated
Party shall by any act or failure to act indicate its consent to, approval of or
acquiescence in any of the foregoing; or any corporate action is taken by any
Obligated Party for the purpose of effecting any of the foregoing.
Section 8.9 Bankruptcy Under Canadian Law.
(a) Any Canadian Borrower (1) becomes insolvent, or generally does not
or becomes unable to pay its debts or meet its liabilities as the same become
due, or admits in writing its inability to pay its debts generally, or declares
any general moratorium on its indebtedness, or proposes a compromise or
arrangement between it and any class of its creditors; (2) commits an act of
bankruptcy under the Bankruptcy and Insolvency Act (Canada), or makes an
assignment of its property for the general benefit of its creditors under such
Act, or makes a proposal (or files a notice of its intention to do so) under
such Act; (3) institutes any proceeding seeking to adjudicate it an insolvent,
or seeking liquidation, dissolution, winding-up, reorganization, compromise,
arrangement, adjustment, protection, moratorium, relief, stay of proceedings of
creditors generally (or any class of creditors), or composition of it or its
debts or any other relief, under any federal, provincial or foreign Law now or
hereafter in effect relating to bankruptcy, winding-up, insolvency,
reorganization, receivership, plans of arrangement or relief or protection of
debtors (including the Bankruptcy and Insolvency Act (Canada), the Companies'
Creditors Arrangement Act (Canada) and any applicable corporations legislation)
or at common law or in equity, or files an answer admitting the material
allegations of a petition filed against it in any such proceeding; (4) applies
for the appointment of, or the taking of possession by, a receiver, interim
receiver, receiver/manager, sequestrator, conservator, custodian, administrator,
trustee, liquidator or other similar official for it or any substantial part of
its property; or (5) threatens to do any of the foregoing, or takes any action,
corporate or otherwise, to approve, effect, consent to or authorize any of the
actions described in this Section 8.9, or otherwise acts in furtherance thereof
or fails to act in a timely and appropriate manner in defense thereof.
(b) Any petition is filed, application made or other proceeding
instituted against or in respect of any Canadian Borrower: (1) seeking to
adjudicate it an insolvent; (2) seeking a receiving order against it under the
Bankruptcy and Insolvency Act (Canada); (3) seeking liquidation, dissolution,
winding-up, reorganization, compromise, arrangement, adjustment, protection,
moratorium, relief, stay of proceedings of creditors generally (or any class of
creditors), or composition of it or its debts or any other relief under any
federal, provincial or foreign Law now or hereafter in effect relating to
bankruptcy, winding-up, insolvency, reorganization, receivership, plans of
arrangement or relief or protection of debtors (including the Bankruptcy and
Insolvency Act (Canada), the Companies' Creditors Arrangement Act (Canada) and
any applicable corporations legislation) or at common law or in equity; or (4)
seeking the entry of an order for relief or the appointment of, or the taking of
possession by, a receiver, interim receiver, receiver/manager, sequestrator,
conservator, custodian, administrator, trustee, liquidator or other similar
official for it or any substantial part of its property; and in any case
describe in clause (b)(1) through (4) such petition, application or proceeding
continues undismissed, or unstayed and in effect, for a period of 60 days after
the institution thereof, provided that if an order, decree or judgment is
granted or entered (whether or not entered or subject to appeal) against any
Canadian Borrower thereunder in the interim, such 60-day period will cease to
apply, and provided further that if the Canadian Borrower files an answer
admitting the material allegations of a petition filed against it in any such
proceeding, such 60-day period will cease to apply.
Section 8.10 Money Judgment. Judgments or orders for the payment of
money involving in the aggregate at any time a liability (net of any insurance
proceeds or indemnity payments actually received in respect thereof prior to or
within 30 days from the entry thereof, or to be received in respect thereof in
the event any appeal thereof shall be unsuccessful) of more than $1,000,000, (or
the Dollar Equivalent thereof) or that would otherwise have a Material Adverse
Effect shall be rendered against any Obligated Party and such judgment or order
shall continue unsatisfied in accordance with the terms of such judgment or
order (in the case of a money judgment) and in effect for a period of 30 days
during which execution shall not be effectively stayed or deferred (whether by
action of a court, by agreement or otherwise).
Section 8.11 Discontinuance of Business. Except as permitted by Section
7.4, any Credit Party shall cease to be principally engaged in the businesses
and operations in which such Credit Party was principally engaged on the Closing
Date.
Section 8.12 Financing Documents. Any Material Provision of any of the
Financing Documents after delivery thereof shall for any reason, except to the
extent permitted by the terms thereof, cease to be in full force and effect and
valid, binding and enforceable (except as enforceability may be limited as
stated in Section 5.3) in accordance with its terms, or, in the case of any of
the Security Instruments, cease to create a valid and perfected Lien of the
priority contemplated thereby on any of the collateral purported to be covered
thereby, or any Obligated Party shall so state in writing. As used in this
Section 8.12, "Material Provision" shall mean (a) with respect to this
Agreement, or the Notes, any material term, covenant, or agreement set forth
therein, and (b) with respect to any other Financing Document, any provision if
the validity and enforceability thereof is necessary for such Financing Document
to accomplish its stated, or clearly intended, purpose or otherwise necessary in
order for any Lender to enforce any material right or remedy under any Financing
Document.
Section 8.13 Change of Control. The occurrence of a Change of Control.
then, and in any such event, and at any time thereafter, if any Event
of Default shall then be continuing, the Administrative Agent, upon the written
or telex request of (a) the Required Lenders, shall, by written notice to the
Borrowers, take any or all of the following actions, without prejudice to the
rights of the Administrative Agent, the Canadian Administrative Agent, any
Lender or the holder of any Note, to enforce its claims against any Credit
Party: (i) declare the Revolving Credit Commitment, the US Swingline Commitment,
and other lending obligations, if any, terminated, whereupon the Revolving
Credit Commitment and other lending obligations, if any, of each Lender shall
terminate immediately; or (ii) declare the entire principal amount of and all
accrued interest on all Lender Indebtedness then outstanding to be, whereupon
the same shall become, forthwith due and payable without presentment, demand,
protest, notice of protest or dishonor, notice of acceleration, notice of intent
to accelerate or other notice of any kind, all of which are hereby expressly
waived by each Credit Party, and thereupon take such action as it may deem
desirable under and pursuant to the Financing Documents; provided, that, if an
Event of Default specified in Section 8.8 or Section 8.9 shall occur, the result
which would occur upon the giving of written notice by the Administrative Agent
to the Borrowers, as specified in clauses (i) and (ii) above, shall occur
automatically without the giving of any such notice; or (iii) if any US Letter
of Credit shall then be outstanding, demand L/C Cover which the US Borrowers
shall immediately pay to the Administrative Agent for deposit in a cash
collateral account maintained by the Administrative Agent; (iv) if any Canadian
Letter of Credit shall then be outstanding, demand L/C Cover which the Canadian
Borrowers shall immediately jointly and severally pay to the Canadian
Administrative Agent for deposit in a cash collateral account maintained by the
Canadian Administrative Agent, or (v) if any B/A shall be outstanding, demand
B/A Cover which the Canadian Borrowers shall immediately jointly and severally
pay to the Canadian Administrative Agent for deposit in a cash collateral
account maintained by the Canadian Administrative Agent, and (b) the Required
SOFA Lenders, shall, by written notice to the Borrowers, take any or all of the
following actions, without prejudice to the rights of the Administrative Agent,
the Canadian Administrative Agent, any Lender or the holder of any Note, to
enforce its claims against any Credit Party: (x) declare the SOFA Commitment
terminated, whereupon the SOFA Commitment of each SOFA Lender shall terminate
immediately; or (y) declare the entire principal amount of and all accrued
interest on all Lender Indebtedness owing to the SOFA Lenders in their capacity
as such then outstanding to be, whereupon the same shall become, forthwith due
and payable without presentment, demand, protest, notice of protest or dishonor,
notice of acceleration, notice of intent to accelerate or other notice of any
kind, all of which are hereby expressly waived by each Credit Party, and
thereupon take such action as it may deem desirable under and pursuant to the
Financing Documents; provided, that, if an Event of Default specified in Section
8.8 or Section 8.9 shall occur, the result which would occur upon the giving of
written notice by the Administrative Agent to the Borrowers, as specified in
clauses (x) and (y) above, shall occur automatically without the giving of any
such notice.
Article 9 AGENTS
Section 9.1 Appointment of Agents. Each Lender (and each Secured
Affiliate by and through its affiliated Lender) and each Issuing Bank hereby
designates JPMorgan Chase Bank as Administrative Agent, CIT Business Credit
Canada Inc. as Canadian Administrative Agent and General Electric Capital
Corporation as Documentation Agent as herein specified and as specified in the
other Financing Documents. Each Lender (and each Secured Affiliate and Cash
Management Affiliate by and through its affiliated Lender) and each Issuing Bank
hereby irrevocably authorizes each such Agent to take such action on its behalf
under the provisions of this Agreement, the Notes, and the other Financing
Documents and to exercise such powers and to perform such duties hereunder and
thereunder as are specifically delegated to or required of such Agent by the
terms hereof and thereof and such other powers as are reasonably incidental
thereto. Such Agent may perform any of its duties hereunder by or through its
agents or employees.
Section 9.2 Limitation of Duties of Agents. No Agent shall have any
duties or responsibilities except those expressly set forth in this Agreement
and as specified in the other Financing Documents. Neither any Agent nor any of
their respective officers, directors, employees or agents shall be liable for
any action taken or omitted by it as such hereunder or in connection herewith,
unless caused by its or their gross negligence or willful misconduct. The duties
of each Agent shall be mechanical and administrative in nature; no Agent shall
have by reason of this Agreement a fiduciary relationship in respect of any
Lender; and nothing in this Agreement, expressed or implied, is intended to or
shall be so construed as to impose upon any Agent any obligations in respect of
this Agreement except as expressly set forth herein.
Section 9.3 Lack of Reliance on the Agents.
(a) Independent Investigation. Independently and without reliance upon
any Agent, each Lender, to the extent it deems appropriate, has made and shall
continue to make (1) its own independent investigation of the financial
condition and affairs of the Credit Parties in connection with the taking or not
taking of any action in connection herewith, and (2) its own appraisal of the
creditworthiness of the Credit Parties, and, except as expressly provided in
this Agreement, and the other Financing Documents, no Agent shall have any
responsibility, either initially or on a continuing basis, to provide any Lender
with any credit or other information with respect thereto, whether coming into
its possession before the consummation of the transactions contemplated herein
or at any time or times thereafter.
(b) Agents Not Responsible. No Agent shall be responsible to any Lender
or any Issuing Bank for any recitals, statements, information, representations
or warranties herein or in any document, certificate or other writing delivered
in connection herewith or for the execution, effectiveness, genuineness,
validity, enforceability, collectability, priority or sufficiency of this
Agreement, the Notes, the Letters of Credit or the other Financing Documents or
the financial condition of any Obligated Party or be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement, the Notes or the other Financing
Documents, or the financial condition of any Obligated Party, or the existence
or possible existence of any Default or Event of Default.
Section 9.4 Certain Rights of the Agents. If any Agent shall request
instructions from the Required Lenders with respect to any act or action
(including the failure to act) in connection with this Agreement, the Notes and
the other Financing Documents, such Agent shall be entitled to refrain from such
act or taking such action unless and until such Agent shall have received
instructions from the Required Lenders; and no Agent shall incur such liability
to any Person by reason of so refraining. Without limiting the foregoing, no
Lender shall have any right of action whatsoever against any Agent as a result
of such Agent acting or refraining from acting under this Agreement, the Notes
and the other Financing Documents in accordance with the instructions of the
Required Lenders, or to the extent required by Section 10.2, all of the Lenders.
Section 9.5 Reliance by Agents. Each Agent shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing, resolution,
notice, statement, certificate, telex, teletype or telecopier message,
cablegram, radiogram, order or other documentary teletransmission or telephone
message believed by it to be genuine and correct and to have been signed, sent
or made by the proper Person. Each Agent may consult with legal counsel
(including counsel for any Borrower), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken by it in good faith in accordance with the advice of such counsel,
accountants or experts.
Section 9.6 Indemnification of Agents. To the extent any Agent is not
reimbursed and indemnified by the Borrowers, each Lender will reimburse and
indemnify each Agent in accordance with its Credit Percentage for and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including reasonable counsel fees and
disbursements) or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against such Agent in performing its duties
hereunder, in any way relating to or arising out of this Agreement and by reason
of the ordinary negligence of such Agent; provided that no Lender shall be
liable to such Agent for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from, as to such Agent, such Agent's gross negligence or willful
misconduct.
Section 9.7 Agents in their Individual Capacity. With respect to its
obligations under this Agreement, the Loans made by it and the Notes issued to
it, each Agent shall have the same rights and powers hereunder as any other
Lender or holder of a Note and may exercise the same as though it were not
performing the duties, if any, specified herein; and the terms "Lenders",
"Required Revolving Lenders", "Required Term Lenders", "Required Lenders,"
"holders of Notes" or any similar terms shall, unless the context clearly
otherwise indicates, include each Agent in its individual capacity. Each Agent
may accept deposits from, lend money to, and generally engage in any kind of
banking, trust, financial advisory or other business with any Credit Party or
any Affiliate of any Credit Party as if it were not performing the duties, if
any, specified herein, and may accept fees and other consideration from any
Credit Party for services in connection with this Agreement and otherwise
without having to account for the same to the Lenders.
Section 9.8 May Treat Lender as Owner. Each Borrower, each Agent and
each Issuing Bank may deem and treat each Lender as the owner of such Lender's
Notes for all purposes hereof unless and until a written notice of the
assignment or transfer thereof shall have been filed with the Administrative
Agent. Any request, authority or consent of any Person who at the time of making
such request or giving such authority or consent is the owner of a Note shall be
conclusive and binding on any subsequent owner, transferee or assignee of such
Note or any promissory note or notes issued in exchange therefor.
Section 9.9 Successor Agent.
(a) Resignation. Each Agent may resign at any time by giving written
notice thereof to the Lenders, the Issuing Banks and the Borrowers and may be
removed at any time with or without cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right, upon five
days' notice to the Borrowers, to appoint a successor Agent (to act in the same
capacity as the resigning or removed Agent), subject to the prior written
approval of the Borrowers, such approval not to be unreasonably withheld and not
to be required during the existence of a Default or Event of Default. If no
successor Agent shall have been so appointed by the Required Lenders, and shall
have accepted such appointment, within 30 days after the retiring Agent's giving
of notice of resignation or the Required Lenders' removal of the retiring Agent,
then, upon five days' notice to the Borrowers, the retiring Agent may, on behalf
of the Lenders, appoint a successor Agent (subject to approval of the Borrowers,
such approval not to be unreasonably withheld and not to be required during the
existence of a Default or Event of Default), which (1) if the resigning or
removed Agent was the Administrative Agent shall be a bank which maintains an
office in the United States, or a commercial bank organized under the laws of
the United States of America or of any State thereof, or any Affiliate of such
bank, having a combined capital and surplus of at least $250,000,000, and (2)
the resigning or removed Agent was the Canadian Administrative Agent, shall be
an entity that is not a non-resident of Canada for purposes of the Income Tax
Act (Canada).
(b) Rights, Powers, etc. Upon the acceptance of any appointment as an
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations under this Agreement. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this Article 9
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was the Agent under this Agreement.
Section 9.10 Documentation Agent. Notwithstanding anything contained in
this Article 9 or any other Financing Document to the contrary, the
Documentation Agent shall have no right, power, obligation, liability,
responsibility or duty under this Agreement or any other Financing Document
other than those applicable to all Lenders as such.
Article 10 MISCELLANEOUS
Section 10.1 Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including, telecopy or similar
teletransmission or writing) and shall be given to such party at its address or
telecopy number set forth on the signature pages hereof or such other address or
telecopy number as such party may hereafter specify by notice to the Canadian
Administrative Agent, the Administrative Agent and the Company. Each such
notice, request or other communication shall be effective (a) if given by mail,
72 hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid, or (b) if given by any other means
(including, but not limited to, by air courier), when delivered at the address
specified on the signature pages hereto; provided that notices to the
Administrative Agent or the Canadian Administrative Agent shall not be effective
until actually and physically received. Any notice to be given to any Borrower
or to all Borrowers pursuant to this Agreement or any of the other Financing
Documents may be given to the Company or to any other Borrower, and if given to
the Company or to any Borrower in the manner set forth in this Section 10.1,
such notice shall be deemed to be effective notice to all Borrowers for purposes
of this Agreement.
Section 10.2 Amendments and Waivers. Neither this Agreement nor any
other Financing Document, nor any terms hereof or thereof, may be amended,
supplemented or modified except in accordance with the provisions of this
Section 10.2. The Required Lenders may, or, with the written consent of the
Required Lenders, the Administrative Agent, shall, from time to time, (x) enter
into with the Borrowers, written amendments, supplements or modifications hereto
and to the other Financing Documents for the purpose of adding any provisions to
this Agreement or to the other Financing Documents or changing in any manner the
rights or obligations of the Lenders or the Borrowers hereunder or thereunder or
(y) waive at the Borrowers' request, on such terms and conditions as the
Required Lenders or the Administrative Agent, as the case may be, may specify in
such instrument, any of the requirements of this Agreement or the other
Financing Documents or any Default and its consequences; provided, however, that
no such waiver and no such amendment, supplement or modification shall:
(a) reduce the amount or extend the scheduled date of maturity of any
Loan or any Reimbursement Obligation or of any scheduled installment thereof or
reduce the stated rate of any interest or fee payable hereunder or extend the
date of any payment thereof or modify any provision that provides for the
ratable sharing by the Lenders (or any sub-set of the Lenders) of any payment or
prepayment of Lender Indebtedness to provide for a non-ratable sharing thereof
or increase the amount or extend the expiration date of any Lender's Revolving
Credit Commitment or Term Commitment or amend, modify or waive any provision of
Section 2.11(f), (g), (h) or (i) or Section 2.20, in each case without the prior
written consent of each Lender directly affected thereby;
(b) (i) change the currency in which any Loan or Reimbursement
Obligation is payable or amend, modify or waive any provision of this Section
10.2 or reduce the percentage specified in the definition of Required Lenders,
in each case without the written consent of all of the Lenders, (ii) reduce the
percentage specified in the definition of Required Revolving Lenders without the
written consent of all Revolving Lenders, or (iii) reduce the percentage
specified in the definition of Required Term Lenders without the written consent
of all Term Lenders;
(c) release any part of the Collateral, without the written consent of
all of the Lenders, except as expressly permitted hereby, provided that the
Administrative Agent or the Canadian Administrative Agent, as applicable, shall
release (without consent from the Lenders) any Collateral sold, transferred or
otherwise disposed of as permitted by Section 7.4;
(d) amend, modify or waive any provision of Article 9 without the
written consent of the Agent directly affected thereby;
(e) amend, modify or waive (1) any Letter of Credit Liability without
the written consent of the applicable Issuing Bank or (2) any Letter of Credit
without the consent of each Lender if such Letter of Credit, after giving effect
to such amendment, modification or waiver, would no longer satisfy the
requirements hereof if such Letter of Credit was being issued ab initio at such
time, provided that in all cases other than clauses (1) or (2), only the consent
of the applicable Issuing Bank shall be required to amend, modify or waive any
Letter of Credit;
(f) amend the definitions of US Borrowing Base, Eligible Account
Advance Percentage, Eligible Account, Eligible Inventory, Eligible Inventory
Advance Percentage, Eligible Included-In-Transit Inventory, Eligible Bailee
Inventory, US Equipment Component, US Excess Cash Flow Amount, Excess Cash Flow,
Eligible ▇▇▇▇ and Hold Accounts, Inventory Limit, WIP Limit, Included-in-Transit
Limit and the advance rates specified in the definition of US Borrowing Base or
the other definitions set forth in this Section 10.2(f) (other than to the
extent already permitted to be reduced at the discretion of the Administrative
Agent) without the written consent of the Administrative Agent and all of the US
Revolving Lenders;
(g) amend the definitions of Canadian Borrowing Base, Eligible Account
Advance Percentage, Eligible Account, Eligible Inventory, Eligible Inventory
Advance Percentage, Eligible Included-In-Transit Inventory, Eligible Bailee
Inventory, Canadian Equipment Component, Canadian Excess Cash Flow Amount,
Excess Cash Flow, Inventory Limit, WIP Limit, Included-in-Transit Limit and the
advance rates specified in the definition of Canadian Borrowing Base or the
other definitions set forth in this Section 10.2(g) (other than to the extent
already permitted to be reduced at the discretion of the Administrative Agent)
without the written consent of all of the Administrative Agent, the Canadian
Administrative Agent and all Canadian Lenders;
(h) amend Section 2.26 without the consent of the US Swingline Lender;
or
(i) amend any provision of this Agreement directly related to the SOFA
Loans or the SOFA Commitment (or any definition of any defined term specifically
pertaining thereto) without prior written consent of all SOFA Lenders.
Neither the Administrative Agent nor the Canadian Administrative Agent
will foreclose upon, acquire via deed in lieu of foreclosure take possession or
operate, (a) the Borrowers' Real Property located in Calgary, Alberta, Conroe,
Texas, Counce, Tennessee, Ferndale, Michigan, Elyria, Ohio, Cedar Springs,
Georgia or Youngstown, Ohio unless and until the Phase II environmental site
assessments required by Schedule 3.3 hereof have been completed and reports have
been issued thereon and each Lender has confirmed in writing that no remediation
is required by such Lender or that any remediation has been completed to the
satisfaction of such Lender, or (b) the Borrowers' Real Property located in
▇▇▇▇▇▇ County, Texas or Mississippi County, Arkansas unless the Administrative
Agent has obtained a Phase II environmental site assessment thereon and reports
have been issued thereon and each Lender has confirmed in writing that no
remediation is required by such Lender or that any remediation, has been
completed to the satisfaction of such Lender.
Any waiver and any amendment, supplement or modification pursuant to
this Section 10.2 shall apply to each of the Lenders and shall be binding upon
each Borrower, the Lenders, the Administrative Agent and all future holders of
the Loans. In the case of any waiver, the Borrowers, the Lenders and the
Administrative Agent shall be restored to their former position and rights
hereunder and under the other Financing Documents, and any Default waived shall
be deemed to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Default, or impair any right consequent thereon.
Section 10.3 No Waiver; Remedies Cumulative. No failure or delay on the
part of any Borrower, any Agent, any Issuing Bank or any Lender or any holder of
any Note in exercising any right or remedy under this Agreement or any other
Financing Document and no course of dealing between any Borrower and any Agent,
any Issuing Bank or any Lender or any holder of any Note shall operate as a
waiver thereof, nor shall any single or partial exercise of any right or remedy
under the Notes, this Agreement or any other Financing Document preclude any
other or further exercise thereof or the exercise of any other right or remedy
under the Notes, this Agreement or any other Financing Document. The rights and
remedies herein expressly provided are cumulative and not exclusive of any
rights or remedies which any Borrower, any Agent, any Issuing Bank or any Lender
would otherwise have. No notice to or demand on any Borrower not required under
the Notes, this Agreement or any other Financing Document in any case shall
entitle any Borrower to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the rights of any Agent, any
Issuing Bank or the Lenders to any other or further action in any circumstances
without notice or demand.
Section 10.4 Payment of Expenses, Indemnities, etc. Subject to Section
10.22 herein, each Borrower agrees to (and shall be jointly and severally liable
for):
(a) Expenses. Whether or not the transactions hereby contemplated are
consummated, pay all reasonable out-of-pocket costs and expenses of each Agent,
and each Issuing Bank in the administration (both before and after the execution
hereof and including advice of counsel for each Agent as to the rights and
duties of such Agent and the Lenders with respect thereto) of, and in connection
with the preparation, execution and delivery of, recording or filing of,
preservation of rights under, enforcement of, interpretation of, and, after a
Default, refinancing, renegotiation or restructuring of, this Agreement, the
Notes, and the other Financing Documents and any amendment, waiver or consent
relating thereto (including, but not limited to, the reasonable fees and
disbursements, for such purposes, of counsel for each Agent and, after Default,
for any of the Lenders) and promptly reimburse such Agent for all amounts
expended, advanced, or incurred by such Agent or the Lenders to satisfy any
obligation of any Borrower under this Agreement or any other Financing Document;
(b) INDEMNIFICATION. INDEMNIFY EACH AGENT, EACH ISSUING BANK AND EACH
LENDER, EACH OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,
REPRESENTATIVES, AGENTS AND AFFILIATES FROM, HOLD EACH OF THEM HARMLESS AGAINST,
AND PROMPTLY UPON DEMAND PAY OR REIMBURSE EACH OF THEM FOR, ANY AND ALL ACTIONS,
SUITS, PROCEEDINGS (INCLUDING ANY INVESTIGATIONS, LITIGATION OR INQUIRIES),
CLAIMS, COSTS, LOSSES, LIABILITIES, DAMAGES OR EXPENSES OF ANY KIND OR NATURE
WHATSOEVER WHICH MAY BE INCURRED BY OR ASSERTED AGAINST OR INVOLVE ANY OF THEM
(WHETHER OR NOT ANY OF THEM IS DESIGNATED A PARTY THERETO) AS A RESULT OF,
ARISING OUT OF OR IN ANY WAY RELATED TO (1) ANY ACTUAL OR PROPOSED USE BY ANY
BORROWER OF THE PROCEEDS OF ANY OF THE LOANS; OR (2) ANY OTHER ASPECT OF THIS
AGREEMENT, THE NOTES, AND THE FINANCING DOCUMENTS, INCLUDING BUT NOT LIMITED TO
THE REASONABLE FEES AND DISBURSEMENTS OF COUNSEL (INCLUDING ALLOCATED COSTS OF
INTERNAL COUNSEL) AND ALL OTHER EXPENSES INCURRED IN CONNECTION WITH
INVESTIGATING, DEFENDING OR PREPARING TO DEFEND ANY SUCH ACTION, SUIT,
PROCEEDING (INCLUDING ANY INVESTIGATIONS, LITIGATION OR INQUIRIES) OR CLAIM, AND
INCLUDING ALL ACTIONS, SUITS, PROCEEDINGS (INCLUDING ANY INVESTIGATIONS,
LITIGATION OR INQUIRIES), CLAIMS, COSTS, LOSSES, LIABILITIES, DAMAGES OR
EXPENSES ARISING BY REASON OF ORDINARY NEGLIGENCE OF EACH AGENT, EACH ISSUING
BANK AND EACH LENDER, EACH OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,
REPRESENTATIVES, AGENTS AND AFFILIATES; PROVIDED, HOWEVER, THE PROVISIONS OF
THIS SECTION 10.4(b) SHALL NOT APPLY TO ANY ACTION, SUITS, PROCEEDINGS, CLAIMS,
COSTS, LOSSES, LIABILITIES, DAMAGES, OR EXPENSES TO THE EXTENT, BUT ONLY TO THE
EXTENT, CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PARTY
SEEKING INDEMNIFICATION;
(c) ENVIRONMENTAL INDEMNIFICATION. INDEMNIFY AND HOLD HARMLESS FROM
TIME TO TIME EACH AGENT, THE ISSUING BANKS AND THE LENDERS, EACH PERSON CLAIMING
BY, THROUGH, UNDER OR ON ACCOUNT OF ANY OF THE FOREGOING AND THE RESPECTIVE
DIRECTORS, OFFICERS, COUNSEL, EMPLOYEES, AGENTS, AFFILIATES, SUCCESSORS AND
ASSIGNS OF EACH OF THE FOREGOING FROM AND AGAINST ANY AND ALL LOSSES, CLAIMS,
COST RECOVERY ACTIONS, ADMINISTRATIVE ORDERS OR PROCEEDINGS, DAMAGES AND
LIABILITIES (WHICH RELATE TO OR ARISE AS A RESULT OF THE LOANS, THE LETTERS OF
CREDIT OR ANY FINANCING DOCUMENT) TO WHICH ANY SUCH PERSON MAY BECOME SUBJECT
AND INCLUDING ANY AND ALL LOSSES, CLAIMS, COST RECOVERY ACTIONS, ADMINISTRATIVE
ORDERS OR PROCEEDINGS, DAMAGES AND LIABILITIES (WHICH RELATE TO OR ARISE AS A
RESULT OF THE LOANS, THE LETTERS OF CREDIT OR ANY FINANCING DOCUMENT) ARISING BY
REASON OF THE ORDINARY NEGLIGENCE OF EACH AGENT, THE ISSUING BANKS AND THE
LENDERS, EACH PERSON CLAIMING BY, THROUGH, UNDER OR ON ACCOUNT OF ANY OF THE
FOREGOING AND THE RESPECTIVE DIRECTORS, OFFICERS, COUNSEL, EMPLOYEES, AGENTS,
AFFILIATES, SUCCESSORS AND ASSIGNS OF EACH OF THE FOREGOING (1) UNDER ANY
ENVIRONMENTAL LAW APPLICABLE TO ANY BORROWER OR ANY OF THEIR RESPECTIVE
PROPERTIES, INCLUDING WITHOUT LIMITATION, THE TREATMENT OR DISPOSAL OF HAZARDOUS
SUBSTANCES ON ANY OF THEIR RESPECTIVE PROPERTIES, (2) AS A RESULT OF THE BREACH
OR NON-COMPLIANCE BY ANY CREDIT PARTY WITH ANY ENVIRONMENTAL LAW APPLICABLE TO
ANY CREDIT PARTY, (3) DUE TO PAST OWNERSHIP BY ANY CREDIT PARTY OF ANY OF THEIR
RESPECTIVE PROPERTIES OR PAST ACTIVITY ON ANY OF THEIR RESPECTIVE PROPERTIES OR
PAST ACTIVITY ON ANY OF THEIR RESPECTIVE PROPERTIES WHICH, THOUGH LAWFUL AND
FULLY PERMISSIBLE AT THE TIME, COULD RESULT IN PRESENT LIABILITY, (4) THE
PRESENCE, USE, RELEASE, STORAGE, TREATMENT OR DISPOSAL OF HAZARDOUS SUBSTANCES
ON OR AT ANY OF THE PROPERTIES OWNED OR OPERATED BY ANY CREDIT PARTY, OR (5) ANY
OTHER ENVIRONMENTAL, HEALTH OR SAFETY CONDITION IN CONNECTION WITH THIS
AGREEMENT, THE NOTES OR ANY OTHER FINANCING DOCUMENT; PROVIDED, HOWEVER, NO
INDEMNITY SHALL BE AFFORDED UNDER THIS SECTION 10.4(C) IN RESPECT OF ANY
PROPERTY FOR ANY OCCURRENCE ARISING PRIMARILY FROM THE ACTS OR OMISSIONS OF AN
AGENT OR ANY LENDER DURING THE PERIOD AFTER WHICH SUCH PERSON, ITS SUCCESSORS OR
ASSIGNS SHALL HAVE OBTAINED ACTUAL PHYSICAL POSSESSION OF SUCH PROPERTY (WHETHER
BY FORECLOSURE OR DEED IN LIEU OF FORECLOSURE, AS MORTGAGEE-IN-POSSESSION OR
OTHERWISE); AND
(d) ENVIRONMENTAL WAIVER. WITHOUT LIMITING THE FOREGOING PROVISIONS,
EACH BORROWER HEREBY DOES WAIVE, RELEASE AND COVENANT NOT TO BRING AGAINST ANY
OF THE PERSONS INDEMNIFIED IN THIS SECTION 10.4 ANY DEMAND, CLAIM, COST RECOVERY
ACTION OR LAWSUIT THEY MAY NOW OR HEREAFTER HAVE OR ACCRUE (WHICH RELATE TO OR
ARISE AS A RESULT OF THE LOANS, THE LETTERS OF CREDIT OR ANY FINANCING DOCUMENT)
ARISING FROM (1) ANY ENVIRONMENTAL LAW NOW OR HEREAFTER ENACTED (INCLUDING THOSE
APPLICABLE TO ANY BORROWER UNLESS THE ACTS OR OMISSIONS OF ANY SUCH PERSON OR
THEIR RESPECTIVE SUCCESSORS AND ASSIGNS ARE THE PRIMARY CAUSE OF THE
CIRCUMSTANCES GIVING RISE TO SUCH DEMAND, COST RECOVERY ACTION OR LAWSUIT, (2)
THE PRESENCE, USE, RELEASE, STORAGE, TREATMENT OR DISPOSAL OF HAZARDOUS
SUBSTANCES ON OR AT ANY OF THE PROPERTIES OWNED OR OPERATED BY ANY CREDIT PARTY,
OR (3) THE BREACH OR NON-COMPLIANCE BY ANY CREDIT PARTY WITH ANY ENVIRONMENTAL
LAW OR ENVIRONMENTAL COVENANT APPLICABLE TO ANY BORROWER, UNLESS THE ACTS OR
OMISSIONS OF SUCH PERSON, ITS SUCCESSORS AND ASSIGNS ARE THE PRIMARY CAUSE OF
THE CIRCUMSTANCES GIVING RISE TO SUCH DEMAND, CLAIM, COST RECOVERY ACTION OR
LAWSUIT.
If and to the extent that the obligations of the Borrowers under this
Section 10.4 are unenforceable for any reason, each Borrower hereby agrees to
make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law. Each Borrower's
obligations under this Section 10.4 shall survive any termination of this
Agreement and the payment of the Notes. Notwithstanding the foregoing, in no
event shall any Canadian Borrower be required to pay any costs and expenses or
indemnify any Person pursuant to this Section 10.4 other than the Canadian
Administrative Agent, any Issuing Bank with respect to Canadian Letters of
Credit or the Canadian Lenders each acting in its capacity as such (and the
officers, directors, employees, representatives, agents and affiliates of such
Persons acting in such capacities).
Section 10.5 Right of Setoff. In addition to and not in limitation of
all rights of offset that any Lender or any Issuing Bank may have under
applicable law, each Lender or other holder of a Note, or any other Lender
Indebtedness shall, upon the occurrence of any Event of Default and at any time
during the continuance thereof and whether or not such Lender, such Issuing Bank
or such holder has made any demand or Borrower's obligations are matured, have
the right at any time and from time to time, without notice to any Borrower (any
such notice being expressly waived by each Borrower) to set-off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by any Lender or any
Issuing Bank to or for the credit or the account of the applicable Borrower
against any and all of the Lender Indebtedness owing to such Lender or such
Issuing Bank by such Borrower then outstanding, subject to the provisions of
Section 2.11(f), (g), (h) and (i); provided, that, no Lender shall exercise any
right of offset with respect to any deposit of any Canadian Borrower to satisfy
any Lender Indebtedness which is not Canadian Lender Indebtedness.
Section 10.6 Benefit of Agreement. The Notes, this Agreement and the
other Financing Documents shall be binding upon and inure to the benefit of and
be enforceable by the respective successors and assigns of the parties hereto,
provided that no Borrower may assign or transfer any of its interest hereunder
or thereunder without the prior written consent of each Lender.
Section 10.7 Successors and Assigns; Participations and Assignments.
(a) The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any Affiliate of any Issuing Bank that issues any
Letter of Credit), except that no Borrower may assign or otherwise transfer any
of its rights or obligations hereunder without the prior written consent of each
Lender (and any attempted assignment or transfer by any Borrower without such
consent shall be null and void). Except as otherwise expressly provided herein,
nothing in this Agreement shall be construed to confer upon any Person (other
than the parties hereto, their respective successors and assigns permitted
hereby any legal or equitable right, remedy or claim under or by reason of this
Agreement.
(b) Any Lender may assign to one or more assignees all or a portion of
its rights and obligations under this Agreement (including all or a portion of
its Commitments and the Loans at the time owing to it) by executing, and causing
the assignee thereof to execute, an assignment and acceptance in the form
attached hereto as Exhibit P ("Assignment and Acceptance"); provided, that, (1)
except in the case of an assignment to a Lender or an Affiliate of a Lender
(other than an assignment by a Canadian Lender to a Lender or an Affiliate which
is not a resident of Canada for purposes of the Income Tax Act (Canada)), each
of the Borrowers and the Administrative Agent (and, in the case of an assignment
of all or a portion of a Revolving Credit Commitment or any Lender's obligations
in respect of its Revolving Credit Exposure, any Issuing Bank which has
outstanding a Letter of Credit) must give their prior written consent to such
assignment (which consent shall not be unreasonably withheld), (2) except in the
case of an assignment of the entire remaining amount of an assigning Revolving
Lender's and its Related Affiliate's Revolving Credit Commitments, the aggregate
amount of the Revolving Credit Commitments assigned to an assignee and its
Related Affiliates, and the aggregate amount of the Revolving Credit Commitments
retained by the assignor and its Related Affiliates after giving effect to such
assignment, shall be not less than $5,000,000 (provided that if the Revolving
Credit Commitments have expired or terminated, such limits shall apply to the
amount of Revolving Credit Exposure assigned and retained), (3) except in the
case of an assignment of the entire interest of a Term Lender in the Term Loans
held by it, the aggregate principal amount of Term Loans assigned by such Term
Lender and the aggregate principal amount of Term Loans retained by such Term
Lender after giving affect to such assignment, shall not be less than
$5,000,000, (4) no US Revolving Lender shall assign all or any part of its US
Revolving Credit Commitment or US Revolving Credit Loans unless such Lender (and
its Related Affiliate if applicable) assigns the same percentage of its Canadian
Revolving Credit Commitment and Canadian Revolving Credit Loans to the same
assignee (or Related Affiliate of the same assignee), (5) no Canadian Lender
shall assign all or any part of its Canadian Revolving Credit Commitment or
Canadian Revolving Credit Loans unless such Lender (and its Related Affiliate if
applicable) assigns the same percentage of its US Revolving Credit Commitment
and US Revolving Credit Loans to the same assignee (or Related Affiliate of the
same assignee), (6) the parties to each assignment shall execute and deliver to
the Administrative Agent an Assignment and Acceptance, together with a
processing and recordation fee of $3,500, (7) the assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire; and provided further that any consent of the Borrowers otherwise
required under this paragraph shall not be required if an Event of Default has
occurred and is continuing, and (8) so long as JPMorgan Chase Bank shall remain
Administrative Agent hereunder, it and its Related Affiliates shall hold
aggregate Revolving Credit Commitments (prior to the termination thereof and
aggregate Revolving Credit Exposure after giving effect to such termination)
which is not less than the aggregate Revolving Credit Commitments (or aggregate
Revolving Credit Exposure as applicable) held by General Electric Capital
Corporation and its Affiliates (without giving effect to any increase in any
such commitments or exposure by General Electric Capital Corporation and its
Affiliates after the Closing Date). Subject to acceptance and recording thereof
pursuant to Section 10.7(d), from and after the effective date specified in each
Assignment and Acceptance the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Acceptance, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Section
2.17, Section 2.19, Section 2.21 and Section 10.4). Any assignment or transfer
by a Lender of rights or obligations under this Agreement that does not comply
with this paragraph shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance with
this Section 10.7(b). Notwithstanding the foregoing, the US Swingline Lender
shall not be permitted to make a partial assignment of the US Swingline
Commitment. Notwithstanding anything contained in this Agreement to the
contrary, no assignee of a Canadian Lender shall be permitted to seek any
indemnification for, or the payment of, any Indemnified Taxes or Other Taxes
described in Section 2.21 hereof or any penalties, interest and reasonable
expenses arising therefrom or with respect thereto from any Canadian Borrower,
unless amounts payable to the Lender from which the assignee received its
assignment (the "assignor") would have also been subject to, or such assignor
would have also been required to pay, such Indemnified Taxes or Other Taxes;
provided, however, the limitation contained in this sentence shall not apply to
any assignees who are assigned their interests hereunder during the existence of
a Default or Event of Default.
(c) The Administrative Agent, acting for this purpose as an agent of
the Borrowers, shall maintain at one of its offices in New York, New York a copy
of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans and Reimbursement Obligations owing to, each
Lender pursuant to the terms hereof from time to time (the "Register"). The
entries in the Register shall be conclusive, and the Borrowers, the
Administrative Agent, the Issuing Banks and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by each Borrower, any
Issuing Bank and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in Section 10.7(b)
and any written consent to such assignment required by Section 10.7(b), the
Administrative Agent shall accept such Assignment and Acceptance and record the
information contained therein in the Register. No assignment shall be effective
for purposes of this Agreement unless it has been recorded in the Register as
provided in this paragraph.
(e) Any Lender may, without the consent of any Borrower, the
Administrative Agent or any Issuing Bank, sell participations to one or more
banks or other entities (a "Participant") in all or a portion of such Lender's
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans and Reimbursement Obligations owing to it); provided
that (1) such Lender's obligations under this Agreement shall remain unchanged,
(2) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, (3) each Borrower, the Administrative
Agent, the Canadian Administrative Agent, the Issuing Banks and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement and
(4) any Canadian Lender that intends to sell a participation to a Person which
is not a resident of Canada for purposes of the Income Tax Act (Canada) shall
give prior written notice thereof to the Canadian Borrowers. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver described in Section 10.2(a) or Section 10.2(b) that
affects such Participant, no US Revolving Lender shall sell any participation in
its US Revolving Credit Commitments or US Revolving Credit Loans unless such
Lender (or its Related Affiliate) sells a participation interest of an equal
percentage of its Canadian Revolving Credit Commitment and Canadian Revolving
Credit Loans to the same Participant or a Related Affiliate of such Participant,
and no Canadian Lender shall sell any participation in its Canadian Revolving
Credit Commitments or Canadian Revolving Credit Loans unless such Lender (or its
Related Affiliate) sells an equal percentage of its US Revolving Credit
Commitment and US Revolving Credit Loans to the same Participant or a Related
Affiliate of such Participant. Subject to this Section 10.7(e), each Borrower
agrees that each Participant shall be entitled to the benefits of Section 2.17,
Section 2.19 and Section 2.21 to the same extent as, but not to any greater
extent than the Lender from which it acquired the participation. To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 10.5 as though it were a Lender, provided such Participant agrees to be
subject to Section 2.20 as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater payment
under Section 2.19 or Section 2.21 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrowers' prior written consent. A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 2.21 unless
the Borrowers are notified of the participation sold to such Participant and
such Participant agrees, for the benefit of each Borrower, to comply with
Section 2.21(f) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section 10.7 shall not apply to any such pledge
or assignment of a security interest; provided that no such pledge or assignment
of a security interest shall release a Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.
(h) Each Borrower authorizes each Lender to disclose to any participant
or Assignee (each, a "Transferee") and any prospective Transferee any and all
information in such Lender's possession concerning the Borrowers and their
Affiliates which has been delivered to such Lender by or on behalf of any
Borrower pursuant to this Agreement or which has been delivered to such Lender
by or on behalf of any Borrower in connection with such Lender's credit
evaluation of the Borrowers and their Affiliates prior to becoming a party to
this Agreement. No assignment or participation made or purported to be made to
any Transferee shall be effective without the prior written consent of the
Borrowers if it would require it to make any filing with any Governmental
Authority or qualify any Loan or Note under the laws of any jurisdiction, and
the Company shall be entitled to request and receive such information and
assurances as it may reasonably request from any Lender or any Transferee to
determine whether any such filing or qualification is required or whether any
assignment or participation is otherwise in accordance with applicable law.
Section 10.8 Governing Law; Submission to Jurisdiction; etc.
(a) Governing Law. This Agreement and the rights and obligations of the
parties hereunder and under the Notes shall be construed in accordance with and
be governed by the laws of the State of New York and, to the extent controlling,
laws of the United States of America.
(b) Submission to Jurisdiction. Any legal action or proceeding with
respect to this Agreement, the Notes or the other Financing Documents may be
brought in the courts of the State of New York or of the United States of
America for the Southern District of New York, and, by execution and delivery of
this Agreement, each Borrower hereby accepts for itself and in respect of its
Property, generally and unconditionally, the jurisdiction of the aforesaid
courts. Each Borrower hereby irrevocably waives any objection, including, but
not limited to, any objection to the laying of venue or based on the grounds of
Forum Non Conveniens, which it may now or hereafter have to the bringing of any
such action or proceeding in such respective jurisdictions.
(c) WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT ALLOWED BY APPLICABLE
LAW, EACH OF THE BORROWERS, THE AGENTS, THE ISSUING BANKS AND THE LENDERS (i)
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO ANY FINANCING DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN;
(ii) IRREVOCABLY WAIVE ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH
LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES
OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (iii) CERTIFY THAT NO PARTY
HERETO NOR ANY REPRESENTATIVE OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS; AND (iv) ACKNOWLEDGE THAT IT
HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER FINANCING DOCUMENTS AND
THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BASED UPON, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION.
(d) Waiver of Consequential Damages. To the maximum extent allowed by
applicable law, each Borrower, each Agent, the Issuing Banks and the Lenders (1)
irrevocably waive any right each may have to claim or recover in any such
litigation any special, exemplary, punitive or consequential damages, or damages
other than, or in addition to, actual damages; (2) certifies that no party
hereto nor any representative or counsel for any party hereto has represented,
expressly or otherwise, or implied that such party would not, in the event of
litigation, seek to enforce the foregoing waiver; and (3) acknowledges that it
has been induced to enter into this Agreement, the other Financing Documents and
the transactions contemplated hereby and thereby based upon, among other things,
the mutual waivers and certifications contained in this Section 10.8.
(e) Designation of Process Agent. Each Borrower hereby irrevocably
designates CT Corporation System, with an office on the date hereof at ▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, as the designee, appointee and process
agent of such Borrower to receive, for and on behalf of such Borrower, service
of process in such respective jurisdictions in any legal action or proceeding
with respect to this Agreement, the Notes, or the other Financing Documents. It
is understood that a copy of such process served on such Agent will be promptly
forwarded by mail to such Borrower at its address set forth opposite its
signature below, but the failure of any Borrower to receive such copy shall not
affect in any way the service of such process. Each Borrower further irrevocably
consents to the service of process of any of the aforementioned courts in any
such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to the Company at its said address, such
service to become effective 30 days after such mailing.
(f) Service of Process. Nothing herein shall affect the right of
Administrative Agent or any Lender or any holder of a Note to serve process in
any other manner permitted by law or to commence legal proceedings or otherwise
proceed against any Borrower in any other jurisdiction.
(g) "Judgment Currency".
(i) If, for the purpose of obtaining or enforcing any judgment against
any Borrowers or any Credit Party in any court in any jurisdiction, it becomes
necessary to convert into any other currency (such other currency being
hereinafter in this Section 10.8(g) referred to as the "Judgment Currency") an
amount due under any Financing Document in any currency (the "Obligation
Currency") other than the Judgment Currency, the conversion shall be made at the
rate of exchange prevailing on the Business Day immediately preceding (i) the
date of actual payment of the amount due, in the case of any proceeding in the
courts of any jurisdiction that will give effect to such conversion being made
on such date, or (ii) the date on which the judgment is given, in the case of
any proceeding in the courts of any other jurisdiction (the applicable date as
of which such conversion is made pursuant to this Section 10.8(g) being
hereinafter in this Section 10.8(g) referred to as the "Judgment Conversion Date
").
(ii) If, in the case of any proceeding in the court of any jurisdiction
referred to in Section 10.8(g)(i), there is a change in the rate of exchange
prevailing between the Judgment Conversion Date and the date of actual receipt
for value of the amount due, the applicable Borrower or Credit Party shall pay
such additional amount (if any, but in any event not lesser amount) as may be
necessary to ensure that the amount actually received in the Judgment Currency,
when converted at the rate of exchange prevailing on the date of payment, will
produce the amount of the Obligation Currency which could have been purchased
with the amount of the Judgment Currency stipulated in the judgment or judicial
order at the rate of exchange prevailing on the Judgment Conversion Date. Any
amount due from a Borrower or Credit Party under Section 10.8(g)(ii) shall be
due as a separate debt and shall not be affected by judgment being obtained for
any other amounts due under or in respect of any of the Loan Documents.
(iii) The term "rate of exchange" in this Section 10.8(g) means the
rate of exchange at which the Administrative Agent would, on the relevant date
at or about 12:00 noon (New York time), be prepared to sell the Obligation
Currency against the Judgment Currency.
Section 10.9 Independent Nature of Lenders' Rights. The amounts payable
at any time hereunder to each Lender shall be a separate and independent debt,
and each Lender shall be entitled to protect and enforce its rights arising out
of this Agreement, and it shall not be necessary for any other Lender to be
joined as an additional party in any proceeding for such purpose.
Section 10.10 Invalidity. In the event that any one or more of the
provisions contained in the Notes, this Agreement or in any other Financing
Document shall, for any reason, be held invalid, illegal or unenforceable in any
respect, (a) each Borrower agrees that such invalidity, illegality or
unenforceability shall not affect any other provision of the Notes, this
Agreement or any other Financing Document and (b) each Borrower and the
Administrative Agent (acting on behalf and at the direction of the Lenders) and
the Canadian Administrative Agent (acting on behalf and at the direction of the
Canadian Lenders) will negotiate in good faith to amend such provision so as to
be legal, valid, and enforceable.
Section 10.11 Renewal, Extension or Rearrangement. All provisions of
this Agreement and of any other Financing Documents relating to the Notes or
other Lender Indebtedness shall apply with equal force and effect to each and
all promissory notes hereafter executed which in whole or in part represent a
renewal, extension for any period, increase or rearrangement of any part of the
Lender Indebtedness originally represented by the Notes, or of any part of such
other Lender Indebtedness.
Section 10.12 Confidentiality. The Administrative Agent, the Canadian
Administrative Agent, the Issuing Banks and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates' directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this Agreement,
(e) in connection with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or the enforcement of rights
hereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section 10.12, to any assignee of or Participant in, or
any prospective assignee of or Participant in, any of its rights or obligations
under this Agreement, (g) with the consent of the Borrowers or (h) to the extent
such Information (1) becomes publicly available other than as a result of a
breach of this Section 10.12 or (2) becomes available to the Administrative
Agent, the Canadian Administrative Agent, any Issuing Bank or any Lender on a
non-confidential basis from a source other than a Borrower. For the purposes of
this Section 10.12, "Information" means all information received from any
Borrower relating to a Borrower or its business, other than any such information
that is available to the Administrative Agent, the Canadian Administrative
Agent, any Issuing Bank or any Lender on a non-confidential basis prior to
disclosure by a Borrower. Any Person required to maintain the confidentiality of
Information as provided in this Section 10.12 shall be considered to have
complied with its obligation to do so if such Person has exercised the same
degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information. Each Borrower
acknowledges that the Administrative Agent or the Canadian Administrative Agent
may be providing debt financing, equity capital or other services (including
financial advisory services) to other companies in respect of which a Credit
Party may have conflicting interests regarding the transactions contemplated by
this Agreement or the other Financing Documents. The Administrative Agent and
the Canadian Administrative Agent will not use confidential information obtained
from any Credit Party by virtue of the transaction contemplated by this
Agreement or the other Financing Documents or their other relationships with the
Borrower in connection with the performance by the Administrative Agent and the
Canadian Administrative Agent of services for other companies, and the
Administrative Agent and the Canadian Administrative Agent will not furnish any
such information to other companies. Each Borrower also acknowledges that the
Administrative Agent and the Canadian Administrative Agent has no obligation to
use in connection with the transactions contemplated by this Agreement or the
other Financing Documents, or to furnish to any Credit Party, confidential
information obtained from other companies.
Section 10.13 Interest. It is the intention of the parties hereto to
conform strictly to usury laws applicable to each Agent, the Issuing Banks and
the Lenders (collectively, the "Financing Parties") and the Transactions.
Accordingly, if the Transactions would be usurious as to any Financing Party
under laws applicable to it, then, notwithstanding anything to the contrary in
the Notes, this Agreement or in any other Financing Document or agreement
entered into in connection with the Transactions or as security for the Notes,
it is agreed as follows: (a) the aggregate of all consideration which
constitutes interest under law applicable to any Financing Party that is
contracted for, taken, reserved, charged or received by such Financing Party
under the Notes, this Agreement or under any of such other Financing Documents
or agreements or otherwise in connection with the Transactions shall under no
circumstances exceed the maximum amount allowed by such applicable law, (b) in
the event that the maturity of the Notes is accelerated for any reason, or in
the event of any required or permitted prepayment, then such consideration that
constitutes interest under law applicable to any Financing Party may never
include more than the maximum amount allowed by such applicable law, and (c)
excess interest, if any, provided for in this Agreement or otherwise in
connection with the Transactions shall be canceled automatically by such
Financing Party and, if theretofore paid, shall be credited by such Financing
Party on the principal amount of the Borrower's Indebtedness to such Financing
Party (or, to the extent that the principal amount of the Borrower's
Indebtedness to such Financing Party shall have been or would thereby be paid in
full, refunded by such Financing Party to the Borrowers). The right to
accelerate the maturity of the Notes does not include the right to accelerate
any interest which has not otherwise accrued on the date of such acceleration,
and the Financing Parties do not intend to collect any unearned interest in the
event of acceleration. All sums paid or agreed to be paid to the Financing
Parties for the use, forbearance or detention of sums included in the Lender
Indebtedness shall, to the extent permitted by law applicable to such Financing
Party, be amortized, prorated, allocated and spread throughout the full term of
the Notes until payment in full so that the rate or amount of interest on
account of the Lender Indebtedness does not exceed the applicable usury ceiling,
if any. As used in this Section 10.13, the terms "applicable law" or "laws
applicable to any Financing Party" shall mean the law of any jurisdiction whose
laws may be mandatorily applicable notwithstanding other provisions of this
Agreement, or law of the United States of America or Canada applicable to any
Financing Party and the Transactions which would permit such Financing Party to
contract for, charge, take, reserve or receive a greater amount of interest than
under such jurisdiction's law.
Section 10.14 Entire Agreement. The Notes, this Agreement and the other
Financing Documents embody the entire agreement and understanding between the
Administrative Agent, the Canadian Administrative Agent, the Issuing Banks or
the Lenders and the other respective parties hereto and thereto and supersede
all prior agreements and understandings between such parties relating to the
subject matter hereof and thereof and may not be contradicted by evidence of
prior, contemporaneous agreements of the parties. There are no unwritten oral
agreements between the parties.
Section 10.15 Attachments. The exhibits, schedules and annexes attached
to this Agreement are incorporated herein and shall be considered a part of this
Agreement for the purposes stated herein, except that in the event of any
conflict between any of the provisions of such exhibits and the provisions of
this Agreement, the provisions of this Agreement shall prevail.
Section 10.16 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original
but all of which shall together constitute one and the same instrument.
Section 10.17 Survival of Indemnities. The Borrowers' obligations under
Section 2.17, Section 2.19, Section 2.21 and Section 10.4 shall survive the
payment in full of the Loans and the Letter of Credit Liabilities.
Section 10.18 Headings Descriptive. The headings of the several
sections and subsections of this Agreement, and the table of contents, are
inserted for convenience only and shall not in any way affect the meaning or
construction of any provision of this Agreement.
Section 10.19 Satisfaction Requirement. If any agreement, certificate,
instrument or other writing, or any action taken or to be taken, is by the terms
of this Agreement required to be satisfactory to any party, the determination of
such satisfaction shall be made by such party in its sole and exclusive judgment
exercised reasonably and in good faith.
Section 10.20 Exculpation Provisions. Each of the parties hereto
specifically agrees that it has a duty to read this Agreement and the other
Financing Documents and agrees that it is charged with notice and knowledge of
the terms of this Agreement and the other Financing Documents; that it has in
fact read this Agreement and is fully informed and has full notice and knowledge
of the terms, conditions and effects of this Agreement; that it has been
represented by legal counsel of its choice throughout the negotiations preceding
its execution of this Agreement and the other Financing Documents; and has
received the advice of its attorneys in entering into this Agreement and the
other Financing Documents; and that it recognizes that certain of the terms of
this Agreement and the other Financing Documents result in one party assuming
the liability inherent in some aspects of the transaction and relieving the
other party of its responsibility for such liability. Each party hereto agrees
and covenants that it will not contest the validity or enforceability of any
exculpatory provision of this Agreement and the other Financing Documents on the
basis that the party had no notice or knowledge of such provision or that the
provision is not "conspicuous."
Section 10.21 Secured Affiliate; Cash Management Affiliate. For
purposes of this Agreement and all other Financing Documents (other than
applicable Swap Agreements and Cash Management Agreements), if a Secured
Affiliate or Cash Management Affiliate of a Lender has entered into one or more
Swap Agreements or Cash Management Agreements with any Credit Party, then to the
extent that such Secured Affiliate or Cash Management Affiliate has rights
against or is owed obligations by (or if the affiliated Lender, rather than the
Secured Affiliate or Cash Management Affiliate, were the counter-party to the
applicable Swap Agreement or the other party to the applicable Cash Management
Agreement, such rights or obligations that such Lender has) the Borrowers
hereunder or under any other Financing Document (other than applicable Swap
Agreements and Cash Management Agreements), such affiliated Lender shall be the
agent and attorney-in-fact for such Secured Affiliate or Cash Management
Affiliate with regard to any such rights and obligations, or deemed rights and
obligations, as if such Lender were the counter-party to the applicable Swap
Agreement or the other party to the applicable Cash Management Agreement
including, but not limited to, the following: (a) all distributions or payments
in respect of Collateral owing to such Secured Affiliate or Cash Management
Affiliate shall be distributed or paid to such Lender, (b) all representations,
statements or disclaimers made herein or in any Financing Document by or to such
Lender shall be deemed to have been made by or to such Secured Affiliate or Cash
Management Affiliate, (c) all obligations incurred by such Lender that would
have been incurred by the Secured Affiliate or Cash Management Affiliate if it
were a party hereto (including, but not limited to, obligations under Section
9.6) shall be the obligations of such Lender, and such Lender, as the agent and
attorney-in-fact of its Secured Affiliate or Cash Management Affiliate, will
make any and all payments owing to the Administrative Agent with respect to such
obligations or deemed obligations of its Secured Affiliate or Cash Management
Affiliate. Each such Lender represents, warrants and covenants to and with the
Administrative Agent and the Canadian Administrative Agent that such Lender has,
or at all applicable times will have, full power and authority to act as Agent
and attorney-in-fact for its Secured Affiliates or Cash Management Affiliates.
Under no circumstance shall any Secured Affiliate or Cash Management Affiliate
have any voting rights hereunder and the voting rights of any affiliated Lender
shall not be increased by virtue of the obligations owing to any such Secured
Affiliate or Cash Management Affiliate.
Section 10.22 No Financial Assistance by Canadian Credit Parties.
Notwithstanding any provision of this Agreement or any of the other Financing
Documents to the contrary (including, without limitation, Section 10.4 and
Section 10.21 of this Agreement) no Canadian Credit Party will have any
liability hereunder or thereunder for, nor shall any of the assets of any such
Canadian Credit Party (including proceeds of any Collateral owned by any such
Canadian Credit Party) be applied against or issued to satisfy or offset, any
indebtedness, obligations or liabilities (actual or contingent) of any Person
which is not indebtedness, an obligation, or a liability of a Canadian Borrower;
provided, that, nothing contained herein shall limit or impair the rights of any
Agent, any Lender or any Secured Affiliate or the liability or obligation of any
Canadian Credit Party with respect to the Canadian Lender Indebtedness,
including, without limitation, any Swap Agreements or Cash Management Agreements
entered into with any Canadian Credit Party.
Section 10.23 Missouri Law Provision. ORAL AGREEMENTS OR COMMITMENTS TO
LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT
INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE. TO PROTECT
THE BORROWERS AND THE LENDERS FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY
AGREEMENTS WE REACH COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH
IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS
WE MAY LATER AGREE IN WRITING TO MODIFY IT.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed as of the date first above written.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
SIGNATURE PAGE
TO
AMENDED AND RESTATED CREDIT AGREEMENT
DATED DECEMBER 31, 2002
BY AND AMONG
MAVERICK TUBE CORPORATION AND CERTAIN OF ITS SUBSIDIARIES, AS BORROWERS,
JPMORGAN CHASE BANK, AS THE ADMINISTRATIVE AGENT,
CIT BUSINESS CREDIT CANADA INC., AS THE CANADIAN ADMINISTRATIVE AGENT,
GENERAL ELECTRIC CAPITAL CORPORATION, AS THE DOCUMENTATION AGENT,
AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS THE LENDERS
Signature Page
US BORROWERS: MAVERICK TUBE CORPORATION
By:
Name:
Title:
MAVERICK INVESTMENT CORPORATION
By:
Name:
Title:
MAVERICK TUBE L.P.
By: Maverick Investment Corporation,
its General Partner
By:
Name:
Title:
PRECISION TUBE HOLDING CORPORATION
By:
Name:
Title:
MAVERICK GP, INC.
By:
Name:
Title:
SIGNATURE PAGE
TO
AMENDED AND RESTATED CREDIT AGREEMENT
DATED DECEMBER 31, 2002
BY AND AMONG
MAVERICK TUBE CORPORATION AND CERTAIN OF ITS SUBSIDIARIES, AS BORROWERS,
JPMORGAN CHASE BANK, AS THE ADMINISTRATIVE AGENT,
CIT BUSINESS CREDIT CANADA INC., AS THE CANADIAN ADMINISTRATIVE AGENT,
GENERAL ELECTRIC CAPITAL CORPORATION, AS THE DOCUMENTATION AGENT,
AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS THE LENDERS
PRECISION GP, LLC
By:
Name:
Title:
PRECISION TUBE TECHNOLOGY, L.P.
By: Precision GP, LLC,
general partner
By:
Name:
Title:
MAVERICK C&P, INC.
By:
Name:
Title:
CANADIAN BORROWERS: PRUDENTIAL STEEL LTD.
By:
Name:
Title:
MAVERICK TUBE (CANADA) INC.
By:
Name:
Title:
MAVERICK EXCHANGECO (NOVA SCOTIA) ULC
By:
Name:
Title:
PRECISION TUBE CANADA LIMITED
By:
Name:
Title:
Address for notice for all Borrowers:
Maverick Tube Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn:
Fax:
Phone:
SIGNATURE PAGE
TO
AMENDED AND RESTATED CREDIT AGREEMENT
DATED DECEMBER 31, 2002
BY AND AMONG
MAVERICK TUBE CORPORATION AND CERTAIN OF ITS SUBSIDIARIES, AS BORROWERS,
JPMORGAN CHASE BANK, AS THE ADMINISTRATIVE AGENT,
CIT BUSINESS CREDIT CANADA INC., AS THE CANADIAN ADMINISTRATIVE AGENT,
GENERAL ELECTRIC CAPITAL CORPORATION AS THE DOCUMENTATION AGENT,
AND FINANCIAL INSTITUTIONS PARTIES THERETO, AS THE LENDERS
LENDERS: JPMORGAN CHASE BANK, individually, as an Issuing Bank, as
the Administrative Agent, as the US Swingline Lender and a
US Revolving Lender
By:
Name:
Title:
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ BRANCH, as a Canadian Lender
By:
Name:
Title:
Address: ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ Bank Plaza
South Tower, Suite 1800
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
CIT BUSINESS CREDIT CANADA INC., individually, as the
Canadian Administrative Agent, as an Issuing Bank and as a
Canadian Lender
By:
Name:
Title:
Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
GENERAL ELECTRIC CAPITAL CORPORATION, as the Documentation
Agent and as a US Revolving Lender
By:
Name:
Title:
Address: ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Address: General Electric Capital Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Region Counsel - Commercial Finance
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
GENERAL ELECTRIC CAPITAL CANADA INC., as a Canadian Lender
By:
Name:
Title:
Address: c/o GE Capital Commercial Finance, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Address: GE Capital Commercial Finance, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Region Counsel - Commercial Finance
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
THE CIT GROUP/BUSINESS CREDIT, INC., as a US Revolving Lender
By:
Name:
Title:
Address: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Regional Credit Manager
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
U.S. BANK NATIONAL ASSOCIATION, as a US Revolving Lender
By:
Name:
Title:
Address: ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: 314-418-8555
FLEET CAPITAL CANADA CORPORATION, as a Canadian Lender
By:
Name:
Title:
Address: ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
FLEET CAPITAL CORPORATION, as a US Revolving Lender
By:
Name:
Title:
Address: ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
RBC CENTURA BANK, as a US Revolving Lender
By:
Name:
Title:
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: E. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
ROYAL BANK OF CANADA, as a Canadian Lender
By:
Name:
Title:
Address: ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
CITIZENS BUSINESS CREDIT, a division of Citizens Leasing
Corporation, as a US Revolving Lender
By:
Name:
Title:
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Annex I - Page 1
ANNEX I
--------------------------------- ---------------------- ---------------------- ----------------------- ----------------------
Lender US Revolving Credit Canadian Revolving US Swingline Loan SOFA Commitment
Commitment Credit Commitment Commitment
--------------------------------- ---------------------- ---------------------- ----------------------- ----------------------
JPMorgan Chase Bank $22,733,600.00 0 $10,000,000 $2,965,700.00
--------------------------------- ---------------------- ---------------------- ----------------------- ----------------------
JPMorgan Chase Bank, Toronto 0 $11,266,400.00 0 0
Branch
--------------------------------- ---------------------- ---------------------- ----------------------- ----------------------
General Electric Capital $23,733,200.00 0 0 $2,965,700.00
Corporation
--------------------------------- ---------------------- ---------------------- ----------------------- ----------------------
General Electric Capital Canada 0 $10,266,800.00 0 0
Inc.
--------------------------------- ---------------------- ---------------------- ----------------------- ----------------------
The CIT Group/Business Credit, $23,733,200.00 0 0 $1,825,600.00
Inc.
--------------------------------- ---------------------- ---------------------- ----------------------- ----------------------
CIT Business Credit Canada Inc. 0 $10,266,800.00 0 0
--------------------------------- ---------------------- ---------------------- ----------------------- ----------------------
U.S. Bank National Association $18,000,000.00 0 0 0
--------------------------------- ---------------------- ---------------------- ----------------------- ----------------------
Fleet Capital Corporation $17,400,000.00 0 0 $1,000,000.00
--------------------------------- ---------------------- ---------------------- ----------------------- ----------------------
Fleet Capital Canada Corp. 0 $6,600,000.00 0 0
--------------------------------- ---------------------- ---------------------- ----------------------- ----------------------
RBC Centura Bank $6,400,000.00 0 0 $1,243,000.00
--------------------------------- ---------------------- ---------------------- ----------------------- ----------------------
Royal Bank of Canada 0 $16,600,000.00 0 0
--------------------------------- ---------------------- ---------------------- ----------------------- ----------------------
Citizens Business Credit, a $18,000,000.00 0 0 0
division of Citizens Leasing
Corporation
--------------------------------- ---------------------- ---------------------- ----------------------- ----------------------
Total $10,000,000.00
--------------------------------- ---------------------- ---------------------- ----------------------- ----------------------
SCHEDULES
Schedule 1.3......Projections
Schedule 3.3......Post-Closing Matters
Schedule 5.7......Litigation
Schedule 5.9......US Employee Benefits Disclosures
Schedule 5.15.....Compliance with Laws
Schedule 5.19.....Capital Structure
Schedule 5.20.....Insurance
Schedule 5.21.....Environmental Matters
Schedule 5.23.....Employee Matters
Schedule 5.24.....Real Property Locations
Schedule 5.26.....Indebtedness
Schedule 7.2......Permitted Indebtedness
Schedule 7.3......Permitted Liens
Schedule 7.6......Permitted Investments
Schedule 7.8......Nature of Business
EXHIBITS
Exhibit A-1.......Form of US Borrowing Base Report
Exhibit A-2.......Form of Canadian Borrowing Base Report
Exhibit A-3.......Form of SOFA Borrowing Base Report
Exhibit B-1.......Form of Borrowing Request (US Revolving Credit Loan)
Exhibit B-2.......Form of Borrowing Request (Canadian Revolving Credit Loans)
Exhibit B-3.......Form of Request for US Letters of Credit
Exhibit B-4.......Form of Request for Canadian Letters of Credit
Exhibit B-5.......Form of Borrowing Request (US Swingline Loans)
Exhibit B-6.......Form of Borrowing Request (SOFA Loans)
Exhibit C-1.......Form of Canadian Real Estate Mortgage
Exhibit C-2.......Form of Canadian Assignment of Leases and Rents
Exhibit D.........Form of Canadian Revolving Credit Note
Exhibit E.........Form of Perfection Certificate Update
Exhibit F.........Form of Term Lender Joinder Agreement
Exhibit G.........Form of Term Note
Exhibit H.........Form of US Real Estate Mortgage
Exhibit I.........Form of US Revolving Credit Note
Exhibit J.........Form of US Swingline Note
Exhibit K.........Form of B/A Equivalent Note
Exhibit L.........Form of Borrower Joinder Agreement
Exhibit M.........Form of Compliance Certificate
Exhibit N-1.......Form of Interim Account Report (US Borrowers)
Exhibit N-2.......Form of Interim Account Report (Canadian Borrowers)
Exhibit O-1.......Form of Inventory Designation Report (US Borrowers)
Exhibit O-2.......Form of Inventory Designation Report (Canadian Borrowers)
Exhibit P.........Form of Assignment and Acceptance
Exhibit Q.........Form of Restricted Account Agreement
Exhibit R.........Form of Certificate of Effectiveness
Exhibit S.........Form of SOFA Note