Exhibit 4
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IPG HOLDINGS LP
AMENDED AND RESTATED
NOTE AGREEMENT
DATED AS OF DECEMBER 20, 2001
U.S. $137,000,000 SENIOR SECURED NOTES DUE MARCH 31, 2008
GUARANTEED BY
INTERTAPE POLYMER GROUP INC.
INTERTAPE POLYMER INC.
INTERTAPE POLYMER CORP.
IPG FINANCE LLC
IPG (US) INC.
AND EACH OF THE OTHER RESTRICTED SUBSIDIARIES
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TABLE OF CONTENTS
PAGE
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1. BACKGROUND; AMENDMENT AND RESTATEMENT...........................................................1
1.1. Background..............................................................................1
1.2. Authorization of Amendment and Restatement..............................................2
1.3. Amendment and Restatement...............................................................2
1.4. Effective Date..........................................................................2
1.5. Guaranty Agreements.....................................................................3
1.6. Collateral..............................................................................3
1.7. Waiver of Existing Defaults.............................................................4
2. INTEREST; PREPAYMENT OF NOTES...................................................................4
2.1. Interest................................................................................4
2.2. Prepayments.............................................................................5
2.3. Required Prepayments upon Equity Events.................................................5
2.4. Required Prepayments from Excess Cash Flow..............................................7
2.5. Offer to Prepay upon Change in Control..................................................8
2.6. Insurance and Condemnation Proceeds.....................................................10
2.7. Optional Prepayment with Premium........................................................10
2.8. Notice of Certain Optional Prepayments..................................................10
2.9. Application of Prepayments..............................................................10
2.10. Direct Payment..........................................................................11
3. REPRESENTATIONS.................................................................................11
3.1. Representations of the General Partner, the Issuer and the Parent.......................11
3.2. Representations of the Noteholders......................................................11
3.3. Deemed Representations of Transferees of the Notes......................................13
4. CONDITIONS TO THE EFFECTIVENESS OF THE AGREEMENT................................................13
4.1. General Partner and Issuer Compliance Certificates......................................13
4.2. Parent Closing Certificates; Restricted Subsidiary Certificates.........................13
4.3. Guaranty Agreements.....................................................................14
4.4. Legal Opinions..........................................................................14
4.5. Security Documents; Collateral..........................................................15
4.6. Collateral Matters......................................................................16
4.7. Bank Documents..........................................................................17
4.8. Private Placement Numbers...............................................................18
4.9. Consent to Receive Service of Process...................................................18
4.10. Representations and Warranties..........................................................18
4.11. Total Debt to EBITDA Ratio..............................................................18
4.12. Financial Statements....................................................................18
4.13. Performance; No Default.................................................................18
4.14. Legality................................................................................18
4.15. Satisfactory Proceedings................................................................19
4.16. Payment of Special Counsel Fees and Noteholder Expenses.................................19
4.17. Payment of Certain Fees.................................................................19
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5. PARENT, GENERAL PARTNER AND ISSUER COVENANTS.... ...............................................20
5.1. Corporate or Partnership Existence, Etc.................................................20
5.2. Insurance...............................................................................20
5.3. Taxes; Claims for Labor and Materials; Compliance with Laws.............................24
5.4. Maintenance, Etc........................................................................24
5.5. Nature of Business......................................................................25
5.6. Consolidated Net Worth..................................................................25
5.7. Coverage Ratios.........................................................................26
5.8. Leverage Ratios.........................................................................27
5.9. Additional Limitations on Debt..........................................................28
5.10. Limitation on Liens.....................................................................29
5.11. Permitted Investments and Restricted Payments...........................................31
5.12. Mergers, Consolidations and Sales of Assets.............................................33
5.13. Interest Rate Adjustment Date Fee.......................................................36
5.14. Repurchase of Notes.....................................................................36
5.15. Transactions with Affiliates............................................................36
5.16. Termination of Pension Plans............................................................36
5.17. Designation of Restricted Subsidiaries..................................................37
5.18. Reports and Rights of Inspection........................................................37
5.19. Pari Passu Debt.........................................................................42
5.20. Most Favored Lender.....................................................................43
5.21. Limitation on Business Activities.......................................................43
5.22. Ownership of Subsidiaries...............................................................43
5.23. Limitation on Issuer Debt...............................................................43
5.24. No Restrictions on Distributions........................................................44
5.25. Limitation on Capital Expenditures......................................................44
5.26. Intellectual Property...................................................................44
5.27. No Amendments to Credit Agreement.......................................................45
6. EVENTS OF DEFAULT AND REMEDIES THEREFOR..........................................................45
6.1. Events of Default.......................................................................45
6.2. Notice to Holders.......................................................................47
6.3. Acceleration of Maturities..............................................................47
6.4. Rescission of Acceleration..............................................................48
7. AMENDMENTS, WAIVERS AND CONSENTS................................................................48
7.1. Consent Required........................................................................48
7.2. Solicitation of Holders.................................................................49
7.3. Effect of Amendment or Waiver...........................................................49
8. INTERPRETATION OF AGREEMENT; DEFINITIONS........................................................49
8.1. Definitions.............................................................................49
8.2. Accounting Principles...................................................................73
8.3. Directly or Indirectly..................................................................73
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9. MISCELLANEOUS...................................................................................73
9.1. Registered Notes........................................................................73
9.2. Exchange of Notes.......................................................................73
9.3. Loss, Theft, Etc. of Notes..............................................................74
9.4. Expenses; Stamp Tax and Other Indemnity.................................................74
9.5. Powers and Rights Not Waived; Remedies Cumulative.......................................75
9.6. Notices.................................................................................75
9.7. Successors and Assigns..................................................................76
9.8. Survival of Covenants and Representations...............................................76
9.9. Severability............................................................................76
9.10. Governing Law...........................................................................76
9.11. Jurisdiction and Service in Respect of Issuer and Parent................................76
9.12. Payments Free and Clear of Taxes........................................................77
9.13. Currency of Payments; Judgments.........................................................77
9.14. Captions................................................................................78
9.15. Power of Attorney for Quebec Purposes...................................................78
9.16. Interest Provisions.....................................................................79
9.17. Language................................................................................80
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Schedules and Exhibits
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Schedule I -- Information as to Noteholders
Schedule II -- Existing Material Adverse Changes and Existing
Defaults
Schedule III -- Environmental Information
Exhibit A -- Form of Senior Secured Note due March 31, 2008
Exhibit B-1 -- Representations and Warranties of the Issuer and
General Partner
Annex A -- Litigation
Exhibit B-2 -- Representations and Warranties of the Parent
Annex A -- Subsidiaries
Annex B -- Debt and Long-Term Liens
Annex C -- Locations of Assets and Head Offices
Annex D -- Real Property
Annex E -- Unrestricted and Inactive Subsidiaries
Annex F -- Patents and Trademarks
Annex G -- Claims, etc. regarding Hazardous Substances
Annex H -- Hazardous Substances
Annex I -- Litigation
Exhibit 4.1(a) -- Form of Officer's Certificate of Issuer
Exhibit 4.1(b)-1 -- Form of Secretary's Certificate of General Partner
Exhibit 4.1(b)-2 -- Form of Secretary's Certificate of Issuer
Exhibit 4.2(a) -- Form of Officer's Certificate of Parent
Exhibit 4.2(b) -- Form of Secretary's Certificate of Parent
Exhibit 4.3(a) -- Form of Parent Guaranty Agreement
Exhibit 4.3(b) -- Form of Subsidiary Guaranty Agreement
Exhibit 4.5(a) -- Form of Collateral Trust Indenture
Exhibit 4.5(b) -- Form of Security Agreement
Exhibit 4.5(c) -- Form of Pledge Agreement
Exhibit 4.5(d) -- Form of Intercreditor Agreement
Exhibit 4.6(b) -- Form of U.S. Environmental Indemnification Agreement
Exhibit 4.6(c) -- Form of Canadian Environmental Indemnification
Agreement
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IPG HOLDINGS LP
110E ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇
AMENDED AND RESTATED NOTE AGREEMENT
Re: U.S. $137,000,000 Senior Secured Notes Due March 31, 2008
Guaranteed By
Intertape Polymer Group Inc.
Intertape Polymer Inc.
Intertape Polymer Corp.
IPG Finance LLC
IPG (US) Inc.
and other Restricted Subsidiaries
Dated as of December 20, 2001
To the Noteholders named in Schedule I hereto
which are signatories to this Agreement
Ladies and Gentlemen:
The undersigned, IPG HOLDINGS LP, a limited partnership formed under the
laws of the State of Delaware (the "ISSUER"), INTERTAPE POLYMER INC., a Canadian
corporation and general partner of the Issuer (the "GENERAL PARTNER") and
INTERTAPE POLYMER GROUP INC., a Canadian corporation (the "PARENT" and, together
with the Issuer and the General Partner, the "OBLIGORS"), jointly and severally,
agree with each of the Persons named in Schedule I hereto (collectively, the
"NOTEHOLDERS") as follows:
1. BACKGROUND; AMENDMENT AND RESTATEMENT
1.1. BACKCKGROUND.
The Issuer issued ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Dollars
(U.S. $137,000,000) in aggregate principal amount of its 6.82% Senior Guaranteed
Notes, due March 31, 2008 (the "EXISTING NOTES") pursuant to those certain
separate Note Agreements, each dated as of June 1, 1998 (collectively, as
amended from time to time prior to the date hereof, the "EXISTING NOTE
AGREEMENT"), among it, the General Partner, the Parent and each of the
purchasers named in Schedule I thereto. The Existing Notes are substantially in
the form of Exhibit A attached to the Existing Note Agreement. Each of the
Noteholders is as of the Effective Date a holder of the aggregate principal
amount of the Existing Notes indicated opposite its name in Schedule I hereto.
Pursuant to the Existing Note Agreement, among other things, each of the Parent
and IPG (US) Inc. entered into those separate guaranty agreements, dated as of
June 1, 1998 and June 10, 1999, respectively (collectively, the "EXISTING
GUARANTY
AGREEMENTS"), pursuant to which the Parent and IPG (US) Inc. each
unconditionally guaranteed the obligations of the Issuer under the Existing Note
Agreement and the Existing Notes. The Obligors have requested the amendment and
restatement, in their entirety, of the Existing Note Agreement and the Existing
Notes as provided for in this Agreement, and the replacement of the Existing
Guaranty Agreements as contemplated hereby.
1.2. AUTHORIZATION OF AMENDMENT AND RESTATEMENT.
Each of the Obligors hereby authorizes, agrees and consents to the
amendment and restatement in their entirety of the Existing Note Agreement and
the Existing Notes as provided for herein. The Existing Notes, as amended and
restated in the form of Exhibit A to this Agreement, shall be hereinafter
referred to, individually, as a "NOTE" and, collectively, as the "NOTES." The
term "NOTES" as used herein shall include each Note delivered pursuant to any
provision of this Agreement, and each Note delivered in substitution or exchange
for any such Note. The obligations of the Issuer under the Notes and this
Agreement shall be unconditionally guaranteed by the General Partner, the Parent
and each of the other Restricted Subsidiaries. The Notes shall be secured
pursuant to and entitled to all of the applicable benefits of the Security
Documents.
1.3. AMENDMENT AND RESTATEMENT.
Subject to the satisfaction or waiver of the conditions precedent set forth
in Section 4 of this Agreement on or before December 27, 2001, each Noteholder,
by its execution of this Agreement, hereby agrees and consents to (a) the
amendment and restatement in its entirety of the Existing Note Agreement by this
Agreement and, upon the satisfaction or waiver of such conditions precedent, the
Existing Note Agreement is hereby so amended and restated, (b) the amendment and
restatement in their entirety of the Existing Notes and (c) the replacement of
the Existing Guaranty Agreements, and, upon the satisfaction or waiver of such
conditions precedent, the Existing Notes are hereby amended and restated in
their entirety in the form attached hereto as Exhibit A, and the Existing
Guaranty Agreements are hereby terminated and of no further force or effect and
replaced with the Parent Guaranty Agreement and the Subsidiary Guaranty
Agreement. Upon the satisfaction or waiver of such conditions precedent, the
Existing Notes shall be, without any further action required on the part of any
other Person, deemed to be automatically amended and restated to conform to and
have the terms provided in the form attached hereto as Exhibit A. Upon the
request of any Noteholder, the Issuer shall deliver a Note, as amended and
restated in the form attached hereto as Exhibit A, against surrender of the
related Existing Note.
1.4. EFFECTIVE DATE.
Subject to the satisfaction or waiver of the conditions set forth in
Section 4 of this Agreement, the closing of the transactions contemplated by
this Agreement will be held on December 27, 2001 (the "EFFECTIVE DATE") at the
offices of ▇▇▇▇▇▇, ▇▇▇▇▇ & Bockius LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇.
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1.5. GUARANTY AGREEMENTS.
The payment by the Issuer of all amounts due with respect to the Notes and
performance of all obligations of the Issuer under this Agreement and the
Collateral Trust Indenture will be unconditionally guaranteed (a) by the Parent
and the General Partner under a guaranty agreement to be dated as of the
Effective Date (as the same may be amended from time to time, the "PARENT
GUARANTY AGREEMENT") from the Parent and the General Partner, and (b) by each of
the other Restricted Subsidiaries under a guaranty agreement to be dated as of
the Effective Date (as the same may be amended from time to time, the
"SUBSIDIARY GUARANTY AGREEMENT") from each of such Restricted Subsidiaries. The
Parent Guaranty Agreement and the Subsidiary Guaranty Agreement are hereafter
referred to collectively as the "GUARANTY AGREEMENTS" and individually as a
"GUARANTY AGREEMENT".
1.6. COLLATERAL.
The Notes and the Guaranty Agreements will be secured pursuant to and
entitled to all of the applicable benefits of the Security Documents. In the
event that at any time after the Effective Date (a) the Parent shall have
maintained an Acceptable Rating at all times during each of its two previous
fiscal quarters in respect of the long-term, senior unsecured Debt of the Issuer
and (b) Total Debt, determined as of the end of each of the four most recently
ended fiscal quarters of the Parent, does not exceed two hundred fifty percent
(250%) of EBITDA for the period of four consecutive fiscal quarters of the
Parent ended at the end of each of such four most recently ended fiscal quarters
of the Parent, the Parent may give written notice to each holder of Notes (which
notice shall include copies of the letters to the Parent from Standard & Poor's
or Moody's evidencing that such Acceptable Rating is in full force and effect
and has been in full force and effect at all times during each of the two
previous fiscal quarters of the Parent immediately preceding the date of such
notice) requesting that the holders of the Notes agree not to direct the U.S.
Collateral Trustee or the Canadian Collateral Trustee to enforce any of the
provisions of the Security Documents, commencing on a date specified in such
notice (the "COLLATERAL SUSPENSION DATE") that is not less than ten (10)
Business Days after the date of such notice. The holders of the Notes agree not
to direct the U.S. Collateral Trustee or the Canadian Collateral Trustee to, and
the holders of the Notes shall not, take any action to enforce or to exercise
any rights or remedies under or in respect of any of the provisions of the
Security Documents for the period commencing on the Collateral Suspension Date
and ending on the earliest date on which the Collateral Suspension Conditions
shall not continue to be satisfied (the "COLLATERAL SUSPENSION PERIOD"),
provided that the holders of the Notes, the U.S. Collateral Trustee and the
Canadian Collateral Trustee shall have received an officer's certificate,
executed by a Senior Officer and dated the Collateral Suspension Date,
specifying that each of the applicable Collateral Suspension Conditions are
satisfied as of such date. If at any time after the Collateral Suspension Date
any of the Collateral Suspension Conditions shall not continue to be satisfied
(other than clause (d) in the definition of "Collateral Suspension Conditions"),
the foregoing agreement of the holders of the Notes not to so direct the U.S.
Collateral Trustee or the Canadian Collateral Trustee, and to not take any such
action, shall no longer be in effect and the holders of the Notes shall be free
to so direct the U.S. Collateral Trustee and the Canadian Collateral Trustee to
take any and all permitted actions under any of the Security Documents and to
take any actions permitted to be taken by the Noteholders thereunder. The
provisions of
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Section 5.10 shall continue to apply during the Collateral Suspension Period. At
any time that there is no Debt outstanding under the Credit Agreement, and each
of the Bank Term Facilities and Bank Facility A shall have been terminated, if
any member of the Restricted Group enters into a successor revolving credit
facility to replace Bank Facility A which is not secured by any Liens on any
property of any member of the Restricted Group, and the Collateral Suspension
Conditions shall continue to be satisfied at such time, the holders of the Notes
shall direct the U.S. Collateral Trustee and the Canadian Collateral Trustee to
fully release the Liens granted under the Security Documents.
1.7. WAIVER OF EXISTING DEFAULTS.
Subject to the satisfaction or waiver of the conditions precedent set forth
in Section 4 of this Agreement on or before December 27, 2001, each Noteholder,
by its execution of this Agreement, hereby permanently and irrevocably waives
its rights arising out of Defaults and Events of Defaults described on Schedule
II hereto, provided that such waiver shall have no effect on any Default or
Event of Default occurring after the Effective Date arising in connection with
any provisions of this Agreement, including any provisions which are similar to
those giving rise to the Defaults and Events of Default set forth on
Schedule II.
2. INTEREST; PREPAYMENT OF NOTES
2.1. INTEREST.
Interest shall accrue on the unpaid principal balance of the Notes on the
basis of a 360-day year of twelve 30-day months at a rate equal to:
(a) prior to the Effective Date, 6.82% per annum;
(b) from and after the Effective Date and prior to May 1, 2002, 9.07%
per annum; and
(c) from and after May 1, 2002, (A) for each date prior to an Interest
Rate Adjustment Date, the lesser of (x) the highest interest rate allowed
by applicable law on the Notes, and (y) 9.07% per annum plus the Applicable
Adjustment Margin as of such date and (B) for each date on or after an
Interest Rate Adjustment Date, 9.07% per annum.
Interest on each Note shall be payable, in arrears, semi-annually on the
last day of each March and September in each year, commencing March 31, 2002,
until the full principal amount of such Note shall have been paid. Interest
shall accrue on any overdue principal (including any overdue prepayment of
principal and Make-Whole Amount, if any), and (to the extent permitted by
applicable law) on any overdue installment of interest on the Notes both before
and after demand and judgment at a rate per annum equal to the Applicable
Default Rate.
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2.2. PREPAYMENTS.
(a) Required Prepayments. Subject to the provisions of Section 2.9(b), the
Issuer agrees that on March 31 and September 30 in each year, commencing
September 30, 2004 and ending September 30, 2007, both inclusive, the Issuer
will prepay and apply and there shall become due and payable on the principal
indebtedness evidenced by the Notes, an amount equal to the lesser of (a) U.S.
$16,500,000 and (b) the principal amount of the Notes then outstanding. The
entire remaining principal amount of the Notes shall become due and payable on
March 31, 2008. No premium shall be payable in connection with any required
prepayment made pursuant to this Section 2.2. Except as set forth in this
Section 2.2, in Section 2.3 through Section 2.5, or as contemplated by the
required offers to prepay with insurance or condemnation proceeds as set forth
in the Intercreditor Agreement, neither the Issuer nor any Obligor shall be
required to make any offer to prepay the Notes and the Notes are not subject to
prepayment or redemption prior to their expressed maturity date.
(b) Tax Cap. Notwithstanding anything else contained herein or in any of
the other Financing Documents, neither the Issuer nor any Obligor shall be
required to prepay, or offer to prepay, more than twenty-five percent (25%) of
the aggregate principal amount of any Note prior to the day following the fifth
(5th) anniversary of the Original Closing Date (in aggregate for all prepayments
made in respect of such Note required under Section 2.2 through Section 2.4 and
prepayments made with insurance or condemnation proceeds as set forth in the
Intercreditor Agreement), except in the circumstances permitted by clauses
212(1)(b)(vii)(C) to (F) inclusive of the Income Tax Act (Canada). For the
avoidance of doubt, this Section 2.2(b) shall not be construed to reduce, limit
or affect any other payments under this Agreement or the other Financing
Documents.
2.3. REQUIRED PREPAYMENTS UPON EQUITY EVENTS.
(a) Notice of Equity Event. At all times prior to the first date after
which any member of the Restricted Group shall have received Equity Event
Proceeds in respect of Equity Events occurring after the Effective Date in an
aggregate amount equal to at least the outstanding principal amount under Bank
Facility B on such date, other than Equity Events to the extent arising out of
the exercise of employee stock options in the ordinary course at an exercise
price up to an aggregate maximum amount of $5,000,000 per fiscal year of the
Parent, the Issuer will, on the date of receipt of such Equity Event Proceeds by
such member of the Restricted Group, give written notice of such Equity Event to
each holder of Notes. Subject to the provisions of Section 2.2(b), such notice
shall contain and constitute an offer to prepay the Notes of such holder, at par
and without payment of the Make-Whole Amount, on a date specified in such notice
(the "EQUITY EVENT PREPAYMENT DATE") that is not more than forty-five (45) days
after the date of such notice, in a principal amount equal to the Pro Rata Share
of such holder at such time, multiplied by the Equity Event Payment in respect
of such Equity Event, multiplied by the Tax Percentage Limit in respect of the
amount of such Equity Event Payment at such time. For the avoidance of doubt,
the Equity Event Proceeds received by the members of
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the Restricted Group in respect of any Equity Event shall be subject to the
provisions of this Section 2.3 only to the extent that such Equity Event
Proceeds, together with all Equity Event Proceeds theretofore received by the
members of the Restricted Group after the Effective Date, do not exceed the
outstanding principal amount under Bank Facility B as of the date on which the
applicable Equity Event Proceeds are so received.
(b) Acceptance; Rejection. At any time prior to twenty (20) days after any
holder of Notes shall have received such written offer pursuant to Section
2.3(a), such holder may accept the offer to prepay made pursuant to this Section
2.3 by causing a notice of such acceptance to be delivered to the Issuer. A
failure by a holder of Notes to respond to an offer to prepay made pursuant to
this Section 2.3 with a timely notice of acceptance shall be deemed to
constitute a rejection of such offer by such holder. Within three days after the
end of such 20-day period, the Issuer shall offer, in writing, to each holder of
Notes that shall have accepted its offer to prepay made pursuant to this Section
2.3, to prepay on such Equity Event Prepayment Date an additional portion of
such holder's Notes as provided in Section 2.3(a) in a principal amount equal to
its ratable share (based upon the ratio of the outstanding principal amount of
Notes held by such holder at such time to the aggregate outstanding principal
amount of Notes held at such time by all holders which have also accepted their
respective offers to prepay made pursuant to this Section 2.3) of the portion of
the Equity Event Payment as to which such offers to prepay were rejected or
deemed rejected, multiplied by the Tax Percentage Limit in respect of such
portion at such time (a "REMNANT EQUITY EVENT PREPAYMENT"). To accept any
Remnant Equity Event Prepayment under this Section 2.3(b), a holder of Notes
shall cause a written notice of such acceptance to be delivered to the Issuer
not later than eight (8) days after the date of receipt by such holder of such
offer of the Remnant Equity Event Prepayment (it being understood that the
failure by a holder to accept such offer of the Remnant Equity Event Prepayment
as provided herein prior to the end of such eight-day period shall be deemed to
constitute a rejection of said Remnant Equity Event Prepayment, and that any
Remnant Equity Event Prepayment so rejected shall be reoffered, in the same
manner, and subject to the applicable Tax Percentage Limit, pro rata, to any
other holders which have accepted their respective offers of the applicable
Remnant Equity Event Prepayments). If after such Equity Event Prepayment Date
any portion of a Remnant Equity Event Prepayment has not been accepted, such
remaining amount shall be offered to reduce the Commitment of the Bank Term
Facilities.
(c) Prepayment. Each prepayment of Notes pursuant to this Section 2.3 shall
be at a price equal to 100% of the principal amount being prepaid with respect
to such Notes, together with interest on such principal amount accrued to the
Equity Event Prepayment Date, but without any Make-Whole Amount. The prepayment
shall be made on the Equity Event Prepayment Date.
(d) Officer's Certificate. Each offer and reoffer to prepay the Notes
pursuant to this Section 2.3 shall be accompanied by a certificate, executed by
a Senior Financial Officer and dated the date of such offer, specifying:
(i) that such offer is made pursuant to this Section 2.3;
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(ii) the Equity Event Prepayment Date;
(iii) the last date upon which the offer or reoffer can be accepted or
rejected, and setting forth the consequences of failing to provide an
acceptance or rejection, as provided in Section 2.3(b);
(iv) the portion of the principal amount of the applicable holder's
Notes offered to be prepaid, setting forth the details of such computation;
(v) the interest that would be due on the portion of such principal amount
offered to be prepaid, accrued to the Equity Event Prepayment Date; and
(vi) in reasonable detail, the nature and date of the applicable
Equity Event.
2.4. REQUIRED PREPAYMENTS FROM EXCESS CASH FLOW.
(a) Offer to Prepay from Excess Cash Flow. On each Excess Cash Flow Notice
Date after March 31, 2002, the Issuer will deliver to each holder of Notes at
such time a written offer to prepay the Notes of such holder, at par and without
payment of the Make-Whole Amount, on the date specified in such notice, which
date shall be no later than forty-five (45) days after such Excess Cash Flow
Notice Date (the "EXCESS CASH FLOW PREPAYMENT DATE"), in a principal amount
equal to the Pro Rata Share of such holder at such time, multiplied by the
Excess Cash Flow Payment with respect to such Excess Cash Flow Prepayment Date,
multiplied by the Tax Percentage Limit in respect of the amount of such Excess
Cash Flow Payment at such time.
(b) Acceptance; Rejection. At any time prior to twenty (20) days after any
holder of Notes shall have received such written offer pursuant to Section
2.4(a), such holder may accept the offer to prepay made pursuant to this Section
2.4 by causing a notice of such acceptance to be delivered to the Issuer. A
failure by a holder of Notes to respond to an offer to prepay made pursuant to
this Section 2.4 with a timely notice of acceptance shall be deemed to
constitute a rejection of such offer by such holder. Within three days after the
end of such 20-day period, the Issuer shall offer, in writing, to each holder of
Notes that shall have accepted its offer to prepay made pursuant to this Section
2.4, to prepay on the Excess Cash Flow Prepayment Date an additional portion of
such holder's Notes as provided in Section 2.4(a) in a principal amount equal to
its ratable share (based upon the ratio of the outstanding principal amount of
Notes held by such holder at such time to the aggregate outstanding principal
amount of Notes held at such time by all holders which have also accepted their
respective offers to prepay made pursuant to this Section 2.4) of the portion of
the Excess Cash Flow Payment as to which such offers to prepay were rejected or
deemed rejected, multiplied by the Tax Percentage Limit in respect of such
portion at such time (a "REMNANT EXCESS CASH FLOW PREPAYMENT"), multiplied by
the Tax Percentage Limit in respect of such amount of such Remnant Excess Cash
Flow Prepayment at such time. To accept any Remnant Excess Cash Flow Prepayment
under this Section 2.4(b), a holder of Notes shall cause a written notice of
such acceptance to be delivered to the Issuer not later than eight (8) days
after
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the date of receipt by such holder of such offer of the Remnant Excess
Cash Flow Prepayment (it being understood that the failure by a holder to accept
such offer of the Remnant Excess Cash Flow Prepayment as provided herein prior
to the end of such eight-day period shall be deemed to constitute a rejection of
said Remnant Excess Cash Flow Prepayment). If after the Excess Cash Flow
Prepayment Date any portion of a Remnant Excess Cash Flow Prepayment has not
been accepted, such remaining amount shall be offered to reduce the Commitment
of the Bank Term Facilities.
(c) Prepayment. Each prepayment of Notes pursuant to this Section 2.4 shall
be at a price equal to 100% of the principal amount being prepaid with respect
to such Notes together with interest on such principal amount accrued to the
Excess Cash Flow Prepayment Date, but without any Make-Whole Amount. The
prepayment shall be made on such Excess Cash Flow Prepayment Date.
(d) Officer's Certificate. Each offer and reoffer to prepay the Notes
pursuant to this Section 2.4 shall be accompanied by a certificate, executed by
a Senior Financial Officer and dated the date of such offer, specifying:
(i) that such offer is made pursuant to this Section 2.4;
(ii) the Excess Cash Flow Prepayment Date;
(iii) the last date upon which the offer or reoffer can be accepted or
rejected, and setting forth the consequences of failing to provide an
acceptance or rejection, as provided in Section 2.4(b);
(iv) the portion of the principal amount of the applicable holder's
Notes offered to be prepaid, setting forth the details of such computation;
(v) the interest that would be due on the portion of such principal
amount offered to be prepaid, accrued to the Excess Cash Flow Prepayment
Date; and
(vi) in reasonable detail, the computation of Excess Cash Flow in
respect of which the Excess Cash Flow Payment is being calculated.
(e) Bank Facility B. Notwithstanding anything else contained in this
Section 2.4, the Issuer will not be obligated to prepay any Notes until Five
Million United States Dollars (U.S. $5,000,000) in principal amount of the
outstanding loans under Bank Facility B shall have been repaid pursuant to the
provisions of Section 9.2.2 of the Credit Agreement (as in effect on the date of
this Agreement).
2.5. OFFER TO PREPAY UPON CHANGE IN CONTROL.
(a) Notice and Offer. In the event of either
(i) a Change in Control, or
8
(ii) the obtaining of knowledge of a Control Event by any officer of
any Obligor,
then the Issuer will, within 3 Business Days of (x) such Change in Control
or (y) the obtaining of knowledge of such Control Event (including via the
receipt of notice of a Control Event from any holder of Notes), as the case
may be, give written notice of such Change in Control or Control Event to
each holder of Notes. In the event of a Change in Control, such written
notice shall contain and constitute an offer to prepay all, but not less
than all, of the Notes held by such holder, at par and without payment of
the Make-Whole Amount, on a date specified in such notice (in respect of
such Change in Control, the "CONTROL PREPAYMENT DATE") that is not less
than 30 days and not more than 120 days after the date of such notice. In
no event will any Obligor take any action, or permit any Subsidiary to take
any action, to permit a Change in Control to occur prior to the Control
Prepayment Date. Any payment made pursuant to this Section 2.5 shall not be
reduced, limited or affected by the provisions of Section 2.2(b).
(b) Acceptance; Rejection. A holder of Notes may accept or reject the offer
to prepay made pursuant to this Section 2.5 by causing a notice of such
acceptance or rejection to be delivered to the Issuer not later than 14 days
after the date of receipt by such holder of the written offer of such
prepayment. If so accepted, such offered prepayment shall be due and payable on
the Control Prepayment Date. A failure by a holder of Notes to respond to an
offer to prepay made pursuant to this Section 2.5 shall be deemed to constitute
a rejection of such offer by such holder.
(c) Prepayment. Each prepayment of Notes pursuant to this Section 2.5 shall
be at a price equal to 100% of the principal amount being prepaid with respect
to such Notes, together with interest on such principal amount accrued to the
Control Prepayment Date, but without any Make-Whole Amount. The prepayment shall
be made on the Control Prepayment Date.
(d) Officer's Certificate. Each offer to prepay the Notes pursuant to this
Section 2.5 shall be accompanied by a certificate, executed by a Senior
Financial Officer and dated the date of such offer, specifying:
(i) that such offer is made pursuant to this Section 2.5;
(ii) the Control Prepayment Date;
(iii) the last date upon which the offer can be accepted or rejected,
and setting forth the consequences of failing to provide an acceptance or
rejection, as provided in Section 2.5(b);
(iv) the principal amount of each Note offered to be prepaid;
(v) the interest that would be due on each Note offered to be prepaid,
accrued to the Control Prepayment Date; and
9
(vi) in reasonable detail, the nature and date or proposed date of
the Change in Control.
2.6. INSURANCE AND CONDEMNATION PROCEEDS.
Each prepayment of the principal amount of Notes with insurance or
condemnation proceeds made pursuant to the provisions of the Intercreditor
Agreement shall be made at 100% of the principal amount being prepaid together
with interest on such principal amount accrued to the date of prepayment but
without Make-Whole Amount, and shall be subject to the provisions of Section
2.2(b).
2.7. OPTIONAL PREPAYMENT WITH PREMIUM.
Subject to Section 2.9, the Issuer shall have the privilege, at any time
and from time to time, of prepaying the outstanding Notes, either in whole or in
part (but if in part then in a minimum principal amount of U.S. $1,000,000 in
the aggregate) by payment of the principal amount of the Notes or portion
thereof to be prepaid, and accrued interest thereon to the date of such
prepayment, together with a premium equal to the Make-Whole Amount, determined
as of the date which is three (3) Business Days prior to the date of such
prepayment pursuant to this Section 2.7.
2.8. NOTICE OF CERTAIN OPTIONAL PREPAYMENTS.
The Issuer will give notice of any prepayment of the Notes pursuant to
Section 2.7 to each holder thereof not less than 30 days nor more than 60 days
before the date fixed for such optional prepayment specifying (a) such date, (b)
the principal amount of the holder's Notes to be prepaid on such date, (c) that
a Make-Whole Amount may be payable, (d) the date when such Make-Whole Amount
will be calculated, (e) the estimated Make-Whole Amount, and (f) the accrued
interest applicable to the prepayment as of the prepayment date. Notice of
prepayment having been so given, the aggregate principal amount of the Notes
specified in such notice, together with accrued interest thereon and the
Make-Whole Amount, if any, payable with respect thereto shall become due and
payable on the prepayment date specified in said notice. Not later than two (2)
Business Days prior to the prepayment date specified in such notice, the Issuer
shall provide each holder of a Note written notice of the Make-Whole Amount, if
any, payable in connection with such prepayment and, whether or not any
Make-Whole Amount is payable, a reasonably detailed computation of the
Make-Whole Amount.
2.9. APPLICATION OF PREPAYMENTS.
(a) In the case of each optional partial prepayment of the Notes
pursuant to Section 2.7, the principal amount of the Notes to be prepaid
shall be allocated among all of the Notes then outstanding in proportion,
as nearly as practicable, to the respective unpaid principal amounts
thereof. Each optional partial prepayment of the Notes pursuant to Section
2.7 shall be applied in inverse order of maturity.
10
(b) Upon any partial prepayment of the Notes pursuant to Section 2.3
through Section 2.5 or repurchase of Notes pursuant to Section 5.14, or any
partial prepayment with insurance or condemnation proceeds as contemplated
by the Intercreditor Agreement, the principal amount of the payment
required at maturity of the Notes and each required prepayment of Notes
that becomes due under Section 2.2(a) on or after the date of such
prepayment or repurchase shall be reduced in the same proportion as the
aggregate unpaid principal amounts of the Notes are reduced as a result of
such prepayment or repurchase.
2.10. DIRECT PAYMENT.
Notwithstanding anything to the contrary contained in this Agreement or the
Notes, in the case of any Note owned by any Noteholder or a nominee of any
Noteholder or owned by any subsequent Institutional Holder which has given
written notice to the Issuer requesting that the provisions of this Section 2.10
shall apply, the Issuer will punctually pay when due the principal thereof,
interest thereon and Make-Whole Amount, if any, due with respect to said
principal, without any presentment thereof, directly to such Noteholder, nominee
or subsequent Institutional Holder at the address set forth in Schedule I hereto
for such Noteholder or nominee or such other address as such Noteholder, nominee
or subsequent Institutional Holder may from time to time designate in writing to
the Issuer or, if a bank account with a United States bank is designated for
such Noteholder or nominee on Schedule I hereto or in any written notice to the
Issuer from such Noteholder, nominee or subsequent Institutional Holder, the
Issuer will make such payments in immediately available funds to such bank
account, marked for attention as indicated, or in such other manner or to such
other account in any United States bank as such Noteholder, nominee or
subsequent Institutional Holder may from time to time direct in writing.
3. REPRESENTATIONS
3.1. REPRESENTATIONS OF THE GENERAL PARTNER, THE ISSUER AND THE PARENT.
(a) The General Partner and the Issuer represent and warrant that all
representations and warranties set forth in Exhibit B-1 are true and
correct as of the date hereof and are incorporated herein by reference with
the same force and effect as though herein set forth in full.
(b) The Parent represents and warrants that all representations and
warranties set forth in Exhibit B-2 are true and correct as of the date
hereof and are incorporated herein by reference with the same force and
effect as though herein set forth in full.
3.2. REPRESENTATIONS OF THE NOTEHOLDERS.
Each Noteholder represents that, by agreeing to the amendment and
restatement of the Existing Note Agreement and the Existing Notes, it is
specifically understood and agreed that such Noteholder holds the Notes for its
own account or for one or more separate accounts maintained by it or for the
account of one or more pension or trust funds and not with a view to the
distribution thereof, provided that the disposition of property of such
Noteholder or such pension or trust funds shall at all times be within its or
their control. Each Noteholder
11
understands that the Notes have not been registered under the Securities Act and
may be resold only if registered pursuant to the provisions of the Securities
Act or if an exemption from registration is available, except under
circumstances where neither such registration nor such an exemption is required
by law, and that the Issuer is not required to register the Notes.
Each Noteholder represents, with respect to the funds with which such
Noteholder paid the purchase price of the Existing Notes purchased by it
(whether upon the original issuance thereof or by transfer from a prior holder
thereof), that at least one of the following statements is an accurate
representation as to each source of such funds (a "SOURCE");
(a) the Source is an "insurance company general account" within the
meaning of Department of Labor Prohibited Transaction Exemption ("PTE")
95-60 (issued July 12, 1995) and there is no employee benefit plan,
treating as a single plan all plans maintained by the same employer or
employee organization, with respect to which the amount of the general
account reserves and liabilities for all contracts held by or on behalf of
such plan, exceeds ten percent (10%) of the total reserves and liabilities
of such general account (exclusive of separate account liabilities) plus
surplus, as set forth in the National Association of Insurance
Commissioners (the "NAIC") Annual Statement filed with such Noteholder's
state of domicile; or
(b) the Source is either (i) an insurance company pooled separate
account, within the meaning of PTE 90-1 (issued January 29, 1990), or (ii)
a bank collective investment fund, within the meaning of the PTE 91-38
(issued July 12, 1991) and, except as such Noteholder has disclosed to the
obligors in writing pursuant to this paragraph (b), no employee benefit
plan or group of plans maintained by the same employer or employee
organization beneficially owns more than 10% of all assets allocated to
such pooled separate account or collective investment fund; or
(c) the Source constitutes assets of an "investment fund" (within the
meaning of Part V of the QPAM Exemption) managed by a "qualified
professional asset manager" or "QPAM" (within the meaning of Part V of the
QPAM Exemption), no employee benefit plan's assets that are included in
such investment fund, when combined with the assets of all other employee
benefit plans established or maintained by the same employer or by an
affiliate (within the meaning of Section V(c)(1) of the QPAM Exemption) of
such employer or by the same employee organization and managed by such
QPAM, exceed 20% of the total client assets managed by such QPAM, the
conditions of Part I(c) and (g) of the QPAM Exemption are satisfied,
neither the QPAM nor a person controlling or controlled by the QPAM
(applying the definition of "control" in Section V(e) of the QPAM
Exemption) owns a 5% or more interest in the Issuer or the Parent and (ii)
the identity of such QPAM and (ii) the names of all employee benefit plans
whose assets are included in such investment fund have been disclosed to
the Issuer and the Parent in writing pursuant to this paragraph (c); or
(d) the Source is a governmental plan; or
12
(e) the Source is one or more employee benefit plans, or a separate
account or trust fund comprised of one or more employee benefit plans, each
of which has been identified to the Issuer and the Parent in writing
pursuant to this paragraph (e); or
(f) the Source does not include assets of any employee benefit plan,
other than a plan exempt from the coverage of ERISA.
As used in this Section 3.2, the terms "employee benefit plan", "governmental
plan", "party in interest" and "separate account" shall have the respective
meanings assigned to such terms in Section 3 of ERISA.
3.3. DEEMED REPRESENTATIONS OF TRANSFEREES OF THE NOTES.
Any transferee of any Note, by its acceptance of a Note registered in
its name (or the name of its nominee), shall be deemed to have made the
representation set forth in Section 3.2 with respect to the Source of the funds
with which such transferee paid the purchase price of such Note.
4. CONDITIONS TO THE EFFECTIVENESS OF THE AGREEMENT
The Existing Note Agreement and the Existing Notes shall be amended and
restated in their entirety as provided in Section 1.3 upon the satisfaction or
waiver by each of the Noteholders of each of the following conditions precedent:
4.1. GENERAL PARTNER AND ISSUER COMPLIANCE CERTIFICATES.
(a) Officer's Certificate. Each Noteholder shall have received a
certificate dated the Effective Date, signed by the President or a Vice
President of the General Partner on behalf of the Issuer and as an
authorized officer of the General Partner, substantially in the form set
out in Exhibit 4.1(a), certifying that the conditions specified in Sections
4.10 and 4.11 have been fulfilled and that no Default or Event of Default
shall have occurred and be continuing on the Effective Date.
(b) Secretary's Certificate. Each Noteholder shall have received: (i)
a certificate signed by the Secretary of the General Partner on behalf of
the Issuer and (ii) a certificate of the Secretary of the General Partner,
each dated the Effective Date, certifying as to the resolutions attached
thereto and other proceedings relating to the authorization, execution and
delivery of the Financing Documents to which the General Partner and the
Issuer, respectively, are parties, substantially in the forms set out in
Exhibit 4.1(b)-1 and Exhibit 4.1(b)-2, respectively.
4.2. PARENT CLOSING CERTIFICATES; RESTRICTED SUBSIDIARY CERTIFICATES.
(a) Officer's Certificate. Each Noteholder shall have received a
certificate dated the Effective Date, signed by the President or Vice
President, Finance and Administration, of the Parent, substantially in the
form set out in Exhibit 4.2(a), certifying that the conditions specified in
Sections 4.10 and 4.11 have been fulfilled and that no Default or Event of
Default shall have occurred and be continuing on the
13
Effective Date and confirming that, with the exception of the Unrestricted
Subsidiaries, all of the Parent's Subsidiaries as of the Effective Date are
and shall remain Restricted Subsidiaries during the term of this Agreement
unless such Restricted Subsidiaries are sold, transferred or dissolved as
permitted in accordance with the terms hereof.
(b) Parent Secretary's Certificate. Each Noteholder shall have
received a certificate signed by the Secretary of the Parent, dated the
Effective Date, certifying as to the resolutions attached thereto and other
proceedings relating to the authorization, execution and delivery of the
Financing Documents to which the Parent is a party, substantially in the
form set out in Exhibit 4.2(b).
(c) Restricted Subsidiary Secretary's Certificate. Each Noteholder
shall have received a certificate signed by the Secretary of each other
Restricted Subsidiary, dated the Effective Date, certifying as to the
resolutions attached thereto and other proceedings relating to the
authorization, execution and delivery of the Financing Documents to which
such Restricted Subsidiary is a party, substantially in the form set out in
Exhibit 4.2(c).
4.3. GUARANTY AGREEMENTS.
Each Noteholder shall have received the Parent Guaranty Agreement and the
Subsidiary Guaranty Agreement, each duly authorized, executed and delivered by
the Parent, the General Partner and each of the Restricted Subsidiaries, as the
case may be, substantially in the forms set out in Exhibit 4.3(a) and Exhibit
4.3(b), respectively, and each of the Guaranty Agreements shall be in full force
and effect.
4.4. LEGAL OPINIONS.
Each Noteholder shall have received opinions, dated the Effective Date,
from
(a) ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, special U.S. counsel for the Obligors
and the Restricted Subsidiaries,
(b) Stikeman, Elliott, Canadian counsel for the Obligors and the
Restricted Subsidiaries,
(c) ▇▇▇▇▇▇▇ ▇▇▇▇ LLP, special counsel for the Noteholders,
(d) ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel for the U.S. Collateral Trustee,
(e) ▇▇▇▇▇▇, ▇▇▇▇▇ & Bockius LLP, special Florida counsel for the
Restricted Subsidiaries,
(f) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇, LLP, special South Carolina
counsel for the Restricted Subsidiaries,
(g) ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, special Virginia counsel for certain Restricted
Subsidiaries,
14
(h) Stikeman, Elliott, special Canadian local counsel for the Obligors
and the Restricted Subsidiaries, and
(i) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Stirling Scales, special Canadian local counsel
for the Obligors and certain Restricted Subsidiaries,
each in form and substance satisfactory to such Noteholder covering such
matters pertaining to the transactions contemplated hereunder as such Noteholder
may reasonably request. Each of the Obligors hereby requests and directs its
counsel named in the foregoing clauses (a), (b), (e), (f), (g), (h) and (i) to
deliver such opinions to each of the Noteholders. The Obligors hereby
acknowledge that in acceding to the amendment and restatement of the Existing
Note Agreement and the Existing Notes pursuant hereto, the Noteholders will be
relying on, among other things, the opinions of such counsel for the Obligors
and such Restricted Subsidiaries.
4.5. SECURITY DOCUMENTS; COLLATERAL.
(a) Collateral Trust Indenture. Each of the Restricted Subsidiaries (other
than those organized under the laws of Canada or any jurisdiction in Canada),
the Noteholders, the Banks and State Street Bank and Trust Company shall have
executed and delivered a collateral trust indenture (as amended, supplemented or
otherwise modified from time to time, the "COLLATERAL TRUST INDENTURE"),
substantially in the form of Exhibit 4.5(a).
(b) U.S. Mortgages. Each of the Obligors and the Restricted Subsidiaries
shall have executed and delivered mortgages and deeds of trust and assignments
of leases and rents, as applicable (collectively, the "U.S. MORTGAGES"), with
respect to all real property (other than Excluded Non-Mortgaged Properties)
located in any jurisdiction in the United States and owned or leased by such
Obligor or such Restricted Subsidiary, in favor of the U.S. Collateral Trustee,
securing such Obligor's or such Restricted Subsidiary's obligations under this
Agreement, the Notes, the Parent Guaranty Agreement or the Subsidiary Guaranty
Agreement, as the case may be, and the obligations of such Obligor or Restricted
Subsidiary in respect of Bank Facility A and the Bank Term Facilities.
(c) Canadian Mortgages and Security Documents. Each of the Obligors and the
Restricted Subsidiaries that is organized under the laws of Canada or any
jurisdiction in Canada shall have executed and delivered (i) each of the deeds
of hypothec, mortgages, pledge agreements, general security agreements and other
documents related thereto (collectively, the "CANADIAN MORTGAGES") with respect
to all real and personal property located in any jurisdiction in Canada held by
such Obligor or such Restricted Subsidiary, in favor of the Canadian Collateral
Trustee, securing such Obligor's or such Restricted Subsidiary's obligations
under this Agreement, the Notes, the Parent Guaranty Agreement or the Subsidiary
Guaranty Agreement, as the case may be, and Bank Facility A and the Bank Term
Facilities and (ii) each of the other agreements and instruments executed or to
be executed pursuant to the terms of the Canadian Mortgages and such other
agreements and instruments, as are required by the Noteholders or the Canadian
15
Collateral Trustee, in form and substance reasonably acceptable to the
Noteholders (collectively, together with the Canadian Mortgages, and as amended,
supplemented or otherwise modified from time to time, the "CANADIAN SECURITY
DOCUMENTS").
(d) Security Agreement and Pledge Agreement. Each of the Obligors and the
Restricted Subsidiaries (other than any such Person that is organized under the
laws of Canada or any jurisdiction in Canada) shall have executed and delivered
to the U.S. Collateral Trustee a Security Agreement, substantially in the form
of Exhibit 4.5(b) (as amended, supplemented or otherwise modified from time to
time, the "SECURITY AGREEMENT") and a Pledge Agreement, substantially in the
form of Exhibit 4.5(c) (as amended, supplemented or otherwise modified from time
to time, the "PLEDGE AGREEMENT"), each securing the indebtedness and obligations
of such Obligor or Restricted Subsidiary under this Agreement, the Notes, the
Parent Guaranty Agreement or the Subsidiary Guaranty Agreement, as the case may
be, and the obligations of such Obligor or Restricted Subsidiary in respect of
Bank Facility A and the Bank Term Facilities with a Lien encumbering certain
personal property of such Obligors and Restricted Subsidiaries and the pledge of
Equity Interests in and Debt owed by Restricted Subsidiaries to such Obligor or
Restricted Subsidiary, respectively.
(e) Collateral. The Security Documents shall be in full force and effect.
All actions necessary to perfect the Liens of the U.S. Collateral Trustee and
the Canadian Collateral Trustee in the Collateral (including, without
limitation, the filing of all appropriate financing statements and the recording
of all appropriate documents with appropriate public officials) shall have been
taken in accordance with the terms and provisions of the Security Documents, to
the extent that such actions are permitted under applicable law. The Liens of
the U.S. Collateral Trustee and the Canadian Collateral Trustee in the
Collateral shall be valid and enforceable and the Collateral shall be subject to
no other Liens, other than Permitted Liens, Liens to be discharged pursuant to
the undertaking contemplated by Section 4.6(e) and any other Liens acceptable to
the Noteholders. All recording, subscription and other similar fees, and all
taxes and other expenses related to such filings, registrations and recordings
shall have been paid, or caused to be paid, in full by the Obligors to the
extent then required in accordance with the terms of the Security Documents.
(f) Intercreditor Agreement. The Parent and each of the Restricted
Subsidiaries, the U.S. Collateral Trustee, the Canadian Collateral Trustee, the
U.S. Collateral Agent and the Canadian Collateral Agent (as each is defined in
the Credit Agreement), the Noteholders and the Banks shall have executed and
delivered to each Noteholder an intercreditor agreement (as amended,
supplemented or otherwise modified from time to time, the "INTERCREDITOR
AGREEMENT") substantially in the form of Exhibit 4.5(d).
4.6. COLLATERAL MATTERS.
(a) Environmental Information. Each of the Obligors shall have delivered to
each Noteholder the information set forth in Schedule III, which relates to
certain environmental matters at certain of the properties which are the subject
of one of the U.S.
16
Mortgages or the Canadian Mortgages relating to real property (collectively,
the "MORTGAGED PROPERTIES").
(b) Environmental Indemnification. Certain of the Obligors shall have
delivered to each Noteholder, the U.S. Collateral Trustee and certain other
parties, one or more environmental indemnification agreements (collectively, as
amended, supplemented or otherwise modified from time to time, the "U.S.
ENVIRONMENTAL INDEMNIFICATION AGREEMENT"), substantially in the form of Exhibit
4.6(b). Certain of the Obligors shall have delivered to each Noteholder and the
Canadian Collateral Trustee one or more environmental indemnification agreements
(collectively, as amended, supplemented or otherwise modified from time to time,
the "CANADIAN ENVIRONMENTAL INDEMNIFICATION AGREEMENT"), substantially in the
form of Exhibit 4.6(c).
(c) Casualty Insurance. The U.S. Collateral Trustee and the Canadian
Collateral Trustee, as applicable, shall have received (and copies shall have
been delivered to each Noteholder), with respect to each of the Mortgaged
Properties, the insurance policies required by Section 5.2; each in form and
substance reasonably satisfactory to the Noteholders and their special counsel.
(d) Title Insurance. The U.S. Collateral Trustee shall have received (and
copies shall have been delivered to each Noteholder), with respect to each of
the Mortgaged Properties that is subject to one of the U.S. Mortgages, a
lenders' title insurance policy issued by First American Title Insurance Company
in such amounts and covering such matters as may be reasonably requested by the
Noteholders, and all premiums in respect of such lenders' title insurance
policies shall have been paid in full.
(e) Undertaking. Each of the Obligors shall have delivered to each
Noteholder an undertaking in form and in substance satisfactory to the
Noteholders, which undertaking shall relate to, without limitation, the
registration of the Liens granted under the Security Documents (including any
registrations specific to intellectual property), environmental matters, the
discharge of Liens for which no Debt is outstanding, and the delivery of certain
leasehold mortgages, lease amendments, landlord consents and title commitments.
4.7. BANK DOCUMENTS.
The Obligors shall have entered into the Credit Agreement in form and
substance satisfactory to the Noteholders and their special counsel. The
Obligors shall have delivered to each Noteholder copies of the Credit Agreement
and each of the other agreements and instruments executed in connection
therewith (collectively, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with the provisions of this Agreement
and the Intercreditor Agreement, the "BANK DOCUMENTS"), certified as true and
correct by a Responsible Officer.
17
4.8. PRIVATE PLACEMENT NUMBERS.
A Private Placement Number issued by Standard & Poor's CUSIP Service Bureau
(in cooperation with the Securities Valuation Office of the NAIC) shall have
been obtained for the Notes.
4.9. CONSENT TO RECEIVE SERVICE OF PROCESS.
Each Noteholder shall have received, in form and substance satisfactory to
such Noteholder, evidence of the consent of CT Corporation System in New York,
New York to the appointment and designation provided for by Section 9.11 for the
period from the Effective Date through July 1, 2009.
4.10. REPRESENTATIONS AND WARRANTIES.
The representations and warranties of the General Partner and the Issuer
and the Parent set forth in Exhibit B-1 and Exhibit B-2, respectively, shall be
correct when made and as of the Effective Date (except in each case where stated
to be made as of an earlier date).
4.11. TOTAL DEBT TO EBITDA RATIO.
The Obligors shall have provided evidence satisfactory to the Noteholders
that on September 30, 2001, the Parent had a ratio of Total Debt to EBITDA for
the period of four fiscal quarters of the Parent ended on such date not
exceeding 5.8:1.
4.12. FINANCIAL STATEMENTS.
Each Noteholder shall have received, in form and substance satisfactory to
such Noteholder, the December 31, 2000 year-end consolidated financial
statements of the Parent and its 4-year financial projections, including
projected financial statements and the Restricted Group's proposed capital
expenditure program.
4.13. PERFORMANCE; NO DEFAULT.
Each Obligor shall have performed and complied in all material respects
with all agreements and conditions contained in the Financing Documents required
to be performed or complied with by it prior to or upon the Effective Date and
after giving effect to this Agreement no Default or Event of Default shall have
occurred and be continuing.
4.14. LEGALITY.
On the Effective Date the amendment and restatement of the Existing Note
Agreement and the Existing Notes, and all other proceedings taken in connection
with the transactions contemplated by this Agreement and the other Financing
Documents, shall (a) be permitted by the laws and regulations of each
jurisdiction to which the Noteholders are subject, without recourse to
provisions (such as Section 1405(a)(8) of the New York Insurance Law) permitting
limited investments by insurance companies without restriction as to the
character of the
18
particular investment, (b) not violate any applicable law or regulation
(including, without limitation, Regulation U, T or X of the Board of Governors
of the Federal Reserve System) and (c) not subject any Noteholder to any tax,
penalty or liability under or pursuant to any applicable law or regulation,
which law or regulation was not in effect on the date hereof. If requested by
any Noteholder, such Noteholder shall have received an officer's certificate
from the Issuer certifying as to such matters of fact as such Noteholder may
reasonably specify to enable such Noteholder to determine whether such
proceedings are so permitted.
4.15. SATISFACTORY PROCEEDINGS.
All proceedings taken in connection with the transactions contemplated by
this Agreement, and all documents necessary to the consummation thereof, shall
be satisfactory in form and substance to each of the Noteholders and the special
counsel referred to in Section 4.4(c), and each such Noteholder and such special
counsel shall have received a copy (executed or certified as may be appropriate)
of all legal documents or proceedings taken in connection with the consummation
of said transactions.
4.16. PAYMENT OF SPECIAL COUNSEL FEES AND NOTEHOLDER EXPENSES.
Without limiting the provisions of Section 9.4, the Obligors shall have
paid on or before the Effective Date (a) the reasonable fees, charges and
disbursements of the special counsel to the Noteholders referred to in Section
4.4(c) and the Canadian special counsel to the Noteholders, in each case to the
extent reflected in a statement of such counsel rendered to the Obligors at
least one Business Day prior to the Effective Date and (b) the out-of-pocket
costs and expenses incurred by any Noteholder in connection with the
transactions contemplated hereby, to the extent reflected in a statement of such
Noteholder rendered to the Obligors at least one Business Day prior to the
Effective Date.
4.17. PAYMENT OF CERTAIN FEES.
The Obligors shall have paid to each Noteholder, as consideration for such
Noteholder's consent to the amendment and restatement of the Existing Note
Agreement and the Existing Notes, and the other transactions provided for in the
Financing Documents, a fee in an amount equal to (a) three quarters of one
percent (0.75%) of the principal amount of each Note held by such Noteholder
(the "RESTRUCTURING FEE") plus (b) a Closing Catch-Up Fee in respect of each
Note held by such Noteholder. The Restructuring Fee and the Closing Catch-Up Fee
shall have been paid in immediately available funds to the account of each
Noteholder as specified in Schedule I. As used herein, the term "Closing
Catch-Up Fee" in respect of any Note means an amount equal to the product of (i)
2.25% times (ii) the principal amount of such Note on August 1, 2001, times
(iii) a fraction, the numerator of which is the number of days which shall have
elapsed from (and including) August 1, 2001 to (and not including) the Effective
Date and the denominator of which is 360.
19
5. PARENT, GENERAL PARTNER AND ISSUER COVENANTS
From and after the Effective Date and continuing so long as any amount
remains unpaid on any Note:
5.1. CORPORATE OR PARTNERSHIP EXISTENCE, ETC.
(a) Legal Existence. The Parent will preserve and keep in full force
and effect, and will cause each Restricted Subsidiary to preserve and keep
in full force and effect, its legal existence and all licenses and permits
necessary to the proper conduct of its business; provided, however, that
the foregoing shall not prevent any transaction permitted by Section 5.12.
The Issuer shall at all times be and remain a Delaware limited partnership
in good standing. Intertape Polymer Inc., a Canadian corporation (or the
Parent or any other Wholly-Owned Restricted Subsidiary incorporated under
the laws of Canada or any Province thereof or of the United States or any
State thereof) shall at all times be and remain the general partner of the
Issuer. The Parent shall at all times own directly or indirectly 100% of
the outstanding shares of capital stock of the General Partner, free and
clear of Liens other than Liens thereon arising under or permitted by the
Security Documents.
(b) Collateral. The Parent will duly obtain and maintain in effect all
licenses, certificates of occupancy, permits, approvals and authorizations
required in connection with the Collateral and the business and other
operations conducted in or on any of the Mortgaged Properties, except for
licenses, certificates, permits, approvals or authorizations the failure of
which to obtain or maintain could not reasonably be expected to result in a
Material Adverse Change.
5.2. INSURANCE.
The Parent will maintain, and will cause each Restricted Subsidiary to
maintain, insurance coverage by financially sound and reputable insurers in such
forms and amounts and against such risks as are customary for corporations of
established reputation engaged in the same or a similar business and owning and
operating similar properties in accordance with good business practice and, in
any event, in amounts and against risks acceptable to the holders of the Notes,
acting reasonably.
(a) In General. Notwithstanding anything else contained in this Section
5.2, the Parent will maintain, and will cause each Restricted Subsidiary to
maintain, at its sole cost and expense, with respect to each Mortgaged Property
owned or leased by such Person, the following:
(i) General Liability Insurance -- Comprehensive general liability
insurance (including, without limitation, excess and umbrella liability
insurance) covering any and all liability of the insured with respect to or
arising out of the ownership (if applicable), maintenance, use or occupancy
of such Mortgaged Property and all operations incidental thereto including,
but not limited to, structural alterations, new construction and
demolition, and including coverage
20
for those hazards generally known in the insurance industry as explosion,
collapse and underground property damage, said insurance to have limits of
not less than $1,000,000 combined single limit per occurrence for bodily
injury, personal injury and property damage liability;
(ii) Building Insurance -- Insurance ("BUILDING INSURANCE") on all
buildings, fixtures and improvements located on and forming a part of such
Mortgaged Property (inclusive of foundations, footings and similar
structures below grade) against all perils generally included within the
classification of "all risks," including fire and earthquake, in amounts at
least equal to the full replacement cost thereof (with the exception of
earthquake and without deduction for depreciation) as such replacement cost
shall be determined from time to time at the request of the Canadian
Collateral Trustee or the U.S. Collateral Trustee, as applicable, at the
direction of the Majority Noteholders, acting reasonably, by an expert
selected and paid by the Parent or such Restricted Subsidiary and approved
by such Collateral Trustee at the direction of the Majority Noteholders,
provided that the Parent or such Restricted Subsidiary shall not be
required to select or pay for such an expert more than one time in any
period of thirty-six (36) consecutive calendar months unless (A) an Event
of Default has occurred and is continuing or (B) the Parent, any Restricted
Subsidiary or the Majority Noteholders have a good faith belief that there
has been a material change in such replacement cost. In addition, the
Building Insurance shall be written in such a manner that, in the event of
loss, the amount of coverage afforded to the insured shall not be reduced
or diminished by reason of the application of any co-insurance or average
clause. Such insurance shall, during the course of any construction or
repair of any improvements on the premises, be on an All Risk Builder's
Risk 100% Completed Value Form or other form approved by the Canadian
Collateral Trustee or U.S. Collateral Trustee, as applicable, at the
direction of the Majority Noteholders, acting reasonably;
(iii) Personal Property Insurance -- Insurance on personal property
against fire and any peril generally included within the classification of
"extended coverage" in amounts at least equal to the actual cash value
thereof as such values shall be determined from time to time at the request
of the Canadian Collateral Trustee or the U.S. Collateral Trustee at the
direction of the Majority Noteholders, acting reasonably;
(iv) Business Interruption Insurance -- Rental value or business
interruption insurance (or a combination thereof as the Canadian Collateral
Trustee or the U.S. Collateral Trustee may require at the direction of the
Majority Noteholders, acting reasonably) on all buildings, fixtures and
improvements located on and forming a part of such Mortgaged Property
(including parking and common areas) against loss by the perils covered by
the Building Insurance in amounts satisfactory to such Collateral Trustee
as directed by the Majority Noteholders, acting reasonably. Such rental
value or business interruption insurance shall be blanket on all such
buildings, fixtures and improvements (including such parking and common
areas);
21
(v) Flood Insurance -- If such Mortgaged Property or any part thereof
is located in an area which has been identified by the Secretary of Housing
and Urban Development as a flood hazard area and in which flood insurance
has been made available under the National Flood Insurance Act of 1968 (the
"FLOOD ACT"), the Parent or such Restricted Subsidiary shall keep the
buildings, fixtures and improvements located on and forming a part of such
Mortgaged Property (or part thereof) covered for so long as any Notes are
outstanding by flood insurance up to the maximum limit of coverage
available under the Flood Act but not in excess of 75% of the current fair
market value of such Mortgaged Property (or part thereof) as determined in
good faith by the board of directors of the Parent; and
(vi) Other Insurance -- Such other insurance with respect to such
Mortgaged Property in such amounts and against such insurable hazards as
the Canadian Collateral Trustee or the U.S. Collateral Trustee from time to
time may require as directed by the Majority Noteholders, acting
reasonably.
(b) Requirements Regarding Policies. All policies evidencing the insurance
required under Section 5.2(a), including the comprehensive general liability
insurance (the "POLICIES"), shall
(i) provide that coverage shall not be cancelled until at least 30
days' written notice of such revision, cancellation or reduction shall have
been sent to the Canadian Collateral Trustee or the U.S. Collateral
Trustee, as applicable;
(ii) in the case of any Mortgaged Property located in the United
States, be issued by insurance companies which are qualified to do business
in the state where such Mortgaged Property is located and which have a
current rating of A Class XII or better in Best's Insurance Guide; and
(iii) be reasonably satisfactory to the Majority Noteholders in all
other respects.
(c) Requirements Regarding General Liability. The comprehensive general
liability insurance to be maintained by the Parent or any of the Restricted
Subsidiaries pursuant to Section 5.2(a)(i) shall
(i) name the U.S. Collateral Trustee, the Canadian Collateral Trustee
and each holder of Notes from time to time as additional insureds,
(ii) subject to the limitation of liability contained in the Policies,
apply severally as to the Parent or such Restricted Subsidiary, as the case
may be, and the U.S. Collateral Trustee and the Canadian Collateral
Trustee,
(iii) subject to the limitation of liability contained in the
Policies, cover each applicable Person referred to in clause (ii) above as
insureds in the same manner as if separate policies had been issued to each
such Person,
22
(iv) subject to the limitation of liability contained in the Policies,
contain no provisions affecting any rights which any of such Persons would
have as claimants if not so named as insureds, and
(v) be primary insurance with respect to or arising out of the
ownership (if applicable), maintenance, use or occupancy of such Mortgaged
Property with any other valid and collectible insurance available to the
U.S. Collateral Trustee or the Canadian Collateral Trustee constituting
excess insurance.
(d) Requirements Regarding Building Insurance. The Building Insurance
required under Section 5.2(a)(ii) shall name the U.S. Collateral Trustee or the
Canadian Collateral Trustee, as applicable, as an additional insured.
(e) Delivery of Policies. The Parent or the applicable Restricted
Subsidiary will deliver to the U.S. Collateral Trustee or Canadian Collateral
Trustee, as applicable, original Policies or certified copies of Policies in
form reasonably satisfactory to the Majority Noteholders evidencing the
insurance which is required under Section 5.2(a), and the Parent or such
Restricted Subsidiary shall, at the request of such Collateral Trustee at the
direction of the Majority Noteholders, or any holder of Notes, promptly furnish
to such Collateral Trustee or such holder of Notes copies of all renewal notices
and all receipts of paid premiums received by the Parent or such Restricted
Subsidiary. At least thirty (30) days prior to the expiration date of a required
policy, the Parent or such Restricted Subsidiary shall deliver to the U.S.
Collateral Trustee or Canadian Collateral Trustee, as applicable, a binder for a
renewal policy in form reasonably satisfactory to the Majority Noteholders. If
the Parent or such Restricted Subsidiary has a blanket insurance policy in force
providing coverage for several Mortgaged Properties, the U.S. Collateral Trustee
or Canadian Collateral Trustee, as applicable, will accept a certificate of such
insurance together with a certified copy of such blanket insurance policy;
provided that the certificate sets forth the types and amounts of insurance
coverage, and such types and amounts are at least equal to the types and amounts
required hereinabove, the original policy of insurance is written by a carrier
or carriers reasonably acceptable to the Majority Noteholders, insures against
the risks set forth hereinabove, cannot be cancelled without thirty (30) days
prior written notice to such Collateral Trustee, is in amounts satisfactory to
such Collateral Trustee, at the direction of the Majority Noteholders, acting
reasonably, and has a replacement cost endorsement meeting the requirements of
Section 5.2(a)(ii).
(f) Assignment of Policy. If a Mortgaged Property is sold at a foreclosure
sale or if the U.S. Collateral Trustee or Canadian Collateral Trustee, as
applicable, shall acquire title to a Mortgaged Property, such Collateral Trustee
shall, as collateral security, have all of the right, title and interest of the
Parent or the applicable Restricted Subsidiary in and to any insurance policies
required under Section 5.2(a) with respect to such Mortgaged Property and the
unearned premiums thereon and in and to the proceeds payable thereunder to the
extent resulting from any damage to the Mortgaged Property prior to such sale or
acquisition.
23
(g) Application of Insurance Proceeds. All sums paid under any insurance
policy required in Section 5.2(a)(ii) through Section 5.2(a)(v) shall be paid as
set forth in Section 6 of the Intercreditor Agreement and shall be subject to
the provisions of Section 2.2(b) hereof.
5.3. TAXES; CLAIMS FOR LABOR AND MATERIALS; COMPLIANCE WITH LAWS.
(a) Taxes, Claims for Labor and Materials. Without limiting any other
obligation of the Parent hereunder including, without limitation, pursuant to
Section 5.3(b), the Parent will promptly pay and discharge, and will cause each
Subsidiary promptly to pay and discharge, all lawful taxes, assessments and
governmental charges or levies imposed upon the Parent or such Subsidiary,
respectively, or upon or in respect of all or any part of the property or
business of the Parent or such Subsidiary, all trade accounts payable in
accordance with usual and customary business terms, and all claims for work,
labor or materials, which if unpaid might become a Lien upon any property of the
Parent or a Subsidiary; provided, however, that the Parent or such Subsidiary
shall not be required to pay any such tax, assessment, charge, levy, account
payable or claim if (a) the validity, applicability or amount thereof is being
contested in good faith by appropriate actions or proceedings which will prevent
the forfeiture or sale of any property of the Parent or such Subsidiary or any
material interference with the use thereof by the Parent or such Subsidiary, (b)
any such Lien will at all times be subject to the prior and senior Lien of the
U.S. Collateral Trustee or the Canadian Collateral Trustee in such property, as
applicable, and (c) the Parent or such Subsidiary shall set aside on its books,
reserves adequate in accordance with GAAP.
(b) Compliance with Laws. The Parent will promptly comply and will cause
each Subsidiary to comply with all laws, ordinances or governmental rules and
regulations to which it is subject including, without limitation, the
Occupational Safety and Health Act of 1970, as amended, ERISA and all
Environmental Laws, and the Parent will comply and will cause each Subsidiary to
comply with all permits, licenses and authorizations required by Environmental
Laws, except where the violation of such laws, ordinances, rules, regulations,
permits, licenses and authorizations could not reasonably be expected to result
in a Material Adverse Change or in any Lien other than a Permitted Lien.
(c) Claims. Subject to the proviso contained in Section 5.3(a), the Parent
will, and will cause each of its Restricted Subsidiaries to, jointly and
severally pay and discharge all claims for which sums have become due and
payable that have become a Lien other than a Permitted Lien on any Mortgaged
Property (including, without limitation, mechanics' liens).
5.4. MAINTENANCE, ETC.
(a) In General. The Parent will maintain, preserve and keep, and will cause
each Restricted Subsidiary to maintain, preserve and keep, its properties which
are used or useful in the conduct of its business (whether owned in fee or a
leasehold interest) in good repair and working order (subject to ordinary wear
and tear) and from time to time
24
will make all necessary repairs, replacements, renewals and additions so that at
all times the efficiency thereof shall be maintained.
(b) Mortgaged Properties. Each of the Obligors
(i) shall keep, or cause to be kept, each Mortgaged Property in safe
and good repair and condition, ordinary wear and tear excepted;
(ii) shall, upon damage or destruction of any Mortgaged Property or
any part thereof by fire or other casualty and, subject to the provisions
of the Intercreditor Agreement, restore, repair, replace or rebuild, or
cause to be restored, repaired, replaced or rebuilt, such Mortgaged
Property that is damaged or destroyed to the condition it was in
immediately prior to such damage or destruction, whether or not any
insurance proceeds are available or sufficient for such purpose; provided
that, if all or any substantial portion of the insurance policy proceeds in
respect of any such fire or other casualty are offered for the repayment of
the Notes, the Bank Term Facilities or Bank Facility A pursuant to the
provisions of the Intercreditor Agreement, the Obligors shall have no
obligation to restore, repair, replace or rebuild the Mortgaged Property
that was so damaged or destroyed by such fire or other casualty; and
(iii) shall not commit, or permit to be committed, waste or permit
impairment or deterioration of any Mortgaged Property, ordinary wear and
tear excepted; and
(iv) shall maintain, or cause to be maintained, the roofs and
structure of each Mortgaged Property in safe, sound and good repair and
condition, ordinary wear and tear excepted.
5.5. NATURE OF BUSINESS.
The Parent and its Restricted Subsidiaries will continue to carry on
substantially the same type of business currently carried on and activities
which are ancillary, incidental or necessary to the ongoing business of the
Parent and its Restricted Subsidiaries as presently conducted.
5.6. CONSOLIDATED NET WORTH.
The Parent will, at all times, keep and maintain Consolidated Net Worth at
an amount not less than the sum of (a) US$275,000,000 plus (b) an amount equal
to the greater of (i) zero (0) and (ii) 50% of Consolidated Net Income of the
Parent and its Restricted Subsidiaries for the period from October 1, 2001 to
the end of the Parent's then most recently ended fiscal quarter plus (c) an
amount equal to the aggregate net proceeds of any issuance after the Effective
Date of equity securities by any member of the Restricted Group to Persons not
members of the Restricted Group.
25
5.7. COVERAGE RATIOS.
(a) Fixed Charge Coverage The Parent will keep and maintain the ratio
(determined as of the end of each fiscal quarter of the Parent) of Net Income
Available for Fixed Charges to Fixed Charges in each case for the immediately
preceding period of four consecutive fiscal quarters including the fiscal
quarter ending on the calculation date (taken as a single accounting period) at
not less than the amount set forth for the applicable quarter end in the table
below:
IF SUCH FISCAL QUARTER ENDS: MINIMUM RATIO
---------------------------- -------------
On or prior to September 30, 2002 1.75:1
From December 31, 2002 to March 31, 2003 1.85:1
From June 30, 2003 to March 30, 2004 2.00:1
From March 31, 2004 to March 30, 2005 2.50:1
On March 31, 2005 and thereafter 3.00:1
(b) Debt Service Coverage. The Parent will not permit, at the end of each
fiscal quarter of the Parent until (but excluding) the fiscal quarter in which
Bank Facility B is fully repaid and cancelled, the ratio of (i) EBITDA for the
period of two consecutive fiscal quarters of the Parent ended on the calculation
date (taken as a single accounting period) less capital expenditures by members
of the Restricted Group paid in cash during such period, to (ii) the sum total
of Fixed Charges for such period and all scheduled repayments of Debt for such
period, excluding (x) a US $8,000,000 repayment of Debt made in the fiscal
quarter ended June 30, 2001 in respect of an agreement entered into by the
Parent dated as of January 1, 1996 with respect to the issuance and sale of
three series of its senior notes in the aggregate amount of US $33,000,000, and
(y) any prepayments required during such period under Section 2.3 and Section
2.4 of this Agreement and the 1999 Note Agreement and the corresponding
provisions of the Credit Agreement (as in effect on the date of this Agreement),
to be less than 1.20 to 1.00. For the purposes of calculations of EBITDA in this
Section 5.7(b), Section 5.8(b) or any other provision of this Agreement, (A) the
consolidated non-recurring expenses incurred by the Parent and its Restricted
Subsidiaries during the fiscal quarter ending December 31, 2000, (B) the
consolidated severance expenses and other unusual non-recurring expenses accrued
or otherwise incurred by the Parent and its Restricted Subsidiaries during the
period commencing on January 1, 2001 and ending on September 30, 2001 and (C)
any charge to earnings resulting from the re-pricing of stock options as may be
applicable under GAAP, shall all be added (to the extent deducted in the
calculation of Consolidated Net Income) to the EBITDA for the relevant period
(including, without limitation, on a trailing four quarter or trailing two
quarter basis).
26
5.8. LEVERAGE RATIOS.
(a) Total Debt to Consolidated Total Capitalization. The Parent will not at
any time permit the ratio of Total Debt to Consolidated Total Capitalization to
exceed the ratio applicable to such time in the table set forth below:
IF SUCH TIME IS: THE APPLICABLE RATIO IS:
---------------- ------------------------
On or prior to March 30, 2002 0.59:1
From March 31, 2002 to June 29, 2002 0.585:1
From June 30, 2002 to September 29, 2002 0.58:1
From September 30, 2002 to December 30, 2002 0.575:1
From December 31, 2002 to March 30, 2003 0.57:1
From March 31, 2003 to June 29, 2003 0.565:1
From June 30, 2003 to September 29, 2003 0.56:1
On September 30, 2003 and at any time thereafter 0.55:1
(b) Total Debt to EBITDA. The Parent will not permit the ratio of Total
Debt as at the end of each fiscal quarter of the Parent to EBITDA for the period
of the four fiscal quarters of the Parent ended on such date (taken as a single
accounting period) to exceed for each such date prior to June 30, 2002, the
ratio applicable to such date in the table set forth below, and if such date is
on or after June 30, 2002, the lesser of (i) the Experience-Based Ratio at such
date and (ii) the ratio applicable to such date in the table set forth below:
IF SUCH DATE IS: THE APPLICABLE RATIO IS:
---------------- ------------------------
On December 31, 2001 6.00:1
On March 31, 2002 5.75:1
On June 30, 2002 5.50:1
On September 30, 2002 5.25:1
On December 31, 2002 5.00:1
27
IF SUCH DATE IS: THE APPLICABLE RATIO IS:
---------------- ------------------------
On March 31, 2003 4.75:1
On June 30, 2003 4.50:1
On September 30, 2003 4.25: 1
On December 31, 2003, March 31, 2004 and
June 30, 2004 4.00:1
On September 30, 2004, December 31, 2004,
March 31, 2005 and June 30, 2005 3.50:1
On September 30, 2005 and December 31, 2005
and at any time thereafter 3.25:1
As used in this Section 5.8(b), the term "Experience-Based Ratio" means, as
at the last day of any fiscal quarter of the Parent, the greater of (a) 3.25:1
and (b) the sum of (i) 0.25 plus (ii) the actual ratio of Total Debt as at the
end of the fiscal quarter of the Parent ended on such date to EBITDA for the
period of the four fiscal quarters of the Parent most recently ended on the last
day of such fiscal quarter (taken as a single accounting period).
5.9. ADDITIONAL LIMITATIONS ON DEBT.
(a) The Parent will not, and will not permit any Restricted Subsidiary
to, create, assume or incur or in any manner become liable in respect of
any Debt, except:
(i) Debt of the Restricted Group permitted by Section 5.8;
(ii) in the case of (x) unsecured Debt of any Restricted
Subsidiary ("SUBSIDIARY PRIORITY DEBT") and (y) Debt of the Restricted
Group secured by Liens not permitted by clauses (a) through (l) of
Section 5.10 ("SECURED PRIORITY DEBT" and, collectively with the
Subsidiary Priority Debt, "PRIORITY DEBT"), provided, that, at the
time of issuance of any such Priority Debt and after giving effect
thereto and to the application of the proceeds thereof, (A) the
aggregate principal amount of Priority Debt shall not exceed 20% of
Consolidated Net Worth, if a Collateral Suspension Period is not then
in effect, or (B) 12.5% of Consolidated Net Worth, if a Collateral
Suspension Period is then in effect; provided, further, that for the
purposes of this Agreement and the Financing Documents, Debt under or
in respect of the Bank Term Facilities, the Notes and the 1999 Notes,
and Debt permitted by Section 5.9(a)(iii), shall not constitute
Priority Debt; and
(iii) Debt of the Parent or a Restricted Subsidiary owed to the
Parent or to a Wholly-Owned Restricted Subsidiary;
28
(b) If any member of the Restricted Group incurs additional Debt other
than Debt secured by Liens described in Section 5.10(h), such Debt shall be
subject to terms and conditions no more restrictive than those contained
herein and in the Credit Agreement (as in effect on the date hereof),
excluding terms and conditions relating to collateral (only in the case of
Priority Debt) and pricing.
5.10. LIMITATION ON LIENS.
The Parent will not, and will not permit any Restricted Subsidiary to,
create or incur, or suffer to be incurred or to exist, any Lien on its or their
property or assets, whether now owned or hereafter acquired, or upon any income
or profits therefrom, except for the following Liens (collectively, the
"PERMITTED LIENS"), and only to the extent, after giving effect to such Lien,
that (x) no Material Adverse Change occurs as a result and (y) the aggregate
amount of Priority Debt does not exceed the amount permitted by Section 5.9(b):
(a) Liens for property taxes and assessments or governmental charges
or levies and Liens securing claims or demands of mechanics and
materialmen, provided payment thereof is not at the time required by
Section 5.3;
(b) Liens of or resulting from any judgment or award, the time for the
appeal or petition for rehearing of which shall not have expired, or in
respect of which the Parent or a Restricted Subsidiary shall at any time in
good faith be prosecuting an appeal or proceeding for a review and in
respect of which a stay of execution pending such appeal or proceeding for
review shall have been secured;
(c) Liens incidental to the conduct of business or the ownership of
properties and assets (including but not limited to Liens in connection
with worker's compensation, unemployment insurance and other like laws,
warehousemen's and attorneys' liens and statutory landlords' liens) and
Liens to secure the performance of bids, tenders or trade contracts, or to
secure statutory obligations, surety or appeal bonds or other Liens of like
general nature incurred in the ordinary course of business and not in
connection with the borrowing of money; provided in each case, the
obligation secured is not overdue or, if overdue, is being contested in
good faith by appropriate actions or proceedings;
(d) minor survey exceptions or minor encumbrances, easements or
reservations, or rights of others for rights-of-way, utilities and other
similar purposes, or zoning or other restrictions as to the use of real
properties, which are necessary for the conduct of the activities of the
Parent and its Restricted Subsidiaries or which customarily exist on
properties of corporations engaged in similar activities and similarly
situated and which do not in any event materially impair their use in the
operation of the business of the Parent and its Restricted Subsidiaries;
(e) Liens securing liabilities of a Restricted Subsidiary to the
Parent or to another Wholly-Owned Restricted Subsidiary so long as such
Liens are subordinate and junior in all respects to the Liens securing the
Notes;
29
(f) Liens on shares of stock of, or other Equity Interests in,
Unrestricted Subsidiaries;
(g) Liens existing as of the Effective Date and reflected in Annex B
to Exhibit B-2 to this Agreement;
(h) Liens incurred after the Effective Date given to secure the
payment of the purchase price of fixed assets useful and intended to be
used in carrying on the business of any member of the Restricted Group to
the extent incurred in connection with (and within twelve months of) the
acquisition of such fixed assets, including, without limitation, Liens
existing on such fixed assets at the time of acquisition thereof or at the
time of acquisition by the Parent or a Restricted Subsidiary of any
business entity then owning such fixed assets, whether or not such existing
Liens were given to secure the payment of the purchase price of the fixed
assets to which they attach so long as they were not incurred, extended or
renewed in contemplation of such acquisition, provided that (i) the Lien
shall attach solely to the fixed assets acquired or purchased, (ii) at the
time of acquisition of such fixed assets, the aggregate amount remaining
unpaid on all liabilities secured by Liens on such fixed assets whether or
not assumed by the Parent or a Restricted Subsidiary shall not exceed an
amount equal to the lesser of the total purchase price or fair market value
at the time of acquisition of such fixed assets (as determined in good
faith by the Board of Directors of the Parent), and (iii) all Debt secured
by such Liens shall have been incurred within the other applicable
limitations of Section 5.8 and Section 5.9;
(i) Liens incurred in connection with any renewals, extensions or
refundings of any Debt secured by Liens described in clause (g) and (h) of
this Section 5.10, provided that no additional property is encumbered and
there is no increase in the aggregate principal amount of Debt secured
thereby;
(j) subject to the provisions of Section 1.6, Liens on the Collateral
and the Canadian Collateral in favor of the U.S. Collateral Trustee and the
Canadian Collateral Trustee for the benefit of the holders of the Notes and
the 1999 Notes and the Banks that secure obligations under any of the
Financing Documents or the Bank Documents;
(k) subject to the second paragraph of Section 10.3 of the Credit
Agreement (as in effect on the Effective Date), Liens on property of the
members of the Restricted Group primarily constituting inventory or
accounts that secure obligations arising under Bank Facility A;
(l) Liens on property of the members of the Restricted Group that
secure obligations arising under or in respect of a successor revolving
credit facility after the termination of Bank Facility A, so long as such
facility is on terms reasonably acceptable to the Majority Noteholders and
the Notes are secured with Liens on such property on a senior or pari passu
basis with such facility; and
30
(m) Liens, in addition to those permitted by clauses (a) through (l)
of this Section 5.10, securing Debt of the Parent or any Restricted
Subsidiary; provided that after giving effect to the incurrence of all Debt
secured by such Liens the Parent is in compliance with the provisions of
Section 5.9.
Nothing in this Section 5.10 shall be deemed to permit any member of the
Restricted Group to cause or permit, or agree or consent to cause or permit in
the future (upon the happening of a contingency or otherwise), any of the
Collateral, whether now owned or hereafter acquired, to be further encumbered by
a Lien except as expressly permitted by this Agreement and the other Financing
Documents and (for so long as the applicable provisions thereof shall be in
effect) the Bank Documents as in effect on the Effective Date. Notwithstanding
anything else contained herein, the Parent will not, and will not permit any
Restricted Subsidiary to, incur or maintain any operating lines or short-term or
revolving bank facilities secured by Liens on any assets of any member of the
Restricted Group (other than Bank Facility A, Bank Facility B, and Bank Facility
C, or a successor revolving credit facility after the termination of Bank
Facility A that complies with the provisions of clause (l) of this Section
5.10).
5.11. PERMITTED INVESTMENTS AND RESTRICTED PAYMENTS.
(a) The Parent will not, and will not permit any Restricted Subsidiary
to, until such time as Bank Facility B is fully repaid and cancelled, make
any Restricted Payment. The Parent will not, and will not permit any
Restricted Subsidiary to, until such time as Bank Facility B is fully
repaid and cancelled, make any Investment, including any Investment in an
Unrestricted Subsidiary, other than Permitted Investments, unless after
giving effect to such Investment, (i) the ratio of Total Debt to EBITDA
(calculated on a quarterly basis for the immediately preceding period of
four consecutive fiscal quarters including the fiscal quarter most recently
ended) is less than or equal to 3.25:1 as of the end of each of the two
previous fiscal quarters and each of the two subsequent fiscal quarters on
a pro forma basis, and (ii) the aggregate amount of all Investments (other
than Permitted Investments) made by the Restricted Group since the
Effective Date would not exceed 10% of Consolidated Net Worth as of the end
of the then most recently ended fiscal quarter. The amount of Investments
(other than Permitted Investments) as of the Effective Date is deemed to be
$11,176,870. Once Bank Facility B is fully repaid and cancelled, the
Restricted Group shall not make (x) any Investment, other than Permitted
Investments, if, after giving effect thereto, the aggregate amount of all
such Investments of the Restricted Group at such time (valued as provided
below) would exceed 10% of Consolidated Net Worth as of the end of the then
most recently ended fiscal quarter, or (y) any Restricted Payments, if
after giving effect thereto the aggregate amount of all Restricted Payments
made in the then current fiscal year of the Parent exceeds US$5,000,000.
(b) In addition to and not in limitation of the foregoing
restrictions, the Parent will not, and will not permit any Restricted
Subsidiary to, make any Investment in any Unrestricted Subsidiary not
engaged in a business substantially related to the business of the
Restricted Group.
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(c) Furthermore, IPG Finance LLC shall not make any Investment other
than Permitted Investments described in clauses (b), (c) and (d) of the
definition thereof and Permitted Investments in IPG (US) Inc. and IPG (US)
Inc. shall not make any Investment other than Permitted Investments
described in such clauses and Permitted Investments in any Restricted
Subsidiary which shall have granted Liens on its assets in the manner
contemplated by the Security Documents.
(d) The following restrictions shall apply in connection with any and
all payments to Drumheath by any member of the Restricted Group:
(i) until such time as Bank Facility B has been repaid in full
and the Commitment thereunder cancelled, all payments to Drumheath
must be on account of premiums payable for the insurance policies
issued by Drumheath. After Bank Facility B has been repaid and the
Commitment thereunder cancelled, such payments may be paid partly as
premiums and partly on account of Investments, as determined by the
Restricted Group. Notwithstanding the foregoing, the sum total of
payments to Drumheath may not exceed US$3,000,000 in any fiscal year
of the Parent;
(ii) no Investments in or payments or Restricted Payments to
Drumheath may be made while a Default has occurred or is continuing or
following the occurrence and during the continuance of an Event of
Default;
(iii) until Bank Facility B has been repaid in full and the
Commitment thereunder cancelled, Drumheath may not enter into any
insurance contracts in respect of any other kinds of insurance other
than the types of insurance it is currently underwriting, consisting
of workers' compensation;
(iv) all of Drumheath's liability in connection with workers'
compensation policies shall be reinsured by reputable reinsurance
companies, which reinsurance policies shall remain in effect at all
times;
(v) Drumheath may not carry on any new line of business, not
currently conducted by Drumheath as of the Effective Date other than,
subject to Section 5.11(d)(iii) or an insurance business, as defined
under applicable Law;
(vi) prior to the occurrence of any Event of Default which has
not been waived, any monies coming from Drumheath including dividends,
distributions and related proceeds (other than payment of claims under
valid policies of insurance and other expenses to be paid in the
ordinary course of business) must be paid directly to a member of the
Restricted Group. Following the occurrence and during the continuance
of an Event of Default, at the request of the Majority Noteholders,
the members of the Restricted Group shall cancel all insurance
policies contracted with Drumheath in accordance with the terms of any
such policy, other than those in respect of workers' compensation,
cause Drumheath to cease carrying on business, and shall cause the net
amount of all sums left in Drumheath (following the payment by
Drumheath of, or reservation for, all
32
claims (including those incurred but not reported) in respect of
policies outstanding, in accordance with applicable Law) to be paid to
a member of the Restricted Group to be paid to the holders of the
Notes, subject to their Pro Rata Share; and
(vii) each of the Obligors confirms that it has not guaranteed
any of the liabilities of Drumheath under any of its insurance
policies, nor has any of them provided any other guarantee of any
liability of Drumheath of any nature whatsoever.
Notwithstanding the provisions of Section 5.11(a), the US$3,000,000
annual Restricted Payments to and/or Investments in Drumheath may be made
even where the restrictions set out in clause (i) of Section 5.11(a) have
not been met. All payments to Drumheath shall be deemed "Investments" for
the purposes of Section 5.11(a).
(e) In addition to the foregoing restrictions, the Parent will not
make any Restricted Payment or any Investment, other than Permitted
Investments, if, at the time thereof or after giving effect thereto, any
Default or Event of Default shall have occurred and be continuing.
(f) The Parent will not declare any dividend which constitutes a
Restricted Payment payable more than 60 days after the date of declaration
thereof.
(g) For the purposes of this Section 5.11, the amount of any
Restricted Payment declared, paid or distributed in property shall be
deemed to be the greater of the book value or fair market value (as
determined in good faith by the Board of Directors of the Parent) of such
property at the time of the making of the Restricted Payment in question.
(h) In valuing any Investments for the purpose of applying the
limitations set forth in this Section 5.11, such Investments shall be taken
at the original cost thereof, without allowance for any subsequent
write-offs or appreciation or depreciation therein, but less any amount
repaid or recovered on account of capital or principal.
(i) For purposes of this Section 5.11, at any time when a Person
becomes a Restricted Subsidiary, all Investments of such Person at such
time shall be deemed to have been made by such Person, as a Restricted
Subsidiary, at such time.
5.12. MERGERS, CONSOLIDATIONS AND SALES OF ASSETS.
(a) The Parent will not, and will not permit any Restricted Subsidiary
to, (i) consolidate or amalgamate with or be a party to a merger with any
other corporation or (ii) sell, lease or otherwise dispose of all or any
substantial part (as defined in clause (d) of this Section 5.12) of
Consolidated Assets; provided, however, that:
(i) any Restricted Subsidiary may merge or amalgamate or
consolidate with or into the Parent or any Wholly-Owned Restricted
Subsidiary so long as (A) in any such transaction involving the
Issuer, the Issuer shall be the
33
surviving or continuing limited partnership or corporation and (B) in
any such transaction involving the Parent, the Parent shall be the
surviving or continuing entity, provided that such successor entity
shall be a solvent limited partnership, corporation or other business
entity organized and existing under the laws of the United States of
America, any state thereof or the District of Columbia, Canada or any
province thereof, and, at the time of any such amalgamation,
consolidation or merger described in this Section 5.12(a), and after
giving effect thereto, no Default or Event of Default shall have
occurred and be continuing;
(ii) the Parent may consolidate or amalgamate or merge with any
other corporation (which is not a Restricted Subsidiary) if, at the
time of any such amalgamation, consolidation or merger described in
this Section 5.12(a) and after giving effect thereto, no Default or
Event of Default shall have occurred and be continuing, and
(A) the surviving or continuing corporation shall be the
Parent, or
(B) if the successor entity is not the Parent, then such
successor entity (x) shall have executed and delivered to each
holder of the Notes, the U.S. Collateral Trustee and the Canadian
Collateral Trustee its assumption of the due and punctual
performance of each covenant and condition of this Agreement, the
Parent Guaranty Agreement and each of the other Financing
Documents to which the Parent is a party (pursuant to such
agreements and instruments as shall be reasonably satisfactory to
the Majority Noteholders), and the successor entity shall have
caused to be delivered to each holder of the Notes an opinion of
nationally recognized independent counsel, or other independent
counsel reasonably satisfactory to the Majority Noteholders, to
the effect that all agreements or instruments effecting such
assumption are enforceable in accordance with their terms and
comply with the terms hereof, and (y) shall be a solvent
corporation organized and existing under the laws of the United
States of America, any state thereof or the District of Columbia
or under the laws of Canada or any province thereof; and
(iii) any Restricted Subsidiary (including the Issuer) may sell,
lease or otherwise dispose of all or any substantial part of its
assets to the Parent and any Restricted Subsidiary (except the Issuer)
may sell, lease or otherwise dispose of all or any substantial part of
its assets to any Wholly-Owned Restricted Subsidiary (including the
Issuer);
so long as in each such case all Liens in favor of the U.S. Collateral
Trustee and the Canadian Collateral Trustee are not adversely affected and
none of the Persons granting such Liens changes its name without at least
20 Business Days prior written notice to the U.S. Collateral Trustee and
the Canadian Collateral Trustee. Notwithstanding the foregoing, no member
of the Restricted Group shall become party to any receivables
securitization program.
34
(b) The Parent will not permit any Restricted Subsidiary to issue or sell
any shares of stock of any class (including as "stock" for the purposes of this
Section 5.12, any warrants, rights or options to purchase or otherwise acquire
stock or other Securities exchangeable for or convertible into any Equity
Interests) of such Restricted Subsidiary to any Person other than the Parent or
a Wholly-Owned Restricted Subsidiary, except for the purpose of qualifying
directors, or (in the case of a Restricted Subsidiary other than the Issuer)
except in satisfaction of the validly preexisting preemptive rights of minority
shareholders in connection with the simultaneous issuance of stock to the Parent
and/or a Restricted Subsidiary whereby the Parent and/or such Restricted
Subsidiary maintain their same proportionate interest in such Restricted
Subsidiary.
(c) The Parent will not sell, transfer or otherwise dispose of any shares
of stock of any class of any Restricted Subsidiary (except to the Parent or a
Wholly-Owned Restricted Subsidiary, so long as the Liens granted under the
Security Documents are not adversely affected, or for the purpose of qualifying
directors) unless:
(i) simultaneously with such sale, transfer, or disposition, all
shares of stock of such Restricted Subsidiary at the time owned by the
Parent and by every other Restricted Subsidiary shall be sold, transferred
or disposed of as an entirety; and
(ii) such sale or other disposition does not involve a substantial
part (as hereinafter defined) of the assets of the Parent and its
Restricted Subsidiaries;
provided, however, that nothing in this Section 5.12(c) or Section 5.12(d)
shall permit any disposition by the Parent of any of the Equity Interests
in any of the Obligors, the disposition by the Issuer of the shares of
Canco, any disposition of Equity Interests in IPG Finance LLC by Canco, or
any disposition of the shares of IPG (US) Holdings Inc. or IPG (US) Inc.
(d) As used in this Section 5.12, a sale, lease or other disposition of
assets (including Securities) (a "TRANSFER") shall (unless consisting of sales
of inventory made in the ordinary course of business) be deemed to be a
"substantial part" of Consolidated Assets if the book value of such assets, when
added to the book value of all other assets Transferred by the Parent and its
Restricted Subsidiaries (other than in the ordinary course of business) during
the 365 day period ending with the date of such Transfer, exceeds, in the
aggregate, 10% of Consolidated Assets, determined as of the end of the
immediately preceding fiscal quarter.
For the purpose of making any determination of "substantial part," any Transfer
shall not be included if and to the extent the net proceeds thereof are
segregated from the general accounts of the Parent and any Restricted
Subsidiary, invested in Available Cash until applied in accordance with clause
(x) or (y) below, and within six months after such Transfer are used either (x)
to acquire Like Assets, or (y) offered to prepay the Secured Obligations in the
manner provided in Section 8.2
35
of the Intercreditor Agreement; provided, however, that any payment to the
holders of the Notes pursuant to Section 8.2 of the Intercreditor Agreement
shall not be subject to the provisions of Section 2.2(b) and shall be paid
to the holders of the Notes in accordance with Section 2.7.
Notwithstanding anything else contained herein, except as expressly permitted in
this Agreement and the other Financing Documents, none of the Collateral may be
sold, transferred, conveyed or pledged. If the encumbering as contemplated by
Section 5.10 or sale, transfer, conveyance or pledge of any of the Collateral
shall be permitted by one Financing Document and prohibited by another Financing
Document, such encumbering, sale, transfer, conveyance or pledge shall be deemed
prohibited hereunder.
5.13. INTEREST RATE ADJUSTMENT DATE FEE.
In the event that no Interest Rate Adjustment Date has occurred before May
1, 2002, the Issuer shall, on May 1, 2002, pay to each holder of Notes a fee in
an amount equal to one-half of one percent (0.5%) of the outstanding principal
amount of such holder's Notes on such date.
5.14. REPURCHASE OF NOTES.
None of the Parent, the Issuer, any Subsidiary or any Affiliate, directly
or indirectly, may repurchase or make any offer to repurchase any Notes unless
an offer has been made to repurchase Notes, pro rata ,from all holders of the
Notes at the same time and upon the same terms. Notes repurchased by the Parent
or any Subsidiary or Affiliate shall be cancelled.
5.15. TRANSACTIONS WITH AFFILIATES.
The Parent will not, and will not permit any Restricted Subsidiary to,
enter into or be a party to any transaction or arrangement with any Affiliate
(including, without limitation, the purchase from, sale to or exchange of
property with, or the rendering of any service by or for, any Affiliate), except
in the ordinary course of and pursuant to the reasonable requirements of the
Parent's or such Restricted Subsidiary's business and upon fair and reasonable
terms no less favorable to the Parent or such Restricted Subsidiary than would
obtain in a comparable arm's-length transaction with a Person other than an
Affiliate.
5.16. TERMINATION OF PENSION PLANS.
(a) The Parent will not and will not permit any ERISA Affiliate to
withdraw from any Multiemployer Plan or permit any Plan to be terminated if
such withdrawal or termination could result in withdrawal liability (as
described in Part I of Subtitle E of Title IV of ERISA) payable by any
member of the Restricted Group, or the imposition of a Lien on any property
of the Parent or any Subsidiary pursuant to Section 4068 of ERISA, in an
amount in excess of $3,500,000.
(b) The Parent will and will cause each Subsidiary to maintain each
Foreign Pension Plan in accordance with the terms and provisions thereof
and the requirements of applicable laws, rules and regulations except to
the extent the failure to so maintain any such Foreign Pension Plan could
not reasonably be expected to result in a Lien on any assets of the Parent
or any of its Restricted Subsidiaries or materially adversely affect (i)
the Parent, the Issuer or the Parent and its Restricted Subsidiaries taken
as a whole or (ii)
36
the performance by the Parent, the Issuer or any Restricted Subsidiary of
its obligations under this Agreement, the Notes or any of the other
Financing Documents.
5.17. DESIGNATION OF RESTRICTED SUBSIDIARIES.
The Parent may designate any Subsidiary which meets the other requirements
of a Restricted Subsidiary as provided in the definition thereof as a Restricted
Subsidiary by giving written notice to each holder of Notes that the Board of
Directors of the Parent has made such designation, provided that no Subsidiary
may be designated a Restricted Subsidiary unless, at the time of such
designation and after giving effect thereto, (a) no Default or Event of Default
shall have occurred and be continuing, and (b) such Subsidiary is also being
designated as a "Restricted Subsidiary" under the Credit Agreement. Such
designation may not be revoked by the Board of Directors of the Parent; and no
Restricted Subsidiary shall at any time be designated an Unrestricted Subsidiary
and, once so designated as a Restricted Subsidiary, will at all times remain a
Restricted Subsidiary. No Unrestricted Subsidiary may own any shares of a
Restricted Subsidiary.
5.18. REPORTS AND RIGHTS OF INSPECTION.
The Parent will keep, and will cause each Restricted Subsidiary to keep,
proper books of record and account in which full and correct entries will be
made of all dealings or transactions of, or in relation to, the business and
affairs of the Parent or such Restricted Subsidiary, in accordance with GAAP
consistently applied (except for changes disclosed in the financial statements
furnished to the holders of Notes pursuant to this Section 5.18 and concurred in
by the independent public accountants referred to in Section 5.18(b) hereof),
and will furnish each holder of the then outstanding Notes (in duplicate if so
specified below or otherwise requested) (and the U.S. Collateral Trustee or the
Canadian Collateral Trustee, if so required by this Section 5.18):
(a) Quarterly Statements. As soon as available and in any event within
60 days after the end of each quarterly fiscal period (except the last) of
each fiscal year, copies of:
(i) the unaudited consolidated and, in the event that the total
EBITDA of the Unrestricted Subsidiaries is in the aggregate greater
than 5% of EBITDA for the period of the four fiscal quarters of the
Parent ending with such quarterly fiscal period, Adjusted
Consolidated, balance sheets of the Parent and each other member of
the Restricted Group, as of the close of such quarterly fiscal period,
setting forth in comparative form the consolidated (or Adjusted
Consolidated, if applicable) figures for the corresponding period of
the fiscal year then most recently ended,
(ii) the unaudited consolidated and, in the event that the total
EBITDA of the Unrestricted Subsidiaries is in the aggregate greater
than 5% of EBITDA for the period of the four fiscal quarters of the
Parent ending with such quarterly fiscal period, Adjusted
Consolidated, statements of earnings and changes in financial position
of the Parent and each other member of the Restricted Group,
37
for such quarterly fiscal period and for the portion of the fiscal
year ending with such quarterly fiscal period, in each case setting
forth in comparative form the consolidated (or Adjusted Consolidated,
if applicable) figures for the corresponding periods of the preceding
fiscal year, and
(iii) the Parent's calculation of Excess Cash Flow for such
quarterly fiscal period (if required by Section 2.4 for any period
ending on the last day of such quarter), setting forth in comparative
form the consolidated figures for the corresponding period of the
preceding fiscal year, all in reasonable detail and certified as
complete and correct by an authorized financial officer of the Parent;
(b) Annual Statements. As soon as available and in any event within
120 days after the close of each fiscal year of the Parent, copies of:
(i) consolidated and consolidating and, in the event that the
total EBITDA of the Unrestricted Subsidiaries is in the aggregate
greater than 5% of EBITDA for such fiscal year, Adjusted Consolidated,
balance sheets of the Parent and its Restricted Subsidiaries as of the
close of such fiscal year, and
(ii) consolidated and consolidating and, in the event that the
total EBITDA of the Unrestricted Subsidiaries is in the aggregate
greater than 5% of EBITDA for such year, Adjusted Consolidated,
statements of earnings and changes in financial position of the Parent
and its Restricted Subsidiaries for such fiscal year, along with the
Parent's calculation of Excess Cash Flow for the last fiscal quarter
in such fiscal year (if required by Section 2.4 for such fiscal year),
in each case setting forth in comparative form the consolidated (or
Adjusted Consolidated, if applicable) and consolidating figures for
the preceding fiscal year, all in reasonable detail and, with regard
to the consolidated figures, certified without qualification by a
reputable firm of independent chartered accountants acceptable to the
Noteholders, together with any audited financial statements of any
Restricted Subsidiary which may be prepared in respect of such fiscal
year or any portion thereof;
(c) Audit Reports. Promptly upon receipt thereof, one copy of each
interim or special audit made by independent accountants of the books of
the Parent or any Restricted Subsidiary;
(d) Governmental And Other Reports. Promptly upon their becoming
available, one copy of each financial statement, report, notice or proxy
statement sent by the Parent to stockholders generally and of each regular
or periodic report, registration statement or prospectus filed by the
Parent or any Subsidiary with any securities exchange or any governmental
regulatory body including, but without limitation, the Parent's Form 20F
and unaudited quarterly reports, and copies of any orders in any
proceedings to which the Parent or any of its Subsidiaries is a party,
issued by any governmental agency having jurisdiction over the Parent or
any of its Subsidiaries;
38
(e) ERISA Reports. Promptly upon the occurrence thereof, written
notice of (i) a Reportable Event with respect to any Plan; (ii) the
institution of any steps by the Parent, any ERISA Affiliate, the PBGC or
any other person to terminate any Plan; (iii) the institution of any steps
by the Parent or any ERISA Affiliate to withdraw from any Plan; (iv) a
non-exempt "prohibited transaction" within the meaning of Section 406 of
ERISA in connection with any Plan; (v) any material increase in the
contingent liability of the Parent or any Subsidiary with respect to any
post-retirement welfare liability; (vi) the taking of any action by, or the
threatening of the taking of any action by, the Internal Revenue Service,
the Department of Labor or the PBGC with respect to any of the foregoing;
or (vii) any event or circumstance with respect to any Foreign Pension Plan
which could reasonably be expected to materially adversely affect the
Parent, the Issuer or the Parent and its Restricted Subsidiaries on a
consolidated basis or the performance by the Parent or the Issuer hereunder
or under the Notes or the Parent Guaranty Agreement;
(f) Officer's Certificates. Within the periods provided in paragraphs
(a) and (b) above, a certificate of an authorized financial officer of the
Parent stating that such officer has reviewed the provisions of this
Agreement and setting forth: (i) the information and computations (in
sufficient detail) required in order to establish whether the Parent was in
compliance with the requirements of Section 5.6 through Section 5.12,
Section 5.23 and Section 5.25 at the end of the period covered by the
financial statements then being furnished and setting forth the ratio of
Total Debt to EBITDA for purposes of Section 5.8(b) and as otherwise may be
required by this Agreement, (ii) whether there existed as of the date of
such financial statements and whether, to the best of such officer's
knowledge, there exists on the date of the certificate or existed at any
time during the period covered by such financial statements any Default or
Event of Default (including, without limitation, with respect to Section
5.2) and, if any such condition or event exists on the date of the
certificate, specifying the nature and period of existence thereof and the
action the Parent is taking and proposes to take with respect thereto and
(iii) any material differences between United States generally accepted
accounting principles and GAAP to the extent reasonably relevant to
determining compliance with the requirements of Section 5.6 through Section
5.13 hereof;
(g) Accountant's Certificates. Within the period provided in clause
(b) above, a certificate of the accountants who render an opinion with
respect to such financial statements, stating that as of the date of the
fiscal year end, and for that year, with respect to which such accountants
have given their report pursuant to Section 5.18(b), the Parent was in
compliance with the provisions of Sections 5.6, 5.7 and 5.8 and that, in
the normal course of their audit (without special or additional
investigation), they have not become aware of a Default or Event of Default
under the provisions of Sections 5.9, 5.10(m), 5.11 or 5.12 (but only to
the extent relative to the sale of a substantial part of Consolidated
Assets thereunder);
(h) Annual Financial Forecasts. Within 60 days following the end of
each fiscal year of the Parent, the annual consolidated pre-tax operating
forecast of the Parent, including balance sheet and statements of income,
retained earnings and cash flow, and
39
the consolidated capital expenditures budget of the Parent, in each case
for the next fiscal year and each quarterly period in such fiscal year;
(i) Pro Forma Acquisition Projections. Promptly, and in any event not
less than 15 Business Days prior to, the consummation of any proposed
Acquisition for consideration in the amount of at least $2,500,000:
(i) notice of such Acquisition, material information with respect
to the nature thereof, and the proposed purchase price with respect
thereto;
(ii) such historical audited and unaudited financial statements
of the business to be acquired in such Acquisition (the "TARGET") as
the Target has made available to any member of the Restricted Group
and any financial statements contained in any other information that
has been reviewed and confirmed by a nationally recognized accounting
firm of the United States or Canada or that has been submitted to and
approved by the Parent's board of directors;
(iii) a pro forma balance sheet and income statement of the
Target and the Restricted Group on a consolidated basis following such
Acquisition, showing the projected impact of such Acquisition both for
the current fiscal year and the immediately succeeding fiscal year;
(iv) a written confirmation of a Senior Financial Officer that
the Parent is satisfied, based on its due diligence, that the
Acquisition of the Target will not result in the assumption by any
member of the Restricted Group of material liabilities which have not
been fully disclosed to the holders of the Notes in the materials
provided in connection with the Acquisition or otherwise in writing;
and
(v) a certificate of a Senior Financial Officer that, on a
consolidated basis following such Acquisition, as of the date of such
Acquisition, after giving effect thereto, no Default or Event of
Default shall have occurred and be continuing;
(j) Environmental Reports. (i) Within 10 days following the end of
each fiscal quarter of the Parent, copies of each environmental report
submitted to the board of directors of the Parent during such fiscal
quarter, and, (ii) to the Collateral Trustees, promptly after obtaining
knowledge thereof, written notice of (A) any material governmental or
regulatory actions instituted or threatened in writing under any
Environmental Law affecting any of the Mortgaged Properties or the matters
indemnified under the U.S. Environmental Indemnification Agreement or the
Canadian Environmental Indemnification Agreement, including, without
limitation, any material notice of inspection, abatement or noncompliance;
(B) all claims made, or material claims threatened in writing, by any third
party against any member of the Restricted Group or any of the Mortgaged
Properties relating to damage, contribution, cost recovery, compensation,
loss or injury resulting from the presence, release or discharge on or from
any of the properties owned by any member of the Restricted Group of any
40
Hazardous Substances; and (C) any member of the Restricted Group's
discovery of any occurrence or condition on any of the Mortgaged Properties
or any real property adjoining or in the vicinity of any Mortgaged Property
which is reasonably likely to subject any member of the Restricted Group to
a material claim under any Environmental Law or to any restrictions on the
ownership, occupancy, transferability or use of said property under any
Environmental Law, and (iii) to the U.S. Collateral Trustee or the Canadian
Collateral Trustee, any non-privileged documentation or records that such
Collateral Trustee may request at the direction of the Majority
Noteholders, acting reasonably, with respect to any of the matters
described in clause (ii) of this Section 5.18(j);
(k) Additional Undertakings. (i) Prior to June 30, 2002, at the
expense of the Parent, an accounts receivable and inventory audit of its
Restricted Subsidiaries, which audit shall have been performed by an
independent third party acceptable to the Banks, and (ii) in the event the
ratio of Total Debt as at June 30, 2002 to EBITDA for the period of four
fiscal quarters of the Parent ended on such date is not less than or equal
to 5.0:1, an appraisal of the Restricted Subsidiaries' equipment and
inventory, such appraisal to be performed by an independent third party
acceptable to the Majority Noteholders; and
(l) Requested Information. With reasonable promptness, such other data
and information as any holder of Notes, the U.S. Collateral Trustee or the
Canadian Collateral Trustee may reasonably request.
Without limiting the foregoing, the Parent will permit each holder of the then
outstanding Notes (or such Persons as any such holder may designate), to visit
and inspect, under the Parent's guidance, any of the properties of the Parent or
any Restricted Subsidiary, to examine all of their books of account, records,
reports and other papers, to make copies and extracts therefrom and to discuss
their respective affairs, finances and accounts with their respective officers,
employees, and independent public accountants (and by this provision the Parent
authorizes said accountants to discuss with such holders the finances and
affairs of the Parent and its Restricted Subsidiaries) all at such reasonable
times and as often as may be reasonably requested. The Parent shall not be
required to pay or reimburse any holder of Notes for any expenses which such
holder may incur in connection with any such visitation or inspection, except
that if such visitation or inspection is made during any period when a Default
or an Event of Default shall have occurred and be continuing, the Parent agrees
to reimburse such holder for all reasonable expenses thereof promptly upon
demand.
Each Noteholder agrees that it will use all reasonable efforts to keep
confidential any information from time to time supplied to it by or on behalf of
the Parent (including, without limitation, any such information provided
pursuant to this Section 5.18) which the Parent or any Person acting on its
behalf designates in writing at the time of its delivery to such Noteholder, or
as promptly as practicable thereafter, is to be treated as confidential,
provided, however, that the foregoing provisions of this paragraph shall not
apply:
(i) to any information already known to such Noteholder at the
time of its receipt thereof (other than any such information which to
such Noteholder's knowledge is already known to such Noteholder by
virtue of any breach by any
41
third party of any confidentiality obligation owed to the Parent or
any Restricted Subsidiary);
(ii) to any information which is or becomes public knowledge
other than (to such Noteholder's knowledge) by reason of any breach of
this paragraph;
(iii) to the extent that such Noteholder is required to disclose
the information in question pursuant to any law, statute, rule or
regulation or any order of any court or judicial process or pursuant
to any direction, request or requirement (whether or not having the
force of law but, if not having the force of law, being of a type with
which Institutional Holders in the relevant jurisdiction are
accustomed to comply) of any self-regulating organization or any
governmental, fiscal, monetary or other authority;
(iv) to the disclosure of any such information to any regulators
or auditors including the NAIC or any successor agency;
(v) to the disclosure of any such information to any other holder
of a Note;
(vi) to the disclosure of any information to such Noteholder's
counsel or accountants or those of any other holder of a Note;
(vii) to the disclosure of any information to any of such
Noteholder's employees, agents or other professional advisors or those
of any other holder of a Note;
(viii) to the disclosure of any information to ▇▇▇▇▇'▇, Standard
& Poor's or any other nationally recognized rating agency;
(ix) to the extent that such Noteholder needs to disclose the
information in question for the protection or enforcement of any of
such Noteholder's rights or interests against the Issuer or the
Parent, whether under this Agreement or otherwise; or
(x) to the prospective transferee in connection with any
contemplated transfer of any of the Notes (or of any other security of
the Parent owned by such Noteholder or any Person advised by such
Noteholder's investment advisor or any of its subsidiaries) by such
Noteholder, provided that such prospective transferee shall agree (in
writing) to be bound by the confidentiality provisions of this Section
5.18 as if it were a holder of Notes hereunder.
5.19. PARI PASSU DEBT.
Except as otherwise provided in this Agreement and the Intercreditor
Agreement, the Notes shall rank, at all times, at least pari passu with all of
the other senior secured Indebtedness of the Restricted
42
Group, other than as permitted by Section 5.9(a)(ii) and subject to
Permitted Liens. The Parent shall at all times cause any Debt owing by any
member of the Restricted Group to any other member of the Restricted Group,
and all Liens securing such Debt, to be subordinated to the Notes and the
Liens securing the Notes, each in form and substance satisfactory to the
Majority Noteholders (and the Noteholders hereby acknowledge that the
manner in which such Debt has been subordinated in the notes subject to the
pledge agreements dated as of the Effective Date is satisfactory to them).
5.20. MOST FAVORED LENDER.
The holders of the Notes shall immediately be notified of the terms and
conditions of any Debt of the nature described in clause (a) of the definition
thereof to be created by any member of the Restricted Group other than Debt
secured by Liens described in Section 5.10(h). The holders of the Notes shall
have the option to require the Obligors and the Restricted Subsidiaries to amend
this Agreement and any of the other Financing Documents to incorporate the
provisions of any agreement relating to such Debt if such holders so wish, it
being understood that the provisions which may be so incorporated shall not
extend to the provision of collateral (other than collateral provided (a) under
a replacement revolving credit facility after the termination of Bank Facility A
or (b) to secure Priority Debt or Debt secured by Liens permitted by Section
5.10(h)) or to pricing.
5.21. LIMITATION ON BUSINESS ACTIVITIES.
The Issuer shall not, and shall not permit IPG Finance LLC or Canco, to
carry on any business, other than (i) taking such steps as may be necessary to
maintain its existence, (ii) to hold Securities of Restricted Subsidiaries,
(iii) taking such action as is required under or in respect of this Agreement,
any of the other Financing Documents or the Bank Documents, (iv) provided no
Default or Event of Default shall have occurred and be continuing, IPG Finance
LLC may lend money to IPG (US) Inc. and (v) the incurrence of any other
Indebtedness permitted by Section 5.23 and, with respect to the Issuer,
Indebtedness permitted hereunder.
5.22. OWNERSHIP OF SUBSIDIARIES.
The Parent shall not permit, at any time, IPG Finance LLC, the Issuer,
Canco, Intertape Polymer Corp, IPI and (prior to the termination of Bank
Facility A) all Restricted Subsidiaries who are borrowers under Bank Facility A
to be other than Wholly-Owned Restricted Subsidiaries, or at any time to own
(either directly or through the Restricted Subsidiaries) less than 80% of the
Voting Stock of its other Restricted Subsidiaries, together with such Securities
of such other Restricted Subsidiaries as are necessary to provide the Parent
with a direct or indirect economic interest of not less than 80% of each such
other Restricted Subsidiary.
5.23. LIMITATION ON ISSUER DEBT.
The Parent will not permit either IPG Finance LLC or Canco to incur or have
at any time any Indebtedness in excess of an aggregate amount of US$100,000,
except for Indebtedness under or with respect to this Agreement, the 1999 Note
Agreement, the Bank Documents and any facility which replaces Bank Facility A
after the termination thereof, and except to a Wholly-Owned Restricted
Subsidiary.
43
5.24. NO RESTRICTIONS ON DISTRIBUTIONS.
The Parent shall not, and shall not permit any of its Restricted
Subsidiaries to, restrict in any way the ability of any Restricted Subsidiary to
declare or make any payment contemplated in clauses (a), (b) and (c) of the
definition of "Restricted Payment" to its shareholder(s) or owners of its other
Equity Interests, except for such restrictions arising under applicable law in
relation to the solvency of the Restricted Subsidiaries.
5.25. LIMITATION ON CAPITAL EXPENDITURES.
(a) The Parent will not, and will not permit any Restricted Subsidiary
to, until such time as Bank Facility B is fully repaid and cancelled, make
any capital expenditures that exceed US$20,000,000 in any fiscal year of
the Parent unless the ratio of Total Debt to EBITDA (calculated on a
quarterly basis for the immediately preceding period of four consecutive
fiscal quarters including the fiscal quarter most recently ended) is less
than or equal to 3.25:1.00; provided that the foregoing restriction shall
continue to apply if, at the end of any subsequent fiscal quarter, such
ratio exceeds 3.25:1.00, unless Bank Facility B has theretofore been fully
repaid and cancelled.
(b) Once Bank Facility B is fully repaid and cancelled, or the ratio
of Total Debt to EBITDA (calculated on a quarterly basis for the
immediately preceding period of four fiscal quarters including the fiscal
quarter most recently ended) is less than or equal to 3.25:1.00 (together,
the "CONDITIONS"), the Restricted Group shall not make capital expenditures
exceeding an amount equal to 10% of Consolidated Net Worth (as at the end
of the fiscal year then most recently ended) in any fiscal year of the
Parent without the consent of the Majority Noteholders, acting reasonably.
If either of the Conditions occurs on a date other than the last day of a
fiscal year of the Parent, the Restricted Group shall be permitted in such
fiscal year to make the capital expenditures permitted under this Section
5.25(b) instead of those permitted under Section 5.25(a). Such amount shall
be increased to 20% of Consolidated Net Worth for any current fiscal year
in which (i) the ratio of Total Debt as at the end of the fiscal quarter of
the Parent then most recently ended to EBITDA for the period of four fiscal
quarters then most recently ended does not exceed 3.0:1.00, and (ii) the
Parent has maintained an Acceptable Rating at all times during the then
most recently ended two fiscal quarters with respect to its long-term,
senior unsecured Debt; provided however, that at any time either of the
tests in the preceding clauses (i) and (ii) are not met, the applicable
percentage shall return to 10% for the fiscal year in which such condition
is no longer met.
5.26. INTELLECTUAL PROPERTY.
Subject to the next succeeding sentence, the Parent will ensure that all
intellectual property, as described in the Security Documents, shall continue to
be owned by the Person identified as the owner thereof in the Security Documents
at all times; provided that, on 20 days prior notice to the Collateral Trustees,
any member of the Restricted Group may sell or otherwise transfer any interest
that such member has in such intellectual property to IPG Technologies Inc. at
any time. Except as otherwise permitted by Section 5.12, the Parent will
44
not, and will not permit any Restricted Subsidiary to, sell or transfer any
portion of such Person's ownership interest in any intellectual property (as
described in the Security Documents); provided that any member of the Restricted
Group may sell or transfer any such intellectual property to IPG Technologies
Inc. at any time.
5.27. NO AMENDMENTS TO CREDIT AGREEMENT.
The Parent will not, and will not permit any Restricted Subsidiary to,
allow any provision of the Credit Agreement in relation to repayments,
prepayments, pricing (including, without limitation, interest rate and margins),
or financial covenants to be amended, replaced or deleted in any manner that the
Majority Noteholders deem, in their sole discretion, to be adverse to the
interests of the holders of the Notes without the prior written consent of the
Majority Noteholders. This Section 5.27 is supplemental to the covenants set
forth in Section 9.5 of the Intercreditor Agreement.
6. EVENTS OF DEFAULT AND REMEDIES THEREFOR
6.1. EVENTS OF DEFAULT.
Any one or more of the following shall constitute an "EVENT OF DEFAULT" as
such term is used herein:
(a) Default shall occur in the payment of interest on any Note when
the same shall have become due and such default shall continue for more
than five Business Days; or
(b) Default shall occur in the making of any payment of the principal
of any Note or premium, if any, thereon at the expressed or any accelerated
maturity date or at any date fixed for prepayment, or the Issuer shall fail
to make an offer to prepay as required under Section 2.5, or the failure of
the Obligors to make an offer to prepay the Secured Obligations as required
under Section 5.12(d); or
(c) Default shall be made in the payment when due (whether by lapse of
time, by declaration, by call for redemption or otherwise) of the principal
of or interest on any Material Debt (other than the Notes) of the Parent or
any Restricted Subsidiary and such default shall not have been waived and
shall continue beyond the period of grace, if any, allowed under the terms
of such Material Debt; or
(d) Default or the happening of any event shall occur under any
indenture, agreement or other instrument under which any Material Debt of
the Parent or any Restricted Subsidiary may be issued and such default or
event shall continue for a period of time sufficient to permit the
acceleration of the maturity of any Material Debt of the Parent or any
Restricted Subsidiary outstanding thereunder; or
(e) Default shall occur in the observance or performance of any
covenant or agreement contained in Section 5.6 through Section 5.14 hereof,
in Section 5.19 through Section 5.25 hereof, or of any covenant or
agreement contained in any Guaranty Agreement; or
45
(f) Default shall occur in the observance or performance of any other
provision of this Agreement or any provision of any of the Financing Documents
which is not remedied within 30 days after the earlier of (i) the day on which
any Responsible Officer first obtains knowledge of such default, or (ii) the day
on which written notice thereof is given to any Obligor by the holder of any
Note; or
(g) Any representation or warranty made by any Obligor in this
Agreement, or made by the Parent or the General Partner in the Parent Guaranty
Agreement or made by any member of the Restricted Group in any other Financing
Document or any statement or certificate furnished by such member of the
Restricted Group in connection with the consummation of the issuance and
delivery of the Notes or furnished by any member of the Restricted Group
pursuant to any other Financing Document, is untrue in any material respect as
of the date of the issuance or making thereof, or if the auditors certifying the
financial statements in accordance with Section 5.18(b) insert a material
qualification in their opinion; or
(h) Final judgment or final judgments for the payment of money
aggregating in excess of U.S. $2,500,000 (or the equivalent thereof in any other
currency) (exclusive of judgment amounts which are covered by insurance of
solvent insurers which have acknowledged such coverage) is or are outstanding
against any member of the Restricted Group or against any property or assets of
any such entity and any one of such judgments has remained unpaid, unvacated,
unbonded or unstayed by appeal for a period of 90 days from the date of its
entry; or
(i) A custodian, liquidator, trustee or receiver is appointed for any
member of the Restricted Group or for the major part of the property of any one
of them and is not discharged within 90 days after such appointment; or
(j) Any member of the Restricted Group becomes insolvent or bankrupt,
is generally not paying its debts as they become due or makes an assignment for
the benefit of creditors, or any member of the Restricted Group applies for or
consents to the appointment of a custodian, liquidator, trustee or receiver for
such member of the Restricted Group or for the major part of the property of any
such entity; or
(k) Bankruptcy, reorganization, arrangement or insolvency proceedings,
or other proceedings for relief under any bankruptcy or similar law or laws for
the relief of debtors, are instituted by or against any member of the Restricted
Group or any member of the Restricted Group (or any committee thereof) shall
adopt any resolution or otherwise authorize any action to approve any of the
actions referred to in clause (j) or this clause (k) of this Section 6.1 (each
of the events referred to in clause (j) or this clause (k), a "PROCEEDING"),
and, if instituted against such member of the Restricted Group, are consented to
or are not dismissed within 20 Business Days after such institution; or
(l) If property of any member of the Restricted Group having a total
value of more than US$2,500,000 is the object of a seizure or of a taking of
possession or other proceeding by a creditor, provided that if such legal
proceedings are commenced against any member of the Restricted Group, such
member shall have the right to contest such
46
seizure or taking in good faith, if the holders of all of the Notes are
absolutely satisfied, in their complete discretion, that the repayment of the
Notes, the interest and all other amounts relating thereto and the ability of
the Issuer to service its Debt shall not be compromised; or
(m) If IPG Finance LLC assigns or transfers any of its rights against
any Restricted Subsidiary with respect to amounts owed to it by such Restricted
Subsidiary, to any Person other than a member of the Restricted Group, except as
permitted under this Agreement or the Security Documents; or
(n) Either Guaranty Agreement shall be held by a court of competent
jurisdiction to be invalid or unenforceable in any respect, or the Parent, the
General Partner or any Restricted Subsidiary takes any action for the purpose of
repudiating or rescinding the Guaranty Agreement to which it is a party or its
obligations thereunder, or the Parent, the General Partner or any Restricted
Subsidiary declares that its obligations thereunder are unenforceable; or
(o) If in the opinion of the Majority Noteholders, acting in good
faith, a Material Adverse Change has occurred since December 31, 2000, except
for any Material Adverse Change described in Schedule II attached hereto, and
the Majority Noteholders shall have given five (5) Business Days written notice
to the Issuer to such effect.
6.2. NOTICE TO HOLDERS.
When any Event of Default described in the foregoing Section 6.1 has
occurred, or if the holder of any Note or of any other evidence of Debt of any
Obligor gives any notice or takes any other action with respect to a claimed
default, such Obligor agrees to give notice within three (3) Business Days of
such event to all holders of the Notes then outstanding.
6.3. ACCELERATION OF MATURITIES.
When any Event of Default described in clause (a) or (b) of Section 6.1
has occurred and is continuing, any holder of any Note may, by notice in writing
sent in the manner provided in Section 9.6 to the Parent declare the entire
principal of and all interest accrued on such Note to be, and such Note shall
thereupon become, forthwith due and payable, without any presentment, demand,
protest or other notice of any kind, all of which are hereby expressly waived.
When any Event of Default described in clause (a), (b), (c), (d), (e), (f), (g),
(h), (m), (n) or (o) of said Section 6.1 has occurred and is continuing, the
holder or holders of 51% or more of the principal amount of Notes (other than
Notes held by any member of the Restricted Group or any Affiliate) at the time
outstanding (the "MAJORITY NOTEHOLDERS") may, by notice to the Parent, declare
the entire principal and all interest accrued on all Notes to be, and all Notes
shall thereupon become, forthwith due and payable, without any presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived. When any Event of Default described in clause (i), (j), (k) or (l) of
Section 6.1 has occurred, then all outstanding Notes shall immediately become
due and payable without presentment, demand or notice of any kind. Upon any or
all of the Notes becoming due and payable as a result of any Event of Default as
aforesaid, the Issuer will forthwith pay to the holders of such Notes the entire
principal of and interest accrued on such
47
Notes and, to the extent not prohibited by applicable law, an amount as
liquidated damages for the loss of the bargain evidenced hereby (and not as a
penalty) equal to the Make-Whole Amount. No course of dealing on the part of the
holder or holders of any Notes nor any delay or failure on the part of any
holder of Notes to exercise any right shall operate as a waiver of such right or
otherwise prejudice such holder's rights, powers and remedies. The Issuer
further agrees, to the extent permitted by law, to pay to the holder or holders
of the Notes all reasonable costs and expenses incurred by them in the
collection of any amounts payable under the Notes in connection with any Event
of Default hereunder, including reasonable compensation to such holder's or
holders' attorneys for all services rendered in connection therewith. All
amounts paid hereunder with respect to principal, Make-Whole Amount, if any, and
interest on the Notes shall be paid ratably to all holders of Notes which have
become due and payable pursuant to this Section 6.3.
6.4. RESCISSION OF ACCELERATION.
The provisions of Section 6.3 are subject to the condition that if the
principal of and accrued interest on all or any outstanding Notes have been
declared immediately due and payable by reason of the occurrence of any Event of
Default described in clause (a), (b), (c), (d), (e), (f), (g), (h), (m), (n) or
(o) of Section 6.1, the holders of at least 66 2/3% in aggregate principal
amount of the Notes then outstanding may rescind and annul such declaration and
the consequences thereof, provided that at the time such declaration is annulled
and rescinded:
(a) no judgment or decree has been entered for the payment of any
monies due pursuant to the Notes or this Agreement;
(b) all arrears of interest upon all the Notes and all other sums
payable under the Notes and under this Agreement (except any principal,
interest or premium on the Notes which has become due and payable
solely by reason of such declaration under Section 6.3) shall have been
duly paid; and
(c) each and every other Default and Event of Default shall have
been made good, cured or waived pursuant to Section 7.1;
and provided, further, that no such rescission and annulment shall extend to or
affect any subsequent Default or Event of Default or impair any right consequent
thereto. Such annulment and rescission shall be by written instrument filed with
the Parent.
7. AMENDMENTS, WAIVERS AND CONSENTS
7.1. CONSENT REQUIRED.
Any term, covenant, agreement or condition of this Agreement may, with
the consent of the Obligors, be amended or compliance therewith may be waived
(either generally or in a particular instance and either retroactively or
prospectively), if the Obligors shall have obtained the consent in writing of
the holders of at least 66 2/3% in aggregate principal amount of the outstanding
Notes; provided that without the written consent of the holders of all of the
Notes then outstanding, no such amendment or waiver shall be effective (a) which
will change the time of payment of the principal of or the interest on any Note
or change the principal amount thereof
48
or change the rate of interest thereon, or (b) which will change any of the
provisions with respect to optional prepayments including, without limitation,
the definition of Make-Whole Amount, or (c) which will change the percentage of
holders of the Notes required to consent to any such amendment or waiver of any
of the provisions of this Section 7 or Section 6.
7.2. SOLICITATION OF HOLDERS.
So long as there are any Notes outstanding, no Obligor will solicit,
request or negotiate for or with respect to any proposed waiver or amendment of
any of the provisions of this Agreement or the Notes unless each holder of Notes
(irrespective of the amount of Notes then owned by it) shall be informed thereof
by such Obligor and shall be afforded the opportunity of considering the same
and shall be supplied by the Obligors with sufficient information to enable it
to make an informed decision with respect thereto. No Obligor will directly or
indirectly, pay or cause to be paid any remuneration, whether by way of
supplemental or additional interest, fee or otherwise, to any holder of Notes as
consideration for or as an inducement to the entering into by any holder of
Notes of any waiver or amendment of any of the terms and provisions of this
Agreement or the Notes unless such remuneration is concurrently offered, on the
same terms, ratably to the holders of all Notes then outstanding.
7.3. EFFECT OF AMENDMENT OR WAIVER.
Any such amendment or waiver shall apply equally to all of the holders
of the Notes and shall be binding upon them, upon each future holder of any Note
and upon the Obligors, whether or not such Note shall have been marked to
indicate such amendment or waiver. No such amendment or waiver shall extend to
or affect any obligation not expressly amended or waived or impair any right
consequent thereon. As used herein, the term "THIS AGREEMENT" and references
thereto shall mean this Agreement as it may from time to time be amended or
supplemented.
8. INTERPRETATION OF AGREEMENT; DEFINITIONS
8.1. DEFINITIONS.
Unless the context otherwise requires, the terms hereinafter set forth
when used herein shall have the following meanings and the following definitions
shall be equally applicable to both the singular and plural forms of any of the
terms herein defined:
"ACCEPTABLE RATING" shall mean a rating of at least BBB by Standard &
Poor's or a rating of at least Baa2 by ▇▇▇▇▇'▇, or an equivalent credit rating
by a rating agency of recognized standing acceptable to the Majority
Noteholders.
"ACQUISITION" shall mean the acquisition (whether by way of purchase,
exchange, Investment or otherwise) of (a) a majority of the issued and
outstanding Voting Stock of a Person (other than a member of the Restricted
Group), or (b) assets of a Person (other than a member of the Restricted Group)
comprising substantially all of the assets of such Person or of an independent
business unit (for example, a division) operated by such Person.
49
"ADJUSTED CONSOLIDATED" for any period, or as of any time, shall have
the same meaning as "consolidated" except that the Unrestricted Subsidiaries are
accounted for on a cost basis rather than on a consolidated basis for such
period or as of such time.
"AFFILIATE" shall mean any Person (other than the Parent or a
Restricted Subsidiary) (a) which directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common control with,
any Obligor, (b) which beneficially owns or holds (i) 5% or more of the Voting
Stock of the Parent or the General Partner or (ii) 5% or more of the Equity
Interests of the Issuer or (c) 5% or more of the Voting Stock (or in the case of
a Person which is not a corporation, 5% or more of the Equity Interests) of
which is beneficially owned or held by any Obligor or a Subsidiary. The term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of Voting Stock, by contract or otherwise.
"AGREEMENT, THIS" is defined in Section 7.3.
"APPLICABLE ADJUSTMENT MARGIN" shall mean, as of any date of
determination prior to an Interest Rate Adjustment Date, an amount equal to the
product of (a) six hundred and three ten-thousandths percent (0.0603%) times (b)
the number of complete calendar months which shall have expired since May 1,
2002 as of such date of determination.
"APPLICABLE DEFAULT RATE" shall mean, for the Notes at any time, a rate
per annum equal to the lesser of (a) the rate of interest in effect at such time
for the Notes plus two percent (2%) and (b) the highest interest rate allowed by
applicable law for the Notes.
"AVAILABLE CASH" shall mean, at any time, cash and Cash Equivalents
which are freely available to the Restricted Group at such time in that there
are no restrictions of any nature whatsoever on the Restricted Group's access
thereto at such time, including, without limitation, any restrictions or
potential delays arising out of any (a) agreement, (b) incorporating,
constituting or charter documents, (c) foreign exchange or currency controls,
(d) Law, (e) Lien or (f) otherwise. For purposes of the computation of Total
Debt, "Available Cash" shall not include cash and Cash Equivalents held in
Drumheath.
"BANK DOCUMENTS" is defined in Section 4.7.
"BANK FACILITY A" shall mean, with respect to and pursuant to the
Credit Agreement, that certain 364-day extendible revolver in the principal
amount of up to U.S. $50,000,000 (or its equivalent in Canadian currency),
extendible annually under the terms of the Credit Agreement.
"BANK FACILITY B" shall mean, with respect to and pursuant to the
Credit Agreement, that certain revolving Facility B in the principal amount of
up to U.S. $35,000,000 (or its equivalent in Canadian currency).
"BANK FACILITY C" shall mean, with respect to and pursuant to the
Credit Agreement, that certain revolving Facility C in the principal amount of
up to U.S. $60,000,000 (or its equivalent in Canadian currency).
"BANKS" shall mean the "Lenders" (as such term is defined in the Credit
Agreement).
50
"BANK TERM FACILITIES" shall mean Bank Facility B and Bank Facility C.
"BUILDING INSURANCE" is defined in Section 5.2(a)(ii).
"BUSINESS DAY" shall mean any day except a Saturday, Sunday or other
day on which banks are generally not open for business in ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇, or any
other day on which the New York Stock Exchange is generally not open for
business.
"CANADIAN COLLATERAL" shall mean all personal and real property located
in Canada granted as security for the obligations of the Obligors and the
Restricted Subsidiaries under this Agreement, the Notes, the Subsidiary Guaranty
Agreement and the Parent Guaranty Agreement, pursuant to the Canadian Security
Documents.
"CANADIAN COLLATERAL TRUSTEE" shall mean Computershare Trust Company of
Canada, in its capacity as Canadian collateral trustee for the holders of Debt
under this Agreement, the other Financing Documents and the Bank Documents,
together with its successors in such capacity duly appointed in accordance with
the provisions of the Financing Documents.
"CANADIAN ENVIRONMENTAL INDEMNIFICATION AGREEMENT" is defined in
Section 4.6(b).
"CANADIAN MORTGAGES" is defined in Section 3.5(c).
"CANADIAN SECURITY DOCUMENTS" is defined in Section 3.5(c).
"CANCO" shall mean IPG Holding Company of Nova Scotia and its
successors.
"CAPITALIZED LEASE" shall mean any lease (a) the obligation for Rentals
with respect to which is required to be capitalized on a consolidated balance
sheet of the Parent and its Subsidiaries in accordance with GAAP or (b) for
which the amount of the asset and liability thereunder if so capitalized is
required to be disclosed in a note to such balance sheet in accordance with
GAAP.
"CAPITALIZED RENTALS" of any Person shall mean, as of the date of any
determination thereof, the amount at which the aggregate Rentals due and to
become due under all Capitalized Leases under which such Person is then a lessee
would be reflected as a liability on a consolidated balance sheet of such Person
as of such date in accordance with GAAP.
"CASH EQUIVALENTS" shall mean, as of the date of any determination
thereof, Investments of the type described in clause (b), (c) or (d) of the
definition of the term "Permitted Investments", and all sums held in bank
accounts.
"CDN" shall mean Canadian dollars.
"CHANGE IN CONTROL" shall mean any change in ownership of the Voting
Stock of the Parent after the Effective Date which results in any Person
(including Affiliates or associates of such Person), other than a member of the
Restricted Group, becoming the "beneficial owner" (as
51
such term is used in Rule 13d-5 under the Exchange Act) of more than 50% of the
total voting power of all classes then outstanding of the Parent's Voting Stock.
"CODE" shall mean the Internal Revenue Code of 1986, as amended, and
the rules and regulations promulgated thereunder from time to time, and any
successor statute thereto, together with the regulations promulgated thereunder,
in each case as in effect from time to time.
"COLLATERAL" shall mean the U.S. Collateral and the Canadian
Collateral.
"COLLATERAL SUSPENSION CONDITIONS" shall mean, at any time:
(a) the Acceptable Rating contemplated by Section 1.6(a) is
then in full force and effect, not having been withdrawn or placed on a
credit watch with a negative implication by ▇▇▇▇▇'▇ or Standard &
Poor's (or, if applicable, such other equivalent rating agency as has
been accepted by the Majority Noteholders);
(b) Total Debt, determined as of the end of each of the four
most recently ended fiscal quarters of the Parent, does not exceed two
hundred fifty percent (250%) of EBITDA for the period of four
consecutive fiscal quarters of the Parent ended at the end of each of
such four most recently ended fiscal quarters of the Parent;
(c) each of the Lenders pursuant to the Credit Agreement, and
each of the holders of the 1999 Notes, shall have agreed not to direct
the U.S. Collateral Trustee, the Canadian Collateral Trustee or any
other trustees or agents holding collateral for the benefit of the
Banks and the holders of the 1999 Notes to enforce any of the
provisions of the Security Documents or other documents creating Liens
securing Bank Facility A (or, if applicable, any replacement thereof)
during the applicable Collateral Suspension Period; and
(d) no Default or Event of Default has occurred and is
continuing;
in each case as of such time.
"COLLATERAL SUSPENSION DATE" is defined in Section 1.6.
"COLLATERAL SUSPENSION PERIOD" is defined in Section 1.6.
"COLLATERAL TRUSTEES" shall mean the U.S. Collateral Trustee and the
Canadian Collateral Trustee.
"COLLATERAL TRUST INDENTURE" is defined in Section 4.5(a).
"COMMITMENT" at any time, with respect to any Bank Term Facility, shall
mean the amount of the "Credit" (as defined in the Credit Agreement as in effect
on the date of this Agreement with respect to such Bank Term Facility), as such
amount may have been reduced (but not increased) from time to time pursuant to
the terms of the Credit Agreement.
52
"CONSOLIDATED" when used as a prefix to any item (unless such item is
defined differently herein) shall mean the aggregate of the relevant financial
statements or accounts of the Subsidiaries (or other Persons which, in
accordance with GAAP, are to be included in such computation) of a Person on a
line-by-line basis (i.e., adding together corresponding items of assets,
liabilities, revenues and expenses) with the relevant financial statements or
accounts of such Person, eliminating inter-company balances and transactions and
providing for any Minority Interests, all as determined in accordance with GAAP;
for greater certainty, all of the financial covenants contained in Sections 5.6,
5.7 and 5.8, and the other financial calculations required to be made on a
consolidated basis hereunder, are calculated solely by reference to the
Restricted Group, excluding any items attributable to Unrestricted Subsidiaries.
"CONSOLIDATED ASSETS" shall mean, as of the date of any determination
thereof, consolidated total assets of the Restricted Group as of such date
determined in accordance with GAAP (excluding, in any event, assets or equity
attributable to Unrestricted Subsidiaries).
"CONSOLIDATED CURRENT LIABILITIES" shall mean, as of the date of any
determination thereof, such liabilities of the Restricted Group on a
consolidated basis as shall be determined in accordance with GAAP to constitute
current liabilities on such date (excluding, in any event, liabilities
attributable to Unrestricted Subsidiaries).
"CONSOLIDATED NET INCOME" for any period shall mean the gross revenues
of the Restricted Group for such period, less all expenses and other proper
charges (including taxes on income) for such period, determined on a
consolidated basis and otherwise in accordance with GAAP after eliminating
earnings or losses attributable to outstanding Minority Interests, but
excluding, in any event:
(a) any gains or losses (i) on the sale or other disposition
of Investments or fixed or capital assets, and any taxes on such
excluded gains and any tax deductions or credits on account of any such
excluded losses or (ii) attributable to any non-recurring or
extraordinary items including, without limitation, any discontinuance
of operations;
(b) the proceeds of any life insurance policy;
(c) net earnings and losses of any Restricted Subsidiary
accrued prior to the date it became a Restricted Subsidiary;
(d) net earnings and losses of any Person (other than a
Restricted Subsidiary), substantially all of the assets of which have
been acquired in any manner by any member of the Restricted Group,
realized by such Person prior to the date of such acquisition;
(e) net earnings and losses of any Person (other than a
Restricted Subsidiary) with which any member of the Restricted Group
shall have consolidated or which shall have merged into or with any
member of the Restricted Group prior to the date of such consolidation
or merger;
53
(f) net earnings of any Person (other than a Restricted
Subsidiary) in which any member of the Restricted Group has an
ownership interest unless such net earnings shall have actually been
received by any member of the Restricted Group in the form of cash
distributions;
(g) any portion of the net earnings of any Restricted
Subsidiary which for any reason is unavailable for payment of dividends
or interest to any member of the Restricted Group;
(h) earnings resulting from any reappraisal, revaluation or
write-up of assets;
(i) any deferred or other credit representing any excess of
the equity in any Subsidiary at the date of acquisition thereof over
the amount invested in such Subsidiary;
(j) any gain arising from the acquisition of any Securities of
any member of the Restricted Group; and
(k) any reversal of any contingency reserve, except to the
extent that provision for such contingency reserve shall have been
created as an expense or charge for such period.
"CONSOLIDATED NET WORTH" shall mean, as of the date of any
determination thereof, the total shareholders' equity of the Restricted Group as
of such date, determined on a consolidated basis, but in any event excluding any
amount of such shareholders' equity allocable or attributable to (a) Minority
Interests and (b) all Investments (other than Permitted Investments) held by any
member of the Restricted Group.
"CONSOLIDATED TOTAL CAPITALIZATION" shall mean, as of the date of any
determination thereof, the sum of (a) the amount of Total Debt on such date,
plus (b) the Consolidated Net Worth as of such date.
"CONTROL EVENT" shall mean:
(a) the execution by any Obligor or any Subsidiary or
Affiliate of any letter of intent with respect to any proposed
transaction or event or series of transactions or events that,
individually or in the aggregate, would result in a Change in Control
if such transactions or events were to be consummated or to occur, or
(b) the execution of any written agreement that, when fully
performed by the parties thereto, would result in a Change in Control.
"CONTROL PREPAYMENT DATE" is defined in Section 2.5(a).
"CREDIT AGREEMENT" shall mean that certain Credit Agreement of even
date herewith, by and among the members of the Restricted Group, The
Toronto-Dominion Bank, Comerica Bank, National Bank of Canada, and certain other
Persons, as the same may be amended, supplemented
54
or otherwise modified from time to time in accordance with the provisions
thereof, of this Agreement and of the Intercreditor Agreement.
"DEBT" of any Person shall mean, as of the date of any determination
thereof (without duplication):
(a) all Indebtedness for borrowed money or evidenced by notes,
bonds, debentures or similar evidences of indebtedness of such Person
on such date;
(b) Negative Value of Derivative Instruments of such Person on
such date;
(c) obligations secured by any Lien on such date upon property
owned by such Person or created or arising under any conditional sale
or other title retention agreement with respect to property acquired by
such Person, notwithstanding the fact that the rights and remedies of
the seller, lender or lessor under any such arrangement in the event of
default are limited to repossession or sale of property, including
obligations secured by Liens arising from the sale or transfer of notes
or accounts receivable, but, in all events, excluding trade payables
and accrued expenses constituting Consolidated Current Liabilities;
(d) Capitalized Rentals of such Person on such date;
(e) reimbursement obligations in respect of credit enhancement
instruments of such Person on such date including letters of credit;
and
(f) (without duplication of any of the foregoing) Guaranties
of such Person on such date of obligations of others of the character
referred to hereinabove in this definition.
"DEFAULT" shall mean any event or condition the occurrence of which
would, with the lapse of time or the giving of notice, or both, constitute an
Event of Default.
"DERIVATIVE INSTRUMENTS" shall mean an agreement entered into from time
to time by the Issuer in order to control, fix or regulate currency exchange
fluctuations or the rate of interest payable on borrowings under either of the
Bank Term Facilities.
"DESIGNATED FACILITIES" shall mean all real property owned or leased by
any member of the Restricted Group in the United States of America and Canada,
including land, buildings and other improvements.
"DRUMHEATH" shall mean Drumheath Indemnity Ltd., a company organized
under the laws of Barbados.
"EBITDA" for any fiscal period shall mean (i) the Consolidated Net
Income of the Restricted Group for such period plus (ii) to the extent included
in the calculation of such Consolidated Net Income, the Interest Expense, taxes,
depreciation and amortization of the Restricted Group for such period, each
calculated on a consolidated basis and otherwise in accordance with GAAP.
Notwithstanding the foregoing, "EBITDA of the Unrestricted
55
Subsidiaries" has the same meaning as EBITDA but shall be calculated in relation
to the Unrestricted Subsidiaries only.
"EFFECTIVE DATE" is defined in Section 1.4.
"ENVIRONMENTAL LAWS" means all applicable United States, Mexican and
Canadian, federal, state, county, provincial and local, and other foreign,
statutes and codes or regulations, rules or ordinances issued, promulgated or
approved thereunder, as well as all other Laws and common laws under which
environmental liabilities can arise, now or hereafter in effect (including those
with respect to asbestos or asbestos-containing material or exposure to asbestos
or asbestos-containing material), relating to the clean-up, remediation,
pollution, protection or regulation of the environment and public health
including, without limitation: (a) emissions, discharges, releases or threatened
releases of pollutants, contaminants, chemicals or industrial toxic or hazardous
constituents, substances or wastes (including, without limitation, any Hazardous
Substance) into the environment (including, without limitation, ambient air,
surface water, ground water, land surface or subsurface strata); and (b) the
manufacture, processing, distribution, use, generation, treatment, storage,
disposal, transport or handling of any Hazardous Substance, and chemicals or
substances regulated by any such statutes, codes, regulations, rules or
ordinances; and (c) underground storage tanks and related piping, and emissions,
discharges and releases or threatened releases therefrom. The statutes, codes,
regulations, rules or ordinances referred to herein shall include the applicable
provisions of (i) the Clean Air Act (42 U.S.C. ss. 7401 et seq.), (ii) the Clean
Water Act (33 U.S.C. ss. 1251 et seq.), (iii) the Resource Conservation and
Recovery Act of 1976 (42 U.S.C. ss. 6901 et seq.), (iv) the Toxic Substances
Control Act (15 U.S.C. ss. 2601 et seq.), (v) the Comprehensive Environmental
Response, Compensation and Liability Act, as amended by the Superfund Amendments
and Reauthorization Act (42 U.S.C. ss. 9601 et seq.), (vi) the Canadian
Environmental Protection Act, (vii) the Environmental Protection Act (Ontario),
and (viii) the Environmental Quality Act (Quebec).
"EQUITY EVENT" shall mean the issuance by any member of the Restricted
Group of Equity Interests or Debt (other than (a) Debt owing by one member of
the Restricted Group to another member of the Restricted Group, and (b) a
replacement of Bank Facility A after the termination thereof) of the nature
contemplated in the definition of "Interest Rate Adjustment Date."
"EQUITY EVENT PAYMENT" shall mean, with respect to any Equity Event:
(a) at any time that there is any Debt outstanding under Bank
Facility B or Bank Facility B has not been terminated, an amount equal
to 100% of the Equity Event Proceeds in respect of such Equity Event;
and
(b) at any time that (i) there is no Debt outstanding under
Bank Facility B, (ii) Bank Facility B has been terminated and (iii)
there is any Debt outstanding under Bank Facility C or Bank Facility C
has not been terminated, an amount equal to 75% of Equity Event
Proceeds in respect of such Equity Event.
"EQUITY EVENT PREPAYMENT DATE" is defined in Section 2.3(a).
56
"EQUITY EVENT PROCEEDS" shall mean, at any time, with respect to any
Equity Event, an amount equal to the difference of (a) the aggregate amount of
the cash consideration received by the Restricted Group in connection with such
Equity Event, minus (b) all reasonable out-of-pocket costs and expenses
(including, without limitation, underwriting and similar fees) actually incurred
by any member of the Restricted Group in connection with such Equity Event.
"EQUITY INTEREST" shall mean:
(a) in the case of a corporation, capital stock;
(b) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents
(however designated) of capital stock;
(c) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited);
(d) any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person; and
(e) any rights, warrants or options or other Securities that
are exercisable, exchangeable or convertible for or into any of the
foregoing.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, and any successor statute thereto, together with the regulations
thereunder, in each case as in effect from time to time. References to sections
of ERISA shall be construed to also refer to any successor sections.
"ERISA AFFILIATE" shall mean any corporation, trade or business that
is, along with the Parent, a member of a controlled group of corporations or a
controlled group of trades or businesses, as described in section 414(b) and
414(c), respectively, of the Code or Section 4001 of ERISA.
"EVENT OF DEFAULT" is defined in Section 6.1.
"EXCESS CASH FLOW" shall mean, in respect of any period, the result of:
(a) the Restricted Group's EBITDA for such period, as of each
Excess Cash Flow Prepayment Date, plus any decrease in the Restricted
Group's consolidated non-cash working capital items (or minus any
increase in the Restricted Group's consolidated non-cash working
capital items) during such period, minus
(b) the sum for such period of:
(i) all cash interest or dividends paid by the Parent and
its Restricted Subsidiaries on Debt or preferred shares
during such period,
57
(ii) the amount of all cash payments in respect of capital
expenditures made by members of the Restricted Group during
such period and not financed using the proceeds of Debt
(other than Debt under the Credit Agreement or Debt from a
member of the Restricted Group to another member of the
Restricted Group), up to a maximum of $15,000,000 during the
Parent's fiscal year 2002, and $20,000,000 during the
Parent's fiscal year 2003, it being understood that from and
after the first date as of which there is no Debt outstanding
under Bank Facility B and Bank Facility B has been
terminated, the maximum amounts set forth in this clause (ii)
shall not apply,
(iii) the amount of all voluntary and scheduled principal
payments during such period of Debt of members of the
Restricted Group held by Persons outside of the Restricted
Group, including any voluntary or mandatory permanent
reductions thereof but excluding (x) prepayments of loans
under the Credit Agreement, the Notes and the 1999 Notes with
Excess Cash Flow Payments from the application of Section
9.2.2 of the Credit Agreement and Section 2.4 of the 1999
Note Agreement (each as in effect on the date of this
Agreement) and Section 2.4 hereof, in each case, for a prior
fiscal period, and (y) prepayments of Debt with proceeds from
the sale of assets (other than sales of inventory or services
in the ordinary course of business),
(iv) principal payments by members of the Restricted Group
during such period on Capitalized Leases held by lessors who
are not members of the Restricted Group and
(v) taxes paid in cash by members of the Restricted Group
in such period.
Excess Cash Flow shall be determined as follows:
(A) at any time that there is any Debt outstanding under Bank
Facility B or Bank Facility B has not been terminated,
(1) for the fiscal quarter ended March 31, 2002, Excess
Cash Flow shall be based on the Excess Cash Flow during such
quarter,
(2) for the fiscal quarter ended June 30, 2002, Excess
Cash Flow shall be based on the Excess Cash Flow during the
first two quarters of fiscal year 2002 reduced by the Excess
Cash Flow paid in accordance with the provisions of this
Agreement, the 1999 Note Agreement, and the Credit Agreement
with respect to the fiscal quarter ended March 31, 2002 (the
amount of any such reduction to be made under this paragraph
is hereinafter referred to as the "Adjusted Amount"),
(3) for the fiscal quarter ended September 30, 2002,
Excess Cash Flow shall be based on the Excess Cash Flow
during the first three quarters of fiscal year 2002 reduced
by the Excess Cash Flow paid in accordance with this
Agreement, the 1999 Note Agreement and the Credit Agreement
with respect to the first two quarters of fiscal year 2002,
58
(4) for the fiscal quarter ended December 31, 2002, Excess
Cash Flow shall be based on the Excess Cash Flow for the
fiscal year 2002 reduced by the Excess Cash Flow paid in
accordance with this Agreement, the 1999 Note Agreement and
the Credit Agreement with respect to the first three quarters
of fiscal year 2002 and to be adjusted promptly following
confirmation by the Parent's auditors upon release of the
fiscal year 2002 year-end financial statements; and
(5) for any fiscal quarter ended on or after March 31,
2003, Excess Cash Flow shall be based on a trailing four
quarter basis reduced by the Excess Cash Flow paid in
accordance with this Agreement, the 1999 Note Agreement and
the Credit Agreement with respect to the previous three
quarters and to be adjusted (in the case of the fiscal year
2003) promptly following confirmation by the Parent's
auditors upon the release of the year-end financial
statements for such fiscal year, and
(B) for each fiscal year commencing with the fiscal year in
which there is no Debt outstanding under Bank Facility B and Bank
Facility B has been terminated, Excess Cash Flow shall be determined on
a fiscal year basis.
Any negative Adjusted Amounts, if any, shall be carried forward into
the following quarter(s) and shall not be repaid to any member of the Restricted
Group.
"EXCESS CASH FLOW NOTICE DATE" shall mean:
(a) at any time that there is any Debt outstanding under Bank
Facility B or Bank Facility B has not been terminated, the date which
is (i) sixty-three (63) days after the end of each fiscal quarter of
the Parent or, if earlier, (ii) the date on which Bank Facility B is
reduced pursuant to Section 9.2.2 of the Credit Agreement (as in effect
on the date of this Agreement) as a consequence of Excess Cash Flow (as
calculated for the applicable period ending on the last day of such
fiscal quarter);
(b) at any time that (i) there is no Debt outstanding under
Bank Facility B, (ii) Bank Facility B has been terminated and (iii)
there is any Debt outstanding under Bank Facility C or Bank Facility C
has not been terminated, the date which is (x) one hundred and twenty
(120) days after the end of each fiscal year of the Parent or, if
earlier, (y) the date on which Bank Facility C is reduced pursuant to
Section 9.2.2 of the Credit Agreement (as in effect on the date of this
Agreement) as a consequence of the existence of Excess Cash Flow for
such year; and
(c) at any time that there is no Debt outstanding under the
Bank Term Facilities, the Bank Term Facilities have been terminated and
Excess Cash Flow Payments are required under the terms of this
Agreement, the date which is one hundred and twenty (120) days after
the end of each fiscal year of the Parent.
59
"EXCESS CASH FLOW PAYMENT" shall mean, in respect of any Excess Cash
Flow Prepayment Date:
(a) at any time that there is any Debt outstanding under Bank
Facility B or Bank Facility B has not been terminated, an amount equal
to 75% of Excess Cash Flow for the fiscal period of the Parent
specified in and determined pursuant to the second sentence of the
definition of "Excess Cash Flow" most recently ended as of such Excess
Cash Flow Prepayment Date;
(b) at any time that (i) there is no Debt outstanding under
Bank Facility B, (ii) Bank Facility B has been terminated, (iii) there
is any Debt outstanding under Bank Facility C, or Bank Facility C has
not been terminated, and (iv) the Excess Cash Flow Reduction Conditions
have not been met on such Excess Cash Flow Prepayment Date, an amount
equal to 50% of Excess Cash Flow for the fiscal year of the Parent most
recently ended as of such Excess Cash Flow Prepayment Date;
(c) at any time that (i) there is no Debt outstanding under
Bank Facility B, (ii) Bank Facility B has been terminated, (iii) there
is any Debt outstanding under Bank Facility C, or Bank Facility C has
not been terminated, (iv) the Excess Cash Flow Reduction Conditions
have been met on such Excess Cash Flow Prepayment Date and (v) no
Default or Event of Default has occurred and is continuing, an amount
equal to 35% of Excess Cash Flow for the fiscal year of the Parent most
recently ended as of such Excess Cash Flow Prepayment Date;
(d) at any time that there is no Debt outstanding under the
Bank Term Facilities, the Bank Term Facilities have been terminated and
the Issuer or any member of the Restricted Group has entered into a new
bank agreement with similar cash flow sweep provisions as those
contained in the Credit Agreement, in form reasonably satisfactory to
the Majority Noteholders, an amount equal to the greater of (i) 35% of
Excess Cash Flow for the fiscal year of the Parent most recently ended
as of such Excess Cash Flow Prepayment Date or (ii) the percentage of
Excess Cash Flow required under the provisions of such new bank
agreement; and
(e) at any time that there is no Debt outstanding under the
Bank Term Facilities, the Bank Term Facilities have been terminated and
neither the Issuer nor any other member of the Restricted Group has
entered into a new bank agreement with similar cash flow sweep
provisions as those contained in the Credit Agreement, zero (0);
provided, however, that, at any time, if the outstanding Debt at such
time under each of the Bank Term Facilities is equal to the maximum amount
permitted at such time under the Credit Agreement, the Excess Cash Flow Payment
made in respect of any Excess Cash Flow Prepayment Date shall be reduced to the
maximum amount (with respect to such Excess Cash Flow Prepayment Date, the
"Reduced Excess Cash Flow Amount") permitted such that, after giving effect
thereto, the principal amount of Debt outstanding at such time under Bank
Facility A (net of Available Cash at such time) does not exceed $35,000,000;
provided, further, that if the Debt outstanding under Bank Facility A is less
than $35,000,000 (net of Available Cash) at any
60
time after such Excess Cash Flow Prepayment Date, the Issuer shall add to the
Excess Cash Flow Payment on the next succeeding Excess Cash Flow Prepayment
Date, such amount by which the Debt under Bank Facility A is less than
$35,000,000 at such time.
"EXCESS CASH FLOW PREPAYMENT DATE" is defined in Section 2.4(a).
"EXCESS CASH FLOW REDUCTION CONDITIONS" shall mean, at any time, (a)
the Parent shall have obtained an Acceptable Rating in respect of the long-term
senior unsecured Debt of the Parent and such Acceptable Rating is then in full
force and effect, not having been withdrawn by Moody's, Standard & Poor's or, if
applicable, such other equivalent rating agency as has been accepted by the
Majority Noteholders or (b) Total Debt, determined as of the end of the then
most recently ended fiscal year of the Parent, does not exceed two hundred fifty
percent (250%) of EBITDA for such fiscal year.
"EXCLUDED NON-MORTGAGED PROPERTIES" shall mean each of the Designated
Facilities that is not a Mortgaged Property. For the purposes of this Agreement,
such term shall mean the following Designated Facilities only: (a) leased
distribution facility in Cumming, Georgia; (b) leased warehouse facility in
Ontario, California; (c) leased manufacturing and distribution facility in
Rayne, Louisiana; and (d) manufacturing and distribution facility in Richmond,
Kentucky which is owned by the City of Richmond, Kentucky and leased to a member
of the Restricted Group.
"EXISTING GUARANTY AGREEMENTS" is defined in Section 1.1.
"EXISTING NOTE AGREEMENT" is defined in Section 1.1.
"EXISTING NOTES" is defined in Section 1.1.
"FINANCING DOCUMENTS" shall mean this Agreement, the Notes, the
Guaranty Agreements, the Security Documents, the Intercreditor Agreement, the
1999 Note Agreement and the other agreements and instruments to be executed
pursuant to the terms of each of such Financing Documents, as each may be
amended, supplemented or otherwise modified from time to time.
"FIXED CHARGES" for any period shall mean the sum, determined on a
consolidated basis, of (a) all Rentals (other than Rentals on Capitalized
Leases) payable during such period by the members of the Restricted Group, and
(b) all Interest Expense for such period an all Indebtedness (including, for
this purpose, the interest component of Rentals on Capitalized Leases) of the
Restricted Group.
"FLOOD ACT" is defined in Section 5.2(a)(v).
"FOREIGN PENSION PLAN" means any plan, fund (including, without
limitation, any superannuation fund) or other similar program, other than social
security or social insurance, established or maintained outside the United
States by the Parent or any one or more of the Subsidiaries primarily for the
benefit of employees of the Parent or such Subsidiaries residing outside the
United States, which plan, fund or other similar program provides for retirement
61
income for such employees or a deferral of income for such employees in
contemplation of retirement and is not subject to ERISA or the Code.
"GAAP" shall mean the generally accepted accounting principles
acknowledged by the Canadian Institute of Chartered Accountants and published in
the Canadian Institute of Chartered Accountants' Handbook.
"GENERAL PARTNER" is defined in the introductory paragraph of this
Agreement.
"GUARANTIES" by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing, or in effect guaranteeing,
any Indebtedness, dividend or other obligation of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including all
obligations incurred through an agreement, contingent or otherwise, by such
Person: (a) to purchase such Indebtedness or other obligation or any property or
assets constituting security therefor, (b) to advance or supply funds (i) for
the purchase or payment of such Indebtedness or other obligation, or (ii) to
maintain working capital or other balance sheet items, or otherwise to advance
or make available funds, for the purchase or payment of such Indebtedness or
other obligation, (c) to lease property or to purchase Securities or other
property or services primarily for the purpose of assuring the owner of such
Indebtedness or other obligation against loss in respect thereof, or (d)
otherwise to assure the owner of the Indebtedness or other obligation of the
primary obligor against loss in respect thereof. For the purposes of all
computations made under this Agreement, a Guaranty in respect of any
Indebtedness for borrowed money, and a Guaranty in respect of any dividend or
other obligation shall be deemed to be Indebtedness equal to the maximum
aggregate amount of such Indebtedness, dividend or other obligation.
"GUARANTY AGREEMENTS" is defined in Section 1.5.
"HAZARDOUS SUBSTANCES" shall have the meaning assigned to that term in
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended by the Superfund Amendments and Reauthorization Acts of 1986
(42 U.S.C. ss. 9601 et seq.) and shall also include, without limitation,
petroleum including crude oil or any fraction thereof, any petroleum product,
asbestos, radon gas, urea formaldehyde foam insulation, polychlorinated
biphenyls, radioactive and toxic substances, prohibited substances and hazardous
waste under the Canadian Environmental Protection Act, a "contaminant" under the
Environmental Protection Act (Ontario), and a "contaminant" and a "pollutant"
under the Environmental Quality Act (Quebec) as well as similar terms for such
substances (including "Dangerous Substances") used in any applicable United
States or Canadian federal, state, county, provincial statute, code or
regulation, rule or ordinance or any other waste, chemicals or substances
regulated by any Environmental Law.
"IMPOSITION" shall have the same meaning ascribed to such term in the
U.S. Mortgages.
"INACTIVE SUBSIDIARIES" shall mean those Subsidiaries of the Parent
which are not Restricted Subsidiaries and which do not conduct any real
operations or business, a list of which, at the Effective Date, is included as
part of Annex A to Exhibit B-2.
62
"INDEBTEDNESS" of any Person shall mean and include all obligations of
such Person which in accordance with GAAP shall be classified upon a balance
sheet of such Person as liabilities of such Person, and in any event shall
include all (a) obligations of such Person for borrowed money or which have been
incurred in connection with the acquisition of property or assets, (b)
obligations secured by any Lien upon property or assets owned by such Person,
even though such Person has not assumed or become liable for the payment of such
obligations, (c) obligations created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such
Person, notwithstanding the fact that the rights and remedies of the seller,
lender or lessor under such agreement in the event of default are limited to
repossession or sale of property, (d) Capitalized Rentals of such Person and (e)
Guaranties of any other Person's obligations of the character referred to in
this definition.
"INSTITUTIONAL HOLDER" shall mean any insurance company, bank, savings
and loan association, trust company, investment company, charitable foundation,
employee benefit plan (as defined in ERISA) or other institutional investor or
financial institution.
"INTERCREDITOR AGREEMENT" is defined in Section 4.5(f).
"INTEREST EXPENSE" of any Person for any period shall mean all interest
and all amortization of debt discount and expense for such period on each item
of Indebtedness of such Person for which such calculations are being made.
Computations of Interest Expense on a pro forma basis for Indebtedness having a
variable interest rate shall be calculated at the rate in effect on the date of
any determination.
"INTEREST RATE ADJUSTMENT DATE" shall mean the first day on which
either (a) the Parent shall have entered into a reasonable and bona fide
agreement with a reputable United States and/or Canadian Securities dealer
authorizing and directing such dealer to (i) market the issuance of any Equity
Interests of the Parent or subordinated or mezzanine Debt of the Parent or the
Issuer, which Debt shall be on terms acceptable to the Majority Noteholders (in
their absolute discretion), in all such cases providing for proceeds to the
Parent or the Issuer in an aggregate amount of at least the outstanding
principal amount under Bank Facility B on such date, or (ii) underwrite such
Securities providing for such amount of proceeds to the Parent or the Issuer on
a firm commitment basis, in each case, on financial and other terms and
conditions that are not materially less favorable to the Parent or the Issuer,
as applicable, than those generally available in the United States and/or
Canadian capital markets to issuers of Securities in the packaging industry
having a creditworthiness comparable to the Parent or the Issuer, as applicable,
or (b) there is no Debt outstanding under Bank Facility B and Bank Facility B
has been terminated.
"INVESTMENTS" shall mean all investments, including Acquisitions, in
cash or by delivery of property, made directly or indirectly in any Person,
whether by acquisition of shares of capital stock, Indebtedness or other
obligations or Securities or by loan, advance, capital contribution or
otherwise; provided, however, that "Investments" shall not mean or include
routine investments in accounts receivable and inventory (including, without
limitation, raw materials, work in process and finished goods) of such Person to
be used or consumed in the ordinary course of business, or any Available Cash.
"ISSUER" is defined in the introductory paragraph of this Agreement.
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"LAW" shall mean all applicable provisions of all laws, ordinances,
decrees, orders, rules, regulations and directives of governmental bodies, and
all applicable provisions of treaties as well as all ordinances and other
decrees of tribunals and arbitrators.
"LIEN" shall mean any right to any property, or the income or benefits
flowing therefrom, which secures an obligation due to a Person or a claim of
such Person, whether such right is based on the common law, statute or contract,
and includes any security interest, hypothec, pledge, pawn, mortgage, prior
claim, lien, charge, assignment for security purposes, cession, encumbrance,
Capitalized Lease, conditional sale or trust receipt or a lease in which such
Person is lessor, or a consignment or bailment for security purposes. The term
"Lien" shall include reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases and other title
exceptions and encumbrances (including, with respect to stock, stockholder
agreements, voting trust agreements, buy-back agreements and all similar
arrangements) affecting property. For the purposes of this Agreement, the Parent
or a Restricted Subsidiary shall be deemed to be the owner of any property which
it has acquired or holds subject to a conditional sale agreement, Capitalized
Lease or other arrangement pursuant to which title to the property has been
retained by or vested in some other Person for security purposes, and such
retention or vesting shall constitute a Lien.
"LIKE ASSETS" shall mean, as of the date of any determination thereof,
fixed or capital assets used or to be used by one or more members of the
Restricted Group in the lines of business in which the Restricted Group is
engaged as of the Effective Date or in a business reasonably related thereto.
"LONG-TERM LEASE" shall mean any lease of real or personal property
(other than a Capitalized Lease) having an original term, including any period
for which the lease may be renewed or extended at the option of the lessor, of
more than three years.
"MAJORITY BANKS" shall have the meaning ascribed to such term in the
Intercreditor Agreement.
"MAJORITY NOTEHOLDERS" is defined in Section 6.3.
"MAKE-WHOLE AMOUNT" means, with respect to any Note, an amount equal to
the excess, if any, of the Discounted Value of the Remaining Scheduled Payments
with respect to the Called Principal of such Note over the amount of such Called
Principal, provided that the Make-Whole Amount may in no event be less than
zero. For the purposes of determining the Make-Whole Amount, the following terms
have the following meanings:
"CALLED PRINCIPAL" means, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to Section 2.7 or
has become or is declared to be immediately due and payable pursuant to
Section 6.3, as the context requires.
"DISCOUNTED VALUE" means, with respect to the Called Principal
of any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a
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discount factor (applied on the same periodic basis as that on which
interest on the Notes is payable) equal to the Reinvestment Yield with
respect to such Called Principal.
"REINVESTMENT YIELD" means, with respect to the Called
Principal of any Note, 0.50% over the yield to maturity implied by (a)
the yields reported, as of 10:00 A.M. (New York City time) on the third
Business Day preceding the Settlement Date with respect to such Called
Principal, on the display designated as "PX1" or other appropriate page
of the Bloomberg Financial Markets Services Screen (or such other
display as may replace Page PX1 on the Bloomberg Financial Markets
Services Screen) for actively traded U.S. Treasury securities having a
maturity equal to the Remaining Average Life of such Called Principal
as of such Settlement Date, or (b) if such yields are not reported as
of such time or the yields reported as of such time are not
ascertainable, the Treasury Constant Maturity Series Yields reported,
for the latest day for which such yields have been so reported as of
the third Business Day preceding the Settlement Date with respect to
such Called Principal, in Federal Reserve Statistical Release H.15
(519) (or any comparable successor publication) for actively traded
U.S. Treasury securities having a constant maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement
Date. Such implied yield will be determined, if necessary, by (i)
converting U.S. Treasury ▇▇▇▇ quotations to bond-equivalent yields in
accordance with accepted financial practice and (ii) interpolating
linearly between (A) the actively traded U.S. Treasury security with
the average life closest to and greater than the Remaining Average Life
and (B) the actively traded U.S. Treasury security with the average
life closest to and less than the Remaining Average Life.
"REMAINING AVERAGE LIFE" means, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth
year) obtained by dividing (a) such Called Principal into (b) the sum
of the products obtained by multiplying (i) the principal component of
each Remaining Scheduled Payment with respect to such Called Principal
by (ii) the number of years (calculated to the nearest one-twelfth
year) that will elapse between the Settlement Date with respect to such
Called Principal and the scheduled due date of such Remaining Scheduled
Payment.
"REMAINING SCHEDULED PAYMENTS" means, with respect to the
Called Principal of any Note, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date with
respect to such Called Principal if no payment of such Called Principal
were made prior to its scheduled due date, provided that if such
Settlement Date is not a date on which interest payments are due to be
made under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount of
interest accrued to such Settlement Date and required to be paid on
such Settlement Date pursuant to Section 2.7 or Section 6.3; and
provided, further, that in calculating interest on Called Principal for
purposes of determining the Remaining Scheduled Payments, it shall be
assumed for such calculation that the Notes bear interest at a per
annum rate equal to 6.82%.
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"SETTLEMENT DATE" means, with respect to the Called Principal
of any Note, the date on which such Called Principal is to be prepaid
pursuant to Section 2.7 or has become or is declared to be immediately
due and payable pursuant to Section 6.3, as the context requires.
"MATERIAL ADVERSE CHANGE" shall mean the occurrence or the failure to
occur of any event or condition or series of events or conditions which, whether
individually or in the aggregate, would result in a material adverse change in
the business, assets, liabilities, financial position, operating results,
business prospects or material agreements of the Restricted Group or in the
ability of the members of the Restricted Group, taken as a whole, to perform
their obligations under this Agreement or under the other Financing Documents.
"MATERIAL DEBT" shall mean, as of any date of determination, any Debt
which then has or relates to, in the aggregate, an unpaid principal amount (or a
corresponding unpaid liability) of more than U.S. $5,000,000 or an equivalent
amount of money in any other currency.
"MINORITY INTERESTS" shall mean any shares of stock or other ownership
interests of any class of a Restricted Subsidiary (other than directors'
qualifying shares or similar ownership interests as required by law) that are
not owned by any member of the Restricted Group (each an "OWNERSHIP INTEREST").
Minority Interests shall be valued by valuing Ownership Interests constituting
preferred stock (or if such Ownership Interest is not in a corporation, then any
such Ownership Interest that has the characteristics of preferred stock; in
either case, a "PREFERRED INTEREST") at the voluntary or involuntary liquidating
value of such Preferred Interest, whichever is greater, and by valuing Ownership
Interests constituting common stock (or if such Ownership Interest is not in a
corporation, then any such Ownership Interest that has the characteristics of
common stock; in either case, a "COMMON INTEREST") at the book value of capital
and surplus applicable thereto adjusted, if necessary, to reflect any changes
from the book value of such Common Interest required by the foregoing method of
valuing Minority Interests in Preferred Interests.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc.
"MORTGAGED PROPERTIES" is defined in Section 4.6(a).
"MULTIEMPLOYER PLAN" shall have the same meaning as in section 3(37) of
ERISA.
"NAIC" is defined in Section 3.2(a).
"NEGATIVE VALUE OF DERIVATIVE INSTRUMENTS" shall mean, as of the date
of any determination thereof, the aggregate amount that would be payable to all
Persons by any member of the Restricted Group (net of all amounts that would be
payable by each such Person to such member of the Restricted Group) on the date
of determination pursuant to Section 6(e)(ii)(2)(A) of each ISDA Master
Agreement between such member and such Persons as if all Derivative Instruments
under such ISDA Master Agreements were being terminated on that date.
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"NET INCOME AVAILABLE FOR FIXED CHARGES" shall mean, for any period,
the sum of Consolidated Net Income for such period plus (to the extent included
in determining such Consolidated Net Income), (a) all provisions for any
Federal, state, provincial or other income taxes made by the Restricted Group
during such period, (b) Fixed Charges for such period, (c) all amortization
expenses of the Restricted Group and (d) all depreciation of the Restricted
Group.
"1999 NOTE AGREEMENT" shall mean that certain Amended and Restated Note
Agreement, dated as of December 20, 2001, among the Obligors and the holders of
notes issued thereunder, as amended, supplemented or otherwise modified from
time to time.
"1999 NOTES" shall mean, collectively, those certain (a) Series A
Senior Secured Notes due 2005 in the aggregate principal amount of $25,000,000,
and (b) Series B Senior Secured Notes due 2009 in the aggregate principal amount
of $112,000,000, each issued by the Issuer under the 1999 Note Agreement, as
amended from time to time.
"NOTEHOLDERS" is defined in the introductory paragraph of this
Agreement.
"NOTES" is defined in Section 1.2.
"OBLIGORS" is defined in the introductory paragraph of this Agreement.
"ORIGINAL CLOSING DATE" shall mean June 1, 1998.
"PARENT" is defined in the introductory paragraph of this Agreement.
"PARENT GUARANTY AGREEMENT" is defined in Section 1.5.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"PERMITTED INVESTMENTS" shall mean all:
(a) Investments by any member of the Restricted Group in any
other member of the Restricted Group, including Investments (i)
directly out of the cash proceeds to the Parent of the concurrent sale
of shares of capital stock of the Parent or (ii) pursuant to a direct
share exchange offer by the Parent;
(b) Investments by any member of the Restricted Group in
commercial paper maturing in 270 days or less from the date of
acquisition thereof by such member of the Restricted Group, and which
is accorded as of such date a rating of at least A-1 by Standard &
Poor's or at least P-1 by ▇▇▇▇▇'▇, or their equivalent acceptable to
the Majority Noteholders;
(c) Investments in (i) direct obligations of the United States
of America or any agency or instrumentality of the United States of
America, the payment or guarantee of which constitutes a full faith and
credit obligation of the United States of America or (ii) direct
obligations of Canada or any agency or instrumentality of Canada, the
payment or
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guarantee of which constitutes a full faith and credit obligation of
Canada, in either case, maturing in twelve months or less from the date
of acquisition thereof by any member of the Restricted Group;
(d) Investments in certificates of deposit maturing within one
year from the date of acquisition thereof by any member of the
Restricted Group, issued by a bank or trust company organized under the
laws of the United States of America, any state thereof or Canada or
any province thereof, having capital, surplus and undivided profits
aggregating at least U.S. $500,000,000 (or its equivalent in Canadian
currency) and whose long-term certificates of deposit are, at the time
of acquisition thereof by any member of the Restricted Group, rated A-
or better by Standard & Poor's or A3 or better by ▇▇▇▇▇'▇, or their
equivalent acceptable to the holders of the Notes, or Investments in
Eurodollar certificates of deposit maturing within one year after the
date of acquisition thereof by any member of the Restricted Group and
issued by a bank in western Europe or England having capital, surplus
and undivided profits of at least U.S. $1,000,000,000 (or its
equivalent in such country's local currency); and
(e) loans or advances to employees of the Parent and its
Subsidiaries for the purchase of shares of stock of the Parent by such
employees in the usual and ordinary course of business, and other loans
and advances to officers, directors and employees for expenses
(including moving expenses related to a transfer) incidental to
carrying on the business of any member of the Restricted Group provided
that the aggregate outstanding amount of all such loans or advances
shall at no time exceed U.S. $5,000,000.
"PERMITTED LIENS" is defined in Section 5.10.
"PERSON" shall mean an individual, partnership, limited liability
company, corporation, trust, an entity created pursuant to Law or unincorporated
organization, and a government or agency or political subdivision thereof.
"PLAN" means an "employee pension benefit plan" (as defined in section
3(2) of ERISA) that is subject to Title IV of ERISA (other than a Multiemployer
Plan) and that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Parent or any ERISA Affiliate or
with respect to which the Parent or any ERISA Affiliate may have any liability.
"PLEDGE AGREEMENT" is defined in Section 4.5(e).
"POLICIES" is defined in Section 5.2(b).
"PRIORITY DEBT" is defined in Section 5.9(a)(ii).
"PROCEEDING" is defined in Section 6.1(k).
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"PRO RATA SHARE" shall mean, at any time, with respect to any holder of
Notes,
(a) at any time that there is any Debt outstanding under Bank
Facility B or Bank Facility B has not been terminated, a fraction the
numerator of which shall be the outstanding principal amount of the
Notes held by such holder at such time and the denominator of which
shall be the sum of the then outstanding principal amount of all Notes,
plus the aggregate unpaid principal amount under the Bank Term
Facilities at such time, plus the outstanding principal amount of 1999
Notes at such time, and
(b) at any time that (i) there is no Debt outstanding under
Bank Facility B, (ii) Bank Facility B has been terminated, and (iii)
there is any Debt outstanding under Bank Facility C, or Bank Facility C
has not been terminated, a fraction the numerator of which shall be the
outstanding principal amount of the Notes held by such holder at such
time and the denominator of which shall be the sum of the then
outstanding principal amount of the Notes, plus the aggregate unpaid
principal amount under Bank Facility C at such time, plus the
outstanding principal amount of 1999 Notes at such time, and
(c) at any time that there is no Debt outstanding under the
Bank Term Facilities, and each of the Bank Term Facilities has been
terminated, a fraction the numerator of which shall be the outstanding
principal amount of the Notes held by such holder at such time and the
denominator of which shall be the sum of the then outstanding principal
amount of all Notes plus the outstanding principal amount of 1999 Notes
at such time.
"PTE" is defined in Section 3.2(a)(i).
"QPAM EXEMPTION" means Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.
"QUALIFYING EU JURISDICTION" shall mean any country (other than Greece)
which as of the Effective Date is a member of the European Union.
"REMAINING TAX PREPAYMENT AMOUNT" shall mean, at any time, the greater
of (a) zero (0) and (b) the result of (i) twenty-five percent (25%) of the
original principal amount of the Notes issued on the Original Closing Date minus
(ii) the aggregate principal amount of Notes prepaid prior to such time under
Section 2.2, Section 2.3 and Section 2.4 and under the provisions of the
Intercreditor Agreement requiring the offer of prepayment of the Notes with
insurance proceeds and condemnation proceeds.
"REMNANT EQUITY EVENT PREPAYMENT" is defined in Section 2.3(b).
"REMNANT EXCESS CASH FLOW PREPAYMENT" is defined in Section 2.4(b).
"RENTALS" shall mean and include, as of the date of any determination
thereof, all fixed payments (including all such payments which the lessee is
obligated to make to the lessor on termination of the lease or surrender of the
property) payable by any member of the Restricted Group, as lessee or sublessee
under a lease of real or personal property, but shall be exclusive of
69
any amounts required to be paid by any member of the Restricted Group (whether
or not designated as rents or additional rents) on account of maintenance,
repairs, insurance, taxes and similar charges. Fixed rents under any so-called
"percentage leases" shall be computed solely on the basis of the minimum rents,
if any, required to be paid by the lessee or sublessee regardless of sales
volume or gross revenues.
"REPORTABLE EVENT" shall mean a reportable event within the meaning of
section 4043(c) of ERISA other than an event for which the 30-day notice period
is waived under applicable Department of Labor regulations.
"RESPONSIBLE OFFICER" shall mean any Senior Financial Officer and any
other officer of the Parent or the Issuer, as the case may be, with
responsibility for the administration of the relevant portion of this Agreement
or the Parent Guaranty Agreement.
"RESTRICTED GROUP" shall mean, as of any date of determination thereof,
the Parent and the Restricted Subsidiaries.
"RESTRICTED PAYMENTS" shall mean
(a) the declaration or payment, directly or indirectly, of any
dividend either in cash or property, on any shares of capital stock of
any member of the Restricted Group;
(b) the purchase, redemption or retirement, directly or
indirectly, of any shares of capital stock or other Equity Interests of
any class, or of any warrants, rights or options to purchase or acquire
any shares of capital stock or other Equity Interests of any member of
the Restricted Group;
(c) any payment or distribution, directly or indirectly, by
any member of the Restricted Group in respect of its capital stock or
other Equity Interests; and
(d) the prepayment of any Debt (other than Debt secured by
Liens described in Section 5.10(h)), except as contemplated herein;
provided, however, that "Restricted Payments" shall not include any such
dividends, purchases, redemptions, retirements, payments, distributions or
prepayments by any member of the Restricted Group to the Parent or by a
Restricted Subsidiary to a Wholly-Owned Restricted Subsidiary.
"RESTRICTED SUBSIDIARY" shall mean, at any time, any Subsidiary (a)
which is at such time organized under the laws of the United States, Puerto
Rico, Canada or any Qualifying EU Jurisdiction or any jurisdiction of any of the
foregoing; (b) which at such time conducts substantially all of its business and
has substantially all of its assets within the ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇ or any Qualifying EU Jurisdiction; (c) of which more than 80% (by number
of votes) of the Voting Stock is at such time beneficially owned by the Parent
or any Wholly-Owned Restricted Subsidiary (or any combination thereof); (d)
which has been designated by the board of directors of the Parent as a
Restricted Subsidiary at or prior to such time in accordance with Section 5.17
and (e) which shall have (i) guarantied the Notes pursuant to a guaranty
agreement substantively in the form of the Subsidiary Guaranty Agreement and
(ii)
70
granted Liens on substantially all of its assets for the benefit of the
holders of the Secured Obligations pursuant to documents substantially in the
form of the Security Documents.
"RESTRUCTURING FEE" is defined in Section 4.17.
"SECURED OBLIGATIONS" shall mean the "Secured Obligations" as such term
is defined in the Collateral Trust Indenture.
"SECURED PRIORITY DEBT" is defined in Section 5.9(a)(ii).
"SECURITIES ACT" shall mean the United States Securities Act of 1933,
as amended from time to time.
"SECURITY" shall have the same meaning as in Section 2(1) of the
Securities Act.
"SECURITY AGREEMENT" is defined in Section 4.5(d).
"SECURITY DOCUMENTS" means the Collateral Trust Indenture, the
Mortgages, the Security Agreement, the Pledge Agreement, the Canadian Security
Documents, the U.S. Environmental Indemnification Agreement, the Canadian
Environmental Indemnification Agreement and the other agreements and instruments
executed or to be executed pursuant to the terms of each of such Security
Documents or which grant Liens to the U.S. Collateral Trustee or the Canadian
Collateral Trustee securing the obligations of any member of the Restricted
Group under any of this Agreement, the Notes, the Parent Guaranty Agreement or
the Subsidiary Guaranty Agreement, as the case may be, as each may be amended,
supplemented or otherwise modified from time to time.
"SENIOR FINANCIAL OFFICER" means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Parent or of the Issuer, as
the case may be.
"SENIOR OFFICER" means the chief executive officer or the chief
financial officer of the Parent.
"SOURCE" is defined in Section 3.2.
"STANDARD & POOR'S" shall mean Standard & Poor's Ratings Group, a
division of ▇▇▇▇▇▇-▇▇▇▇, Inc.
"SUBSIDIARY" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries directly or indirectly owns
sufficient equity or voting interests to enable it or them (as a group)
ordinarily, in the absence of contingencies, to elect a majority of the
directors (or Persons performing similar functions) of such entity. Unless the
context otherwise clearly requires, any reference to a "Subsidiary" is a
reference to a Subsidiary of the Parent and such "Subsidiary" shall include a
limited partnership, the general partner of which is the Parent or one or more
of its Subsidiaries.
"SUBSIDIARY GUARANTY AGREEMENT" is defined in Section 1.5.
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"SUBSIDIARY PRIORITY DEBT" is defined in Section 5.9(a)(ii).
"TAX PERCENTAGE LIMIT" shall mean, at any time and in respect of the
principal amount of any prepayment, (a) 100% if such time is after the fifth
anniversary of the Original Closing Date or (b) if such time is on or before the
fifth anniversary of the Original Closing Date, the lesser of (i) 100% and (ii)
a fraction, expressed as a percentage, the numerator of which is the Remaining
Tax Prepayment Amount at such time and the denominator of which is the principal
amount of such prepayment.
"TOTAL DEBT" shall mean, as of any date of determination, the sum of
(a) the aggregate principal amount of all Debt of the Restricted Group then
outstanding other than Debt owing by a member of the Restricted Group to another
member thereof (and for greater certainty, includes any Debt of an Unrestricted
Subsidiary Guarantied by any member of the Restricted Group), determined on a
consolidated basis for the Restricted Group, plus (b) the greater of (i) the
stated value of all preferred shares or (ii) the voluntary or involuntary
liquidation value of all preferred shares, as issued by a member of the
Restricted Group then outstanding (other than any such preferred shares held by
another member of the Restricted Group), less (c) Available Cash as of such
date.
"UNRESTRICTED SUBSIDIARY" shall mean any Subsidiary of the Parent which
is an Inactive Subsidiary or which is not otherwise a Restricted Subsidiary, a
list of which, as of the Effective Date, is included as part of Annex E to
Exhibit B-2, or as may be determined by the Parent at any later date.
"U.S. COLLATERAL" shall mean the "U.S. Collateral" as such term is
defined in the Collateral Trust Indenture.
"U.S. COLLATERAL TRUSTEE" shall mean "Collateral Trustee", as such term
is defined in the Collateral Trust Indenture.
"U.S. ENVIRONMENTAL INDEMNIFICATION AGREEMENT" is defined in Section
4.6(b).
"U.S. MORTGAGES" is defined in Section 4.5(b).
"VOTING STOCK" shall mean Securities of any class or classes, the
holders of which are ordinarily, in the absence of contingencies, entitled
whether through the ownership of stock, partnership interests, by contract or
otherwise, to elect a majority of the board of directors (or Persons performing
similar functions).
"WHOLLY-OWNED RESTRICTED SUBSIDIARY" shall mean any Restricted
Subsidiary of which all of the issued and outstanding equity interests (except
directors' qualifying shares or similar equity and voting interests as required
by law) of which shall be owned directly or indirectly by the Parent or one or
more of the Parent's other Wholly-Owned Restricted Subsidiaries, or any
combination of the Parent and one or more other Wholly-Owned Restricted
Subsidiaries.
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8.2. ACCOUNTING PRINCIPLES.
Where the character or amount of any asset or liability or item of
income or expense is required to be determined or any consolidation or other
accounting computation is required to be made for the purposes of this
Agreement, the same shall be done in accordance with GAAP, to the extent
applicable, except where such principles are inconsistent with the requirements
of this Agreement.
8.3. DIRECTLY OR INDIRECTLY.
Where any provision in this Agreement refers to action to be taken by
any Person, or which such Person is prohibited from taking, such provision shall
be applicable whether the action in question is taken directly or indirectly by
such Person.
9. MISCELLANEOUS
9.1. REGISTERED NOTES.
The Issuer shall cause to be kept at its principal office a register
for the registration and transfer of the Notes (hereinafter called the "NOTE
REGISTER") and the Issuer will register or transfer or cause to be registered or
transferred as hereinafter provided any Note.
At any time and from time to time the registered holder of any Note
which has been duly registered as hereinabove provided may transfer such Note
upon surrender thereof at the principal office of the Issuer duly endorsed or
accompanied by a written instrument of transfer duly executed by the registered
holder of such Note or its attorney duly authorized in writing.
The Person in whose name any registered Note shall be registered shall
be deemed and treated as the owner and holder thereof for all purposes of this
Agreement. Payment of or on account of the principal, premium, if any, and
interest on any registered Note shall be made to or upon the written order of
such registered holder.
9.2. EXCHANGE OF NOTES.
At any time and from time to time, upon not less than ten days' notice
to that effect given by the holder of any Note initially delivered or of any
Note substituted therefor pursuant to Section 9.1, this Section 9.2 or Section
9.3, and, upon surrender of such Note at its office, the Issuer will deliver in
exchange therefor, without expense to such holder, except as set forth below, a
Note for the same aggregate principal amount as the then unpaid principal amount
of the Note so surrendered, or Notes aggregating such unpaid principal amount in
the denomination of U.S. $500,000 (or such lesser amount as shall constitute
100% of the Notes of such holder) or any amount in excess thereof as such holder
shall specify, dated as of the date to which interest has been paid on the Note
so surrendered or, if such surrender is prior to the payment of any interest
thereon, then dated as of the date of issue, registered in the name of such
Person or Persons as may be designated by such holder, and otherwise of the same
form and tenor as the Notes so surrendered for exchange. The Issuer may require
the payment of a sum sufficient to cover any stamp tax or governmental charge
imposed upon such exchange or transfer.
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9.3. LOSS, THEFT, ETC. OF NOTES.
Upon receipt of evidence satisfactory to the Issuer of the loss, theft,
mutilation or destruction of any Note, and in the case of any such loss, theft
or destruction upon delivery of a bond of indemnity in such form and amount as
shall be reasonably satisfactory to the Issuer, or in the event of such
mutilation upon surrender and cancellation of the Note, the Issuer will make and
deliver without expense to the holder thereof, a new Note, of like tenor, in
lieu of such lost, stolen, destroyed or mutilated Note. If the Noteholders, any
subsequent Institutional Holder which is an insurance company or any other
Institutional Holder which has a net worth in excess of U.S. $50,000,000 is the
owner of any such lost, stolen or destroyed Note, then the affidavit of an
authorized officer of such owner, setting forth the fact of loss, theft or
destruction and of its ownership of such Note at the time of such loss, theft or
destruction shall be accepted as satisfactory evidence thereof and no further
indemnity shall be required as a condition to the execution and delivery of a
new Note other than the written agreement of such owner to indemnify the Issuer.
9.4. EXPENSES; STAMP TAX AND OTHER INDEMNITY.
Whether or not the transactions herein contemplated shall be
consummated, the Obligors, jointly and severally, agree to pay directly all of
the Noteholders' out-of-pocket expenses in connection with the preparation,
execution and delivery of this Agreement and the transactions contemplated
hereby, including but not limited to (a) the reasonable charges and
disbursements of ▇▇▇▇▇▇▇ ▇▇▇▇ LLP, special counsel to the Noteholders, (b)
duplicating and printing costs and charges for shipping the Notes (if so
required), adequately insured to the Noteholders at each Noteholder's home
office or at such other place as such Noteholder may designate, (c) the fees and
costs incurred in connection with the initial filing of this Agreement and all
related documents and financial information, and all subsequent annual and
interim filings of documents and financial information related to this
Agreement, with the Securities Valuation Office of the NAIC or any successor
organization acceding to the authority thereof, and (d) all such reasonable
expenses (including the fees and expenses of any investment banker or financial
consultant) relating to any proposed or actual amendment, waivers or consents
pursuant to the provisions hereof, including, without limitation, any
amendments, waivers, or consents resulting from any work-out, renegotiation or
restructuring relating to the performance by any Obligor of its obligations
under any Financing Document to which it is a party. The Obligors, jointly and
severally, also agree that they will pay and save each Noteholder harmless
against any and all liability with respect to stamp and other taxes, if any,
which may be payable or which may be determined to be payable in connection with
the execution and delivery of this Agreement, the Notes, or any other Financing
Document, whether or not any Notes are then outstanding. The Obligors, jointly
and severally, agree to protect and indemnify each Noteholder against any
liability for any and all brokerage fees and commissions payable or claimed to
be payable to any Person in connection with the transactions contemplated by
this Agreement and the other Financing Documents (other than those expressly
retained by such Noteholder). The Obligors, jointly and severally, agree to
indemnify each Noteholder, the U.S. Collateral Trustee and the Canadian
Collateral Trustee and their respective directors, officers, agents and
employees from, and hold each of them harmless against, any and all losses,
liabilities, claims, damages or expenses of any of them for or in connection
with (i) the participation of any of the Noteholders in the transactions
contemplated by this Agreement and the other Financing Documents, (ii) the
74
role of any of the Noteholders in any investigation, litigation or other
proceeding brought or threatened by any third party and relating to the Parent
or any of its Subsidiaries, and/or (iii) the compliance with or enforcement of
any of their rights or obligations hereunder, including, without limitation (A)
the reasonable fees and disbursements of counsel and (B) the costs of defending,
counterclaiming or claiming against third parties in respect of any action or
matter and any cost, liability or damage arising out of any settlement, in each
case other than losses, liabilities, claims, damages or expenses incurred by
reason of the gross negligence or willful misconduct of the indemnified party,
as determined by a final judgment of a court of competent jurisdiction.
9.5. POWERS AND RIGHTS NOT WAIVED; REMEDIES CUMULATIVE.
No delay or failure on the part of the holder of any Note in the
exercise of any power or right shall operate as a waiver thereof; nor shall any
single or partial exercise of the same preclude any other or further exercise
thereof, or the exercise of any other power or right, and the rights and
remedies of the holder of any Note are cumulative to, and are not exclusive of,
any rights or remedies any such holder would otherwise have.
9.6. NOTICES.
All communications provided for hereunder shall be in writing and, if
to a Noteholder, delivered or mailed prepaid by registered or certified mail or
overnight air courier, or by facsimile communication followed (on the date of
transmission) by overnight air courier, in each case addressed to each
Noteholder at such Noteholder's address appearing on Schedule I to this
Agreement or such other address as such Noteholder or the subsequent holder of
any Note initially issued to such Noteholder may designate to the Parent in
writing, and if to the Parent or the Issuer, delivered or mailed by registered
or certified mail or overnight air courier, or by facsimile communication
followed (on the date of transmission) by overnight air courier, to the Parent
or to the Issuer at 110E ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇, St. Laurent, Quebec, Canada ▇▇▇ ▇▇▇,
Attention: Vice President, Finance, Fax No. ▇▇▇-▇▇▇-▇▇▇▇, with a copy to
Stikeman Elliott, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇ H3B 3V2, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq., Fax No. ▇▇▇-▇▇▇-▇▇▇▇, and
to ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attn:
▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq., Fax No. ▇▇▇-▇▇▇-▇▇▇▇ or to such other address as the Parent
or the Issuer may in writing designate to the Noteholders or to a subsequent
holder of the Note initially issued to a Noteholder, provided that the failure
to provide copies of any such notices to the parties set forth above or to
provide any other copies shall not invalidate any notice provided to the Parent
or the Issuer pursuant to the terms of this Section 9.6; provided, further, that
a notice to a Noteholder by overnight air courier shall only be effective if
delivered to such Noteholder at a street address designated for such purpose in
Schedule I, and a notice to a Noteholder by facsimile communication shall only
be effective if made by confirmed transmission to such Noteholder at a telephone
number designated for such purpose in Schedule I and followed (on the day of
transmission) by overnight air courier, or, in either case, as such Noteholder
or a subsequent holder of any Note initially issued to such Noteholder may
designate to the Obligors in writing.
75
9.7. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon each party hereto and its
successors and assigns and shall inure to the benefit of each party hereto and
its successors and assigns, including each successive holder or holders of any
Notes.
9.8. SURVIVAL OF COVENANTS AND REPRESENTATIONS.
All covenants, representations and warranties made by any party herein
and in any certificates delivered pursuant hereto, whether or not in connection
with the Effective Date, shall survive the delivery of this Agreement and the
Notes.
9.9. SEVERABILITY.
Should any part of this Agreement for any reason be declared invalid or
unenforceable, such decision shall not affect the validity or enforceability of
any remaining portion, which remaining portion shall remain in force and effect
as if this Agreement had been executed with the invalid or unenforceable portion
thereof eliminated and it is hereby declared the intention of the parties hereto
that they would have executed the remaining portion of this Agreement without
including therein any such part, parts or portion which may, for any reason, be
hereafter declared invalid or unenforceable.
9.10. GOVERNING LAW.
This Agreement and the Notes issued and sold hereunder shall be
governed by and construed in accordance with New York law, excluding choice of
law principles of the law of such State that would require the application of
the laws of a jurisdiction other than such State.
9.11. JURISDICTION AND SERVICE IN RESPECT OF ISSUER AND PARENT.
Any legal action or proceeding with respect to this Agreement, the
Notes, any Guaranty Agreement or any document related thereto 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 of the Parent and the Issuer hereby ACCEPTS FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS. EACH OF THE ISSUER AND THE PARENT HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING
OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH RESPECTIVE
JURISDICTIONS. EACH OF THE ISSUER, THE PARENT AND EACH HOLDER OF A NOTE HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY.
76
Each of the Issuer and the Parent further consents that all service of
process may be made by delivery to it at the address of the Issuer or the
Parent, as the case may be, set forth in Section 9.6 hereof or to its Agent
referred to below at such Agent's address set forth below and that service so
made shall be deemed to be completed upon actual receipt. Each of the Issuer and
the Parent for itself hereby irrevocably appoints CT Corporation System with an
office on the date hereof at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as its
Agent for the purpose of receiving service of any process within the State of
New York. Nothing contained in this Section 9.11 shall affect the right of any
holder of Notes to serve legal process in any other manner permitted by law or
to bring any action or proceeding in the courts of any jurisdiction against the
Issuer or the Parent, or to enforce a judgment obtained in the courts of any
other jurisdiction.
9.12. PAYMENTS FREE AND CLEAR OF TAXES.
The Obligors, for the benefit of those holders of the Notes which are
residents, citizens or domestic corporations of the United States of America at
the time of any payment made by an Obligor hereunder (the "RELEVANT HOLDERS"),
agree that in the event any such payments made by an Obligor under the Notes,
this Agreement, a Guaranty Agreement or any other Financing Document are subject
to any present or future tax, duty, assessment, impost, levy or other similar
charge (a "RELEVANT TAX") imposed, levied, collected, assessed, deducted or
withheld by the government of Canada (or any authority therein or thereof) or by
the government of any other country or jurisdiction (or any authority therein or
thereof) other than the United States (or any authority therein or thereunder)
from or through which payments hereunder are actually made (each a "TAXING
JURISDICTION"), the Obligors will pay to the Relevant Holder such additional
amounts (the "ADDITIONAL AMOUNTS") as may be necessary in order that the net
amounts paid to such Relevant Holder pursuant to the terms of this Agreement,
such Notes, the Guaranty Agreements and the other Financing Documents after
imposition of any such Relevant Tax (including, without limitation, any Relevant
Tax on such Additional Amounts) shall be not less than the amounts specified in
this Agreement to be then due and payable (after giving effect to the exclusion
for Relevant Taxes imposed by the government of the United States (or any
authority therein or thereunder) as described above), except that no such
Additional Amounts shall be payable in respect of this Agreement, any Note, a
Guaranty Agreement or any other Financing Document to a Relevant Holder which is
liable for such Relevant Tax in respect of this Note Agreement, such Notes, such
Guaranty Agreement or such other Financing Document solely by reason of such
Relevant Holder being resident or being deemed resident in such Taxing
Jurisdiction or carrying on business or being deemed to carry on business in
such Taxing Jurisdiction or having some other business connection with such
Taxing Jurisdiction other than, in the case of Canada, the mere holding of this
Agreement, such Notes, such Guaranty Agreement or such other Financing Document
or the receipt of principal or interest in respect thereof.
9.13. CURRENCY OF PAYMENTS; JUDGMENTS.
Any payment made by any member of the Restricted Group to any holder of
the Notes or for the account of any such holder in respect of any amount payable
by such member of the Restricted Group (including any payments under the
Guaranty Agreements or any other Financing Document) shall be made in U.S.
Dollars. Any payment made by such member of the
77
Restricted Group to any holder of Notes or for the account of any such holder in
respect of any amount payable by such member of the Restricted Group in lawful
currency of the United States of America, which payment is made in Canadian
dollars or other foreign currency, whether pursuant to any judgment or order of
any court or tribunal or otherwise, shall constitute a discharge of the
obligations of such member of the Restricted Group only to the extent of the
amount of lawful currency of the United States of America which may be purchased
with such Canadian dollars or other foreign currency on the date of payment (or
if it is not practicable to make the purchase on such date, on the first day on
which it is practicable to do so); provided that any such conversion of a
foreign currency into lawful currency of the United States shall be calculated
as of the date such payment is received by such holder. If the amount of U.S.
Dollars so purchased is less than the amount of U.S. Dollars expressed to be due
hereunder or under the Notes or under such other Financing Document, the
Obligors shall indemnify such holder against any loss sustained by such holder
as a result hereunder or under the Notes or such other Financing Document; and
in any event, the Obligors shall indemnify such holder against the reasonable
cost of making any such purchase. These indemnities shall constitute a separate
and independent obligation from the other obligations herein, in the Notes, the
Guaranty Agreements and the other Financing Documents, shall give rise to a
separate and independent cause of action, shall apply irrespective of any
indulgence granted by any such holder, shall continue in full force and effect
despite any judgment, order, claim or proof for a liquidated amount in respect
of any such sum due hereunder, under any Note, under any Guaranty Agreement, or
under any other Financing Document and shall survive the payment of the Notes
and the termination of this Agreement and the other Financing Documents.
9.14. CAPTIONS.
The descriptive headings of the various Sections or parts of this
Agreement are for convenience only and shall not affect the meaning or
construction of any of the provisions hereof.
9.15. POWER OF ATTORNEY FOR QUEBEC PURPOSES.
For greater certainty, and without limiting the powers of the U.S.
Collateral Trustee or the Canadian Collateral Trustee under the Security
Documents, each of the Noteholders hereby acknowledges that the Canadian
Collateral Trustee shall, for the purposes of holding any security granted under
the Security Documents pursuant to the laws of the Province of Quebec to secure
payment of debentures (or any similar instruments), be the holder of an
irrevocable power of attorney (fonde de pouvoir) (within the meaning of Article
2692 of the Civil Code of Quebec) for all present and future holders of the
Notes and holders of debentures. Each of the Noteholders hereby constitutes, to
the extent necessary, the Canadian Collateral Trustee as the holder of such
irrevocable power of attorney (fonde de pouvoir) in order to hold security
granted under the Security Documents in the Province of Quebec to secure the
debentures (or any similar instrument). Each assignee of the Notes shall be
deemed to have confirmed and ratified the constitution of the Canadian
Collateral Trustee as the holder of such irrevocable power of attorney (fonde de
pouvoir). Notwithstanding the provisions of Section 32 of the Special Powers of
Legal Persons Act (Quebec), the Canadian Collateral Trustee may acquire and be
the holder of a debenture (or any similar instrument). Each of the Obligors
hereby acknowledges that a debenture executed by it constitutes a title of
indebtedness, as such term is used in Article 2692
78
of the Civil Code of Quebec. Notwithstanding the provisions of Section 9.10, the
provisions of this Section 9.15 shall be governed by the laws of the Province of
Quebec and the federal laws of Canada applicable therein.
9.16. INTEREST PROVISIONS.
(a) Interest Act (Canada). Solely for purposes of the Interest
Act (Canada) and in respect of all or any portion of a calendar year,
the annual rate of interest to which any interest rate herein is equal
is such rate multiplied by a fraction, the numerator of which is the
total number of days in such year and the denominator of which is 360.
(b) Criminal Code (Canada). If any provision of this Agreement
or any other Financing Document would obligate any member of the
Restricted Group to make any payment of interest or other amount
payable to the holders of the Notes in an amount or calculated at a
rate which would be prohibited by law or would result in a receipt by
the holders of the Notes of interest at a criminal rate (as construed
under the Criminal Code (Canada)), then, notwithstanding such
provision, such amount or rate shall be deemed to have been adjusted
with retroactive effect to the maximum amount or rate of interest, as
the case may be, as would not be so prohibited by law or result in a
receipt by the holders of the Notes of interest at a criminal rate, the
adjustment to be effected, to the extent necessary, as follows: (i)
firstly, by reducing the amount or rate of interest required to be paid
to the holders of the Notes, and (ii) thereafter, by reducing any fees,
commissions, premiums and other amounts required to be paid to the
holders of the Notes which would constitute interest for purposes of
Section 347 of the Criminal Code (Canada). Any amount or rate of
interest shall be determined in accordance with generally accepted
actuarial practices and principles as an effective annual rate of
interest over the term that the Notes remain outstanding on the
assumption that any charges, fees or expenses that fall within the
meaning of interest (as defined in the Criminal Code (Canada)) shall,
if they relate to a specific period of time, be prorated over such
period of time and, in the event of a dispute, a certificate of a
Fellow of the Canadian Institute of Actuaries appointed by the Majority
Noteholders, shall be conclusive for the purposes of such
determination, absent manifest error.
(c) Bankruptcy and Insolvency. If any member of the Restricted
Group files a notice of intention to file a proposal, or files a
proposal under the Canadian Bankruptcy and Insolvency Act, or files a
petition under the US Bankruptcy Code, or if the Parent or any of the
Restricted Subsidiaries obtains the permission of a Canadian court to
file a Plan of Arrangement under the Companies' Creditors Arrangements
Act, and if a stay of proceedings is obtained or ordered under the
provisions of any such statute, without prejudice to the rights of the
holders of the Notes to contest such stay of proceedings, the Issuer
covenants and agrees to continue to pay interest on all amounts due to
the holders of the Notes. In this regard, the Issuer acknowledges that
permitting the Issuer to continue to use the proceeds of the Notes
constitutes valuable consideration provided after the filing of any
such proceeding in the same way that permitting the Issuer to use
leased premises constitutes such valuable consideration.
79
9.17. LANGUAGE.
The parties hereby confirm their express intent that this Agreement,
the Guaranty Agreements, the Notes, the other Financing Documents and all
documents and agreements directly and indirectly related thereto be written in
English.
Les parties reconnaissent leur volonte expresse que la presente
convention, les billets ainsi que les documents et convention qui s'y rattachent
directement ou indirectement soient rediges en anglais.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.
NEXT PAGE IS SIGNATURE PAGE.]
80
The execution hereof by the Noteholders shall constitute a contract
between the Noteholders, the Parent, the Issuer and the General Partner for the
uses and purposes hereinabove set forth, and this Agreement may be executed in
any number of counterparts, each executed counterpart constituting an original
but all together only one agreement.
INTERTAPE POLYMER GROUP INC.
LE GROUPE INTERTAPE POLYMER INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President Finance
IPG HOLDINGS LP
BY: INTERTAPE POLYMER INC., ITS GENERAL PARTNER
By: /s/ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President
INTERTAPE POLYMER INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Assistant Secretary
ACCEPTED AND AGREED:
NEW YORK LIFE INSURANCE COMPANY
By: /s/ A. Post ▇▇▇▇▇▇▇
------------------------------
Name: A. Post ▇▇▇▇▇▇▇
Title: Investment Vice President
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION
BY: NEW YORK LIFE INVESTMENT MANAGEMENT LLC, ITS INVESTMENT MANAGER
By: /s/ A. Post ▇▇▇▇▇▇▇
------------------------------
Name: A. Post ▇▇▇▇▇▇▇
Title: Vice President
[Signature Page to Amended and Restated 1998 Note Agreement]
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION
INSTITUTIONALLY OWNED LIFE INSURANCE SEPARATE ACCOUNT
BY: NEW YORK LIFE INVESTMENT MANAGEMENT LLC, ITS INVESTMENT MANAGER
By: /s/ A. Post ▇▇▇▇▇▇▇
----------------------------
Name: A. Post ▇▇▇▇▇▇▇
Title: Vice President
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
U.S. PRIVATE PLACEMENT FUND
BY: PRUDENTIAL PRIVATE PLACEMENT INVESTORS, L.P., INVESTMENT ADVISOR
BY: PRUDENTIAL PRIVATE PLACEMENT INVESTORS, INC., ITS GENERAL PARTNER
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY,
A WISCONSIN CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇....
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Its Authorized Representative
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
BY: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & COMPANY INC. AS INVESTMENT ADVISER
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Managing Director
[Signature Page to Amended and Restated 1998 Note Agreement]
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
BY: CIGNA INVESTMENTS, INC. (AUTHORIZED AGENT)
By: /s/ ▇▇▇▇▇ ▇. Height
--------------------------------
Name: ▇▇▇▇▇ ▇. Height
Title: Managing Director
LIFE INSURANCE COMPANY OF NORTH AMERICA
BY: CIGNA INVESTMENTS, INC. (AUTHORIZED AGENT)
By: /s/ ▇▇▇▇▇ ▇. Height
--------------------------------
Name: ▇▇▇▇▇ ▇. Height
Title: Managing Director
PRINCIPAL LIFE INSURANCE COMPANY
BY: PRINCIPAL CAPITAL MANAGEMENT, LLC,
A DELAWARE LIMITED LIABILITY COMPANY,
ITS AUTHORIZED SIGNATORY
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Counsel
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Counsel
PRINCIPAL LIFE INSURANCE COMPANY,
ON BEHALF OF ONE OR MORE SEPARATE ACCOUNTS
BY: PRINCIPAL CAPITAL MANAGEMENT, LLC,
A DELAWARE LIMITED LIABILITY COMPANY,
ITS AUTHORIZED SIGNATORY
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Counsel
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Counsel
[Signature Page to Amended and Restated 1998 Note Agreement]
CGU LIFE INSURANCE COMPANY OF AMERICA, A DELAWARE CORPORATION
(FORMERLY KNOWN AS COMMERCIAL UNION LIFE INSURANCE COMPANY OF AMERICA)
BY: PRINCIPAL CAPITAL MANAGEMENT, LLC,
A DELAWARE LIMITED LIABILITY COMPANY,
ITS ATTORNEY IN FACT
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Counsel
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Counsel
JEFFERSON-PILOT LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇
Title: Vice President
JEFFERSON PILOT FINANCIAL INSURANCE COMPANY,
SUCCESSOR BY MERGER TO AH (MICHIGAN) LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇
Title: Vice President
NORTHERN LIFE INSURANCE COMPANY
BY: ING INVESTMENT MANAGEMENT LLC, AS AGENT
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
RELIASTAR LIFE INSURANCE COMPANY
BY: ING INVESTMENT MANAGEMENT LLC, AS AGENT
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
[Signature Page to Amended and Restated 1998 Note Agreement]
RELIASTAR LIFE INSURANCE COMPANY, AS SUCCESSOR BY MERGER TO
RELIASTAR UNITED SERVICES LIFE INSURANCE COMPANY
BY: ING INVESTMENT MANAGEMENT LLC, AS AGENT
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
MODERN WOODMEN OF AMERICA
By: /s/ ▇▇▇▇ ▇. Coin
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Name: ▇▇▇▇ ▇. Coin
Title: Manager
Securities Division
CLARICA LIFE INSURANCE COMPANY - U.S.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Director
Private Placements
[Signature Page to Amended and Restated 1998 Note Agreement]
EXHIBIT A
[FORM OF SENIOR SECURED NOTE DUE MARCH 31, 2008]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
IPG HOLDINGS LP
AMENDED AND RESTATED SENIOR SECURED NOTE DUE
MARCH 31, 2008
No. R-[__] [Date]
$[_______] PPN: 44981# AD 9
IPG HOLDINGS LP, a Delaware limited partnership (the "ISSUER"), for
value received, hereby promises to pay to [_________________], or its registered
assigns, on the 31st day of March 31, 2008, the principal amount of
[__________________] U.S. DOLLARS ($[_________]) and to pay interest (computed
on the basis of a 360-day year of twelve 30-day months) on the principal amount
from time to time remaining unpaid hereon, computed in the manner provided in
Section 2.1 of the Note Agreement (defined below), payable semiannually on the
last day of each March and September in each year (commencing on March 31, 2002)
and at maturity. The Issuer agrees to pay interest on overdue principal
(including any overdue required or optional prepayment of principal) and
Make-Whole Amount, if any, and (to the extent legally enforceable) on any
overdue installment of interest, both before and after demand and judgment, at a
rate equal to the Applicable Default Rate (as defined in the Note Agreement).
Payments of principal of, interest on and any Make-Whole Amount with respect to
this Note are to be made in lawful money of the United States of America at
Citibank, N.A., in New York, New York or at such other place in the State of New
York as the Issuer shall have designated by written notice to the holder of this
Note as provided in the Note Agreement referred to below.
This Note is one of the Amended and Restated Senior Secured Notes due
March 31, 2008 (collectively, as may be amended from time to time, the "NOTES")
of the Issuer in an aggregate principal amount of U.S. $137,000,000, pursuant to
the terms and provisions of that certain Amended and Restated Note Agreement,
dated as of December 20, 2001 (as may be amended from time to time, the "NOTE
AGREEMENT"), entered into by the Issuer, Intertape Polymer, Inc., a Canadian
corporation and general partner of the Issuer and Intertape Polymer Group Inc.,
a Canadian corporation, and the purchasers named therein. This Note and the
holder hereof are entitled equally and ratably with the holders of all other
Notes outstanding under the Note Agreement to all the benefits provided by the
Note Agreement. Reference is hereby made to the Note Agreement for a statement
of such rights and benefits. Each holder of this Note will be deemed, by its
acceptance hereof, (i) to have agreed to the confidentiality provisions set
forth in
Exhibit 4.6(c)-1
ss.5.18 of the Note Agreement and (ii) to have made the representation set forth
in ss.3.2 of the Note Agreement.
This Note and the other Notes outstanding under the Note Agreement may
be declared due prior to their expressed maturity dates and certain prepayments
are required to be made thereon, all in the events, on the terms and in the
manner and amounts as provided in the Note Agreement.
The Notes are not subject to prepayment or redemption at the option of
the Issuer prior to its expressed maturity date except on the terms and
conditions and in the amounts and with the Make-Whole Amount, if any, set forth
in the Note Agreement.
The payment of all principal of, premium, if any, and interest in this
Note and the other Notes outstanding under the Note Agreement has been
unconditionally guaranteed, and has the benefit of security, in each case as
contemplated by the Note Agreement. Reference is hereby made thereto for a
statement of the rights and benefits accorded thereby.
This Note is registered on the books of the Issuer and is transferable
only by surrender thereof at the principal office of the Issuer duly endorsed or
accompanied by a written instrument of transfer duly executed by the registered
holder of this Note or its attorney duly authorized in writing. Payment of or on
account of principal, Make-Whole Amount, if any, and interest on this Note shall
be made only to or upon the order in writing of the registered holder.
This Note shall be governed by and construed in accordance with the
laws of the State of New York.
IPG HOLDINGS LP
BY: INTERTAPE POLYMER INC.,
ITS GENERAL PARTNER
By: __________________________
Name:
Title:
Exhibit 4.6(c)-2