Exhibit 10.1
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AMERICAN BILTRITE INC.
K&M ASSOCIATES L.P.
AMENDED AND RESTATED CREDIT AGREEMENT
Originally dated as of October 14, 2003
Amended and Restated as of May 20, 2005
FLEET NATIONAL BANK, A Bank of America Company, Domestic Administrative Agent
BANK OF AMERICA, National Association, acting through its Canada
branch, Canadian Administrative Agent
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TABLE OF CONTENTS
Page
1. Restatement; Definitions.................................................1
1.1. Restatement.......................................................1
1.2. Definitions.......................................................2
2. The Credits.............................................................27
2.1. Domestic Revolving Credit........................................27
2.2. Canadian Revolving Credit........................................28
2.3. Domestic Letters of Credit.......................................29
2.4. Canadian Letters of Credit.......................................31
2.5. Application of Proceeds..........................................33
3. Interest; Pricing Options; Fees.........................................34
3.1. Interest.........................................................34
3.2. LIBOR Pricing Options............................................35
3.3. Fixed Rate Pricing Options.......................................37
3.4. Unused Line Fees.................................................37
3.5. Letter of Credit Fees............................................38
3.6. Computations of Interest and Fees................................39
3.7. Maximum Lawful Interest Rate.....................................39
4. Payment.................................................................40
4.1. Payment at Maturity..............................................40
4.2. Voluntary Prepayments............................................40
4.3. Letters of Credit................................................40
4.4. Reborrowing; Application of Payments, etc........................40
5. Conditions to Extending Credit..........................................41
5.1. Conditions on Initial Closing Date...............................41
5.2. Conditions to Each Extension of Credit...........................42
6. General Covenants.......................................................43
6.1. Taxes and Other Charges; Accounts Payable........................43
6.2. Conduct of Business, etc.........................................43
6.3. Insurance........................................................44
6.4. Financial Statements and Reports.................................45
6.5. Certain Financial Tests..........................................47
6.6. Indebtedness.....................................................48
6.7. Liens............................................................50
6.8. Investments and Acquisitions.....................................51
6.9. Distributions....................................................52
6.10. Issuance of Equity by Subsidiaries; Subsidiary Distributions.....53
6.11. Voluntary Prepayments of Other Indebtedness......................53
6.12. Negative Pledge Clauses..........................................53
6.13. ERISA, etc.......................................................53
6.14. Transactions with Affiliates.....................................53
6.15. Environmental Laws...............................................54
6.16. Congoleum........................................................54
7. Representations and Warranties..........................................54
7.1. Organization and Business........................................54
7.2. Financial Statements and Other Information; Material Agreements..55
7.3. Agreements Relating to Financing Debt, Investments, etc..........55
7.4. Changes in Condition.............................................55
7.5. Title to Assets..................................................56
7.6. Operations in Conformity With Law, etc...........................56
7.7. Litigation.......................................................56
7.8. Authorization and Enforceability.................................56
7.9. No Legal Obstacle to Agreements..................................56
7.10. Defaults.........................................................57
7.11. Licenses, etc....................................................57
7.12. Pension Plans....................................................58
7.13. Environmental Regulations........................................58
7.14. Government Regulation; Margin Stock..............................58
7.15. Disclosure.......................................................58
8. Defaults................................................................59
8.1. Events of Default................................................59
8.2. Certain Actions Following an Event of Default....................62
8.3. Annulment of Defaults............................................63
8.4. Waivers..........................................................63
9. Expenses; Indemnity.....................................................64
9.1. Expenses.........................................................64
9.2. General Indemnity................................................64
9.3. Indemnity With Respect to Letters of Credit......................65
9.4. Taxes............................................................65
9.5. Separate Obligations of Canadian Borrower........................67
10. Operations; Agent.......................................................68
10.1. Interests in Credits.............................................68
10.2. Agent's Authority to Act, etc....................................68
10.3. Power of Attorney for Quebec Purposes............................68
10.4. Lender Operations for Advances, Letters of Credit, etc...........69
10.5. Sharing of Payments, etc.........................................71
10.6. Agent's Resignation..............................................72
10.7. Concerning the Agent.............................................72
10.8. Rights as a Lender...............................................73
10.9. Independent Credit Decision......................................74
10.10. Indemnification..................................................74
10.11. Canadian Agent and Canadian Lenders..............................74
11. Successors and Assigns; Lender Assignments and Participations...........75
11.1. Assignments by Lenders...........................................75
11.2. Credit Participants..............................................77
11.3. Special Purpose Funding Vehicles.................................78
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12. Confidentiality.........................................................79
13. Notices.................................................................79
14. Amendments, Consents, Waivers, etc......................................80
14.1. Lender Consents for Amendments...................................80
14.2. Course of Dealing; No Implied Waivers............................81
15. General Provisions......................................................82
15.1. Defeasance.......................................................82
15.2. No Strict Construction...........................................82
15.3. Venue; Service of Process; Certain Waivers.......................82
15.4. WAIVER OF JURY TRIAL.............................................83
15.5. Interpretation; Governing Law; etc...............................83
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AMENDED AND RESTATED CREDIT AGREEMENT
This Agreement, dated as of May 20, 2005, is among American Biltrite Inc.,
a Delaware corporation (the "Company"), K&M Associates L.P., a Rhode Island
limited partnership ("K&M"; the Company and K&M being, collectively but jointly
and severally, the "Domestic Borrower"), American Biltrite (Canada) Ltd., a
corporation governed by the Canada Business Corporations Act (the "Canadian
Borrower"), the Canadian Lenders and Domestic Lenders (collectively, the
"Lenders") from time to time party hereto, Fleet National Bank, a Bank of
America company ("Fleet"), both in its capacity as a Domestic Lender and in its
capacity as domestic administrative agent for the Lenders, and Bank of America,
National Association, acting through its Canada branch ("Bank of America
Canada"), both in its capacity as a Canadian Lender and in its capacity as
Canadian administrative agent for the Lenders. The parties agree as follows:
WHEREAS, the Domestic Borrower, the guarantors party thereto, the lenders
party thereto and Fleet National Bank, as administrative agent, entered into
that certain Credit Agreement dated as of October 14, 2003 (as amended,
restated, modified or supplemented prior to the date hereof, the "Existing
Credit Agreement"), pursuant to which such lenders agreed to extend to the
Domestic Borrower a secured revolving credit facility, including a sub-allotment
for Letters of Credit;
WHEREAS, the Domestic Borrower has requested that the credit facilities
provided under the Existing Credit Agreement be restructured to add a
$12,000,000 sub-limit to the Domestic Borrower's secured revolving credit
facility that the Canadian Lender will extend to the Canadian Borrower to be
used for operations of the Canadian Borrower and to extend the Final Maturity
Date until September 30, 2006, and that, in connection therewith, the Existing
Credit Agreement be amended and restated in accordance with the terms hereof;
and
WHEREAS, the Lenders have agreed to amend and restate the Existing Credit
Agreement and to make the loans and other financial accommodations contemplated
hereby to the Borrower, as defined below, on the terms and conditions contained
herein.
NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto hereby agree as follows:
1. Restatement; Definitions.
1.1. Restatement. Effective as of the Initial Closing Date, this Agreement
amends and restates in its entirety the Existing Credit Agreement. Amounts in
respect of interest, commitment fees, Letter of Credit Fees and other amounts
payable hereunder shall be payable in accordance with the terms of this
Agreement as in effect prior to the amendment and restatement on the Initial
Closing Date for periods prior to the Initial Closing Date and in accordance
with this Agreement as amended and restated hereby for periods from and after
the Initial Closing Date.
1.2. Definitions. Certain capitalized terms are used in this Agreement and
in the other Credit Documents with the specific meanings defined below in this
Section 1.
"Affiliate" means, with respect to the Company (or any other specified
Person), any other Person directly or indirectly controlling, controlled by or
under direct or indirect common control with the Company (or such specified
Person), and shall include (a) any officer or director or general partner of the
Company (or such specified Person), (b) any Person of which the Company (or such
specified Person) or any Affiliate (as defined in clause (a) above) of the
Company (or such specified Person) shall, directly or indirectly, beneficially
own either (i) at least 10% of the outstanding equity securities having the
general power to vote or (ii) at least 10% of all equity interests and (c) any
Person directly or indirectly controlling the Company (or such specified Person)
through a management agreement, voting agreement or other contract.
"Agent" means the Domestic Agent and the Canadian Agent, collectively.
"Agreement" means this Amended and Restated Credit Agreement as from time
to time amended, modified and in effect.
"Applicable Margin" means the amount in the table below set opposite the
Reference Leverage Ratio for such date:
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Reference Leverage Ratio Applicable Margin
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>/=325% 275 b.p.
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>/=300% < 325% 250 b.p.
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>/=250% < 300% 200 b.p.
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>/=200% < 250% 150 b.p.
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>/=101% < 200% 125 b.p.
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/=300% 0.625%
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>/=250% < 300% 0.50%
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>/=200% < 250% 0.375%
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>/=100% < 200% 0.25%
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< 100% 0.125%
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3.5. Letter of Credit Fees. The Domestic Borrower or the Canadian Borrower
will pay to the Domestic Agent or the Canadian Agent, as the case may be, for
the account of the Domestic Lenders or the Canadian Lenders, in accordance with
such Lenders' respective Percentage Interests, on each Payment Date, a Letter of
Credit fee equal to daily interest at a rate per annum equal to the Applicable
Margin indicated for the LIBOR Rate on the daily Letter of Credit Exposure
during the three-month period or portion thereof ending on such Payment Date.
The Domestic Borrower or the Canadian Borrower, as the case may be, will pay to
each of the Domestic Letter of Credit Issuer and the Canadian Letter of Credit
Issuer customary service charges and expenses for its services in connection
with the Domestic Letters of Credit and the Canadian Letters of Credit,
respectively, at the times and in the amounts from time to time in effect in
accordance with its general rate structure, including fees and expenses relating
to issuance, amendment, negotiation, cancellation and similar operations.
3.5.1. Capital Adequacy. If any Lender shall reasonably determine
that compliance by such Lender with any Legal Requirement regarding
capital adequacy of banks or bank holding companies has or would have the
effect of reducing the rate of return on the capital of such Lender and
its Affiliates as a consequence of such Lender's commitment to make the
extensions of credit contemplated hereby, or such Lender's maintenance of
the extensions of credit contemplated hereby, to a level below that which
such Lender could have achieved but for such compliance (taking into
consideration the policies of such Lender and its Affiliates with respect
to capital adequacy immediately before such compliance and assuming that
the capital of such Lender and its Affiliates was fully utilized prior to
such compliance) by an amount reasonably deemed by such Lender to be
material, then such Lender may claim compensation from the Domestic
Borrower or the Canadian Borrower, as applicable, under Section 3.5.3.
3.5.2. Regulatory Changes. Subject to the provisions of Section 9.4,
if any Lender shall determine that (a) any change in any Legal Requirement
(including any new Legal Requirement) after the date hereof shall directly
or indirectly (i) reduce the amount of any sum received or receivable by
such Lender with respect to the Loan or the Letters of Credit or the
return to be earned by such Lender on the Loan or the Letters of Credit,
(ii) impose a cost on such Lender or any Affiliate of such Lender that is
attributable to the making or maintaining of, or such Lender's commitment
to make, its portion of the Loan or the Letters of Credit, or (iii)
require such Lender or any Affiliate of such Lender to make any payment
on, or calculated by reference to, the gross amount of any amount received
by such Lender under any Credit Document (other than Excluded Taxes), and
(b) such reduction, increased cost or payment shall not be fully
compensated for by an adjustment in the Applicable Rate or the Letter of
Credit fees, then such Lender may claim compensation from the Domestic
Borrower or the Canadian Borrower, as applicable, under Section 3.5.3.
3.5.3. Compensation Claims. Within 15 days after the receipt by the
Domestic Borrower or the Canadian Borrower, as applicable, of a
certificate from any Lender setting forth why it is claiming compensation
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under this Section 3.5 and computations (in reasonable detail) of the
amount thereof, such Borrower shall pay to such Lender such additional
amounts as such Lender sets forth in such certificate as sufficient fully
to compensate it on account of the foregoing provisions of this Section
3.5, together with interest on such amount from the 15th day after receipt
of such certificate until payment in full thereof at the Overdue
Reimbursement Rate. The determination by such Lender of the amount to be
paid to it and the basis for computation thereof hereunder shall be
conclusive so long as (a) such determination is made in good faith, (b) no
manifest error appears therein and (c) the Lender uses reasonable
averaging and attribution methods.
3.6. Computations of Interest and Fees. For purposes of this Agreement,
interest, commitment fees and Letter of Credit fees (and any other amount
expressed as interest or such fees) with respect to the Credit Obligations of
the Domestic Borrower shall be computed on the basis of (a) with respect to the
Domestic Borrower, a 360-day year for actual days elapsed, or (b) with respect
to the Canadian Borrower, (i) for portions of the Canadian Revolving Loan
bearing interest at the Canadian Prime Rate, a 365-day year for actual days
elapsed (or a 366-day year in the case of a leap year), or (ii) for portions of
the Canadian Revolving Loan bearing interest at LIBOR Basic Rate, a 360-day year
for actual days elapsed; provided, however, that interest on any portion of the
Domestic Revolving Loan calculated with respect to the Base Rate shall be
computed on the basis of a 360-day year, and interest on any portion of the
Canadian Revolving Loan calculated with respect to the Base Rate shall be
computed on the basis of a 365-day year (or a 366-day year in the case of a leap
year). If any payment required by this Agreement becomes due on any day that is
not a Banking Day, such payment shall, except as otherwise provided in the
definition of "LIBOR Interest Period", be made on the next succeeding Banking
Day. If the due date for any payment of principal is extended as a result of the
immediately preceding sentence, interest shall be payable for the time during
which payment is extended at the Applicable Rate. Each rate of interest which is
calculated with reference to a period (the "Deemed Interest Period") that is
less than the actual number of days in the calendar year of calculation is, for
the purposes of the Interest Act (Canada), equivalent to a rate based on a
calendar year calculated by multiplying such rate of interest by the actual
number of days in the calendar year of calculation and dividing by the number of
days in the Deemed Interest Period.
3.7. Maximum Lawful Interest Rate. All Credit Documents are expressly
limited so that in no event, including the acceleration of the maturity of the
Credit Obligations, shall the amount paid or agreed to be paid in respect of
interest on the Credit Obligations (or fees or other amounts deemed payment for
the use of funds) exceed the maximum permissible amount under applicable law, as
in effect on the date hereof and as subsequently amended or modified to allow a
greater amount of interest (or fees or other amounts deemed payment for the use
of funds) to be paid under the Credit Documents. If for any reason the amount in
respect of interest (or fees or other amounts deemed payment for the use of
funds) required by the Credit Documents exceeds such maximum permissible amount,
the obligation to pay interest under the Credit Documents (or fees or other
amounts deemed payment for the use of funds) shall be automatically reduced to
such maximum permissible amount and any amounts in respect of interest (or fees
or other amounts deemed payment for the use of funds) previously paid to the
Lenders in excess of such maximum permissible amount shall be automatically
applied to reduce the amount of the Loans and Letter of Credit Exposure.
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4. Payment.
4.1. Payment at Maturity. On the Final Maturity Date or any accelerated
maturity of the Domestic Revolving Loan, the Domestic Borrower will pay to the
Domestic Agent an amount equal to the Domestic Revolving Loan then due, together
with all accrued and unpaid interest and fees with respect thereto and all other
Credit Obligations (other than Credit Obligations relating to the Canadian
Borrower) then outstanding. On the Final Maturity Date or any accelerated
maturity of the Canadian Revolving Loan, the Canadian Borrower will pay to the
Canadian Agent an amount equal to the Canadian Revolving Loan then due, together
with all accrued and unpaid interest and fees with respect thereto and all other
Credit Obligations (other than Credit Obligations relating to the Domestic
Borrower) then outstanding. For Canadian Revolving Loans, payments of all Credit
Obligations related thereto must be received by 2:00 p.m. Toronto time in
immediately available funds on the date specified.
4.2. Voluntary Prepayments. The Borrower may from time to time prepay all
or any portion of the Loan (in a minimum amount of $500,000 and an integral
multiple of $100,000, or such lesser amount as is then outstanding), without
premium or penalty of any type (except as provided in Section 3.2.4 with respect
to the early termination of LIBOR Pricing Options). The Borrower shall give the
Domestic Agent or the Canadian Agent, as applicable, at least one Banking Day
prior notice of its intention to prepay the Domestic Revolving Loan or the
Canadian Revolving Loan under this Section 4.2, specifying the date of payment
and the total amount of the Domestic Revolving Loan or the Canadian Revolving
Loan to be paid on such date.
4.3. Letters of Credit. If on the Final Maturity Date or any accelerated
maturity of the Credit Obligations the Domestic Lenders shall be obligated in
respect of a Domestic Letter of Credit or a draft accepted under a Domestic
Letter of Credit, or the Canadian Lenders shall be obligated in respect of a
Canadian Letter of Credit or a draft accepted under a Canadian Letter of Credit,
the Domestic Borrower or the Canadian Borrower, as the case may be, will either:
(a) prepay such obligation by depositing cash with the
Domestic Agent or the Canadian Agent, as the case may be, or
(b) deliver to the Domestic Agent or the Canadian Agent, as
the case may be, a standby letter of credit (designating the
Domestic Letter of Credit Issuer and/or the Canadian Letter of
Credit Issuer, as appropriate, as beneficiary and issued by a bank
and on terms reasonably acceptable to the Domestic Letter of Credit
Issuer and/or Canadian Letter of Credit Issuer, as appropriate),
in each case in an amount equal to the portion of the then Letter of Credit
Exposure issued for the account of the Domestic Borrower or the Canadian
Borrower, as the case may be.
4.4. Reborrowing; Application of Payments, etc.
4.4.1. Reborrowing. The amounts of the Domestic Revolving Loan or
the Canadian Revolving Loan prepaid pursuant to Section 4.2 may be
reborrowed from time to time prior to the Final Maturity Date in
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accordance with Sections 2.1 and 2.2, subject to the limits set forth
therein.
4.4.2. Payment with Accrued Interest, etc. Upon all prepayments of
the Revolving Loan at a time when the Revolving Loan Commitments have been
terminated, the Domestic Borrower shall pay to the Domestic Agent together
with the principal amount of the Domestic Revolving Loan to be prepaid,
unpaid interest in respect thereof accrued to the date of prepayment, and
the Canadian Borrower shall pay to the Canadian Agent, together with the
principal amount of the Canadian Revolving Loan to be prepaid, unpaid
interest in respect thereof accrued to the date of prepayment.
4.4.3. Payments for Lenders. All payments of principal hereunder
shall be made to the Domestic Agent or the Canadian Agent, as the case may
be, for the account of the Domestic Lenders or the Canadian Lenders in
accordance with such Lenders' respective Percentage Interests in the
Credit Obligations so repaid. For Canadian Revolving Loans, payments of
all Credit Obligations related thereto must be received by 2:00 p.m.
Toronto time in immediately available funds on the date specified.
5. Conditions to Extending Credit.
5.1. Conditions on Initial Closing Date. The obligations of the Lenders to
make the initial extension of credit pursuant to Section 2 shall be subject to
the satisfaction, on or before the Initial Closing Date, of the conditions set
forth in this Section 5.1 as well as the further conditions in Section 5.2. If
the conditions set forth in this Section 5.1 are not met on or prior to the
Initial Closing Date, the Lenders shall have no obligation to make any
extensions of credit hereunder.
5.1.1. Notes. The Domestic Borrower shall have duly executed and
delivered to the Domestic Agent a Revolving Note for each Domestic Lender
having a Commitment with respect thereto who has requested delivery of a
Note prior to the Initial Closing Date.
5.1.2. Note Purchase Agreement. The Domestic Borrower shall have
duly executed and delivered to the Domestic Agent the Note Purchase
Agreement.
5.1.3. Legal Opinions. On the Initial Closing Date, the Lenders
shall have received an opinion from Davies ▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP,
outside counsel for the Canadian Borrower, which opinion shall be in form
and substance reasonably satisfactory to the Required Lenders.
5.1.4. Security Agreement. The Canadian Borrower shall have duly
authorized, executed and delivered to the Canadian Agent a Deed of
Hypothec and Issue of Mortgage Bonds in substantially the form of the Deed
of Hypothec and Issue of Mortgage Bonds attached as Exhibit 5.1.4(a)
together with the documents to be executed or delivered in connection
therewith (the "Canadian Security Agreement").
5.1.5. Intercreditor Agreement. Each of the Domestic Agent and
Prudential shall have duly authorized, executed and delivered, and the
Domestic Borrower shall have acknowledged, an Intercreditor and Collateral
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Agency Agreement in substantially the form of Exhibit 5.1.5 (the
"Intercreditor Agreement").
5.1.6. Extension Fee. The Domestic Borrower shall have paid to the
Domestic Agent an extension fee of $50,000.
5.1.7. Proper Proceedings. This Agreement, each other Credit
Document and the transactions contemplated hereby and thereby shall have
been authorized by all necessary corporate or other proceedings. All
necessary consents, approvals and authorizations of any governmental or
administrative agency or any other Person of any of the transactions
contemplated hereby or by any other Credit Document shall have been
obtained and shall be in full force and effect.
5.1.8. General. All legal and corporate proceedings in connection
with the transactions contemplated by this Agreement shall be reasonably
satisfactory in form and substance to the Agent and the Agent shall have
received copies of all documents, including certified copies of the
Charter and By-Laws of the Company and the other Obligors, records of
corporate proceedings, certificates as to signatures and incumbency of
officers and opinions of counsel, which the Agent may have reasonably
requested in connection therewith, such documents where appropriate to be
certified by proper corporate or governmental authorities.
5.1.9. Joinder Agreements. Each of the Tape Subsidiaries and Abimex,
LLC shall have duly authorized, executed and delivered, and the Domestic
Agent shall have acknowledged, a Joinder Agreement in substantially the
form of Exhibit 5.1.9 (the "Joinder Agreement").
5.2. Conditions to Each Extension of Credit. The obligations of the
Lenders to make any extension of credit pursuant to Section 2 shall be subject
to the satisfaction, on or before the Closing Date for such extension of credit,
of the following conditions:
5.2.1. Officer's Certificate. The representations and warranties
contained in Section 7 shall be true and correct on and as of such Closing
Date with the same force and effect as though made on and as of such date
(except as to any representation or warranty which refers to a specific
earlier date); no Default shall exist on such Closing Date prior to or
immediately after giving effect to the requested extension of credit; no
Material Adverse Change shall have occurred since December 31, 2004; and
the Borrower shall have furnished to the Domestic Agent or the Canadian
Agent, as applicable, in connection with the requested extension of credit
a certificate to these effects, in substantially the form of Exhibit
5.2.1(a) or Exhibit 5.2.1(b), as the case may be, signed by a Financial
Officer.
5.2.2. Legality, etc. The making of the requested extension of
credit shall not (a) subject any Lender to any penalty or special tax
(other than a tax for which the Borrower is required to reimburse the
Lenders under Section 3.5 or Section 9.4), (b) be prohibited by any Legal
Requirement or (c) violate any credit restraint program of the executive
branch of the government of the United States of America, the Board of
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Governors of the Federal Reserve System or any other governmental or
administrative agency so long as any Lender reasonably believes that
compliance therewith is customary commercial practice.
6. General Covenants. Each Borrower covenants that, until all of the Credit
Obligations shall have been paid in full and until the Lenders' commitments to
extend credit under this Agreement and any other Credit Document shall have been
irrevocably terminated, the Borrower and its Subsidiaries will comply with the
following provisions, it being understood that the transactions contemplated by
the Congoleum Plan, the Congoleum Note or the Congoleum Plan Trust, and the
effects thereof, shall be excluded for each and all of the purposes hereof:
6.1. Taxes and Other Charges; Accounts Payable.
6.1.1. Taxes and Other Charges. Each of the Borrower and its
Subsidiaries shall duly pay and discharge, or cause to be paid and
discharged, before the same becomes in arrears, all taxes, assessments and
other governmental charges imposed upon such Person and its properties,
sales or activities, or upon the income or profits therefrom, as well as
all claims for labor, materials or supplies which if unpaid might by law
become a Lien upon any of its property; provided, however, that any such
tax, assessment, charge or claim need not be paid if the validity or
amount thereof shall at the time be contested in good faith by appropriate
proceedings and if such Person shall, in accordance with GAAP, have set
aside on its books adequate reserves with respect thereto; and provided,
further, that each of the Borrower and its Subsidiaries shall pay or bond,
or cause to be paid or bonded, all such taxes, assessments, charges or
other governmental claims immediately upon the commencement of proceedings
to foreclose any Lien which may have attached as security therefor (except
to the extent such proceedings have been dismissed or stayed).
6.1.2. Accounts Payable. Each of the Borrower and its Subsidiaries
shall promptly pay when due, or in conformity with customary trade terms,
all accounts payable incident to the operations of such Person not
referred to in Section 6.1.1; provided, however, that any such accounts
payable need not be paid if the validity or amount thereof shall at the
time be contested in good faith and if such Person shall, in accordance
with GAAP, have set aside on its books adequate reserves with respect
thereto.
6.2. Conduct of Business, etc.
6.2.1. Types of Business. The Borrower and its Subsidiaries shall
engage only in the business as they are currently engaged in and other
activities related thereto.
6.2.2. Maintenance of Properties. Each of the Borrower and its
Subsidiaries:
(a) shall keep its properties in such repair, working order
and condition, and shall from time to time make such repairs,
replacements, additions and improvements thereto, as are necessary
for the efficient operation of its businesses and shall comply at
all times in all material respects with all material franchises,
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licenses and leases to which it is party so as to prevent any loss
or forfeiture thereof or thereunder, except where (i) compliance is
at the time being contested in good faith by appropriate proceedings
and (ii) failure to comply with the provisions being contested has
not resulted, and does not create a material risk of resulting, in
the aggregate in any Material Adverse Change; and
(b) shall do all things necessary to preserve, renew and keep
in full force and effect and in good standing its legal existence
and authority necessary to continue its business.
6.2.3. Compliance with Legal Requirements. Each of the Borrower and
its Subsidiaries shall comply in all material respects with all valid
Legal Requirements applicable to it, except where (a) compliance therewith
shall at the time be contested in good faith by appropriate proceedings
and (b) failure so to comply with the provisions being contested has not
resulted, and does not create a material risk of resulting, in the
aggregate in any Material Adverse Change.
6.2.4. Compliance with Material Agreements. Each of the Borrower and
its Subsidiaries shall comply in all material respects with the Material
Agreements (to the extent not in violation of the other provisions of this
Agreement or any other Credit Document). Without the prior written consent
of the Required Lenders, no Material Agreement shall be amended, modified,
waived or terminated in any manner that would have in any material respect
an adverse effect on the interests of the Lenders.
6.3. Insurance.
6.3.1. Business Interruption Insurance. Each of the Borrower and its
Subsidiaries shall maintain with financially sound and reputable insurers
insurance related to interruption of business, either for loss of profits
or for extra expense, in the manner customary for businesses of similar
size engaged in similar activities.
6.3.2. Property Insurance. Each of the Borrower and its Subsidiaries
shall keep its assets which are of an insurable character insured by
financially sound and reputable insurers against theft and fraud and
against loss or damage by fire, explosion and hazards insured against by
extended coverage to the extent, in amounts and with deductibles at least
as favorable as those generally maintained by businesses of similar size
engaged in similar activities.
6.3.3. Liability Insurance. Each of the Borrower and its
Subsidiaries shall maintain with financially sound and reputable insurers
insurance against liability for hazards, risks and liability to persons
and property, including product liability insurance, to the extent, in
amounts and with deductibles at least as favorable as those generally
maintained by businesses of similar size engaged in similar activities;
provided, however, that it may effect workers' compensation insurance or
similar coverage with respect to operations in any particular state or
other jurisdiction through an insurance fund operated by such state or
jurisdiction or by meeting the self-insurance requirements of such state
or jurisdiction.
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6.4. Financial Statements and Reports. Each of the Borrower and its
Subsidiaries shall maintain a system of accounting in which correct entries
shall be made of all transactions in relation to their business and affairs in
accordance with generally accepted accounting practice. The fiscal year of the
Borrower and its Subsidiaries shall end on December 31 in each year and the
fiscal quarters of the Borrower and its Subsidiaries shall end on or about March
31, June 30, September 30 and December 31 in each year.
6.4.1. Annual Reports. The Company shall furnish to the Lenders as
soon as available, and in any event within 90 days after the end of each
fiscal year, the Consolidated and Consolidating balance sheets as at the
end of such fiscal year, the Consolidated and Consolidating statements of
income and Consolidated statements of changes in shareholders' equity and
of cash flows for such fiscal year (all in reasonable detail) and, in the
case of Consolidated financial statements, comparative figures for the
immediately preceding fiscal year, all accompanied by:
(a) Reports of independent certified public accountants of
recognized national standing reasonably satisfactory to the Required
Lenders, containing no material qualification, to the effect that
they have audited the consolidated financial statements of the
Company and its Subsidiaries in accordance with the standards of the
Public Company Accounting Oversight Board (United States) (or such
relevant successor standards) and that such consolidated financial
statements present fairly, in all material respects, the financial
position of the Company and its Subsidiaries covered thereby at the
dates thereof and the results of their operations for the periods
covered thereby in conformity with GAAP.
(b) A certificate of the Company signed by a Financial Officer
to the effect that such officer has caused this Agreement to be
reviewed and has no knowledge of any Default, or if such officer has
such knowledge, specifying such Default and the nature thereof, and
what action the Company has taken, is taking or proposes to take
with respect thereto.
(c) Computations by the Company in substantially the form of
Exhibit 6.4 demonstrating, as of the end of such fiscal year,
compliance with the Computation Covenants, signed by a Financial
Officer.
(d) In the event of a change in GAAP, computations by the
Company, signed by a Financial Officer, reconciling the financial
statements referred to above with financial statements prepared in
accordance with GAAP as applied to the other covenants in Section 6
and related definitions.
6.4.2. Quarterly Reports. The Company shall furnish to the Lenders
as soon as available and, in any event, within 45 days after the end of
each of the first three fiscal quarters of the Company, the internally
prepared Consolidated balance sheet as of the end of such fiscal quarter,
the Consolidated statements of income, of changes in shareholders' equity
and of cash flows for such fiscal quarter and for the portion of the
fiscal year then ended (all in reasonable detail) and comparative figures
for the same period in the preceding fiscal year, all accompanied by:
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(a) A certificate of the Company signed by a Financial Officer
to the effect that such financial statements have been prepared in
accordance with GAAP and present fairly, in all material respects,
the financial position of the Company and its Subsidiaries covered
thereby at the dates thereof and the results of their operations for
the periods covered thereby, subject only to normal year-end audit
adjustments and the addition of footnotes.
(b) A certificate of the Company signed by a Financial Officer
to the effect that such officer has caused this Agreement to be
reviewed and has no knowledge of any Default, or if such officer has
such knowledge, specifying such Default and the nature thereof and
what action the Company has taken, is taking or proposes to take
with respect thereto.
(c) Computations by the Company in substantially the form of
Exhibit 6.4 demonstrating, as of the end of such quarter, compliance
with the Computation Covenants, signed by a Financial Officer.
(d) In reasonable detail, management's discussion and analysis
of the results of operations and financial condition of the Company
and its Subsidiaries as at the end of and for the fiscal period
covered by the financial statements referred to above.
6.4.3. Borrowing Base Reports. The Company, or with respect to the
Canadian Borrower, the Canadian Borrower or the Company, shall furnish to
the Lenders, as soon as available and, in any event (a) within 15 days
after the end of each month, or (b) within 10 days following any written
request by the Domestic Agent or Canadian Agent if more frequently than
monthly, but in any event not more frequently than once per week, a
certificate of a Financial Officer supplying computations of the Borrowing
Base and the Canadian Borrowing Base, as applicable, at the end of such
month (or week, as the case may be), it being understood that any such
certification may exclude foreign amounts and foreign calculations, in
which event all such excluded amounts shall be deemed not included in the
Borrowing Base for such date.
6.4.4. Other Reports. The Company shall promptly furnish to the
Lenders:
(a) As soon as prepared and in any event before the beginning
of each fiscal year, an annual budget and operating projections for
such fiscal year of the Company and its Subsidiaries, prepared in a
manner consistent with the manner in which the financial projections
described in Section 7.2.1 were prepared.
(b) Any material updates of such budget and projections, if
requested by the Agent on behalf of the Lenders.
(c) Any management letters furnished to the Company or any of
its Subsidiaries by the Company's auditors, if requested by the
Agent on behalf of the Lenders.
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(d) All budgets, projections, statements of operations and
other reports furnished generally to the shareholders of the
Company.
(e) Such registration statements, proxy statements and
reports, including Forms ▇-▇, ▇-▇, ▇-▇, ▇-▇, 10-K, 10-Q and 8-K, as
may be filed by the Company or any of its Subsidiaries with the
Securities and Exchange Commission.
(f) Any 90-day letter or 30-day letter from the federal
Internal Revenue Service (or the equivalent notice received from
state or other taxing authorities) or any notice of assessment from
the Canada Revenue Agency (or any provincial equivalent) asserting
tax deficiencies against the Company or any of its Subsidiaries.
6.4.5. Notice of Litigation, Defaults, etc. The Borrower shall
promptly furnish to the Lenders notice of any litigation or any
administrative or arbitration proceeding (a) which creates a material risk
of resulting, after giving effect to any applicable insurance, in the
payment by the Borrower and its Subsidiaries of more than $500,000 or (b)
which results, or creates a material risk of resulting, in a Material
Adverse Change. Promptly upon acquiring knowledge thereof, the Borrower
shall notify the Lenders of the existence of any Default or Material
Adverse Change, specifying the nature thereof and what action the Borrower
or any of its Subsidiaries has taken, is taking or proposes to take with
respect thereto.
6.4.6. Other Information; Audit. From time to time at reasonable
intervals upon request of any authorized officer of any Lender, each of
the Borrower and its Subsidiaries shall furnish to such Lender such other
information regarding the business, assets, financial condition, income or
prospects of the Borrower and its Subsidiaries as such officer may
reasonably request, including copies of all tax returns, licenses,
agreements, leases and instruments to which any of the Borrower or its
Subsidiaries is party. Each Lender's authorized officers and
representatives shall have the right during normal business hours upon
reasonable notice and at reasonable intervals to examine the books and
records of the Borrower and its Subsidiaries, to make copies and notes
therefrom for the purpose of ascertaining compliance with or obtaining
enforcement of this Agreement or any other Credit Document. The Domestic
Agent or Canadian Agent, as the case may be, upon reasonable advance
notice, may undertake to have the Borrower and its Subsidiaries reviewed
by the Domestic Agent or Canadian Agent's commercial financial examiners
and fixed asset appraisers.
6.5. Certain Financial Tests. All of the financial tests set forth in this
Section 6.5 shall be measured on the basis of financial statements of the
Company and it Subsidiaries reporting Congoleum on the equity method.
6.5.1. Consolidated Total Liabilities to Consolidated Tangible Net
Worth. On the last day of each fiscal quarter of the Company, Consolidated
Total Liabilities shall not exceed the percentage set forth in the table
below of Consolidated Tangible Net Worth on such date.
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Quarter Ending Percentage
-------------- ----------
3/31/05 and thereafter 200%
6.5.2. Consolidated Adjusted EBITDA to Consolidated Interest
Expense. For each period of four consecutive fiscal quarters of the
Company, Consolidated Adjusted EBITDA shall equal or exceed the percentage
set forth in the table below of Consolidated Interest Expense.
Quarter Ending Percentage
-------------- ----------
3/31/05 and 6/30/05 125%
9/30/05 and thereafter 150%
6.5.3. Consolidated Tangible Net Worth. Consolidated Tangible Net
Worth shall on each quarter end exceed the sum of (a) $40,000,000 plus (b)
33?% of Consolidated Net Income (if positive) for each fiscal quarter of
the Company ending June 30, 2003 and thereafter.
6.5.4. Income or Loss from Continuing Operations. Net income from
continuing operations of the Borrower and its Subsidiaries reporting
Congoleum on the equity method shall equal or exceed $1.00 in at least one
of any two consecutive fiscal quarters of the Company for any two
consecutive fiscal quarters of the Company ending March 31, 2004 and
thereafter.
6.5.5. Capital Expenditures. The aggregate amount of Capital
Expenditures in any fiscal year of the Borrower ending after December 31,
2002 shall not exceed $4,000,000.
6.5.6. Consolidated Adjusted EBITDA to Consolidated Pro Forma Fixed
Charges. On and after June 30, 2006, on the last day of each fiscal
quarter of the Company, Consolidated Adjusted EBITDA for the period of
four consecutive fiscal quarters then ending shall exceed 150% of
Consolidated Pro Forma Fixed Charges for the 12-month period beginning
immediately after such date.
6.6. Indebtedness. Neither the Borrower nor any of its Subsidiaries shall
create, incur, assume or otherwise become or remain liable with respect to any
Indebtedness, including Guarantees of Indebtedness of others and reimbursement
obligations, whether contingent or matured, under letters of credit or other
financial guarantees by third parties, (or become contractually committed to do
so), except the following:
6.6.1. Indebtedness in respect of the Credit Obligations.
6.6.2. Indebtedness in respect of Capitalized Lease Obligations,
Synthetic Lease Obligations or secured by Purchase Money Liens; provided,
however, that the aggregate principal amount of all Indebtedness permitted
by this Section 6.6.2 at any one time outstanding shall not exceed
$1,000,000.
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6.6.3. Current liabilities, other than Financing Debt, incurred in
the ordinary course of business or in accordance with hedge agreements
permitted by the other provisions of this Agreement.
6.6.4. To the extent that payment thereof shall not at the time be
required by Section 6.1, Indebtedness in respect of taxes, assessments,
governmental charges and claims for labor, materials and supplies.
6.6.5. Indebtedness secured by Liens of carriers, warehouses,
mechanics, landlords and other Persons permitted by Sections 6.7.2 and
6.7.3.
6.6.6. Indebtedness in respect of judgments or awards (a) which have
been in force for less than the applicable appeal period or (b) in respect
of which the Borrower or any Subsidiary shall at the time in good faith be
prosecuting an appeal or proceedings for review and, in the case of each
of clauses (a) and (b), the Borrower or such Subsidiary shall have taken
appropriate reserves therefor in accordance with GAAP and execution of
such judgment or award shall not be levied.
6.6.7. Guarantees by the Borrower of Indebtedness and other
obligations incurred by its Subsidiaries and permitted by the other
provisions of this Section 6.6.
6.6.8. Indebtedness in respect of inter-company loans and advances
among the Borrower and its Subsidiaries which are not prohibited by
Section 6.8.
6.6.9. Indebtedness outstanding on the date hereof or incurred after
the date hereof under any unused portion of a committed facility that
exists on the date hereof and is described in Exhibit 7.3 and all
refinancings and extensions thereof not in excess of the amount thereof
outstanding or committed immediately prior to such refinancing or
extension.
6.6.10. Indebtedness (other than Financing Debt) in addition to the
foregoing; provided, however, that the aggregate amount of all such
Indebtedness at any one time outstanding shall not exceed $1,000,000.
6.6.11. The obligation of the Company to contribute cash in the
amount of $250,000 to the Congoleum Plan Trust.
6.6.12. The obligation of the Company to make a contribution to the
Congoleum Plan Trust if the Company sells or otherwise disposes of all or
substantially all of its shares of Congoleum stock within a certain period
of time if the value of Congoleum implied by such stock sale or
disposition exceeds a certain amount, as further provided under the
Congoleum Plan.
6.6.13. Indebtedness contemplated by the Congoleum Plan, Congoleum
Plan Note or Congoleum Plan Trust.
6.6.14. Indebtedness in respect of the Note Obligations.
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6.6.15. Until May 31, 2005 only, Indebtedness outstanding on the
date hereof under the CIBC Credit Agreement.
6.6.16. Until August 1, 2005 only, Indebtedness of the Canadian
Borrower secured by letters of credit issued under the CIBC Credit
Agreement as set forth in Exhibit 6.6.16.
6.6.17. Until August 1, 2005 only, Indebtedness to secure amounts
drawn on the Canadian Imperial Bank of Commerce checking accounts or
purchasing cards of the Canadian Borrower, not to exceed $1,000,000.
6.7. Liens. Neither the Borrower nor any of its Subsidiaries shall create,
incur or enter into, or suffer to be created or incurred or to exist, any Lien
(or become contractually committed to do so), except the following:
6.7.1. Liens constituting Purchase Money Liens; provided, however,
that (i) each such Lien shall be confined solely to the particular item of
property leased or acquired pursuant to such Lien, and the principal
amount of Indebtedness (including Indebtedness in respect of Capitalized
Lease Obligations and Synthetic Lease Obligations) secured thereby shall
not exceed the cost (including all such Indebtedness secured thereby,
whether or not assumed) of such item of property; and (ii) the aggregate
principal amount of all Indebtedness secured by Liens permitted by this
Section 6.7.1 shall not exceed the amount permitted by Section 6.6.2.
6.7.2. Liens of carriers, warehouses, mechanics, builders and
similar Liens or other Liens imposed or permitted by applicable law,
including Liens for taxes, assessments or other charges or levies of any
governmental or administrative authority, in each case (a) in existence
less than 90 days from the date of creation thereof or (b) being contested
in good faith by the Borrower or any Subsidiary in appropriate proceedings
(so long as the Borrower or such Subsidiary shall, in accordance with
GAAP, have set aside on its books adequate reserves with respect thereto).
6.7.3. Encumbrances in the nature of (a) zoning restrictions, (b)
easements or servitudes, (c) restrictions of record on the use of real or
immovable property, (d) landlords' and lessors' Liens on rented premises
and (e) restrictions on transfers or assignment of leases, which in each
case do not materially detract from the value of the encumbered property
or impair the use thereof in the business of the Borrower or any
Subsidiary.
6.7.4. Liens as in effect on the date hereof described in Exhibit
7.3 (and renewals and replacements thereof) and securing Indebtedness
permitted by Section 6.
6.7.5. Any pledge by the Company of shares of common stock of
Congoleum held by the Company, and any other equity rights the Company has
in Congoleum, which pledge shall serve as collateral for any amounts owed
by Congoleum under the Congoleum Plan Note.
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6.7.6. Any pledge by the Company of amounts receivable under the
Congoleum Joint Venture Agreement to the Congoleum Plan Trust as
additional collateral securing Congoleum's obligations under the Congoleum
Plan Note.
6.7.7. Liens existing as of the date hereof on foreign assets. The
Borrower covenants and agrees that it shall not materially alter, or
suffer to exist any material alteration of, such liens on foreign assets.
6.7.8. Encumbrances in the nature of non-exclusive licenses of the
Borrower's or any Subsidiaries' intellectual property (i) in the ordinary
course of business consistent with past practices or (ii) to their
respective Affiliates, notwithstanding the requirements of Section 6.14.
6.7.9. Until May 31, 2005 only, Liens as of the date hereof in favor
of Canadian Imperial Bank of Commerce.
6.7.10. Until August 1, 2005 only, Liens in favor of Canadian
Imperial Bank of Commerce as security for letters of credit issued under
the CIBC Credit Agreement as set forth in Exhibit 6.6.16.
6.7.11. Until August 1, 2005 only, deposits by the Canadian Borrower
with Canadian Imperial Bank of Commerce to secure amounts drawn on the
CIBC checking accounts or purchasing cards of the Canadian Borrower, not
to exceed $1,000,000.
6.8. Investments and Acquisitions. Neither the Borrower nor any of its
Subsidiaries shall have outstanding, acquire or hold any Investment (including
any Investment consisting of the acquisition of any business) (or become
contractually committed to do so), except the following:
6.8.1. Investments of the Borrower and its Subsidiaries in (a)
Unrestricted Subsidiaries or (b) Persons that have become Unrestricted
Subsidiaries after the date hereof; provided, however, that no such
Investment shall involve the transfer by the Company or the Borrower of
any material assets other than cash or capital stock of the Company.
6.8.2. (i) Intercompany loans and advances from any Subsidiary to
the Borrower but in each case only to the extent reasonably necessary for
Consolidated tax planning and working capital management and (ii)
Intercompany loans and advances among any Borrower or Subsidiary in the
ordinary course of business for working capital management.
6.8.3. Loans to any employee of either the Borrower or Subsidiaries
that in the aggregate do not exceed $250,000.
6.8.4. Investments in Cash Equivalents and hedge agreements
permitted by the other provisions of this Agreement.
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6.8.5. Guarantees permitted by Section 6.6.
6.8.6. Investments of the Company or its Subsidiaries in Foreign
Wholly-Owned Subsidiaries outstanding on the date hereof and described in
Exhibit 7.3.
6.8.7. The Borrower and its Subsidiaries may make acquisitions of
businesses in the same or a substantially similar line of business so long
as:
(a) The Borrower has provided the Agent at least 15 Banking
Days prior written notice of such acquisition and copies of all
letters of intent and agreements relating thereto.
(b) The Borrower provides written computations, historical
financial statements and projections satisfactory to the Agent
demonstrating pro forma compliance with Section 6.5 and the absence
of any Default, both immediately before and after giving effect to
such acquisition.
(c) The aggregate purchase price (including cash, assumed
debt, earnout payments, seller debt, stock issuances and
noncompetition payments) for such acquisition (including any related
acquisitions) is less than $500,000, or the consent of the Required
Lenders has been obtained.
(d) The Borrower or one of its Subsidiaries is the surviving
entity of such acquisition or, in the event of a stock acquisition,
the Company or one of its Subsidiaries will own at least 80% of the
capital stock, as well as at least 80% of the capital stock entitled
to vote generally for the election of directors, of the acquired
entity.
6.8.8. Investments not otherwise provided for in this Section 6.8 in
Subsidiaries not to exceed $500,000 in the aggregate.
6.8.9. Investments existing on the date of this Agreement set forth
on Exhibit 6.8.9 hereto, or any other non-material Investments not
exceeding $10,000 in the aggregate.
6.8.10. Investments contemplated by the Congoleum Plan, Congoleum
Plan Note or Congoleum Plan Trust.
6.9. Distributions. Neither the Borrower nor any of its Subsidiaries shall
make any Distribution (or become contractually committed to do so), except the
following:
6.9.1. So long as immediately before and after giving effect thereto
no Default exists, Subsidiaries of the Borrower may make Distributions to
the Borrower or any Unrestricted Subsidiary of the Borrower and the
Borrower and its Subsidiaries may make Investments permitted by Sections
6.8.1 and 6.8.2.
6.9.2. So long as immediately before and after giving effect thereto
no Default exists, the Company may make Distributions in an amount which
shall not exceed the sum of (i) 50% of Consolidated Net Income (including
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for this purpose only losses relating to Janus Floor Corporation occurring
after December 31, 2002) for the period from and after June 30, 2003 to
and including the most recent quarter ended prior to the measurement date,
minus (ii) the aggregate amount of all Distributions declared, ordered,
paid, made or set apart after June 30, 2003.
6.9.3. Any Wholly Owned Subsidiary of the Company (other than the
Borrower) may merge, consolidate or be liquidated into the Company or any
other Wholly Owned Subsidiary of the Company so long as after giving
effect to any such merger to which the Company is a party the Company
shall be the surviving or resulting Person.
6.10. Issuance of Equity by Subsidiaries; Subsidiary Distributions.
6.10.1. Issuance of Equity by Subsidiaries. No Subsidiary shall
issue or sell any shares of its capital stock or other evidence of equity
or beneficial ownership to any Person other than the Borrower or any
Wholly Owned Subsidiary of the Borrower.
6.10.2. No Restrictions on Subsidiary Distributions. Except for this
Agreement, the Note Purchase Agreement and the Credit Documents, neither
the Company nor any Subsidiary shall enter into or be bound by any
agreement (including covenants requiring the maintenance of specified
amounts of net worth or working capital) restricting the right of any
Subsidiary of the applicable Borrower to make Distributions or extensions
of credit to such Borrower (directly or indirectly through another
Subsidiary); provided, however, that Foreign Subsidiaries may become
subject to such restrictions pursuant to loan agreements with respect to
Indebtedness permitted by Section 6.6.9.
6.11. Voluntary Prepayments of Other Indebtedness. The Canadian Borrower
may prepay any and all amounts pursuant to the CIBC Credit Agreement, at any
time and from time to time.
6.12. Negative Pledge Clauses. Neither the Borrower nor any of its
Subsidiaries shall enter into any agreement, instrument, deed or lease which
prohibits or limits the ability of the Borrower or any of its Subsidiaries to
create, incur, assume or suffer to exist any Lien upon any of their respective
properties, assets or revenues, whether now owned or hereafter acquired, or
which requires the grant of any collateral for such obligation if collateral is
granted for another obligation except for such agreements, instruments, deeds or
loans with respect to liens permitted by Sections 6.7.5, 6.7.6 and 6.7.7 hereof
and except as set forth in the Credit Documents, the Note Purchase Agreement and
the CIBC Credit Agreement.
6.13. ERISA, etc. Each of the Borrower and its Subsidiaries shall comply,
and shall cause all ERISA Group Persons to comply, in all material respects,
with the provisions of ERISA and the Code applicable to each Plan.
6.14. Transactions with Affiliates. Neither the Borrower nor any of its
Subsidiaries shall effect any transaction with any of their respective
Affiliates (except for the Borrower and its Subsidiaries) on a basis less
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favorable to the Borrower and its Subsidiaries than would be the case if such
transaction had been effected with a non-Affiliate.
6.15. Environmental Laws. Each of the Borrower and its Subsidiaries shall
use and operate all of its facilities and properties in material compliance with
all Environmental Laws, keep in effect all necessary permits, approvals,
certificates, licenses and other authorizations relating to environmental
matters and remain in material compliance therewith, and handle all Hazardous
Materials in material compliance with all applicable Environmental Laws.
6.16. Congoleum. Each of the Company and its Subsidiaries will not make
any amendments or changes to the Congoleum Plan, the Congoleum Plan Note and the
Congoleum Plan Trust without the prior written consent of the Agent if the
effect of such amendment or change would be to increase the obligations of the
Borrowers or any of their Subsidiaries.
7. Representations and Warranties. In order to induce the Lenders to extend
credit to the Borrower hereunder, each Borrower represents and warrants as
follows, it being understood that the transactions contemplated by the Congoleum
Plan, the Congoleum Note or the Congoleum Plan Trust, and the dissolution and
performance of Janus Flooring Corporation, and, in each case, the effects
thereof, shall be excluded for each and all of the purposes hereof:
7.1. Organization and Business.
7.1.1. The Company. The Company is a duly organized and validly
existing corporation, in good standing under the laws of Delaware, with
all power and authority, corporate or otherwise, necessary to enter into
and perform this Agreement and each other Credit Document to which it is
party.
7.1.2. The Canadian Borrower. The Canadian Borrower is duly
organized and validly existing corporation, in good standing under the
laws of Canada, with all power and authority, corporate or otherwise,
necessary to enter into and perform this Agreement and each other Credit
Document to which it is party.
7.1.3. Subsidiaries. Each Subsidiary of the Company is duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is organized, with all power and authority,
corporate or otherwise, necessary to enter into and perform this Agreement
and each other Credit Document to which it is party. Exhibit 7.1 sets
forth, as of the date hereof (i) the name, jurisdiction of organization,
the organizational identification number issued by such jurisdiction and
the federal taxpayer identification number of each Subsidiary of the
Company (to the extent applicable), (ii) the address of the chief
executive office and principal place of business of each such Subsidiary,
(iii) each name under which each such Subsidiary conducts its business,
(iv) each jurisdiction in which each such Subsidiary owns real or tangible
personal property, and, in the case of real property, whether such real
property is owned or leased by such Subsidiary and (v) the number of
authorized and issued equity interests and ownership of each such
Subsidiary.
7.1.4. Qualification. Each of the Company and its Subsidiaries is
duly and legally qualified to do business as a foreign corporation or
other entity and is in good standing in each state or jurisdiction in
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which such qualification is required and is duly authorized, qualified and
licensed under all laws, regulations, ordinances or orders of public
authorities, or otherwise, to carry on its business in the places and in
the manner in which it is conducted, except for failures to be so
qualified, authorized or licensed which would not in the aggregate result,
or create a material risk of resulting, in any Material Adverse Change.
7.2. Financial Statements and Other Information; Material Agreements.
7.2.1. Financial Statements and Other Information. The Company has
previously furnished to the Lenders copies of the audited consolidated
balance sheets of the Company and its Subsidiaries as at December 31 in
each of 2000, 2001, 2002, 2003 and 2004 and the audited consolidated
statements of income and the audited consolidated statements of changes in
shareholders' equity and of cash flows of the Company and its Subsidiaries
for the fiscal years of the Company then ended.
The audited consolidated financial statements (including the notes
thereto) referred to in this Section 7.2.1 were prepared in accordance
with GAAP and fairly present in all material respects the financial
position of the Company and its Subsidiaries on a consolidated basis at
the respective dates thereof and the results of their operations for the
periods covered thereby. Neither the Company nor any of its Subsidiaries
has any known contingent liability material to the Company and its
Subsidiaries on a Consolidated basis which is not reflected in the balance
sheets referred to in this Section 7.2.1 (or delivered pursuant to
Sections 6.4.1 or 6.4.2) or in the notes thereto.
7.2.2. Material Agreements. The Borrower has previously furnished to
the Lenders correct and complete copies, including all exhibits, schedules
and amendments thereto, of the agreements and instruments, each as in
effect on the date hereof, listed in Exhibit 7.2.2, which constitute all
agreements and instruments material to the Borrower and its Subsidiaries
on a Consolidated basis (together with the Charters and Bylaws of the
Company and its Subsidiaries, the "Material Agreements").
7.3. Agreements Relating to Financing Debt, Investments, etc. Exhibit 7.3
sets forth:
7.3.1. The amounts (as of the dates indicated in Exhibit 7.3), of
all Financing Debt of the Borrower and its Subsidiaries and all
agreements, Liens and Guarantees which relate to such Financing Debt.
7.3.2. All agreements which directly or indirectly require the
Borrower or any Subsidiary to make any Investment.
7.4. Changes in Condition. Since December 31, 2004, no Material Adverse
Change has occurred (except to the extent referenced in any filing made by the
Company with the United States Securities and Exchange Commission with respect
to a period ending on or before December 31, 2004), and between December 31,
2004 and the date hereof, neither the Borrower nor any Subsidiary of the
Borrower has entered into any material transaction outside the ordinary course
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of business except for the transactions contemplated by this Agreement and the
Material Agreements.
7.5. Title to Assets. The Borrower and its Subsidiaries have good and
marketable title to all assets necessary for or used in the operations of their
business as now conducted by them and reflected in the most recent balance sheet
as owned by them referred to in Section 7.2.1 (or the balance sheet most
recently furnished to the Lenders pursuant to Sections 6.4.1 or 6.4.2), and to
all assets acquired subsequent to the date of such balance sheet, subject to no
Liens except for Liens permitted by Section 6.7.
7.6. Operations in Conformity With Law, etc. The operations of the
Borrower and its Subsidiaries as now conducted or proposed to be conducted are
not in violation of, nor is the Borrower or its Subsidiaries in default under,
any Legal Requirement presently in effect, except for such violations and
defaults as do not and will not, in the aggregate, result, or create a material
risk of resulting, in any Material Adverse Change. The Borrower has received no
notice of any such violation or default and has no knowledge of any basis on
which the operations of the Borrower or its Subsidiaries, as now conducted and
as currently proposed to be conducted after the date hereof, would be held so as
to violate or to give rise to any such violation or default.
7.7. Litigation. Except with respect to the Congoleum Plan, the Congoleum
Plan Note and the Congoleum Plan Trust, no litigation, at law or in equity, or
any proceeding before any court, board or other governmental or administrative
agency or any arbitrator is pending or, to the knowledge of the Borrower, the
Borrower or any Guarantor, threatened which involves any material risk of any
final judgment, order or liability which, after giving effect to any applicable
insurance, has resulted, or creates a material risk of resulting, in any
Material Adverse Change or which seeks to enjoin the consummation, or which
questions the validity, of any of the transactions contemplated by this
Agreement or any other Credit Document. Except with respect to the Congoleum
Plan, the Congoleum Plan Note and the Congoleum Plan Trust, no judgment, decree
or order of any court, board or other governmental or administrative agency or
any arbitrator has been issued against or binds the Borrower or any of its
Subsidiaries which has resulted, or creates a material risk of resulting, in any
Material Adverse Change.
7.8. Authorization and Enforceability. Each of the Borrower and each other
Obligor has taken all corporate action required to execute, deliver and perform
this Agreement and each other Credit Document to which it is party. No consent
of stockholders of the Company is necessary in order to authorize the execution,
delivery or performance of this Agreement or any other Credit Document to which
a Borrower is party. Each of this Agreement and each other Credit Document
constitutes the legal, valid and binding obligation of each Obligor party
thereto and is enforceable against such Obligor in accordance with its terms.
7.9. No Legal Obstacle to Agreements. Neither the execution and delivery
of this Agreement or any other Credit Document, nor the making of any borrowings
hereunder, nor the consummation of any transaction referred to in or
contemplated by this Agreement or any other Credit Document (excluding the
transactions contemplated by the Congoleum Plan, the Congoleum Plan Trust or the
Congoleum Note), nor the fulfillment of the terms hereof or thereof or of any
other agreement, instrument, deed or lease contemplated by this Agreement or any
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other Credit Document (excluding the transactions contemplated by the Congoleum
Plan, the Congoleum Plan Trust or the Congoleum Note), has constituted or
resulted in or will constitute or result in:
(a) any breach or termination of the provisions of any
material agreement, instrument, deed or lease to which the Borrower,
any of its Subsidiaries or any other Obligor is a party or by which
it is bound, or of the Charter or By-laws of the Company, any of its
Subsidiaries or any other Obligor;
(b) the material violation of any law, statute, judgment,
decree or governmental order, rule or regulation applicable to the
Borrower, any of its Subsidiaries or any other Obligor;
(c) except for Liens under (i) the Credit Documents and (ii)
the Note Purchase Agreement, the creation under any agreement,
instrument, deed or lease of any Lien upon any of the assets of the
Borrower, any of its Subsidiaries or any other Obligor; or
(d) any redemption, retirement or other repurchase obligation
of the Borrower, any of its Subsidiaries or any other Obligor under
any Charter, By-law, agreement, instrument, deed or lease.
Except with respect to the Note Purchase Agreement and the CIBC Credit
Agreement, and for filings required in order to perfect or publish the Liens of
the Lenders under the Security Agreements or required pursuant to disclosure
obligations under the U.S. federal securities laws and the rules of the
Securities and Exchange Commission, no approval, authorization or other action
by, or declaration to or filing with, any governmental or administrative
authority or any other Person is required to be obtained or made by the
Borrower, any of its Subsidiaries or any other Obligor in connection with the
execution, delivery and performance of this Agreement or any other Credit
Document, the transactions contemplated hereby or thereby or the making of any
borrowing hereunder (excluding the transactions contemplated by the Congoleum
Plan, the Congoleum Plan Trust or the Congoleum Note).
7.10. Defaults. Neither the Borrower nor any of its Subsidiaries is in
default under any provision of its Charter or By-laws or of this Agreement or
any other Credit Document. Neither the Borrower nor any of its Subsidiaries is
in default under any provision of any agreement, instrument, deed or lease to
which it is party or by which it or its property is bound so as to result, or
create a material risk of resulting, in any Material Adverse Change.
7.11. Licenses, etc. The Borrower and its Subsidiaries have all patents,
patent applications, patent licenses, patent rights, trademarks, trademark
rights, trade names, trade name rights, copyrights, licenses, franchises,
permits, authorizations and other rights as are reasonably necessary for the
conduct of the business of the Borrower and its Subsidiaries as now conducted by
them. All of the foregoing are in full force and effect in all material
respects, and each of the Borrower and its Subsidiaries is in substantial
compliance with the foregoing without any known conflict with the valid rights
of others which has resulted, or creates a material risk of resulting, in any
Material Adverse Change.
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7.12. Pension Plans. Each Plan (other than a Multiemployer Plan) and, to
the knowledge of the Borrower and its Subsidiaries, each Multiemployer Plan is
in material compliance with the applicable provisions of ERISA and the Code.
Each Multiemployer Plan and each Plan that constitutes a "defined benefit plan"
(as defined in ERISA) are set forth in Exhibit 7.12. Each ERISA Group Person has
met all of the funding standards applicable to all Plans that are not
Multiemployer Plans, and no condition exists which would permit the institution
of proceedings to terminate any Plan that is not a Multiemployer Plan under
section 4042 of ERISA. To the knowledge of the Borrower and each Subsidiary, no
Plan that is a Multiemployer Plan is currently insolvent or in reorganization or
has been terminated within the meaning of ERISA.
7.13. Environmental Regulations. Each of the Borrower and its Subsidiaries
is in compliance in all material respects with the Clean Air Act, the Federal
Water Pollution Control Act, the Marine Protection Research and Sanctuaries Act,
RCRA, CERCLA and any other Environmental Law in effect in any jurisdiction in
which any properties of the Borrower or any of its Subsidiaries are located or
where any of them conducts its business, and with all applicable published rules
and regulations (and applicable standards and requirements) of the federal
Environmental Protection Agency and of any similar agencies in states or foreign
countries in which the Borrower or its Subsidiaries conducts its business other
than those which in the aggregate have not resulted, and do not create a
material risk of resulting, in a Material Adverse Change.
7.14. Government Regulation; Margin Stock.
7.14.1. Government Regulation. Neither the Borrower nor any of its
Subsidiaries, nor any Person controlling the Borrower or any of its
Subsidiaries or under common control with the Borrower or any of its
Subsidiaries, is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Investment Company Act,
the Interstate Commerce Act or any other statute or regulation (other than
Regulation X of the Board of Governors of the Federal Reserve System) that
regulates the incurring by the Borrower or any of its Subsidiaries of
Financing Debt as contemplated by this Agreement and the other Credit
Documents.
7.14.2. Margin Stock. Neither the Borrower nor any of its
Subsidiaries owns any Margin Stock.
7.15. Disclosure. Subject to the final sentence of this Section 7.15 and
disclosures made by the Company in filings it makes with the Securities and
Exchange Commission (the "SEC Reports"), neither this Agreement nor any other
Credit Document nor any financial statement, report, notice, mortgage,
assignment or certificate furnished or to be furnished to the Lenders or the
Agent by or on behalf of the Borrower or any of its Subsidiaries in connection
with the transactions contemplated hereby or by such Credit Document contains
any untrue statement of material fact or omits to state a material fact
necessary in order to make the statements contained herein or therein, taken as
a whole, not misleading in light of the circumstances under which they were
made. Except as disclosed in the SEC Reports, no fact is actually known to the
Borrower or any of its Subsidiaries which has resulted, or in the future (so far
as the Borrower or any of its Subsidiaries can reasonably foresee) will result,
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or creates a material risk of resulting, in any Material Adverse Change, except
to the extent that present or future general economic conditions may result in a
Material Adverse Change. Notwithstanding the foregoing, it is hereby
acknowledged that the documentation included in each of Exhibit 1(a) and Exhibit
1(b) is not effective as of the date hereof, and that such documentation is,
accordingly, forward looking and reflective of present intentions as to future
transactions, provided, however, that the foregoing does not limit in any way
the rights of the Agent under Section 6.16 hereof.
8. Defaults.
8.1. Events of Default. The following events are referred to as "Events of
Default":
8.1.1. Payment. The Borrower shall fail to make any payment in
respect of: (a) interest or any fee on or in respect of any of the Credit
Obligations owed by it as the same shall become due and payable, and such
failure shall continue for a period of three Banking Days, or (b) any
Credit Obligation with respect to payments made by any Domestic Letter of
Credit Issuer under any Domestic Letter of Credit or any draft drawn
thereunder within three Banking Days, or (c) any Credit Obligation with
respect to payments made by any Canadian Letter of Credit Issuer under any
Canadian Letter of Credit or any draft drawn thereunder within three
Banking Days, or (d) principal of any of the Credit Obligations owed by it
as the same shall become due, whether at maturity or by acceleration or
otherwise.
8.1.2. Specified Covenants. The Borrower or any of its Subsidiaries,
as applicable, shall fail to perform or observe any of the provisions of
Sections 6.5 through 6.16.
8.1.3. Other Covenants. The Borrower, any of its Subsidiaries or any
other Obligor shall fail to perform or observe any other covenant,
agreement or provision to be performed or observed by it under this
Agreement or any other Credit Document, and such failure shall not be
rectified or cured to the written satisfaction of the Required Lenders
within 30 days after the earlier of (a) notice thereof by the Domestic
Agent or the Canadian Agent to the Borrower or (b) a Financial Officer
shall have actual knowledge thereof.
8.1.4. Representations and Warranties. Any representation or
warranty of or with respect to the Borrower, any of its Subsidiaries or
any other Obligor made to the Lenders or the Domestic Agent or Canadian
Agent in, pursuant to or in connection with this Agreement or any other
Credit Document, or in any financial statement, report, notice, mortgage,
assignment or certificate delivered to the Domestic Agent or Canadian
Agent or any of the Lenders by the Borrower, any of its Subsidiaries or
any other Obligor in connection herewith or therewith, shall be false in
any material respect on the date as of which it was made.
8.1.5. Material Financing Debt Cross Default, etc.
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(a) The Borrower or any of its Subsidiaries shall fail to make
any payment when due (after giving effect to any applicable grace
periods) in respect of any Material Financing Debt;
(b) the Borrower or any of its Subsidiaries shall fail to
perform or observe the terms of any agreement or instrument relating
to any Material Financing Debt, and such failure shall continue,
without having been duly cured, waived or consented to, beyond the
period of grace, if any, specified in such agreement or instrument,
and such failure shall permit the acceleration of such Material
Financing Debt;
(c) all or any part of any Material Financing Debt of the
Borrower or any of its Subsidiaries shall be accelerated or shall
become due or payable prior to its stated maturity for any reason
whatsoever (except with respect to voluntary prepayments or
mandatory contingent payments that do not result from a default
thereunder or the occurrence of an event similar to an Event of
Default hereunder);
(d) any Lien on any property of the Borrower or any of its
Subsidiaries securing any Material Financing Debt shall be enforced
by foreclosure or similar action; or
(e) any holder of any Material Financing Debt shall exercise
any right of rescission with respect to the issuance thereof or put,
mandatory prepayment or repurchase rights against the Borrower or
any of its Subsidiaries with respect to such Material Financing Debt
(other than any such rights that may be satisfied with "payment in
kind" notes or other similar securities).
8.1.6. Ownership; Liquidation; etc.
(a) the Company shall cease to own, directly or indirectly,
the capital stock of its Subsidiaries in the percentage, or a
greater percentage, as currently owned, except to the extent
permitted by Section 6.10.1; or
(b) Any member of the Senior Management Team shall cease to be
actively involved in the executive management of the Company and a
replacement reasonably satisfactory to the Required Lenders shall
not have been selected within 180 days; or
(c) a majority of the board of directors of the Company shall
be neither (i) directors of the Company as of the date hereof nor
(ii) nominated, appointed or approved by directors of the Company as
of the date hereof nor (iii) nominated, appointed or approved by
directors described in clause (ii) above; or
(d) any Person, together with "affiliates" and "associates" of
such Person within the meaning of Rule 12b-2 of the Exchange Act, or
any "group" including such Person under sections 13(d) and 14(d) of
the Exchange Act, other than the Persons described in paragraph (b)
above and any Person with whom any such Person may be deemed to be
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part of such a "group", shall acquire after the date hereof (i)
beneficial ownership within the meaning of Rule 13d-3 of the
Exchange Act of 33% or more of either the voting stock or total
equity capital of the Company or (ii) direct or indirect control of
the Company through a shareholder, voting or similar agreement or
arrangement; or
(e) the Borrower or any of its Subsidiaries or any other
Obligor shall initiate any action to dissolve, liquidate or
otherwise terminate its existence.
8.1.7. Enforceability, etc. Any Credit Document shall cease for any
reason (other than the scheduled termination thereof in accordance with
its terms) to be enforceable in accordance with its terms or in full force
and effect; or any party to any Credit Document shall so assert in a
judicial or similar proceeding; or the security interests created by this
Agreement or any other Credit Documents shall cease to be enforceable and
of the same effect and priority purported to be created hereby.
8.1.8. Judgments. Except with regard to judgments in connection with
the Congoleum Plan, the Congoleum Plan Trust and the Congoleum Plan Note,
a final judgment (a) which, with other outstanding final judgments against
the Company and its Subsidiaries, exceeds an aggregate of $500,000 in
excess of applicable insurance coverage shall be rendered against the
Company or any of its Subsidiaries, or (b) which grants injunctive relief
that results, or creates a material risk of resulting, in a Material
Adverse Change and in either case if (i) within 30 days after entry
thereof, such judgment shall not have been discharged or execution thereof
stayed pending appeal or (ii) within 30 days after the expiration of any
such stay, such judgment shall not have been discharged (it being
understood that the Congoleum Plan and proceedings, settlements and
transactions in connection therewith shall be excluded for the purposes
hereof).
8.1.9. ERISA. Any "reportable event" (as defined in section 4043 of
ERISA) shall have occurred that reasonably could be expected to result in
termination of a Plan or the appointment by the appropriate United States
District Court of a trustee to administer any Plan or the imposition of a
Lien in favor of a Plan.
8.1.10. Bankruptcy, etc. The Borrower, any of its Subsidiaries or
any other Obligor (it being understood that the Congoleum Plan and
proceedings, settlements and transactions in connection therewith shall be
excluded for the purposes hereof) shall:
(a) commence a voluntary case under the Bankruptcy Code or
authorize, by appropriate proceedings of its board of directors or
other governing body, the commencement of such a voluntary case;
(b) (i) have filed against it a petition commencing an
involuntary case under the Bankruptcy Code that shall not have been
dismissed within 60 days after the date on which such petition is
filed, or (ii) file an answer or other pleading within such 60-day
period admitting or failing to deny the material allegations of such
a petition or seeking, consenting to or acquiescing in the relief
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therein provided, or (iii) have entered against it an order for
relief in any involuntary case commenced under the Bankruptcy Code;
(c) seek relief as a debtor under any applicable law, other
than the Bankruptcy Code, of any jurisdiction relating to the
liquidation or reorganization of debtors or to the modification or
alteration of the rights of creditors, or consent to or acquiesce in
such relief;
(d) have entered against it an order by a court of competent
jurisdiction (i) finding it to be bankrupt or insolvent, (ii)
ordering or approving its liquidation or reorganization as a debtor
or any modification or alteration of the rights of its creditors or
(iii) assuming custody of, or appointing a receiver or other
custodian for, all or a substantial portion of its property; or
(e) make an assignment for the benefit of, or enter into a
composition with, its creditors, or appoint, or consent to the
appointment of, or suffer to exist a receiver or other custodian
for, all or a substantial portion of its property.
8.2. Certain Actions Following an Event of Default. If any one or more
Events of Default shall occur and be continuing, then in each and every such
case:
8.2.1. Terminate Obligation to Extend Credit. Upon written request
of the Required Lenders, the Agent shall terminate the obligations of the
Lenders to make any further extensions of credit under the Credit
Documents by furnishing notice of such termination to the Borrower;
provided, however, that if a Bankruptcy Default shall have occurred, the
obligations of the Lenders to make any further extensions of credit under
the Credit Documents shall automatically terminate.
8.2.2. Specific Performance; Exercise of Rights. Upon written
request of the Required Lenders, the Domestic Agent and/or the Canadian
Agent, as applicable, shall proceed to protect and enforce the Domestic
Lenders' or the Canadian Lenders' rights by suit in equity, action at law
and/or other appropriate proceeding, either for specific performance of
any covenant or condition contained in this Agreement or any other Credit
Document or in any instrument or assignment delivered to such Lenders
pursuant to this Agreement or any other Credit Document, or in aid of the
exercise of any power granted in this Agreement or any other Credit
Document or any such instrument or assignment.
8.2.3. Acceleration. Upon written request of the Required Lenders,
the Agent shall by notice in writing to the Borrower (a) declare all or
any part of the unpaid balance of the Credit Obligations then outstanding
to be immediately due and payable, and (b) require the Borrower
immediately to deposit with the Domestic Agent and/or the Canadian Agent,
as the case may be, in cash an amount equal to the then Letter of Credit
Exposure (which cash shall be held and applied as provided in Section
4.3), and thereupon such unpaid balance or part thereof and such amount
equal to the Letter of Credit Exposure shall become so due and payable
without presentation, protest or further demand or notice of any kind, all
of which are hereby expressly waived; provided, however, that if a
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Bankruptcy Default shall have occurred, the unpaid balance of the Credit
Obligations shall automatically become immediately due and payable.
8.2.4. Enforcement of Payment; Setoff. Upon written request of the
Required Lenders, the Domestic Agent and/or the Canadian Agent, as the
case may be, shall proceed to enforce payment of the Credit Obligations in
such manner as it may elect, to cancel, or instruct other Domestic Letter
of Credit Issuers and Canadian Letter of Credit Issuers to cancel, any
outstanding Domestic Letters of Credit and Canadian Letters of Credit
which permit the cancellation thereof. The Lenders may offset and apply
toward the payment of the Credit Obligations (and/or toward the curing of
any Event of Default) any Indebtedness from the Lenders to the respective
Obligors, including any Indebtedness represented by deposits in any
account maintained with the Lenders, regardless of the adequacy of any
security for the Credit Obligations. The Lenders shall have no duty to
determine the adequacy of any such security in connection with any such
offset.
8.2.5. Cumulative Remedies. To the extent not prohibited by
applicable law which cannot be waived, all of the Lenders' rights
hereunder and under each other Credit Document shall be cumulative.
8.3. Annulment of Defaults. Once an Event of Default has occurred, such
Event of Default shall be deemed to exist and be continuing for all purposes of
the Credit Documents until the Required Lenders or the Agent (with the consent
of the Required Lenders) shall have waived such Event of Default in writing,
stated in writing that the same has been cured to such Lenders' reasonable
satisfaction or entered into an amendment to this Agreement which by its express
terms cures such Event of Default, at which time such Event of Default shall no
longer be deemed to exist or to have continued. No such action by the Lenders or
the Agent shall extend to or affect any subsequent Event of Default or impair
any rights of the Lenders upon the occurrence thereof. The making of any
extension of credit during the existence of any Default or Event of Default
shall not constitute a waiver thereof.
8.4. Waivers. To the extent that such waiver is not prohibited by the
provisions of applicable law that cannot be waived, each of the Borrower and the
other Obligors waives:
(a) all presentments, demands for performance, notices of
nonperformance (except to the extent required by this Agreement or
any other Credit Document), protests, notices of protest and notices
of dishonor;
(b) any requirement of diligence or promptness on the part of
the Agent or any Lender in the enforcement of its rights under this
Agreement or any other Credit Document;
(c) any and all notices of every kind and description which
may be required to be given by any statute or rule of law; and
(d) any defense (other than indefeasible payment in full)
which it may now or hereafter have with respect to its liability
under this Agreement or any other Credit Document or with respect to
the Credit Obligations.
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9. Expenses; Indemnity.
9.1. Expenses. Whether or not the transactions contemplated hereby shall
be consummated, subject to Section 9.5, the Borrower will pay:
(a) all reasonable expenses of the Agent (including the
out-of-pocket expenses related to forming the group of Lenders and
reasonable fees and disbursements of the counsel to the Agent) in
connection with the negotiation, preparation and duplication of this
Agreement and each other Credit Document, examinations by, and
reports of, the Agent's commercial financial examiners, fixed asset
appraisers and environmental consultants, the annual Domestic
Agent's fee of $25,000 and amendments, waivers, consents and other
operations hereunder and thereunder;
(b) all other reasonable expenses incurred by the Agent, the
Lenders or the holder of any Credit Obligation in connection with
the enforcement of any rights hereunder or under any other Credit
Document or any work-out negotiations relating to the Credit
Obligations, including costs of collection and reasonable attorneys'
fees (including a reasonable allowance for the hourly cost of
attorneys employed by the Lenders on a salaried basis) and expenses.
9.2. General Indemnity. Subject to Section 9.5, the Borrower shall
indemnify the Lenders and the Agent and hold them harmless from any liability,
loss or damage resulting from the violation by the Borrower of Section 2.3. In
addition, subject to Section 9.5, the Borrower shall indemnify each Lender, the
Agent, each of the Lenders' or the Agent's directors, officers, employees,
agents, attorneys, accountants, consultants and Affiliates (each Lender, the
Agent and each of such directors, officers, employees, agents, attorneys,
accountants, consultants and Affiliates is referred to as an "Indemnified
Party") and hold each of them harmless from and against any and all claims,
damages, liabilities and reasonable expenses (including reasonable fees and
disbursements of counsel with whom any Indemnified Party may consult in
connection therewith and all reasonable expenses of litigation or preparation
therefor) which any Indemnified Party may incur or which may be asserted against
any Indemnified Party in connection with (a) the Indemnified Party's compliance
with or contest of any subpoena or other process issued against it in any
proceeding involving the Borrower or any of its Subsidiaries or their
Affiliates, (b) any litigation or investigation involving the Borrower, any of
its Subsidiaries or their Affiliates, or any officer, director or employee
thereof, or (c) this Agreement, any other Credit Document or any transaction
contemplated hereby or thereby; provided, however, that the foregoing indemnity
shall not apply (i) to litigation commenced by the Borrower against the Lenders
or the Agent which seeks enforcement of any of the rights of the Borrower
hereunder or under any other Credit Document and is determined adversely to the
Lenders or the Agent in a final nonappealable judgment or (ii) to any
Indemnified Party to the extent such claims, damages, liabilities and expenses
are determined in a final, nonappealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's own gross negligence
or willful misconduct. THE BORROWER EXPRESSLY ACKNOWLEDGES THAT IT MAY BE
REQUIRED TO INDEMNIFY PERSONS AGAINST THEIR OWN NEGLIGENCE.
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9.3. Indemnity With Respect to Letters of Credit. Subject to Section 9.5,
the Borrower shall indemnify each Domestic Letter of Credit Issuer and each
Canadian Letter of Credit Issuer and their correspondents and hold each of them
harmless from and against any and all claims, losses, liabilities, damages and
reasonable expenses (including reasonable attorneys' fees) arising from or in
connection with any Domestic Letter of Credit or Canadian Letter of Credit,
including any such claim, loss, liability, damage or expense arising out of any
transfer, sale, delivery, surrender or endorsement of any invoice, ▇▇▇▇ of
lading, warehouse receipt or other document at any time held by the Agent, such
Domestic Letter of Credit Issuer or such Canadian Letter of Credit Issuer or
held for their respective accounts by any of their correspondents, in connection
with any Domestic Letter of Credit or Canadian Letter of Credit, except to the
extent such claims, losses, liabilities, damages and expenses are determined in
a final, nonappealable judgment by a court of competent jurisdiction to have
resulted from gross negligence or willful misconduct on the part of the Agent or
any other Domestic Letter of Credit Issuer or Canadian Letter of Credit Issuer.
9.4. Taxes.
9.4.1. Excluded Taxes.
(a) Except as provided in this Section 9.4, any and all
payments by the Borrower and Guarantors to or for the account of the
Domestic Agent, Canadian Agent or any Lender under any Credit
Document shall be made free and clear of and without deduction for
any and all present or future taxes, duties, levies, imposts,
deductions, assessments, fees, withholdings or similar charges, and
all liabilities with respect thereto, including without limitation
all taxes imposed pursuant to Part XIII of the Income Tax Act
(Canada) and any withholding or other taxes imposed on any Lender
under Canadian law, excluding, in the case of the Domestic Agent,
Canadian Agent and each Lender, taxes imposed on or measured by its
net income, and franchise taxes imposed on it (in lieu of net income
taxes), by the jurisdiction (or any political subdivision thereof)
under the Laws of which Domestic Agent, Canadian Agent or such
Lender, as the case may be, is organized or maintains its lending
office from which the applicable Loans are made hereunder or where
the Domestic Agent, Canadian Agent or such Lender, as the case may
be, maintains a permanent establishment or similar business
connection (a "Connecting Factor"), to the extent that such taxes
are imposed as a result of or with respect to such Connecting Factor
(or in the case of Canada, enters into transactions contemplated by
this Credit Agreement in the course of carrying on business in
Canada within the meaning of the Income Tax Act (Canada)) and
further excluding, in the case of each Canadian Lender, taxes
imposed on or measured by such Canadian Lender's capital by the
jurisdiction (or any political subdivision thereof) under the laws
of which such Lender is organized or maintains its lending office
from which Canadian Revolving Loans are made hereunder or has a
Connecting Factor, to the extent such tax is imposed as a result of
or with respect to such Connecting Factor (or in the case of Canada,
enters into transactions contemplated by this Credit Agreement in
the course of carrying on business in Canada within the meaning of
the Income Tax Act (Canada)) and further excluding any branch taxes
imposed under Section 219 of the Income Tax Act (Canada) (all such
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excluded Taxes being hereinafter referred to as "Excluded Taxes",
and all such non-excludable taxes, duties, levies, imposts,
deductions, assessments, fees, withholdings or similar charges, and
liabilities being hereinafter referred to as a "Tax" or "Taxes"). If
any Borrower or Guarantor shall be required by any Legal
Requirements to deduct any Taxes from or in respect of any sum
payable under any Credit Document to Domestic Agent or Canadian
Agent or any Lender: (i) the sum payable shall be increased as
necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section
9.4), each of Domestic Agent, Canadian Agent and such Lender
receives an amount equal to the sum it would have received had no
such deductions been made; (ii) the Borrower and Guarantors shall
make such deductions; (iii) the Borrower and Guarantors shall pay
the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable Laws; and (iv) within thirty
(30) days after the date of such payment, the Borrower and
Guarantors shall furnish to Domestic Agent or Canadian Agent, as
applicable (which shall forward the same to such Lender) evidence of
the payment thereof.
(b) Notwithstanding the foregoing, (i) in the event that the
Canadian Lender assigns all or any portion of its Canadian Revolving
Loan to any Person that is not an Eligible Canadian Assignee, if
such assignment is made at a time when no Event of Default has
occurred and is continuing, then unless otherwise agreed by the
Guarantors, no Borrower or Guarantor shall be responsible for
payment of any Taxes or other amounts payable pursuant to Section
9.4.1(a) on account of such Taxes that are imposed as a result of
the fact that such assignee is not an Eligible Canadian Assignee,
and (ii) in the event that a Canadian Lender designates a new
lending office with the result that such Canadian Lender is no
longer an Eligible Canadian Assignee (other than a designation done
at the request of the Guarantors or Borrower pursuant to Section
9.4.3), if such designation is made at a time when no Event of
Default has occurred and is continuing, then unless otherwise agreed
by the Guarantors, no Borrower or Guarantor shall be responsible for
payment of any Taxes or other amounts payable pursuant to Sections
9.4.1, 9.4.3 or 9.4.4 on account of such Taxes that are imposed as a
result of such designation.
9.4.2. Other Taxes. In addition, the Borrower and Guarantors agree
to pay any and all present or future stamp, court or documentary taxes and
any other excise or property taxes or charges or similar levies (other
than Excluded Taxes) which arise from any payment made under any Credit
Document or from the execution, delivery, performance, enforcement or
registration of, or otherwise with respect to, any Loan Document
(hereinafter referred to as "Other Taxes").
9.4.3. Gross Up. If any Borrower or Guarantor shall be required to
deduct or if the Domestic Agent, the Canadian Agent or any Lender shall be
required to pay any Taxes or Other Taxes from or with respect of any sum
payable under any Credit Document to the Domestic Agent, Canadian Agent or
any Lender, such Borrower or Guarantor shall also pay to the Domestic
Agent, Canadian Agent or to such Lender, as the case may be, at the time
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such sum is paid, such additional amount that the Domestic Agent, Canadian
Agent or such Lender specifies is necessary to preserve the after-tax
yield (after factoring in all Taxes, including Excluded Taxes) that the
Domestic Agent, Canadian Agent or such Lender would have received if such
Taxes or Other Taxes had not been imposed.
9.4.4. Indemnification.
(a) Each Domestic Borrower and Guarantor agrees to indemnify
the Domestic Agent and each Domestic Lender for (i) the full amount
of Taxes and Other Taxes (including any Taxes or Other Taxes imposed
or asserted by any jurisdiction on amounts payable under this
Section 9.4) paid by the Domestic Agent and such Lender, (ii)
amounts payable under Section 9.4.3, and (iii) any liability
(including additions to tax, penalties, interest and expenses)
arising therefrom or with respect thereto.
(b) Each Canadian Borrower and Guarantor agrees to indemnify
the Canadian Agent and each Canadian Lender for (i) the full amount
of Taxes and Other Taxes (including any Taxes or Other Taxes imposed
or asserted by any jurisdiction on amounts payable under this
Section 9.4) paid by the Canadian Agent and such Lender, (ii)
amounts payable under Section 9.4.3, and (iii) any liability
(including additions to tax, penalties, interest and expenses)
arising therefrom or with respect thereto, in each case whether or
not such Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant governmental authority. Payment under this
Section 9.4.4 shall be made within thirty (30) days after the date
the Lender, Domestic Agent or Canadian Agent makes a demand
therefor. The obligations of the Borrower under this Section 9.4 are
several and not joint.
9.4.5. Exception. If a Tax would not be imposed but for the fact
that the representation made by the Canadian Agent and the Canadian Lender
in Section 10.11 is not true at any time, then Sections 9.4.1 through
9.4.4 will not apply with respect to that Tax.
9.5. Separate Obligations of Canadian Borrower. Notwithstanding any other
provision of this Agreement to the contrary, except upon the occurrence of an
Event of Default that is continuing,
9.5.1. all liabilities, obligations and other amounts payable under
or in connection with this Agreement or any other Credit Document by the
Canadian Borrower (whether on account of principal, interest, fees,
indemnities, expenses or otherwise and including without limitation
amounts provided for in Sections 3.2.4, 3.4, 3.5 and 9 hereof), shall be
deemed to be owing and payable to and for the account of the Canadian
Agent or the Canadian Lenders only;
9.5.2. in no event shall the Canadian Borrower be liable (a) for any
Credit Obligations (whether on account of principal, interest, fees,
indemnities, expenses or otherwise) other than Credit Obligations owing to
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the Canadian Agent or the Canadian Lenders, or (b) for any covenant,
obligation, agreement or liability of the Domestic Borrower under this
Agreement; and
9.5.3. all amounts paid or credited by or on behalf of the Canadian
Borrower under the Canadian Revolving Loans and under any Credit Document
shall be paid to the Canadian Agent or a Canadian Lender.
10. Operations; Agent.
10.1. Interests in Credits. The Percentage Interest of each Lender in the
respective portions of the Loan and Letter of Credit Exposure, and the related
Commitments, shall be computed based on the maximum principal amount for each
Lender as set forth in the Register, as from time to time in effect. The current
Percentage Interests are set forth in Exhibit 10.1, which may be updated by the
Domestic Agent from time to time to conform to the Register.
10.2. Agent's Authority to Act, etc. Each of the Domestic Lenders appoints
and authorizes Fleet to act for the Domestic Lenders as the Domestic Lenders'
Agent and each of the Canadian Lenders appoints and authorizes Bank of America
Canada, to act for the Canadian Lenders as the Canadian Lenders' Agent in
connection with the transactions contemplated by this Agreement and the other
Credit Documents on the terms set forth herein. All action in connection with
the enforcement of, or the exercise of any remedies (other than the Lenders'
rights of set-off as provided in Section 8.2.4 or in any Credit Document) in
respect of the Credit Obligations and Credit Documents shall be taken by the
Domestic Agent and/or the Canadian Agent, as the case may be.
10.2.1. Borrower to Pay Agent, etc. The Borrower and each Guarantor
shall be fully protected in making all payments in respect of the Credit
Obligations to the Domestic Agent and/or the Canadian Agent, as the case
may be, in relying upon consents, modifications and amendments executed by
the Agent purportedly on the Lenders' behalf, and in dealing with the
Agent as herein provided. The Domestic Agent and/or the Canadian Agent, as
the case may be, may charge the accounts of the Borrower, on the dates
when the amounts thereof become due and payable, with the amounts of the
principal of and interest on the Loan, any amounts paid by the Domestic
Letter of Credit Issuers or Canadian Letter of Credit Issuers to third
parties under Domestic Letters of Credit or Canadian or drafts presented
thereunder, commitment fees, Domestic Letter of Credit fees, Canadian
Letter of Credit fees and all other fees and amounts owing under any
Credit Document.
10.3. Power of Attorney for Quebec Purposes. Without limiting the powers
of Bank of America Canada under this Agreement and the Canadian Security
Agreement, each Canadian Lender and Bank of America Canada acknowledges and
agrees that Bank of America Canada shall, for the purposes of holding any
security granted under the Canadian Security Agreement pursuant to the laws of
the Province of Quebec to secure payment of bonds or any similar instruments
(collectively, the "Bonds"), 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 Canadian Lenders as well as holders and
depositaries of the Bonds. Each of the Canadian Lenders and Bank of America
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Canada constitutes, to the extent necessary, Bank of America Canada as the
holder of such irrevocable power of attorney (fonde de pouvoir) in order to hold
security granted under the Canadian Security Agreement in the Province of Quebec
to secure payment of the Bonds. Each successor Canadian Lender and successor to
Bank of America Canada shall be deemed to have confirmed and ratified the
constitution of Bank of America Canada as the holder of such irrevocable power
of attorney (fonde de pouvoir). Furthermore, Bank of America Canada agrees to
act in the capacity of the holder and depositary of the Bonds for the benefit of
all present and future Canadian Lenders. Notwithstanding the provisions of
Section 32 of the Special Powers of Legal Persons Act (Quebec), Bank of America
Canada may acquire and be the holder of a Bond. Each of the Canadian Lenders and
the Canadian Borrower acknowledges that each of the Bonds executed by it
constitutes a title of indebtedness, as such term is used in Article 2692 of the
Civil Code of Quebec. Notwithstanding the provisions of Section 15.5, the
provisions of this paragraph shall be governed by and interpreted in accordance
with the laws of the Province of Quebec and the federal laws of Canada
applicable therein.
10.4. Lender Operations for Advances, Letters of Credit, etc.
10.4.1. Advances. On each Closing Date, each Lender shall advance to
the Domestic Agent or the Canadian Agent, as the case may be, in
immediately available funds such Lender's Percentage Interest in the
portion of the Loan advanced on such Closing Date prior to 12:00 noon
(Boston time or Toronto time, as the case may be). If such funds are not
received at such time, but all applicable conditions set forth in Section
5 have been satisfied, each Lender authorizes and requests the Domestic
Agent or the Canadian Agent, as the case may be, to advance for the
Lender's account, pursuant to the terms hereof, the Lender's respective
Percentage Interest in such portion of the Loan and agrees to reimburse
the Domestic Agent or the Canadian Agent, as the case may be, in
immediately available funds for the amount thereof prior to 2:00 p.m.
(Boston time or Toronto time, as the case may be) on the day any portion
of the Loan is advanced hereunder; provided, however, that the Domestic
Agent or the Canadian Agent, as the case may be, is not authorized to make
any such advance for the account of any Lender who has previously notified
the Domestic Agent or the Canadian Agent in writing that such Lender will
not be performing its obligations to make further advances hereunder; and
provided, further, that the Domestic Agent or the Canadian Agent shall be
under no obligation to make any such advance.
10.4.2. Domestic Letters of Credit. Each of the Domestic Lenders
authorizes and requests each Domestic Letter of Credit Issuer to issue the
Domestic Letters of Credit provided for in Section 2.3 and to grant each
Domestic Lender a participation in each of such Domestic Letters of Credit
in an amount equal to its Percentage Interest in the amount of each such
Domestic Letter of Credit. Promptly upon the request of the Domestic
Letter of Credit Issuer, each Domestic Lender shall reimburse the Domestic
Letter of Credit Issuer in immediately available funds for such Domestic
Lender's Percentage Interest in the amount of all obligations to third
parties incurred by the Domestic Letter of Credit Issuer in respect of
each Domestic Letter of Credit and each draft accepted under a Domestic
Letter of Credit to the extent not reimbursed by the Domestic Borrower by
2:00 p.m. (Boston time or Toronto time, as the case may be) on the Banking
Day when due. The Domestic Letter of Credit Issuer will notify each
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Domestic Lender of the issuance of any Domestic Letter of Credit, the
amount and date of payment of any draft drawn or accepted under a Domestic
Letter of Credit and whether in connection with the payment of any such
draft the amount thereof was added to the Domestic Revolving Loan or was
reimbursed by the Domestic Borrower.
10.4.3. Canadian Letters of Credit. Each of the Canadian Lenders
authorizes and requests each Canadian Letter of Credit Issuer to issue the
Canadian Letters of Credit provided for in Section 2.4 and to grant each
Canadian Lender a participation in each of such Canadian Letters of Credit
in an amount equal to its Percentage Interest in the amount of each such
Canadian Letter of Credit. Promptly upon the request of the Canadian
Letter of Credit Issuer, each Canadian Lender shall reimburse the Canadian
Letter of Credit Issuer in immediately available funds for such Canadian
Lender's Percentage Interest in the amount of all obligations to third
parties incurred by the Canadian Letter of Credit Issuer in respect of
each Canadian Letter of Credit and each draft accepted under a Canadian
Letter of Credit to the extent not reimbursed by the Canadian Borrower by
2:00 p.m. (Toronto time) on the Banking Day when due. The Canadian Letter
of Credit Issuer will notify each Canadian Lender of the issuance of any
Canadian Letter of Credit, the amount and date of payment of any draft
drawn or accepted under a Canadian Letter of Credit and whether in
connection with the payment of any such draft the amount thereof was added
to the Canadian Revolving Loan or was reimbursed by the Canadian Borrower.
10.4.4. Agent to Allocate Payments, etc. All payments of principal
and interest in respect of the extensions of credit made pursuant to this
Agreement, reimbursement of amounts paid by any Domestic Letter of Credit
Issuer or Canadian Letter of Credit Issuer to third parties under Domestic
Letters of Credit or Canadian Letters of Credit or drafts presented
thereunder, commitment fees, Domestic Letter of Credit fees, Canadian
Letter of Credit fees and other fees under this Agreement shall, as a
matter of convenience, be made by the Borrower and the Guarantors to the
Domestic Agent or the Canadian Agent, as the case may be, in immediately
available funds by noon (Boston time or Toronto time, as the case may be)
on any Banking Day. The share of each Lender shall be credited to such
Lender by the Domestic Agent or the Canadian Agent, as the case may be, in
immediately available funds by 2:00 p.m. (Boston time or Toronto time, as
the case may be) on such Banking Day in such manner that the principal
amount of the Credit Obligations to be paid shall be paid proportionately
in accordance with the Lenders' respective Percentage Interests in such
Credit Obligations, except as otherwise provided in this Agreement. Under
no circumstances shall any Lender be required to produce or present its
Notes as evidence of its interests in the Credit Obligations in any action
or proceeding relating to the Credit Obligations.
10.4.5. Nonperforming Lenders. In the event that any Lender fails to
reimburse the Domestic Agent or the Canadian Agent, as the case may be,
pursuant to Sections 10.4.1, 10.4.2 or 10.4.3 for the Percentage Interest
of such lender (a "Nonperforming Lender") in any credit advanced by the
Domestic Agent or the Canadian Agent pursuant hereto, overdue amounts (the
"Delinquent Payment") due from the Nonperforming Lender to the Domestic
Agent or the Canadian Agent shall bear interest, payable by the
Nonperforming Lender on demand, at a per annum rate equal to (a) the
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Federal Funds Rate for the first three days overdue and (b) the sum of 2%
plus the Federal Funds Rate for any longer period. Such interest shall be
payable to the Domestic Agent or the Canadian Agent, as the case may be,
for its own account for the period commencing on the date of the
Delinquent Payment and ending on the date the Nonperforming Lender
reimburses the Domestic Agent of the Canadian Agent on account of the
Delinquent Payment (to the extent not paid by any Obligor as provided
below) and the accrued interest thereon (the "Delinquency Period"),
whether pursuant to the assignments referred to below or otherwise. Upon
notice by the Domestic Agent or the Canadian Agent, as the case may be,
the Domestic Borrower or the Canadian Borrower, as the case may be, will
pay to the Domestic Agent or the Canadian Agent, as the case may be, the
principal (but not the interest) portion of the Delinquent Payment. During
the Delinquency Period, in order to make reimbursements for the Delinquent
Payment and accrued interest thereon, the Nonperforming Lender shall be
deemed to have assigned to the Domestic Agent of the Canadian Agent all
interest, commitment fees and other payments made by the Borrower under
Section 3 that would have thereafter otherwise been payable under the
Credit Documents to the Nonperforming Lender. During any period in which
any Nonperforming Lender is not performing its obligations to extend
credit under Section 2, the Nonperforming Lender shall be deemed to have
assigned to each Lender that is not a Nonperforming Lender (a "Performing
Lender") all principal and other payments made by the Borrower under
Section 4 that would have thereafter otherwise been payable under the
Credit Documents to the Nonperforming Lender. The Domestic Agent or the
Canadian Agent, as the case may be, shall credit a portion of such
payments to each Performing Lender in an amount equal to the Percentage
Interest of such Performing Lender in an amount equal to the Percentage
Interest of such Performing Lender divided by one minus the Percentage
Interest of the Nonperforming Lender until the respective portions of the
Loan owed to all the Lenders are the same as the Percentage Interests of
the Lenders immediately prior to the failure of the Nonperforming Lender
to perform its obligations under Section 2. The foregoing provisions shall
be in addition to any other remedies the Domestic Agent or the Canadian
Agent, as the case may be, the Performing Lenders or the Borrower may have
under law or equity against the Nonperforming Lender as a result of the
Delinquent Payment or as a result of its failure to perform its
obligations under Section 2.
10.5. Sharing of Payments, etc. Each Lender agrees that (a) if by
exercising any right of set-off or counterclaim or otherwise, it shall receive
payment of (i) a proportion of the aggregate amount due with respect to its
Percentage Interest in the Loan and Letter of Credit Exposure which is greater
than (ii) the proportion received by any other Lender in respect of the
aggregate amount due with respect to such other Lender's Percentage Interest in
the Loan and Letter of Credit Exposure and (b) if such inequality shall continue
for more than 10 days, the Lender receiving such proportionately greater payment
shall purchase participations in the Percentage Interests in the Loan and Letter
of Credit Exposure held by the other Lenders, and such other adjustments shall
be made from time to time (including rescission of such purchases of
participations in the event the unequal payment originally received is recovered
from such Lender through bankruptcy proceedings or otherwise), as may be
required so that all such payments of principal and interest with respect to the
Loan and Letter of Credit Exposure held by the Lenders shall be shared by the
Lenders pro rata in accordance with their respective Percentage Interests;
provided, however, that this Section 10.5 shall not impair the right of any
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Lender to exercise any right of set-off or counterclaim it may have and to apply
the amount subject to such exercise to the payment of Indebtedness of any
Obligor other than such Obligor's Indebtedness with respect to the Loan and
Letter of Credit Exposure. Each Lender that grants a participation in the Credit
Obligations to a Credit Participant shall require as a condition to the granting
of such participation that such Credit Participant agree to share payments
received in respect of the Credit Obligations as provided in this Section 10.5.
The provisions of this Section 10.5 are for the sole and exclusive benefit of
the Lenders and no failure of any Lender to comply with the terms hereof shall
be available to any Obligor as a defense to the payment of the Credit
Obligations.
10.6. Agent's Resignation. The Domestic Agent or the Canadian Agent may
resign at any time by giving at least 60 days' prior written notice of its
intention to do so to each of the Lenders and the Borrower and upon the
appointment by the Required Lenders of a successor Domestic Agent or the
Canadian Agent reasonably satisfactory to the Borrower. After any retiring
Domestic Agent or Canadian Agent's resignation hereunder as Domestic Agent or
Canadian Agent, as the case may be, or the removal hereunder of any successor
Domestic Agent or Canadian Agent, the provisions of this Agreement shall
continue to inure to the benefit of such retiring or removed Domestic Agent or
Canadian Agent as to any actions taken or omitted to be taken by it while it was
Domestic Agent or Canadian Agent under this Agreement.
10.7. Concerning the Agent.
10.7.1. Action in Good Faith, etc. The Agent and its officers,
directors, employees and agents shall be under no liability to any of the
Lenders or to any future holder of any interest in the Credit Obligations
for any action or failure to act taken or suffered in good faith, and any
action or failure to act in accordance with an opinion of its counsel
shall conclusively be deemed to be in good faith. The Agent shall in all
cases be entitled to rely, and shall be fully protected in relying, on
instructions given to the Agent by the Required Lenders.
10.7.2. No Implied Duties, etc. The Agent shall have and may
exercise such powers as are specifically delegated to the Agent under this
Agreement or any other Credit Document together with all other powers
incidental thereto. The Agent shall have no implied duties to any Person
or any obligation to take any action under this Agreement or any other
Credit Document except for action specifically provided for in this
Agreement or any other Credit Document to be taken by the Agent.
10.7.3. Validity, etc. The Agent shall not be responsible to any
Lender or any future holder of any interest in the Credit Obligations (a)
for the legality, validity, enforceability or effectiveness of this
Agreement or any other Credit Document, (b) for any recitals, reports,
representations, warranties or statements contained in or made in
connection with this Agreement or any other Credit Document or (c) for the
existence or value of any assets included in any security for the Credit
Obligations.
10.7.4. Compliance. The Agent shall not be obligated to ascertain or
inquire as to the performance or observance of any of the terms of this
Agreement or any other Credit Document; and in connection with any
extension of credit under this Agreement or any other Credit Document, the
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Agent shall be fully protected in relying on a certificate of the Borrower
as to the fulfillment by the Borrower of any conditions to such extension
of credit.
10.7.5. Employment of Agents and Counsel. The Agent may execute any
of its duties as Agent under this Agreement or any other Credit Document
by or through employees, agents and attorneys-in-fact and shall not be
responsible to any of the Lenders, the Borrower or any other Obligor for
the default or misconduct of any such agents or attorneys-in-fact selected
by the Agent acting in good faith. The Agent shall be entitled to advice
of counsel concerning all matters pertaining to the agency hereby created
and its duties hereunder or under any other Credit Document.
10.7.6. Reliance on Documents and Counsel. The Agent shall be
entitled to rely, and shall be fully protected in relying, upon any
affidavit, certificate, cablegram, consent, instrument, letter, notice,
order, document, statement, telecopy, telegram, telex or teletype message
or writing reasonably believed in good faith by the Agent to be genuine
and correct and to have been signed, sent or made by the Person in
question, including any telephonic or oral statement made by such Person,
and, with respect to legal matters, upon an opinion or the advice of
counsel selected by the Agent.
10.7.7. Agent's Reimbursement. Each of the Lenders severally agrees
to reimburse the Agent, pro rata in accordance with such Lender's
Percentage Interest, for any reasonable expenses not reimbursed by the
Borrower or the Guarantors (without limiting the obligation of the
Borrower or the Guarantors to make such reimbursement): (a) for which the
Agent is entitled to reimbursement by the Borrower or the Guarantors under
this Agreement or any other Credit Document, and (b) after the occurrence
and during the continuance of a Default, for any other reasonable expenses
incurred by the Agent on the Lenders' behalf in connection with the
enforcement of the Lenders' rights under this Agreement or any other
Credit Document; provided, however, that the Agent shall not be reimbursed
for any such expenses arising as a result of its gross negligence or
willful misconduct.
10.8. Rights as a Lender. With respect to any credit extended by it
hereunder, Fleet and Bank of America Canada shall have the same rights,
obligations and powers hereunder as any other Lender and may exercise such
rights and powers as though it were not the Agent, and unless the context
otherwise specifies, each of Fleet and Bank of America Canada shall be treated
in its individual capacity as though it were not the Domestic Agent or the
Canadian Agent, as the case may be, hereunder. Without limiting the generality
of the foregoing, the Percentage Interest of Fleet and Bank of America Canada
and its Affiliates shall be included in any computations of Percentage
Interests. Fleet and its Affiliates and Bank of America Canada may each accept
deposits from, lend money to, act as trustee for and generally engage in any
kind of banking or trust business with the Borrower, any of its Subsidiaries or
any Affiliate of any of them and any Person who may do business with or own an
equity interest in the Borrower, any of its Subsidiaries or any Affiliate of any
of them, all as if Fleet were not the Domestic Agent and without any duty to
account therefor to the other Lenders or as if Bank of America Canada were not
the Canadian Agent and without any duty to account therefor to the other
Lenders, as the case may be.
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10.9. Independent Credit Decision. Each of the Lenders acknowledges that
it has independently and without reliance upon the Agent, based on the financial
statements and other documents referred to in Section 7.2, on the other
representations and warranties contained herein and on such other information
with respect to the Borrower and its Subsidiaries as such Lender deemed
appropriate, made such Lender's own credit analysis and decision to enter into
this Agreement and to make the extensions of credit provided for hereunder. Each
Lender represents to the Agent that such Lender will continue to make its own
independent credit and other decisions in taking or not taking action under this
Agreement or any other Credit Document. Each Lender expressly acknowledges that
neither the Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations or warranties to
such Lender, and no act by the Agent taken under this Agreement or any other
Credit Document, including any review of the affairs of the Borrower and its
Subsidiaries, shall be deemed to constitute any representation or warranty by
the Agent. Except for notices, reports and other documents expressly required to
be furnished to each Lender by the Agent under this Agreement or any other
Credit Document, the Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the business,
operations, property, condition, financial or otherwise, or creditworthiness of
the Borrower or any Subsidiary which may come into the possession of the Agent
or any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
10.10. Indemnification. The Lenders shall severally indemnify the Agent
and its officers, directors, employees, agents, attorneys, accountants,
consultants and controlling Persons (to the extent not reimbursed by the
Obligors and without limiting the obligation of any of the Obligors to do so),
pro rata in accordance with their respective Percentage Interests, from and
against any and all liabilities, obligations, damages, penalties, actions,
judgments, suits, losses (including accrued and unpaid Agent's fees), costs,
expenses or disbursements of any kind whatsoever which may at any time be
imposed on, incurred by or asserted against the Agent or such Persons relating
to or arising out of this Agreement, any other Credit Document, the transactions
contemplated hereby or thereby, or any action taken or omitted by the Agent in
connection with any of the foregoing; provided, however, that the foregoing
shall not extend to actions or omissions which are determined in a final,
nonappealable judgment by a court of competent jurisdiction to have taken by the
Agent with gross negligence or willful misconduct.
10.11. Canadian Agent and Canadian Lenders. The Canadian Agent and each
Canadian Lender hereby represent and certify that such Canadian Agent and
Canadian Lender is and will continue to be (i) a resident of Canada for the
purpose of the Income Tax Act (Canada), or (ii) an "authorized foreign bank" as
defined in section 2 of the Bank Act (Canada) and in subsection 248(l) of the
Income Tax Act (Canada), that is not subject to the restrictions and
requirements referred to in subsection 524(2) of the Bank Act (Canada) and which
will receive all amounts paid or credited to it under its Canadian Revolving
Loans and under the Credit Documents in respect of its "Canadian banking
business" (as defined in subsection 248(l) of the Income Tax Act (Canada)) for
the purposes of paragraph 212(13.3)(a) of the Income Tax Act (Canada) and will
include all amounts paid or credited to it under its Canadian Revolving Loans
and under the Credit Documents under Part I of the Income Tax Act (Canada) in
computing its income from a business carried on by it in Canada.
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11. Successors and Assigns; Lender Assignments and Participations. Any reference
in this Agreement or any other Credit Document to any of the parties hereto
shall be deemed to include the successors and assigns of such party, and all
covenants and agreements by or on behalf of the Borrower, the other Obligors,
the Agent or the Lenders that are contained in this Agreement or any other
Credit Document shall bind and inure to the benefit of their respective
successors and assigns; provided, however, that (a) the Borrower and its
Subsidiaries may not assign their rights or obligations under this Agreement or
any other Credit Document except for mergers or liquidations permitted by
Section 6.9, and (b) the Lenders shall be not entitled to assign their
respective Percentage Interests in the credits extended hereunder or their
Commitments except as set forth below in this Section 11.
11.1. Assignments by Lenders.
11.1.1. Assignees and Assignment Procedures. Each Domestic Lender
and Canadian Lender may, in compliance with applicable laws in connection
with such assignment, assign to one or more Eligible Domestic Assignees or
Eligible Canadian Assignees, as the case may be (each, an "Assignee"), all
or a portion of its interests, rights and obligations under this Agreement
and the other Credit Documents, including all or a portion of its
Commitment, the portion of the Loan and Letter of Credit Exposure at the
time owing to it and any Notes held by it, but excluding its rights and
obligations as a Domestic Letter of Credit Issuer or Canadian Letter of
Credit Issuer; provided, however, that the parties to each such assignment
shall execute and deliver to the Agent an Assignment and Acceptance (the
"Assignment and Acceptance") substantially in the form of Exhibit 11.1.1,
together with the Note subject to such assignment and, except in the event
of a transfer pursuant to Section 11.3 or to another Lender, any Eligible
Domestic Assignee or Eligible Canadian Assignee that acquires all or a
substantial portion of the assets of a Lender or an Affiliate of a Lender,
a processing fee of $3,500 payable to the Domestic Agent or the Canadian
Agent, as the case may be, by the assigning Lender (or as the assigning
Lender and the Assignee may otherwise agree between themselves).
Upon acceptance and recording pursuant to Section 11.1.4, from and after the
effective date specified in each Assignment and Acceptance (which effective date
shall be at least five Banking Days after the execution thereof unless waived by
the Agent):
(i) the Assignee shall be a party hereto and, to the extent
provided in such Assignment and Acceptance, have the rights
and obligations of a Lender under this Agreement and
(ii) the assigning Lender shall, to the extent provided in such
assignment, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance
covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall
cease to be a party hereto but shall continue to be entitled
to the benefits of Sections 3.2.4, 3.4 and 9, as well as to
any fees accrued for its account hereunder and not yet paid).
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11.1.2. Terms of Assignment and Acceptance. By executing and
delivering an Assignment and Acceptance, the assigning Lender and the
Assignee shall be deemed to confirm to and agree with each other and the
other parties hereto as follows:
(a) other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned thereby
free and clear of any adverse claim, such assigning Lender makes no
representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or
in connection with this Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this
Agreement, any other Credit Document or any other instrument or
document furnished pursuant hereto;
(b) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial
condition of the Borrower and its Subsidiaries or the performance or
observance by the Borrower or any of its Subsidiaries of any of its
obligations under this Agreement, any other Credit Document or any
other instrument or document furnished pursuant hereto;
(c) such Assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial
statements delivered pursuant to Section 7.2 or Section 6.4 and such
other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such Assignment
and Acceptance;
(d) such Assignee will independently and without reliance upon
the Agent, such assigning Lender or any other Lender, and based on
such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not
taking action under this Agreement;
(e) such Assignee appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under
this Agreement as are delegated to the Agent by the terms hereof,
together with such powers as are reasonably incidental thereto; and
(f) such Assignee agrees that it will perform in accordance
with the terms of this Agreement all the obligations which are
required to be performed by it as a Lender.
11.1.3. Register. The Domestic Agent shall maintain at the Boston
Office (solely for the limited purpose set forth in this Section 11.1.3,
as the agent of the Borrower) a register (the "Register") for the
recordation of (a) the names and addresses of the Lenders and the
Assignees which assume rights and obligations pursuant to an assignment
under Section 11.1.1, (b) the Percentage Interest of each such Lender as
set forth in Exhibit 10.1 and (c) the amount of the Loan and Letter of
Credit Exposure owing to each Lender from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
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Borrower, the Agent and the Lenders may treat each Person whose name is
registered therein for all purposes as a party to this Agreement. The
Register shall be available for inspection by the Borrower or any Lender
at any reasonable time and from time to time upon reasonable prior notice.
11.1.4. Acceptance of Assignment and Assumption. Upon its receipt of
a completed Assignment and Acceptance executed by an assigning Lender and
an Assignee (and any necessary consent of the Agent and the Borrower)
together with the processing and recordation fee referred to in Section
11.1.1 and, to the extent necessary, the Note being assigned, the Agent
shall (a) accept such Assignment and Acceptance, (b) record the
information contained therein in the Register and (c) give prompt notice
thereof to the Borrower. Within five Banking Days after receipt of notice,
the Borrower, at its own expense, shall execute and deliver to the Agent
(in exchange for the surrendered Note if such Note must be surrendered or
reissued as a result of such assignment) a new Note to the order of such
Assignee in a principal amount equal to the applicable Commitment and Loan
assumed by it pursuant to such Assignment and Acceptance. If the assigning
Lender has retained a Commitment and Loan, its Note shall be deemed to be
then outstanding in a principal amount equal to the applicable Commitment
and Loan retained by it.
11.1.5. Federal Reserve Bank. Notwithstanding the foregoing
provisions of this Section 11 (without the consent of or notice to the
Agent or the Borrower), any Lender may at any time pledge all or any
portion of such Lender's rights under this Agreement and the other Credit
Documents to a Federal Reserve Bank or, in the case of any Lender that is
a fund, to the trustee of such fund to support the fund's obligations to
such trustee; provided, however, that no such pledge or assignment shall
release such Lender from such Lender's obligations hereunder or under any
other Credit Document.
11.1.6. Further Assurances. The Borrower and its Subsidiaries shall
sign such documents and take such other actions from time to time
reasonably requested by an Assignee to enable it to share in the benefits
of the rights created by the Credit Documents.
11.2. Credit Participants. Each Lender may, without the consent of the
Borrower or the Agent, in compliance with applicable laws in connection with
such participation, sell to one or more commercial banks, other financial
institutions or funds in the business of making or purchasing loans similar to
the Credit Obligations (each a "Credit Participant") participations in all or a
portion of its interests, rights and obligations under this Agreement and the
other Credit Documents (including all or a portion of its Commitment, the Loan
and Letter of Credit Exposure owing to it and the Note held by it); provided,
however, that:
(a) the Credit Participant must be an Eligible Canadian
Assignee in the case of a sale by a Canadian Lender, or an Eligible
Domestic Assignee in the case of a sale by a Domestic Lender;
(b) such Lender's obligations under this Agreement shall
remain unchanged;
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(c) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations;
(d) the Credit Participant shall be entitled to the benefit of
the cost protection provisions contained in Sections 3.2.4, 3.5 and
9, but shall not be entitled to receive any greater payment
thereunder than the selling Lender would have been entitled to
receive with respect to the interest so sold if such interest had
not been sold; and
(e) the Borrower, the Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this Agreement and,
under any agreements between such Lender and such Credit
Participant, such Lender shall retain the sole right as one of the
Lenders to vote (and to determine how to vote) with respect to the
enforcement of the obligations of the Obligors relating to the Loan
and Letter of Credit Exposure and the approval of any amendment,
modification or waiver of any provision of this Agreement (other
than amendments, modifications, consents or waivers described in
clause (b) of the proviso to Section 14.1, with respect to which the
Credit Participant may determine how to vote).
Each Obligor agrees, to the fullest extent permitted by applicable law, that any
Credit Participant and any Lender purchasing a participation from another Lender
pursuant to Section 10.6 may exercise all rights of payment (including the right
of set-off), with respect to its participation as fully as if such Credit
Participant or such Lender were the direct creditor of the Obligors and a Lender
hereunder in the amount of such participation.
11.3. Special Purpose Funding Vehicles. Notwithstanding anything to the
contrary contained herein, any Lender (a "Granting Lender") may, with the prior
written consent of the Borrower, grant to a special purpose funding vehicle
identified in writing by the Granting Lender to the Agent and the Borrower from
time to time (an "SPV") the option to provide to the Borrower all or part of any
extension of credit that such Granting Lender would otherwise be obligated to
make to the Borrower pursuant hereto; provided, however, that (a) nothing herein
shall constitute a commitment by any SPV to make any extension of credit, (b) if
an SPV elects not to exercise such option or otherwise fails to provide all or
any part of such extension of credit, the Granting Lender shall be obligated to
make such extension of credit pursuant to the terms hereof and (c) the Granting
Lender shall remain for all purposes the Lender of record under the Credit
Documents, including for the purposes of approving amendments, waivers and other
modifications of the Credit Documents. The making of an extension of credit by
an SPV hereunder shall utilize the Commitment of the Granting Lender to the same
extent as if such extension of credit had been made by such Granting Lender. No
SPV shall be liable for any indemnity or similar payment obligation under the
Credit Documents (all liability for which shall remain with the Granting
Lender). Prior to the date that is one year and one day after the payment in
full of all outstanding commercial paper or other senior indebtedness of any
SPV, no party hereto will institute against, or join any other Person in
instituting against, such SPV any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings. In addition, notwithstanding anything to
the contrary contained herein, any SPV may (i) with notice to, but without the
prior consent of, the Borrower and the Agent and without paying any processing
fee therefor, assign all or a portion of its interests in any Credit Obligations
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to the Granting Lender or to any financial institutions (consented to in writing
by the Borrower and Agent) providing liquidity or credit support to such SPV to
support the funding or maintenance of extensions of credit and (ii) disclose on
a confidential basis any non-public information relating to its extensions of
credit to any rating agency, commercial paper dealer or provider of any surety,
guarantee or credit or liquidity enhancement to such SPV. This Section shall
survive the termination of this Agreement and may not be amended without the
written consent of each SPV to which a grant has been made pursuant to this
Section.
12. Confidentiality. Each Lender will make no disclosure of confidential
information furnished to it by the Borrower or any of its Subsidiaries unless
such information shall have become public, except:
(a) in connection with operations under or the enforcement of
this Agreement or any other Credit Document to Persons who have a
reasonable need to be furnished such confidential information and
who agree to comply with the restrictions contained in this Section
12 with respect to such information;
(b) pursuant to any statutory or regulatory requirement or any
mandatory court order, subpoena or other legal process;
(c) to any parent or corporate Affiliate of such Lender or to
any Credit Participant, proposed Credit Participant or proposed
Assignee; provided, however, that any such Person shall agree to
comply with the restrictions set forth in this Section 12 with
respect to such information;
(d) to its independent counsel, auditors and other
professional advisors with an instruction to such Person to keep
such information confidential; and
(e) with the prior written consent of the Borrower, to any
other Person.
Notwithstanding the foregoing, except as reasonably necessary to comply with
applicable securities laws, the Agent and the Lenders (and each employee,
representative, agent or advisor of the Agent or the Lenders) may disclose to
any and all persons, without limitation of any kind, the U.S. tax treatment and
U.S. tax structure of this transaction and the portions of all materials of any
kind (including opinions or other tax analyses) that are provided to the Agent
or the Lenders relating to such tax treatment and tax structure.
13. Notices. Except as otherwise specified in this Agreement or any other Credit
Document, any notice required to be given pursuant to this Agreement or any
other Credit Document shall be given in writing. Any notice, consent, approval,
demand or other communication in connection with this Agreement or any other
Credit Document shall be deemed to be given if given in writing (including by
telecopy) addressed as provided below (or to the addressee at such other address
as the addressee shall have specified by notice actually received by the
addressor), and if either (a) actually delivered in fully legible form to such
address or (b) in the case of a letter, unless actual receipt of the notice is
required by any Credit Document five days shall have elapsed after the same
shall have been deposited in the United States or Canada mails, with first-class
postage prepaid and registered or certified.
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If to the Borrower or any of its Subsidiaries, to it at its address set forth in
Exhibit 7.1 to the attention of the chief financial officer.
If to any Lender or the Agent, to it at its address set forth on the signature
pages of this Agreement or in the Register, with a copy to the Agent.
Any notice, consent, approval, demand or other communication or any report or
certificate to be sent by a Borrower to the Agent or the Lenders under this
Agreement shall, unless otherwise specified, be sent (a) in the case of the
Canadian Borrower, to the Canadian Agent, and (b) in the case of the Domestic
Borrower, to the Domestic Agent. Any notice, consent, approval, demand or other
communication or any report or certificate to be sent by the Agent to the
Borrower under this Agreement shall, unless otherwise specified, (a) to the
extent relating to the Canadian Revolving Loan, Canadian Letter of Credit
Exposure or otherwise relating to the Canadian Borrower, be sent by the Canadian
Agent to the Canadian Borrower, with a copy to the Domestic Borrower, and (b) to
the extent relating to the Domestic Revolving Loan, Revolving Notes, Domestic
Letter of Credit Exposure or otherwise relating to the Domestic Borrower, be
sent by the Domestic Agent to the Domestic Borrower.
14. Amendments, Consents, Waivers, etc.
14.1. Lender Consents for Amendments. Except as otherwise set forth
herein, the Agent may (and upon the written request of the Required Lenders the
Agent shall) take or refrain from taking any action under this Agreement or any
other Credit Document, including giving its written consent to any modification
of or amendment to and waiving in writing compliance with any covenant or
condition in this Agreement or any other Credit Document or any Default or Event
of Default, all of which actions shall be binding upon all of the Lenders;
provided, however, that:
(a) Except as provided below, without the written consent of
the Lenders owning at least 75% of the Percentage Interests no
written modification of, amendment to, consent with respect to,
waiver of compliance with or waiver of a Default under, any of the
Credit Documents shall be made.
(b) Without the written consent of such Lenders as own 100% of
the Percentage Interests :
(i) None of the conditions specified in Section 5 shall be
amended, waived or modified.
(ii) No incurrence or existence of any Lien on all or
substantially all of the assets of the Borrower shall be
permitted.
(iii) No contractual subordination of the Loans or any other
portion of the Credit Obligations to any other
Indebtedness shall be permitted.
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(iv) No alteration shall be made of the Lenders' rights of
set-off contained in Section 8.2.4.
(v) No amendment to or modification of this Section 14.1 or
the definition of "Required Lenders" shall be made.
(c) Without the written consent of each Lender that is
directly affected thereby, as well as such Lenders as own at least
75% of the Percentage Interests (disregarding the Percentage
Interest of Nonperforming Lender so long as such Lender is treated
equally with the other Lenders with respect to any actions
enumerated below):
(i) No reduction shall be made in (A) the amount of
principal of the Loan owing to such Lender or
reimbursement obligations for payments made under
Letters of Credit payable or participated to such
Lender, (B) the interest rate on the portion of the Loan
owing to such Lender or (C) the Domestic Letter of
Credit fees, Canadian Letter of Credit fees or
commitment fees owing to such Lender with respect to the
credit facility provided herein (other than amendments
and waivers approved by the Required Lenders that modify
defined terms used in calculating the Applicable Margin
or Consolidated Excess Cash Flow or that waive an
increase in the Applicable Rate as a result of an Event
of Default).
(ii) No change shall be made in the stated, scheduled time of
payment of any portion of the Loan owing to such Lender
or interest thereon or reimbursement of payments made
under Letters of Credit or fees relating to any of the
foregoing payable to such Lender and no waiver shall be
made of any Default under Section 8.1.1 with respect to
such Lender .
(iii) No increase shall be made in the amount, or extension of
the term, of the stated Commitments of such Lender
beyond that provided for under Section 2.
(d) Without the written consent of the Agent, no amendment or
modification of any Credit Document shall affect the rights or
duties of the Agent under the Credit Documents.
(e) Without the written consent of a Domestic Letter of Credit
Issuer or a Canadian Letter of Credit Issuer, no amendment or
modification of any Credit Document shall affect the rights or
duties of such Domestic Letter of Credit Issuer or Canadian Letter
of Credit Issuer under the Credit Documents.
14.2. Course of Dealing; No Implied Waivers. No course of dealing between
any Lender or the Agent, on one hand, and the Borrower or any other Obligor, on
the other hand, shall operate as a waiver of any of the Lenders' or the Agent's
rights under this Agreement or any other Credit Document or with respect to the
Credit Obligations. In particular, no delay or omission on the part of any
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Lender or the Agent in exercising any right under this Agreement or any other
Credit Document or with respect to the Credit Obligations shall operate as a
waiver of such right or any other right hereunder or thereunder. A waiver on any
one occasion shall not be construed as a bar to or waiver of any right or remedy
on any future occasion. No waiver, consent or amendment with respect to this
Agreement or any other Credit Document shall be binding unless it is in writing
and signed by the Agent or the Required Lenders.
15. General Provisions.
15.1. Defeasance. When all Credit Obligations have been paid, performed
and reasonably determined by the Agent to have been indefeasibly discharged in
full, and if at the time no Lender continues to be committed to extend any
credit to the Borrower hereunder or under any other Credit Document, this
Agreement and the other Credit Documents shall terminate. Thereupon, on the
Obligors' demand and at their cost and expense, the Agent shall execute proper
instruments, acknowledging satisfaction of and discharging this Agreement and
the other Credit Documents; provided, however, that Sections 3.2.4, 3.4, 9,
10.7.7, 10.10, 12 and 15 shall survive the termination of this Agreement.
15.2. No Strict Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement and the other Credit Documents with
counsel sophisticated in financing transactions. In the event an ambiguity or
question of intent or interpretation arises, this Agreement and the other Credit
Documents shall be construed as if drafted jointly by the parties and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement and the other
Credit Documents.
15.3. Venue; Service of Process; Certain Waivers. Each of the Borrower,
the other Obligors, the Agent and the Lenders:
(a) Irrevocably submits to the nonexclusive jurisdiction of
the state courts of The Commonwealth of Massachusetts and to the
nonexclusive jurisdiction of the United States District Court for
the District of Massachusetts for the purpose of any suit, action or
other proceeding arising out of or based upon this Agreement or any
other Credit Document or the subject matter hereof or thereof;
(b) Waives to the extent not prohibited by applicable law that
cannot be waived, and agrees not to assert, by way of motion, as a
defense or otherwise, in any such proceeding brought in any of the
above-named courts, any claim that it is not subject personally to
the jurisdiction of such court, that its property is exempt or
immune from attachment or execution, that such proceeding is brought
in an inconvenient forum, that the venue of such proceeding is
improper, or that this Agreement or any other Credit Document, or
the subject matter hereof or thereof, may not be enforced in or by
such court;
(c) Consents to service of process in any such proceeding in
any manner at the time permitted by Chapter 223A of the General Laws
of The Commonwealth of Massachusetts and agrees that service of
process by registered or certified mail, return receipt requested,
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at its address specified in or pursuant to Section 13 is reasonably
calculated to give actual notice; and
(d) Waives to the extent not prohibited by applicable law that
cannot be waived any right it may have to claim or recover in any
such proceeding any special, exemplary, punitive or consequential
damages.
15.4. WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW
THAT CANNOT BE WAIVED, EACH OF THE BORROWER, THE OTHER OBLIGORS, THE AGENT AND
THE LENDERS WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF,
DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF
ANY ISSUE, CLAIM OR PROCEEDING ARISING OUT OF THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENT OR THE SUBJECT MATTER HEREOF OR THEREOF OR ANY CREDIT OBLIGATION OR IN
ANY WAY CONNECTED WITH THE DEALINGS OF THE LENDERS, THE AGENT, THE BORROWER OR
ANY OTHER OBLIGOR IN CONNECTION WITH ANY OF THE ABOVE, IN EACH CASE WHETHER NOW
EXISTING OR HEREAFTER ARISING AND WHETHER IN CONTRACT, TORT OR OTHERWISE. Each
of the Borrower and the other Obligors acknowledges that it has been informed by
the Agent that the foregoing sentence constitutes a material inducement upon
which each of the Lenders has relied and will rely in entering into this
Agreement and any other Credit Document. Any Lender, the Agent, the Borrower or
any other Obligor may file an original counterpart or a copy of this Agreement
with any court as written evidence of the consent of the Borrower, the other
Obligors, the Agent and the Lenders to the waiver of their rights to trial by
jury.
15.5. Interpretation; Governing Law; etc. Time is (and shall be) of the
essence in this Agreement and the other Credit Documents. All covenants,
agreements, representations and warranties made in this Agreement or any other
Credit Document or in certificates delivered pursuant hereto or thereto shall be
deemed to have been relied on by each Lender, notwithstanding any investigation
made by any Lender on its behalf, and shall survive the execution and delivery
to the Lenders hereof and thereof. The invalidity or unenforceability of any
provision hereof shall not affect the validity or enforceability of any other
provision hereof, and any invalid or unenforceable provision shall be modified
so as to be enforced to the maximum extent of its validity or enforceability.
The headings in this Agreement are for convenience of reference only and shall
not limit or otherwise affect the meaning hereof. Dollar amounts included in
this Agreement are in United States dollars unless the context provides
otherwise. This Agreement and the other Credit Documents constitute the entire
understanding of the parties with respect to the subject matter hereof and
thereof and supersede all prior and contemporaneous understandings and
agreements, whether written or oral. This Agreement may be executed in any
number of counterparts which together shall constitute one instrument. This
Agreement shall be governed by and construed in accordance with the laws (other
than the conflict of laws rules) of The Commonwealth of Massachusetts, except
that the matters expressly covered by Section 10.3 shall be governed by the laws
of the Province of Quebec and the federal laws of Canada applicable therein.
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[The rest of this page is intentionally blank.]
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Each of the undersigned has caused this Agreement to be executed and delivered
by its duly authorized officer as an agreement under seal as of the date first
above written.
AMERICAN BILTRITE INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
-----------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
Title: V. P. Finance
K&M ASSOCIATES L.P.
By: AIMPAR, INC., its General Partner
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
-----------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
Title: V.P.
AMERICAN BILTRITE (CANADA) LTD.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
Domestic Lender:
FLEET NATIONAL BANK, A BANK OF AMERICA COMPANY
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: SVP
Fleet National Bank, a Bank of America company
Massachusetts Middle Market Division
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Canadian Lender:
BANK OF AMERICA, NATIONAL ASSOCIATION, ACTING THROUGH ITS CANADA BRANCH
Bank of America, National Association, acting through its Canada branch
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
By /s/ ▇▇▇▇▇▇ Sales ▇▇ ▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ Sales ▇▇ ▇▇▇▇▇▇▇
Title: Assistant Vice President
AMERICAN BILTRITE INC.
EXHIBITS
1(a) - Congoleum Plan
1(b) - Congoleum Plan Note
1(c) - Guarantee Agreement
2.1.4 - Revolving Note
5.1.4(a) - Canadian Security Agreement
5.1.4(b) - Domestic Security Agreement
5.1.5 - Intercreditor Agreement
5.1.9 - Joinder Agreement
5.2.1(a) - Domestic Form of Borrowing Request
5.2.1(b) - Canadian Form of Borrowing Request
6.4 - Compliance Certificate
6.6.16 - Letters of Credit Outstanding under the CIBC Credit Agreement
6.8.9 - Investments
7.1 - Borrower and its Subsidiaries
7.2.2 - Material Agreements
7.3 - Financing Debt, Certain Investments, etc.
7.12 - Multi-employer and Defined Benefit Plans
10.1 - Percentage Interests
11.1.1 - Assignment and Acceptance
PERCENTAGE INTERESTS
Principal Amount Approximate
Lender of Commitment Percentage Interest
------ ------------- -------------------
Domestic Lender:
Fleet National Bank, a Bank of $20,000,000 100%
America company
Canadian Lender:
Bank of America, National Association, $12,000,000 100%
acting through its Canada branch