Exhibit 4.1
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
Further Amended and Restated as of September 25, 0000
XXXX XX XXXXXXX, National Association,
successor by merger to Fleet National Bank,
Domestic Administrative Agent
BANK OF AMERICA, National Association,
acting through its Canada branch, Canadian
Administrative Agent
TABLE OF CONTENTS
Page
1. Restatement; Definitions..................................................2
1.1. Restatement......................................................2
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......................................30
2.4. Canadian Letters of Credit......................................32
2.5. Term Credit.....................................................34
2.6. Application of Proceeds.........................................34
3. Interest; Pricing Options; Fees..........................................35
3.1. Interest........................................................35
3.2. LIBOR Pricing Options...........................................36
3.3. Fixed Rate Pricing Options......................................38
3.4. Unused Line Fees................................................38
3.5. Letter of Credit Fees...........................................39
3.6. Computations of Interest and Fees...............................40
3.7. Maximum Lawful Interest Rate....................................40
4. Payment..................................................................41
4.1. Payment at Maturity.............................................41
4.2. Scheduled Required Prepayments..................................41
4.3. Voluntary Prepayments...........................................41
4.4. Letters of Credit...............................................42
4.5. Reborrowing; Application of Payments, etc.......................42
5. Conditions to Extending Credit...........................................42
5.1. Conditions on Initial Closing Date..............................42
5.2. Conditions to Each Extension of Credit..........................44
6. General Covenants........................................................44
6.1. Taxes and Other Charges; Accounts Payable.......................44
6.2. Conduct of Business, etc........................................45
6.3. Insurance.......................................................46
6.4. Financial Statements and Reports................................46
6.5. Certain Financial Tests.........................................49
6.6. Indebtedness....................................................50
6.7. Liens...........................................................51
6.8. Investments and Acquisitions....................................53
6.9. Distributions...................................................54
6.10. Issuance of Equity by Subsidiaries; Subsidiary Distributions....54
6.11. Derivative Contracts............................................55
6.12. Negative Pledge Clauses.........................................55
6.13. ERISA, etc......................................................55
6.14. Transactions with Affiliates....................................55
6.15. Environmental Laws..............................................55
6.16. Congoleum.......................................................55
7. Representations and Warranties............................................56
7.1. Organization and Business.......................................56
7.2. Financial Statements and Other Information; Material Agreements.56
7.3. Agreements Relating to Financing Debt, Investments, etc. ......57
7.4. Changes in Condition............................................57
7.5. Title to Assets.................................................57
7.6. Operations in Conformity With Law, etc..........................57
7.7. Litigation......................................................58
7.8. Authorization and Enforceability................................58
7.9. No Legal Obstacle to Agreements.................................58
7.10. Defaults........................................................59
7.11. Licenses, etc...................................................59
7.12. Pension Plans...................................................59
7.13. Environmental Regulations.......................................59
7.14. Government Regulation; Margin Stock.............................60
7.15. Disclosure......................................................60
8. Defaults..................................................................60
8.1. Events of Default...............................................61
8.2. Certain Actions Following an Event of Default...................64
8.3. Annulment of Defaults...........................................65
8.4. Waivers.........................................................65
9. Expenses; Indemnity.......................................................65
9.1. Expenses........................................................65
9.2. General Indemnity...............................................66
9.3. Indemnity With Respect to Letters of Credit.....................66
9.4. Taxes...........................................................67
9.5. Separate Obligations of Canadian Borrower.......................69
10. Operations; Agent........................................................70
10.1. Interests in Credits............................................70
10.2. Agent's Authority to Act, etc...................................70
10.3. Power of Attorney for Quebec Purposes...........................70
10.4. Lender Operations for Advances, Letters of Credit, etc..........71
10.5. Sharing of Payments, etc........................................73
10.6. Agent's Resignation.............................................74
10.7. Concerning the Agent............................................74
10.8. Rights as a Lender..............................................75
10.9. Independent Credit Decision.....................................75
10.10. Indemnification.................................................76
10.11. Canadian Agent and Canadian Lenders.............................76
11. Successors and Assigns; Lender Assignments and Participations............76
11.1. Assignments by Lenders..........................................77
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11.2. Credit Participants.............................................80
11.3. Special Purpose Funding Vehicles................................80
12. Confidentiality.........................................................81
13. Notices.................................................................82
14. Amendments, Consents, Waivers, etc......................................82
14.1. Lender Consents for Amendments..................................82
14.2. Course of Dealing; No Implied Waivers...........................84
15. General Provisions......................................................84
15.1. Defeasance......................................................84
15.2. No Strict Construction..........................................84
15.3. Venue; Service of Process; Certain Waivers......................84
15.4. Waiver Of Jury Trial............................................85
15.5. Interpretation; Governing Law; etc..............................85
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AMENDED AND RESTATED CREDIT AGREEMENT
This Agreement, dated as of September 25, 2006, 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, Bank of America, National
Association ("Bank of America"), successor by merger to Fleet National Bank
("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, 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 "2003 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, the guarantors party thereto, the lenders
party thereto and Fleet, as administrative agent, entered into that certain
Amended and Restated Credit Agreement dated as of May 20, 2005 (as amended,
restated, modified or supplemented prior to the date hereof, the "Existing
Credit Agreement"), pursuant to which such lenders agreed to restructure the
2003 Credit Agreement to add a $12,000,000 sub-limit to the Domestic Borrower's
secured revolving credit facility that the Canadian Lender would extend to the
Canadian Borrower and to extend the final maturity date until September 30,
2006, and other changes as provided therein;
WHEREAS, the Domestic Borrower has requested that the credit facilities
provided under the Existing Credit Agreement be restructured to provide (i) a
$30,000,000 secured revolving credit facility, including a $5,000,000
sub-allotment for Domestic Letters of Credit, that the Domestic Lender will
extend to the Domestic Borrower to be used for operations of the Domestic
Borrower, (ii) a $12,000,000 secured revolving credit facility, including a
$1,000,000 sub-allotment for Canadian Letters of Credit, that the Canadian
Lender will extend to the Canadian Borrower to be used for operations of the
Canadian Borrower, (iii) a $10,000,000 secured term loan facility with a
maturity date of September 30, 2009, to pay off the Domestic Borrower's existing
outstanding notes issued under the Note Purchase Agreement, together with any
accrued interest thereon, Yield Maintenance Amount (as defined in the Note
Purchase Agreement) and fees and expenses incurred by the Company in connection
therewith, and to be used for operations of the Domestic Borrower, 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% 125b.p.
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< 100% 100 b.p.
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Changes in the Applicable Margin shall occur on the third Banking Day after
annual or quarterly financial statements, as applicable, have been furnished to
the Agent in accordance with Sections 6.4.1 or 6.4.2 from time to time, as
applicable. In the event that the financial statements required to be delivered
pursuant to Section 6.4.1 or 6.4.2, as applicable, are not delivered when due,
then during the period from the third Banking Day following the date such
financial statements were due until the third Banking Day following the date on
which they are actually delivered, the Applicable Margin shall be the maximum
amount set forth in the table above.
"Applicable Rate" means, at any date, the sum of:
(a) (i) with respect to each portion of the Loan subject to a LIBOR Pricing
Option, the sum of the Applicable Margin (which may change during the LIBOR
Interest Period for such LIBOR Pricing Option in accordance with the definition
of "Applicable Margin") plus the LIBOR Rate with respect to such LIBOR Pricing
Option;
(ii) with respect to each portion of the Loan subject to a Fixed Rate
Pricing Option, the sum of the Applicable Margin plus the Fixed Rate with
respect to such Fixed Rate Pricing Option;
(iii) with respect to each other portion of the Loan, the Base Rate;
plus (b) an additional 4% per annum effective on the day written notice from the
Agent has been delivered to the Borrower that the interest rates hereunder are
increasing as a result of the occurrence and continuance of an Event of Default
until the earlier of such time as (i) such Event of Default is no longer
continuing or (ii) such Event of Default is deemed no longer to exist, in each
case pursuant to Section 8.3.
"Assignee" is defined in Section 11.1.1.
"Assignment and Acceptance" is defined in Section 11.1.1.
"Banking Day" means any day other than Saturday, Sunday or a day on which
banks in Boston, Massachusetts or Xxxxxxx, Xxxxxxx, as applicable, are
authorized or required by law or other governmental action to close.
"Bank of America" is defined in the preamble.
"Bank of America Canada" is defined in the preamble.
"Bankruptcy Code" means Title 11 of the United States Code, the Bankruptcy
and Insolvency Act (Canada), the Companies' Creditors Arrangement Act (Canada)
or any other reorganization, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any competent jurisdiction, whether now or
hereafter in effect.
"Bankruptcy Default" means an Event of Default referred to in Section
8.1.10.
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"Base Rate" means, on any date, (a) with respect to the Term Loan and
Domestic Revolving Loan, the greater of (i) the rate of interest announced by
Bank of America at the Boston Office as its prime rate or (ii) the sum of 1/2%
plus the Federal Funds Rate, (b) with respect to the portions of the Canadian
Revolving Loan denominated in Canadian Funds, the rate of interest announced by
Bank of America Canada at the Toronto Office as its Canadian Prime Rate, or (c)
with respect to the portions of the Canadian Revolving Loan denominated in
United States Funds, the Canadian U.S. Dollar Base Rate. The Base Rate is a
reference rate and does not necessarily represent the lowest or best rate being
charged to any customer. Changes in the rate of interest resulting from changes
in the Base Rate shall take place immediately without notice or demand of any
kind.
"Bonds" is defined in Section 10.3.
"Borrower" means either one of the Domestic Borrower or the Canadian
Borrower individually, or both of them collectively, as the context permits.
"Borrowing Base" means, on any date, the sum of the following, but only
with respect to the Company, the Tape Subsidiaries and K&M:
(a) 70% of Eligible Accounts Receivable,
plus (b) 35% of Eligible Inventory,
plus (c) 20% of Eligible Fixed Assets.
provided, however, that the Borrowing Base shall be reduced to $1.00
during any period when the Company has failed to furnish the computation of the
Borrowing Base required by Section 6.4.3, commencing seven days following notice
to the Borrower of its failure to furnish the computation.
"Boston Office" means the principal banking office of Bank of America in
Boston, Massachusetts.
"By-laws" means all written by-laws, rules, regulations and all other
documents relating to the management, governance or internal regulation of any
Person other than an individual, all as from time to time in effect.
"Canadian Agent" means Bank of America Canada.
"Canadian Borrower" is defined in the preamble.
"Canadian Borrowing Base" means, on any date, the sum of the following,
but only with respect to the Canadian Borrower:
(a) 70% of Eligible Accounts Receivable,
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plus (b) 35% of Eligible Inventory,
plus (c) 20% of Eligible Fixed Assets;
provided, however, that the Canadian Borrowing Base shall be reduced to
$1.00 during any period when the Canadian Borrower has failed to furnish the
computation of the Canadian Borrowing Base required by Section 6.4.3, commencing
seven days following notice to the Canadian Borrower of its failure to furnish
the computation. All amounts denominated in Canadian dollars that are factored
into the calculation of the Canadian Borrowing Base shall, solely for purposes
of making such calculation, be converted into United States dollars at the
prevailing foreign exchange spot rate of the Domestic Agent on the date the
calculation of Canadian Borrowing Base is made.
"Canadian Funds" means such coin or currency of Canada as at the time
shall be legal tender therein for the payment of public and private debts.
"Canadian Lender" means each of the Persons listed as Canadian lenders on
the signature page hereto, including Bank of America Canada in its capacity as a
Canadian Lender and such other Persons who may from time to time own a
Percentage Interest in the Credit Obligations of the Canadian Borrower, but the
term "Canadian Lender" shall not include any Credit Participant in such
capacity.
"Canadian Letter of Credit" is defined in Section 2.4.1.
"Canadian Letter of Credit Exposure" means, at any date, the sum of (a)
the aggregate face amount of all drafts that may then or thereafter be presented
by beneficiaries under all Canadian Letters of Credit then outstanding, plus (b)
the aggregate face amount of all drafts that the Canadian Letter of Credit
Issuer has previously accepted under Canadian Letters of Credit but for which
the Canadian Letter of Credit Issuer has not been reimbursed by the Canadian
Borrower (whether pursuant to an automatic advance under the Canadian Revolving
Loan or otherwise).
"Canadian Letter of Credit Issuer" means, for any Letter of Credit, Bank
of America Canada or, in the event Bank of America Canada does not for any
reason issue a requested Canadian Letter of Credit, another Canadian Lender
selected by the Canadian Borrower to issue such Canadian Letter of Credit.
"Canadian Prime Rate" means on any day a fluctuating rate of interest per
annum equal to the higher of (a) the 30-day CDOR Rate plus 0.50%, and (b) the
rate of interest per annum most recently announced by the Canadian Agent as its
reference rate of interest for loans made in Canadian Funds to Canadian
customers and designated as its "prime rate" (the "prime rate" being a rate set
by the Canadian Agent based upon various factors including the Canadian Agent's
costs and desired return, general economic conditions and other factors, and is
used as a reference point for pricing some loans, which may be priced at, above,
or below such announced rate). Any change in the prime rate announced by the
Canadian Agent shall take effect at the opening of business on the day specified
in the public announcement of such change. Each interest rate based upon the
Canadian Prime Rate shall be adjusted simultaneously with any change in the
Canadian Prime Rate.
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"Canadian Revolving Loan" is defined in Section 2.2.4.
"Canadian Security Agreement" means that Hypothec and Pledge Bonds dated
May 20, 2005, by the Canadian Borrower in favor of the Canadian Agent and the
Canadian Lender, attached hereto as Exhibit 5.1.4(a).
"Canadian Security Agreement Reaffirmation" is defined in Section 5.1.4.
"Canadian U.S. Dollar Base Rate" means for any day a fluctuating rate per
annum equal to the higher of (a) the Federal Funds Rate plus 0.50% and (b) the
rate of interest in effect for such day as publicly announced from time to time
by the Canadian Agent, as its "reference rate" for United States Funds
commercial loans made to a Person in Canada. The "reference rate" is a rate set
by the Canadian Agent based upon various factors including the Canadian Agent's
costs and desired return, general economic conditions and other factors, and is
used as a reference point for pricing some loans, which may be priced at, above,
or below such announced rate. Any change in such rate announced by the Canadian
Agent shall take effect at the opening of business on the day specified in the
public announcement of such change.
"Capital Expenditures" means, for any period, amounts added or required to
be added to the property, plant and equipment or other fixed assets account on
the Consolidated balance sheet of the Company and its Subsidiaries, prepared in
accordance with GAAP.
"Capitalized Lease" means any lease which is required to be capitalized on
the balance sheet of the lessee in accordance with GAAP, including Statement
Nos. 13 and 98 of the Financial Accounting Standards Board.
"Capitalized Lease Obligations" means the amount of the liability
reflecting the aggregate discounted amount of future payments under all
Capitalized Leases calculated in accordance with GAAP, including Statement Nos.
13 and 98 of the Financial Accounting Standards Board.
"Cash Equivalents" means:
(a) negotiable certificates of deposit, time deposits (including sweep
accounts), demand deposits and bankers' acceptances having a maturity of nine
months or less and issued by any United States or Canadian financial institution
having capital and surplus and undivided profits aggregating at least
$100,000,000 and rated at least Prime-1 by Xxxxx'x or A-1 by S&P or issued by
any Lender;
(b) corporate obligations having a maturity of nine months or less and
rated at least Prime-1 by Xxxxx'x or A-1 by S&P or issued by any Lender;
(c) any direct obligation of the United States of America, Canada, or any
agency or instrumentality thereof, or of any state, province or municipality
thereof, (i) which has a remaining maturity at the time of purchase of not more
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than one year or which is subject to a fully collateralized repurchase agreement
with any Lender (or any other financial institution referred to in clause (a)
above) exercisable within one year from the time of purchase and (ii) which, in
the case of obligations of any state or municipality, is rated at least Aaa by
Xxxxx'x or AAA by S&P; and
(d) any mutual fund or other pooled investment vehicle rated at least Aa
by Xxxxx'x or AA by S&P which invests principally in obligations described
above.
"CDOR Rate" means the average bankers' acceptance rate as quoted on
Reuters CDOR page (or such other page as may, from time to time, replace such
page on that service for the purpose of displaying quotations for bankers'
acceptances accepted by banks listed in Schedule I to the Bank Act (Canada)) at
approximately 10:00 a.m. (Toronto time) on the applicable date for bankers'
acceptances having a comparable maturity date as the date of the applicable
Canadian Revolving Loan.
"CERCLA" means the federal Comprehensive Environmental Response,
Compensation and Liability Act of 1980.
"Charter" means the articles of organization, certificate of
incorporation, statute, constitution, joint venture agreement, partnership
agreement, trust indenture, limited liability company agreement or other charter
document of any Person other than an individual, each as from time to time in
effect.
"Closing Date" means the Initial Closing Date and each other date on which
any extension of credit is made pursuant to Sections 2.1, 2.2, 2.3, 2.4 or 2.5.
"Code" means the federal Internal Revenue Code of 1986.
"Commitment" means, with respect to any Lender, such Lender's obligations
to extend the respective credits contemplated by Section 2 and its interests in
such credits at any time outstanding. The original Commitments are set forth in
Exhibit 10.1 and the subsequent Commitments are recorded from time to time in
the Register.
"Company" is defined in the preamble.
"Computation Covenants" means Sections 6.5, 6.6.2, 6.6.10, 6.8.5, 6.8.6,
6.9.2, 6.10.2 and 6.11.
"Congoleum" means Congoleum Corporation, a subsidiary (but not a
Subsidiary) of the Company, and/or any of its direct or indirect subsidiaries.
"Congoleum Joint Venture Agreement" means the Joint Venture Agreement
dated as of December 16, 1992 by and among the Company, Resilient Holdings,
Incorporated, Congoleum, Hillside Industries Incorporated and Hillside Capital
Incorporated, as amended.
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"Congoleum Plan" means the Tenth Modified Joint Plan of Reorganization
under Chapter 11 of the Bankruptcy Code of Congoleum Corporation, et al. and the
Asbestos Claimant's Committee, substantially in the form attached hereto as
Exhibit 1(a) as the same may be amended to the extent permitted by Section 6.16.
"Congoleum Plan Note" means the promissory note to be issued by Congoleum
to the Congoleum Plan Trust substantially in the form attached hereto as Exhibit
1(b) as the same may be amended to the extent permitted by Section 6.15.
"Congoleum Plan Trust" means the trust to be established upon consummation
of the Congoleum Plan as the same may be amended to the extent permitted by
Section 6.16.
"Consolidated" and "Consolidating", when used with reference to any term,
mean that term as applied to the accounts of the Company (or other specified
Person) and all of its Subsidiaries (or other specified group of Persons), or
such of its Subsidiaries as may be specified, consolidated (or combined) or
consolidating (or combining), as the case may be, in accordance with GAAP
(except that Congoleum shall be accounted for on the equity method) and with
appropriate deductions for minority interests in Subsidiaries.
"Consolidated Adjusted EBITDA" means, for any period, the total of:
(a) Consolidated EBITDA; minus
(b) Capital Expenditures except to the extent (i) attributable to
Capitalized Lease Obligations or (ii) financed with the proceeds of Financing
Debt; minus
(c) any dividends paid or payable, without duplication, in cash by the
Company or any of its Subsidiaries to third parties; minus
(d) the aggregate amount paid by the Company and its Subsidiaries to
repurchase shares of capital stock and options to purchase shares of capital
stock, in each case excluding any such payments made prior to June 30, 2003;
minus
(e) any net income taxes paid or payable, without duplication, in cash by
the Company or any of its Subsidiaries after subtracting any income tax refunds
paid or payable in cash to the Company or any of its Subsidiaries.
"Consolidated Current Assets" means, at any date, all amounts carried as
current assets on the balance sheet of the Company and its Subsidiaries
determined in accordance with GAAP on a Consolidated basis, excluding cash and
Cash Equivalents.
"Consolidated Current Liabilities" means, at any date, all amounts that
are or should be carried as current liabilities on the balance sheet of the
Company and its Subsidiaries determined in accordance with GAAP on a
Consolidated basis, excluding the current portion of long-term Financing Debt,
the Term Loan and the Revolving Loan, each to the extent they are included in
Consolidated Interest Expense.
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"Consolidated EBITDA" means, for any period, the total of:
(a) Consolidated Net Income; plus
(b) all amounts deducted in computing such Consolidated Net Income in
respect of:
(i) depreciation, amortization and unusual noncash charges (other
than the write-down of current assets),
(ii) interest expense, and
(iii) income tax expense, minus
(c) all cash payments made during such period on account of reserves,
restructuring charges and other noncash charges added back to Consolidated
EBITDA in a previous period, minus
(d) all amounts included in Consolidated Net Income in respect of deferred
income tax benefits and other noncash income items, except such amounts that
have been deducted from Consolidated EBITDA in a previous period.
"Consolidated Fixed Charges" means, for any period, the sum of (without
duplication):
(a) Consolidated Interest Expense,
plus (b) the aggregate amount of all mandatory scheduled payments, mandatory
scheduled prepayments, sinking fund payments and mandatory reductions in
revolving loans as a result of mandatory reductions in revolving credit
availability, all with respect to Financing Debt of the Company and its
Subsidiaries in accordance with GAAP on a Consolidated basis, including payments
in the nature of principal under Capitalized Leases.
plus (c) any mandatory dividends paid or payable in cash by the Company or any
of its Subsidiaries to third parties.
"Consolidated Interest Expense" means, for any period, the total of:
(a) the aggregate amount of interest, including commitment fees, payments
in the nature of interest under Capitalized Leases and net payments under Hedge
Agreements, accrued by the Company and its Subsidiaries reporting Congoleum on
the equity method (whether such interest is reflected as an item of expense or
capitalized), minus
(b) to the extent otherwise included in clause (a) above, the amortization
of deferred financing fees and costs, original issue discount relating to
Indebtedness and accrued interest on Indebtedness not paid in cash to the extent
permitted by the terms, including subordination terms, of such Indebtedness
(including PIK Interest), plus
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(c) actual cash payments with respect to accrued and unpaid interest
(including PIK Interest) that has previously reduced Consolidated Interest
Expense pursuant to clause (b) above, plus
(d) the current portion of long-term Financing Debt (other than the
Revolving Loan, Term Loan, or Letters of Credit)
"Consolidated Net Income" means, for any period, net income (or loss) from
continuing operations of the Company and its Subsidiaries reporting Congoleum on
the equity method, excluding:
(a) extraordinary gains (net of any extraordinary losses up to the amount
of any extraordinary gains),
(b) net income of any Person (other than a Subsidiary) in which the
Company or any of its Subsidiaries has an ownership interest, unless those net
earnings have actually been received in the form of cash for distributions,
(c) any portion of the net income of any Subsidiary which for any reason
is legally unavailable to pay dividends to the Company or any other Subsidiary,
(d) any aggregate net gain (in excess of any net losses) arising from the
sale, exchange or other disposition of capital assets (such term to include all
fixed assets, whether tangible or intangible, all inventory sold in conjunction
with the disposition of fixed assets, and all securities),
(e) any write-up of any asset,
(f) any gain arising from the acquisition of any securities of the Company
or any of its Subsidiaries,
(g) net income or gain (but not any loss) resulting from a change in
accounting, an extraordinary event or prior period adjustments,
(h) the income (or loss) of any Person accrued to the date it becomes a
Subsidiary, and
(i) the reserve for environmental liabilities for the 10.33 acres of land
bordering on Xxx Xxxxxx Xxxxxxx Xxxx, Xxxxxxxxx, XX owned by Tullahoma
Properties, L.L.C.
"Consolidated Net Working Capital" means, at any date, the amount (whether
positive or negative) equal to (a) Consolidated Current Assets minus (b)
Consolidated Current Liabilities.
Consolidated Net Working Capital increases when it becomes more positive
or less negative, and decreases when it becomes less positive or more negative.
-10-
"Consolidated Tangible Net Worth" means the aggregate amount of (a)
capital stock (less any treasury stock, capital stock subscribed and unissued
and other contra-equity accounts), (b) surplus, (c) foreign currency translation
adjustments made after June 30, 2003, and (d) retained earnings of the Company
and it Subsidiaries reporting Congoleum on the equity method, excluding (i) any
inter-company balances, (ii) intangibles, (iii) any change in the value of the
Company's Investments in Congoleum as reflected on the Company's balance sheet
as of December 31, 2002 and (iv) the cumulative amount of any net write-up of
asset values after any audit immediately preceding the Closing Date.
"Consolidated Total Debt" means, at any date, all Financing Debt of the
Company and its Subsidiaries on a Consolidated basis.
"Consolidated Total Liabilities" means, at any date, total liabilities of
the Company and its Subsidiaries on a Consolidated basis, reduced by any rights,
proceeds or funds available due to or in connection with any insurance, and
excluding in all events Indebtedness in connection with or contemplated by the
Congoleum Joint Venture Agreement, Congoleum Plan, Congoleum Plan Note and
Congoleum Plan Trust.
"Credit Documents" means:
(a) this Agreement, the Revolving Notes, the Term Notes, each Domestic
Letter of Credit, each Canadian Letter of Credit, each draft presented or
accepted under a Domestic Letter of Credit or Canadian Letter of Credit, the
Security Agreement, the Guarantee Agreement, and each Hedge Agreement provided
by a Lender (or an Affiliate of a Lender) to the Company or any of its
Subsidiaries, each as from time to time in effect; and
(b) any other present or future agreement or instrument from time to time
entered into among the Company, any of its Subsidiaries or any other Obligor, on
one hand, and the Domestic Agent or Canadian Agent, any Domestic Letter of
Credit Issuer or Canadian Letter of Credit Issuer or all the Lenders, on the
other hand, relating to, amending or modifying this Agreement or any other
Credit Document referred to above or which is stated to be a Credit Document,
each as from time to time in effect.
"Credit Obligations" means all present and future liabilities, obligations
and Indebtedness of the Company, any of its Subsidiaries or any other Obligor
owing to the Domestic Agent or Canadian Agent or any Lender (or any Affiliate of
a Lender) under or in connection with this Agreement or any other Credit
Document, including obligations in respect of principal, interest, reimbursement
obligations under Letters of Credit and Hedge Agreements provided by a Lender
(or an Affiliate of a Lender) at the time of the issuance thereof, commitment
fees, Domestic Letter of Credit fees, Canadian Letter of Credit fees, amounts
provided for in Sections 3.2.4, 3.4, 3.5 and 9 and other fees, charges,
indemnities and expenses from time to time owing hereunder or under any other
Credit Document (all whether accruing before or after a Bankruptcy Default and
regardless of whether allowed as a claim in bankruptcy or similar proceedings).
"Credit Participant" is defined in Section 11.2.
-11-
"Currency Exchange Agreement" means any currency swap, foreign exchange
contract or similar arrangement providing for protection against fluctuations in
currency exchange rates, either generally or under specific contingencies.
"Deemed Interest Period" is defined in Section 3.6.
"Default" means any Event of Default and any event or condition which with
the passage of time or giving of notice, or both, would become an Event of
Default, including the filing against the Company, any of its Subsidiaries or
any other Obligor of a petition commencing an involuntary case under the
Bankruptcy Code.
"Delinquency Period" is defined in Section 10.4.5.
"Delinquent Payment" is defined in Section 10.4.5.
"Distribution" means, with respect to the Company (or other specified
Person):
(a) the declaration or payment of any dividend or distribution on or in
respect of any shares of any class of capital stock of or other equity interests
in the Company (or such specified Person);
(b) the purchase, redemption or other retirement of any shares of any
class of capital stock of or other equity interest in the Company (or such
specified Person) or any of its Subsidiaries, or of options, warrants or other
rights for the purchase of such shares, directly, indirectly through a
Subsidiary or corporate parent or otherwise;
(c) any other distribution on or in respect of any shares of any class of
capital stock of or equity or other beneficial interest in the Company (or such
specified Person);
(d) any payment of principal, interest or fees with respect to, or any
purchase, redemption or defeasance of, any Financing Debt of the Company (or
such specified Person) or any of its Subsidiaries which by its terms or the
terms of any agreement is subordinated to the payment of the Credit Obligations;
and
(e) any payment, loan or advance by the Company (or such specified Person)
to, or any other Investment by the Company (or such specified Person) in, the
holder of any shares of any class of capital stock of or equity interest in the
Company (or such specified Person) or any of its Subsidiaries, or any Affiliate
of such holder (including the payment of management and transaction fees and
expenses);
provided, however, that the term "Distribution" shall not include (i) dividends
payable in, or conversion of securities into, perpetual common stock of or other
similar equity interests in the Company (or such specified Person), (ii) the
issuance of PIK Interest or (iii) payments in the ordinary course of business in
respect of (A) reasonable compensation paid to employees, officers and
directors, (B) advances and reimbursements to employees for travel expenses,
drawing accounts, relocation costs and similar expenditures, or (C) rent paid
to, or accounts payable for services rendered or goods sold by, non-Affiliates
that own capital stock of or other equity interests in the Company (or such
specified Person) or any of its Subsidiaries.
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"Domestic Agent" means Bank of America in its capacity as administrative
agent for the Lenders hereunder, as well as its successors and assigns in such
capacity pursuant to Section 10.6.
"Domestic Borrower" is defined in the preamble.
"Domestic Lender" means each of the Persons listed as domestic lenders on
the signature page hereto, including Bank of America in its capacity as a Lender
and such other Persons who may from time to time own a Percentage Interest in
the Credit Obligations, but the term "Domestic Lender" shall not include any
Credit Participant in such capacity.
"Domestic Letter of Credit" is defined in Section 2.3.1.
"Domestic Letter of Credit Exposure" means, at any date, the sum of (a)
the aggregate face amount of all drafts that may then or thereafter be presented
by beneficiaries under all Domestic Letters of Credit then outstanding, plus (b)
the aggregate face amount of all drafts that the Domestic Letter of Credit
Issuer has previously accepted under Domestic Letters of Credit but for which
the Domestic Letter of Credit Issuer has not been reimbursed by the Domestic
Borrower (whether pursuant to an automatic advance under the Domestic Revolving
Loan or otherwise).
"Domestic Letter of Credit Issuer" means, for any Domestic Letter of
Credit, Bank of America or, in the event Bank of America does not for any reason
issue a requested Domestic Letter of Credit, another Domestic Lender selected by
the Domestic Borrower to issue such Domestic Letter of Credit.
"Domestic Reaffirmation Agreement" is defined in Section 5.1.3.
"Domestic Revolving Loan" is defined in Section 2.1.4.
"Domestic Security Agreement" means the Security Agreement dated October
14, 2003, among the Domestic Borrower and Bank of America, and attached hereto
as Exhibit 5.1.3(a).
"Eligible Accounts Receivable" means, at any date, the remainder of:
(a) the aggregate amount carried as accounts receivable (reduced
appropriately for doubtful accounts and customer returns) on the most recent
borrowing base report of either (i) the Company, the Tape Subsidiaries and K&M
or (ii) the Canadian Borrower, as the case may be, delivered in accordance with
Section 6.4.3,
minus (b) the aggregate amount of any such accounts receivable that are
unpaid more than 90 days past the due date to the extent not already included in
doubtful accounts,
-13-
minus (c) the amount of such accounts receivable due from Affiliates
referenced in subsection (a) hereof,
minus (d) either (i) for the Company, the Tape Subsidiaries and K&M, all
payments under such accounts receivable to be made in a currency other than
United States Funds that is not freely convertible into United States Funds or
that may not be freely withdrawn from the country of origin, or (ii) for the
Canadian Borrower, all payments under such accounts receivable to be made in a
currency other than Canadian Funds that is not freely convertible into Canadian
Funds or that may not be freely withdrawn from the country of origin,
minus (e) accounts receivable in which the security interest of the
Domestic Agent or the Canadian Agent, as the case may be, is not perfected or
published, as the case may be, or that are subject to Liens other than Liens
securing the Secured Obligations as such term is defined in the Domestic
Security Agreement or Liens securing Credit Obligations pursuant to the Canadian
Security Agreement, as applicable,
minus (f) all such accounts receivable due from any Person and its
Affiliates for which at least 50% of such accounts receivable are unpaid more
than 90 days past the due date to the extent not already included in doubtful
accounts,
minus (g) accounts receivable to the extent the debtor is a creditor of
the Company or any of its Subsidiaries and has asserted a right of setoff and
has disputed its liability or has filed any claim to contest the amount due, and
minus (h) accounts receivable for which the Domestic Agent or the Canadian
Agent, as the context may require, has certified in writing to the Company that
in its commercially reasonable judgment, believes to be doubtful to the extent
not already included in doubtful accounts;
it being understood that each reduction hereof shall be made without any
double counting or other duplication of any amount.
"Eligible Canadian Assignee" means a financial institution that is (i) not
a non-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;
provided, however, that no Obligor or Affiliate of an Obligor shall qualify as
an Eligible Canadian Assignee under any circumstances.
-14-
"Eligible Domestic Assignee" means (a) a Domestic Lender, (b) an Affiliate
of a Domestic Lender, and (c) subject to the prior approval of the Domestic
Agent and, so long as no Event of Default shall have occurred and be continuing,
the Domestic Borrower, such approval by the Domestic Agent and the Domestic
Borrower not to be unreasonably withheld:
(i) a commercial bank organized under the laws of the United States of
America, or any state thereof, and having total assets in excess of
$500,000,000;
(ii) a savings and loan association or savings bank organized under the
laws of the United States of America, or any state thereof, and having total
assets in excess of $500,000,000;
(iii) a commercial bank organized under the laws of any other country that
is a member of the Organization for Economic Cooperation and Development or has
concluded special lending arrangements with the International Monetary Fund
associated with its General Arrangements to Borrow or of the Cayman Islands, or
a political subdivision of any such country, and having total assets in excess
of $500,000,000, so long as such bank is acting through a branch or agency
located in the United States of America;
(iv) the central bank of any country that is a member of the Organization
for Economic Cooperation and Development; and
(v) a finance company, insurance company or other financial institution or
fund (whether a corporation, partnership, trust or other entity) that is engaged
in making, purchasing or otherwise investing in commercial loans in the ordinary
course of its business and having total assets in excess of $500,000,000;
provided, however, that (A) no Person shall qualify as an Eligible Domestic
Assignee with respect to assignments of obligations as a Domestic Letters of
Credit Issuer unless such Person qualifies under clauses (c)(i) or (c)(iii)
above and (B) no Obligor or Affiliate of an Obligor shall qualify as an Eligible
Domestic Assignee under any circumstances; and provided further, that no
Domestic Lender shall assign or sell participations of all or a portion of its
interest in the Loan to any Person who is (x) listed on the Specially Designated
Nationals and Blocked Persons List maintained by the U.S. Department of Treasury
Office of Foreign Assets Control ("OFAC") and/or on any other similar list
maintained by OFAC pursuant to any authorizing statute, executive order or
regulation, or (y) included within the term "designated national" as defined in
the Cuban Assets Control Regulations, 31 C.F.R. Part 515.
"Eligible Fixed Assets" means, at any date, the total of:
(a) the aggregate amount carried as property, plant and equipment
(calculated at cost and not reduced by accumulated or other depreciation) on the
most recent borrowing base report of either (i) the Company, the Tape
Subsidiaries and K&M or (ii) the Canadian Borrower, as the case may be,
delivered in accordance with Section 6.4.3,
minus (b) any amounts included in the foregoing clause (a) in respect of:
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(i) assets in which the security interest of the Domestic Agent or the
Canadian Agent, as the case may be, is not perfected or published, as the case
may be, or that are subject to Liens other than Liens securing the Secured
Obligations as such term is defined in the applicable Security Agreement, or
existing liens on the real property of the Company located at Ronse Renaix,
Belgium and the real property of American Biltrite Far East, Inc. located in
Singapore, Singapore, and
(ii) obsolete, damaged, defective or worn items (normal wear and tear
excluded).
"Eligible Inventory" means, at any date, the remainder of:
(a) the aggregate amount carried as inventory, at the lower of cost
or market value and net of any related valuation reserves, all computed in
accordance with GAAP, on the most recent borrowing base report of either
(i) the Company, the Tape Subsidiaries and K&M or (ii) the Canadian
Borrower, as the case may be, delivered in accordance with Section 6.4.3,
including work in progress,
minus (b) advance payments from customers reflected on the Consolidated
balance sheet of the Company and its Subsidiaries except to the extent it
reduces accounts receivable,
minus (c) inventory in which the security interest of the Domestic Agent
or the Canadian Agent, as the case may be, is not perfected or published,
as the case may be, or that is subject to Liens other than Liens securing
the Secured Obligations as such term is defined in the Domestic Security
Agreement or Liens securing Credit Obligations pursuant to the Canadian
Security Agreement, as applicable,
minus (d) obsolete, damaged or returned inventory to the extent not
covered by reserves on the Consolidated balance sheet of the Company and
its Subsidiaries.
"Environmental Laws" means all applicable federal, state or local
statutes, laws, ordinances, codes, rules, regulations and guidelines (including
consent decrees and administrative orders) relating to public health and safety
and protection of the environment, including the federal Occupational Health and
Safety Act.
"ERISA" means the federal Employee Retirement Income Security Act of 1974,
as amended.
"ERISA Group Person" means the Company, any of its Subsidiaries and any
Person which is a member of the controlled group or under common control with
the Company or any of its Subsidiaries within the meaning of section 414 of the
Code or section 4001(a)(14) of ERISA.
"Event of Default" is defined in Section 8.1.
"Exchange Act" means the federal Securities Exchange Act of 1934.
"Excluded Taxes" is defined in Section 9.4.1.
-16-
"Existing Credit Agreement" is defined in the preamble.
"Federal Funds Rate" means, for any day, the rate equal to the weighted
average (rounded upward to the nearest 1/8%) of (a) the rates on overnight
federal funds transactions with members of the Federal Reserve System arranged
by federal funds brokers, as such weighted average is published for such day
(or, if such day is not a Banking Day, for the immediately preceding Banking
Day) by the Federal Reserve Bank of New York or (b) if such rate is not so
published for such Banking Day, quotations received by the Domestic Agent from
three federal funds brokers of recognized standing selected by the Domestic
Agent. Each determination by the Domestic Agent of the Federal Funds Rate shall,
in the absence of manifest error, be conclusive.
"Final Maturity Date" means September 30, 2009.
"Financial Officer" of the Company or the Canadian Borrower, as
applicable, (or other specified Person) means its chief executive officer, chief
financial officer, chief operating officer, chairman, president, treasurer,
controller or any of its vice presidents whose primary responsibility is for its
financial affairs, in each case whose incumbency and signatures have been
certified to the Domestic Agent and/or the Canadian Agent, as the case may be,
by the secretary or other appropriate attesting officer of the Company (or such
specified Person).
"Financing Debt" means each of the items described in clauses (a) through
(e) of the definition of the term "Indebtedness" and, without duplication, any
Guarantees of such items.
"Fixed Rate" means for any Fixed Rate Interest Period, the rate identified
by the Domestic Agent for such period.
"Fixed Rate Interest Period" means any period, selected as provided in
Section 3.3.1, of seven, fourteen or twenty-one days or one, two, three or six
months, commencing on any Banking Day and ending on the corresponding date in
the subsequent calendar month so indicated (or, if such subsequent calendar
month has no corresponding date, on the last day of such subsequent calendar
month); provided, however, if any Fixed Rate Interest Period so selected would
otherwise begin or end on a date which is not a Banking Day, such Fixed Rate
Interest Period shall instead begin or end, as the case may be, on the
immediately preceding or succeeding Banking Day as determined by the Domestic
Agent.
"Fixed Rate Pricing Option" means the options granted pursuant to Section
3.3.1 to have the interest on any portion of the Loan computed on the basis of a
Fixed Rate.
"Fleet" is defined in the recitals.
"Foreign Subsidiary" means each Subsidiary that is organized under the
laws of, and conducting its business primarily in a jurisdiction outside of, the
United States of America and that is not domesticated or dually incorporated
under the laws of the United States of America or the states thereof.
-17-
"Foreign Wholly-Owned Subsidiary" means each Wholly Owned Subsidiary that
is organized under the laws of, and conducting its business primarily in a
jurisdiction outside of, the United States of America and that is not
domesticated or dually incorporated under the laws of the United States of
America or the states thereof.
"GAAP" means generally accepted accounting principles as from time to time
in effect, including the statements and interpretations of the United States
Financial Accounting Standards Board; provided, however, that (a) for purposes
of compliance with Section 6 (other than Section 6.4) and the related
definitions, "GAAP" means such principles as in effect on December 31, 2005, as
applied by the Company and its Subsidiaries in the preparation of the most
recent annual statements referred to in Section 7.2.1(a), and consistently
followed, without giving effect to any subsequent changes thereto and (b) in the
event of a change in generally accepted accounting principles after such date,
either the Company or the Required Lenders may request a change in the
definition of "GAAP", in which case the parties hereto shall negotiate in good
faith with respect to an amendment of this Agreement implementing such change.
It being understood that, for purposes of this Agreement, with respect to any
reference to or requirement that financial statements of and other financial
measurements with respect to the Company be (or be based on or derived from)
financial measurements determined in accordance with GAAP, accounting for
Congoleum on the equity method of accounting shall be deemed GAAP compliant.
"Granting Lender" is defined in Section 11.3.
"Guarantee" means, with respect to the Company (or other specified
Person):
(a) any guarantee by the Company (or such specified Person) of the payment
or performance of, or any contingent obligation by the Company (or such
specified Person) in respect of, any Indebtedness or other obligation of any
primary obligor;
(b) any other arrangement whereby credit is extended to a primary obligor
on the basis of any promise or undertaking of the Company (or such specified
Person), including any binding "comfort letter" or "keep well agreement" written
by the Company (or such specified Person), to a creditor or prospective creditor
of such primary obligor, to (i) pay the Indebtedness of such primary obligor,
(ii) purchase an obligation owed by such primary obligor, (iii) pay for the
purchase or lease of assets or services regardless of the actual delivery
thereof or (iv) maintain the capital, working capital, solvency or general
financial condition of such primary obligor;
(c) any liability of the Company (or such specified Person), as a general
partner of a partnership in respect of Indebtedness or other obligations of such
partnership;
(d) any liability of the Company (or such specified Person) as a joint
venturer of a joint venture in respect of Indebtedness or other obligations of
such joint venture;
-18-
(e) any liability of the Company (or such specified Person) with respect
to the tax liability of others as a member of a group (other than a group
consisting solely of the Company and its Subsidiaries) that is consolidated for
tax purposes; and
(f) reimbursement obligations, whether contingent or matured, of the
Company (or such specified Person) with respect to letters of credit, bankers
acceptances, surety bonds, other financial guarantees and Hedge Agreements,
in each case whether or not any of the foregoing are reflected on the balance
sheet of the Company (or such specified Person) or in a footnote thereto;
provided, however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The amount of any
Guarantee and the amount of Indebtedness resulting from such Guarantee shall be
the maximum amount that the guarantor may become obligated to pay in respect of
the obligations (whether or not such obligations are outstanding at the time of
computation).
"Guarantee Agreement" means the Guarantee Agreement dated October 14, 2003
among the Subsidiaries party thereto and the Domestic Agent, and attached hereto
as Exhibit 1(c).
"Guarantor" shall have the meaning given to such term in the Guarantee
Agreement.
"Hazardous Material" means any pollutant, toxic or hazardous material or
waste, including any "hazardous substance" or "pollutant" or "contaminant" as
defined in section 101(14) of CERCLA or any other Environmental Law or regulated
as toxic or hazardous under RCRA or any other Environmental Law.
"Hedge Agreement" means, collectively, Currency Exchange Agreements and
Interest Rate Protection Agreements.
"Indebtedness" means all obligations, contingent or otherwise, which in
accordance with GAAP are required to be classified upon the balance sheet of the
Company (or other specified Person) as liabilities, but in any event including
(without duplication):
(a) indebtedness for borrowed money;
(b) indebtedness evidenced by notes, debentures or similar instruments;
(c) that portion of Capitalized Lease Obligations and Synthetic Lease
Obligations that is properly classified as a liability on a balance sheet in
conformity with GAAP;
(d) mandatory redemption, repurchase or dividend rights on capital stock
(or other equity), including provisions that require the exchange of such
capital stock (or other equity) for Indebtedness from the issuer;
-19-
(e) reimbursement obligations, whether contingent or matured, with respect
to letters of credit, bankers acceptances, surety bonds, other financial
guarantees and Hedge Agreements (without duplication of other Indebtedness
supported or guaranteed thereby);
(f) obligations that are immediately and directly due and payable out of
the proceeds of or production from property;
(g) liabilities secured by any Lien existing on property owned or acquired
by the Company (or such specified Person), whether or not the liability secured
thereby shall have been assumed (but only to the extent of the fair market value
of such property); and
(h) all Guarantees in respect of Indebtedness of others (but only to the
extent of any such Guarantee).
"Indemnified Party" is defined in Section 9.2.
"Initial Closing Date" means September 25, 2006.
"Interest Period" means each of the LIBOR Interest Period and the Fixed
Rate Interest Period.
"Interest Rate Protection Agreements" means any interest rate swap,
interest rate cap, interest rate hedge or other contractual arrangement that
converts variable interest rates into fixed interest rates, fixed interest rates
into variable interest rates or other similar arrangements.
"Investment" means, with respect to the Company (or other specified
Person):
(a) acquisition of any share of capital stock, partnership or other equity
interest, evidence of Indebtedness or other security issued by any other Person;
(b) any loan, advance or extension of credit to, or contribution to the
capital of, any other Person;
(c) any Guarantee of the obligations of any other Person; and
(d) any acquisition of all, or any division or similar operating unit of,
the business of any other Person or the assets comprising such business,
division or unit.
The investments described in the foregoing clauses (a) through (d) shall be
included in the term
"Investment" whether they are made or acquired by purchase, exchange,
issuance of stock or other securities, merger, reorganization or any other
method; provided, however, that the term "Investment" shall not include (i)
trade and customer accounts receivable for property leased, goods furnished or
services rendered in the ordinary course of business and payable within one year
in accordance with customary trade terms, (ii) deposits, advances or prepayments
to suppliers for property leased or licensed, goods furnished and services
rendered in the ordinary course of business, (iii) advances to employees for
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relocation and travel expenses, drawing accounts and similar expenditures, (iv)
stock or other securities acquired in connection with the satisfaction or
enforcement of Indebtedness or claims due to the Company (or such specified
Person) or as security for any such Indebtedness or claim or (v) demand deposits
in banks or similar financial institutions.
In determining the amount of outstanding Investments:
(A) the amount of any Investment shall be the cost thereof minus any returns of
capital in cash on such Investment (determined in accordance with GAAP without
regard to amounts realized as income on such Investment);
(B) the amount of any Investment in respect of a purchase described in clause
(d) above shall include the amount of any Financing Debt assumed in connection
with such purchase or secured by any asset acquired in such purchase or for
which any Person that becomes a Subsidiary is liable on the date on which the
securities of such Person are acquired; and
(C) no Investment shall be increased as the result of an increase in the
undistributed retained earnings of the Person in which the Investment was made
or decreased as a result of an equity interest in the losses of such Person.
"K&M" is defined in the preamble.
"Lease Line" means the Lease Line Agreement, between the Company and Bank
of America (or its designee), as lender, as supplemented, amended and modified
from time to time, entered into pursuant to the Summary of Terms and Conditions
dated July 21, 2006.
"Legal Requirement" means any present or future requirement imposed upon
any of the Lenders or the Company and its Subsidiaries by any law, statute,
rule, regulation, directive, order, decree or guideline (or any interpretation
thereof by courts or of administrative bodies) of the United States of America
or Canada, or any jurisdiction in which any LIBOR Office is located or any state
or political subdivision of any of the foregoing, or by any board, governmental
or administrative agency, central bank or monetary authority of the United
States of America or Canada, any jurisdiction in which any LIBOR Office is
located or where the Company or any of its Subsidiaries may from time to time be
organized, owns property or conducts its business, or any political subdivision
of any of the foregoing. Any such law, statute, rule, regulation, directive,
order, decree, guideline or interpretation imposed on any of the Lenders not
having the force of law shall be deemed to be a Legal Requirement for purposes
of Section 3 if such Lender reasonably believes that compliance therewith is
customary commercial practice.
"Lender" means each of the Domestic Lenders and Canadian Lenders.
"Letters of Credit" means, collectively, the Domestic Letters of Credit
and the Canadian Letters of Credit.
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"Letter of Credit Exposure" means, at any date, the sum of Domestic Letter
of Credit Exposure plus Canadian Letter of Credit Exposure.
"LIBOR Basic Rate" means, (i) for any LIBOR Interest Period of the Term
Loan or the Domestic Revolving Loans the rate of interest at which deposits of
United States funds are offered in the London interbank market for a period of
time equal to such LIBOR Interest Period that appears on Dow Xxxxx Market
Service Page 3750 (or any other commercially available source) as of 11:00
a.m.(London time) two Banking Days prior to the Banking Day on which such LIBOR
Interest Period begins, and (ii) for any LIBOR Interest Period of the Canadian
Revolving Loans the rate of interest at which deposits of United States fund or
Canadian funds, as applicable, are offered in the London interbank market for a
period of time equal to such LIBOR Interest Period that appears on Reuters
Screen Rate (or any other commercially available source) as of 11:00 a.m.
(London time) two Banking Days prior to the Banking Day on which such LIBOR
Interest Period begins for deposits in the relevant currency.
"LIBOR Interest Period" means any period, selected as provided in Section
3.2.1, of seven, fourteen or twenty-one days or one, two, three or six months,
commencing on any Banking Day and ending on the corresponding date in the
subsequent calendar month so indicated (or, if such subsequent calendar month
has no corresponding date, on the last day of such subsequent calendar month);
provided, however, that subject to Section 3.2.3, if any LIBOR Interest Period
so selected would otherwise begin or end on a date which is not a Banking Day,
such LIBOR Interest Period shall instead begin or end, as the case may be, on
the immediately preceding or succeeding Banking Day as determined by the
Domestic Agent or the Canadian Agent, as the case may be, in accordance with the
then current banking practice in the inter-bank Eurodollar market with respect
to Eurodollar deposits at the applicable LIBOR Office, which determination by
the Domestic Agent or the Canadian Agent, as the case may be, shall, in the
absence of manifest error, be conclusive.
"LIBOR Office" means such non-United States office or international
banking facility of any Lender as such Lender may from time to time select.
"LIBOR Pricing Options" means the options granted pursuant to Section
3.2.1 to have the interest on any portion of the Loan computed on the basis of a
LIBOR Rate.
"LIBOR Rate" for any LIBOR Interest Period means the rate, rounded upward
to the nearest 1/100,000, obtained by dividing (a) the LIBOR Basic Rate for such
LIBOR Interest Period by (b) an amount equal to 1 minus the LIBOR Reserve Rate;
provided, however, that if at any time during such LIBOR Interest Period the
LIBOR Reserve Rate applicable to any outstanding LIBOR Pricing Option changes,
the LIBOR Rate for such LIBOR Interest Period shall automatically be adjusted to
reflect such change, effective as of the date of such change to the extent
required by the Legal Requirement implementing such change.
"LIBOR Reserve Rate" means the stated maximum rate (expressed as a
decimal) of all reserves (including any basic, supplemental, marginal or
emergency reserve or any reserve asset), if any, as from time to time in effect,
required by any Legal Requirement to be maintained by any Lender against (a)
"Eurocurrency liabilities" as specified in Regulation D of the Board of
Governors of the Federal Reserve System applicable to LIBOR Pricing Options or
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(b) any other category of extensions of credit, or other assets, that includes
loans subject to a LIBOR Pricing Option by a non-United States office of any of
the Lenders to United States residents, in each case without the benefits of
credits for prorations, exceptions or offsets that may be available to a Lender.
"Lien" means, with respect to the Borrower (or any other specified
Person):
(a) any lien, encumbrance, mortgage, pledge, hypothec, charge or security
interest of any kind upon any property or assets of the Company (or such
specified Person), whether now owned or hereafter acquired, or upon the income
or profits therefrom (excluding in any event a financing statement or
application for registration filed by a lessor under an operating lease not
intended to be a secured financing);
(b) the acquisition of, or the agreement to acquire, any property or asset
upon conditional or installment sale or subject to any other title retention
agreement, device or arrangement (including a Capitalized Lease and a Synthetic
Lease);
(c) the sale, assignment, pledge or transfer for security of any accounts,
general intangibles or chattel paper of the Borrower (or such specified Person),
with or without recourse;
(d) in the case of securities, any purchase option, call or similar
purchase right of a third party;.
(e) the transfer of any tangible or corporeal property or assets for the
purpose of subjecting such items to the payment of previously outstanding
Indebtedness in priority to payment of the general creditors of the Borrower (or
such specified Person); and
(f) the existence for a period of more than 120 consecutive days of any
Indebtedness against the Borrower (or such specified Person) which if unpaid
would by law or upon a Bankruptcy Default be given priority over general
creditors.
"Loan" means, collectively, the Revolving Loans and the Term Loan.
"Margin Stock" means "margin stock" within the meaning of Regulations T, U
or X of the Board of Governors of the Federal Reserve System.
"Material Adverse Change" means, since any specified date or from the
circumstances existing immediately prior to the happening of any specified
event, a material adverse change in (a) the business, assets, financial
condition, income or prospects of the Company and its Subsidiaries (on a
Consolidated basis), whether as a result of (i) general economic conditions
affecting the industries in which the Company operates, (ii) difficulties in
obtaining supplies and raw materials, (iii) fire, flood or other natural
calamities, (iv) environmental pollution, (v) regulatory changes, judicial
decisions, war or other governmental action or (vi) any other event or
development, whether or not related to those enumerated above or (b) the ability
of any Obligor to perform material obligations under the Credit Documents or (c)
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the rights and remedies of the Agent and the Lenders under the Credit Documents,
it being understood that the transactions contemplated by the Congoleum Plan,
the Congoleum Note or the Congoleum Plan Trust, and the effects thereof
(including, without limitation, changes in ownership or ownership rights in
Congoleum), shall be excluded for the purposes hereof.
"Material Agreements" is defined in Section 7.2.2.
"Material Financing Debt" means any Financing Debt (other than the Credit
Obligations) outstanding in an aggregate amount of principal (whether or not
due) and accrued interest exceeding $250,000.
"Maximum Amount of Canadian Revolving Credit" is defined in Section 2.2.2.
"Maximum Amount of Revolving Credit" is defined in Section 2.1.2.
"Multiemployer Plan" means any Plan that is a "multiemployer plan" as
defined in section 4001(a)(3) of ERISA.
"Non Consenting Lender" is defined in Section 11.1.6.
"Nonperforming Lender" is defined in Section 10.4.5.
"Note Purchase Agreement" means the Amended and Restated Note Purchase
Agreement and Facility Guarantee dated as of May 20, 2005, as amended and as
from time to time in effect, among the Company, K&M, Prudential, the Guarantors,
and other Persons joining thereto as Guarantors from time to time, pursuant to a
guarantor joinder agreement.
"Notes" means the Revolving Notes and the Term Notes.
"Obligor" means the Borrowers and each other Person guaranteeing or
providing collateral for the Credit Obligations (but in all events and for all
purposes excluding Congoleum).
"Other Taxes" is defined in Section 9.4.2.
"Overdue Reimbursement Rate" means, at any date, the highest Applicable
Rate then in effect.
"Payment Date" means (a) the last Banking Day of each March, June,
September and December, beginning on the first such date after the date hereof
and (b) the Final Maturity Date, except that, with respect to the Term Loan,
Payment Date shall be the Payment Date provided in Section 4.2.
"Percentage Interest" means, with respect to any Lender, the Commitment of
such Lender with respect to the respective portions of the Loan and Letter of
Credit Exposure. For purposes of determining votes or consents by the Lenders,
the Percentage Interest of any Lender shall be computed as follows: (a) at all
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times when no Event of Default under Section 8.1.1 and no Bankruptcy Default
exists, the ratio that the respective Commitments of such Lender bears to the
total Commitments of all Lenders as from time to time in effect and reflected in
the Register, and (b) at all other times, the ratio that the respective amounts
of the outstanding Loan and Letter of Credit Exposure owing to such Lender bear
to the total outstanding Loan and Letter of Credit Exposure owing to all
Lenders.
"Performing Lender" is defined in Section 10.4.5.
"Person" means any present or future natural person or any corporation,
association, partnership, joint venture, limited liability, joint stock or other
company, business trust, trust, organization, business or government or any
governmental agency or political subdivision thereof.
"PIK Interest" means any accrued interest payments on Financing Debt that
are postponed or made through the issuance of "payment-in-kind" notes or other
similar securities (including book-entry accrual with respect to such postponed
interest payments), all in accordance with the terms of such Financing Debt;
provided, however, that in no event shall PIK Interest include payments made
with cash or Cash Equivalents.
"Plan" means, at any date, any pension benefit plan subject to Title IV of
ERISA maintained, or to which contributions have been made or are required to be
made, by any ERISA Group Person within six years prior to such date.
"Pricing Options" means each of the LIBOR Pricing Options and the Fixed
Rate Pricing Options.
"Prudential" means The Prudential Insurance Company of America.
"Purchase Money Lien" means, with respect to the Borrower (or any other
specified Person), any Lien on any real or immovable, personal or movable
property purchased or leased by such Person (under purchase money security
interests, mortgages, conditional sales, installment sales, Capitalized Leases,
Synthetic Leases and any other title retention or deferred purchase devices, and
whether given to the vendor, the lessor or to a lender) existing or created on
the date on which such property is leased or acquired or within 60 days
thereafter, and any renewal, extension or refunding of any such Lien in an
amount not to exceed the amount thereof remaining unpaid immediately prior to
such renewal, extension or refunding.
"RCRA" means the federal Resource Conservation and Recovery Act, 42 U.S.C.
section 690, et seq.
"Reference Leverage Ratio" means, on any date, the ratio of (a)
Consolidated Total Debt as of the end of the most recent period of four
consecutive fiscal quarters for which financial statements have been furnished
to the Lenders in accordance with Sections 6.4.1 and 6.4.2 prior to such date to
(b) Consolidated EBITDA for such period.
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"Register" is defined in Section 11.1.3.
"Replacement Lender" is defined in Section 11.1.6.
"Required Lenders" means, with respect to any approval, consent,
modification, waiver or other action to be taken by the Agent or the Lenders
under the Credit Documents which require action by the Required Lenders, such
Lenders as own at least 75% of the Percentage Interests; provided, however, that
with respect to any matters referred to in the proviso to Section 14.1, Required
Lenders means such Lenders as own at least the respective portions of the
Percentage Interests required by Section 14.1.
"Revolving Loan" means, collectively, the Domestic Revolving Loan and the
Canadian Revolving Loan.
"Revolving Notes" is defined in Section 2.1.4.
"SEC Reports" is defined in Section 7.15.
"Securities Act" means the federal Securities Act of 1933.
"Security Agreement" means the Canadian Security Agreement and the
Domestic Security Agreement, collectively.
"Senior Management Team" means each of Xxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxx,
Xxxxxxx X. Xxxxxx and Xxxxxx X. Xxxxx III.
"SPV" is defined in Section 11.3.
"Subsidiary" means any Person of which the Borrower (or other specified
Person) shall at the time, directly or indirectly through one or more of its
Subsidiaries, (a) own at least 50% of the outstanding capital stock (or other
shares of beneficial interest) entitled to vote generally, (b) hold at least 50%
of the partnership, joint venture or similar interests or (c) be a general
partner or joint venturer; provided that, at no time and for no purpose shall
Congoleum or any of its subsidiaries be considered a Subsidiary.
"Synthetic Lease" means a lease by the Company and its Subsidiaries that
is treated as an operating lease under GAAP and as a loan or other financing for
federal income tax purposes.
"Synthetic Lease Obligations" means the aggregate amount of future rental
payments under all Synthetic Leases discounted at a discount rate equal to the
rate on Treasury bills of comparable maturity.
"Tape Subsidiaries" means Ideal Tape Co., Inc., ABItalia, Inc. and
American Biltrite Far East, Inc.
"Tax" or "Taxes" is defined in Section 9.4.1.
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"Terminated Lender" is defined in Section 11.1.6.
"Term Loan" is defined in Section 2.5.1.
"Term Loan Funding Date" is defined in Section 5.1.1.
"Term Note" is defined in Section 2.5.2.
"Toronto Office" means the principal banking office of Bank of America
Canada in Toronto, Ontario.
"United States Funds" means such coin or currency of the United States of
America as at the time shall be legal tender therein for the payment of public
and private debts.
"Unrestricted Subsidiaries" means (a) K&M and American Biltrite Canada
Ltd., (b) each Subsidiary that is a Guarantor under the Guarantee Agreement, and
(c) Persons that are designated in writing as "Unrestricted Subsidiaries" after
the date hereof by the Domestic Agent; provided, however, that Unrestricted
Subsidiaries shall not include Janus Flooring Corporation or Congoleum.
"Wholly Owned Subsidiary" means any Subsidiary of which all of the
outstanding capital stock (or other shares of beneficial interest) entitled to
vote generally (other than directors' qualifying shares and, in the case of
Foreign Subsidiaries, shares required by Legal Requirements to be held by
foreign nationals) is owned by the Company (or other specified Person) directly,
or indirectly through one or more other Wholly Owned Subsidiaries.
2. The Credits.
2.1. Domestic Revolving Credit.
2.1.1. Domestic Revolving Loan. Subject to all the terms and
conditions of this Agreement and so long as no Default exists, from time
to time on and after the Initial Closing Date and prior to the Final
Maturity Date the Domestic Lenders will, severally in accordance with
their respective Commitments in the Domestic Revolving Loan, make loans to
the Domestic Borrower in such amounts as may be requested by the Domestic
Borrower in accordance with Section 2.1.3. The sum of the aggregate
principal amount of loans made under this Section 2.1.1 at any one time
outstanding plus the Letter of Credit Exposure shall in no event exceed
the lesser of (a) the Borrowing Base or (b) Maximum Amount of Revolving
Credit. In no event will the principal amount of loans at any one time
outstanding made by any Domestic Lender pursuant to this Section 2.1,
together with such Domestic Lender's Percentage Interest in the Domestic
Letter of Credit Exposure, exceed such Domestic Lender's Commitment with
respect to the Domestic Revolving Loan. For purposes of determining the
maximum amount that may be borrowed at any particular time pursuant to
this Section 2.1.1, any loans made or letters of credit issued pursuant to
this Agreement denominated in Canadian dollars shall, solely for purposes
of making such determination, be converted into United States dollars at
the prevailing foreign exchange spot rate of the Domestic Agent on the
date the applicable borrowing in Canadian dollars was made.
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2.1.2. Maximum Amount of Revolving Credit. The term "Maximum Amount
of Revolving Credit" means $30,000,000 minus the amount outstanding under
the Canadian Revolving Credit minus the Canadian Letter of Credit
Exposure.
2.1.3. Domestic Borrowing Requests. The Domestic Borrower may from
time to time request a loan under Section 2.1.1 by providing to the
Domestic Agent a notice, which may be by telephone if confirmed in
writing. Such notice must be received by the Domestic Agent not later than
noon (Boston time) on the Banking Day (second Banking Day preceding the
requested Closing Date if any portion of such loan will be subject to a
LIBOR Pricing Option) that is the requested Closing Date for such loan.
The notice must specify (a) the amount of the requested loan, which shall
be not less than $500,000 and an integral multiple of $100,000 and (b) the
requested Closing Date therefor, which shall be a Banking Day. Upon
receipt of such notice, the Domestic Agent will promptly inform each other
Domestic Lender (by telephone or otherwise). Each such loan will be made
at the Boston Office by depositing the amount thereof to the general
account of the Domestic Borrower with the Domestic Agent. In connection
with each such loan, the Domestic Borrower shall furnish to the Domestic
Agent a certificate in substantially the form of Exhibit 5.2.1(a).
2.1.4. Revolving Notes. The aggregate principal amount of the loans
outstanding from time to time under this Section 2.1 is referred to as the
"Domestic Revolving Loan". The Domestic Agent shall keep a record of the
Domestic Revolving Loan and the respective interests of the Domestic
Lenders therein as part of the Register, which shall evidence the Domestic
Revolving Loan. The Domestic Revolving Loan shall be deemed owed to each
Domestic Lender having a Commitment therein severally in accordance with
such Domestic Lender's Percentage Interest therein, and all payments
thereon shall be for the account of each Domestic Lender in accordance
with its Percentage Interest therein. Upon written request of any Domestic
Lender, the Domestic Borrower's obligations to pay such Domestic Lender's
Percentage Interest in the Domestic Revolving Loan shall be further
evidenced by a separate note of the Domestic Borrower in substantially the
form of Exhibit 2.1.4 (each, a "Revolving Note"), payable to such Domestic
Lender in accordance with such Domestic Lender's Percentage Interest in
the Domestic Revolving Loan.
2.2. Canadian Revolving Credit.
2.2.1. Canadian Revolving Loan. Subject to all the terms and
conditions of this Agreement and so long as no Default exists, from time
to time on and after the Initial Closing Date and prior to the Final
Maturity Date the Canadian Lenders will, severally in accordance with
their respective Commitments in the Canadian Revolving Loan, make loans to
the Canadian Borrower in such amounts as may be requested by the Canadian
Borrower in accordance with Section 2.2.3. The sum of the aggregate
principal amount of loans made under this Section 2.2.1 at any one time
outstanding plus the Canadian Letter of Credit Exposure shall in no event
exceed the lesser of (a) the Canadian Borrowing Base or (b) Maximum Amount
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of Canadian Revolving Credit. In no event will the principal amount of
loans at any one time outstanding made by any Canadian Lender pursuant to
this Section 2.2, together with such Canadian Lender's Percentage Interest
in the Canadian Letter of Credit Exposure, exceed such Canadian Lender's
Commitment with respect to the Canadian Revolving Loan. At the Canadian
Borrower's request, Canadian Revolving Loans may be made in either United
States dollars or Canadian dollars, provided that for purposes of
determining the maximum amount that may be borrowed at any particular time
pursuant to this Section 2.2.1, any loans made or letters of credit issued
pursuant to this Agreement denominated in Canadian dollars shall, solely
for purposes of making such determination, be converted into United States
dollars at the prevailing foreign exchange spot rate of the Domestic Agent
on the date the applicable borrowing in Canadian dollars was made.
Canadian Revolving Loans may be Base Rate Loans in Canadian Funds or
United States Funds, or may be priced according to a LIBOR Pricing Option.
2.2.2. Maximum Amount of Canadian Revolving Credit. The term
"Maximum Amount of Canadian Revolving Credit" shall initially mean the
lesser of (a) $12,000,000, and (b) an amount equal to $30,000,000 minus
the Domestic Revolving Loans outstanding, and, if requested by the
Borrower, can be adjusted up or down on a quarterly basis but shall never
exceed $12,000,000.
2.2.3. Canadian Borrowing Requests. The Canadian Borrower may from
time to time request a loan under Section 2.2.1 by providing to the
Canadian Agent a notice, which may be by telephone if confirmed in
writing. Such notice must be received by the Canadian Agent not later than
noon (Toronto time) on the Banking Day (second Banking Day preceding the
Closing Date if any portion of such loan will be subject to a LIBOR
Pricing Option) that is the requested Closing Date for such loan. The
notice must specify (a) the amount of the requested loan, which shall be
not less than $500,000 and an integral multiple of $100,000 and (b) the
requested Closing Date therefor, which shall be a Banking Day. Upon
receipt of such notice, the Canadian Agent will promptly inform each other
Canadian Lender (by telephone or otherwise). Each such loan will be made
at the Toronto Office by depositing the amount thereof to the general
account of the Canadian Borrower with the Canadian Agent, or as designated
by the Canadian Borrower. In connection with each such loan, the Canadian
Borrower shall furnish to the Canadian Agent a certificate in
substantially the form of Exhibit 5.2.1(b).
2.2.4. Register of Canadian Revolving Loans. The aggregate principal
amount of the loans outstanding from time to time under this Section 2.2
is referred to as the "Canadian Revolving Loan". The Domestic Agent shall
keep a record of the Canadian Revolving Loan and the respective interests
of the Canadian Lenders therein as part of the Register, which shall
evidence the Canadian Revolving Loan. The Canadian Revolving Loan shall be
deemed owed to each Canadian Lender having a Commitment therein severally
in accordance with such Canadian Lender's Percentage Interest therein, and
all payments thereon shall be for the account of each Canadian Lender in
accordance with its Percentage Interest therein. Each Canadian Lender
shall keep in its books, accounts for the Canadian Revolving Loan and
other amounts payable by any Canadian Borrower under this Agreement. Each
Canadian Lender shall keep appropriate registers showing the amount of the
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indebtedness of each Canadian Borrower in respect of the Canadian
Revolving Loan and showing each payment or repayment of principal and
interest made in respect of such indebtedness. Such registers shall,
absent manifest error, constitute conclusive evidence of their content
against the Canadian Borrower; provided that the obligation of the
Canadian Borrower to pay or repay any indebtedness and liability owing by
it in accordance with the terms and conditions of this Agreement and the
Credit Documents shall not be affected by the failure of any Canadian
Lender to keep such registers. Such registers shall be available for
inspection by the Canadian Borrower at any reasonable time and from time
to time upon reasonable prior notice.
2.3. Domestic Letters of Credit.
2.3.1. Issuance of Domestic Letters of Credit. Subject to all the
terms and conditions of this Agreement and so long as no Default exists,
from time to time on and after the Initial Closing Date and prior to the
date five Banking Days preceding the Final Maturity Date, the Domestic
Letter of Credit Issuer will issue for the account of the Domestic
Borrower one or more irrevocable documentary or standby letters of credit
(the "Domestic Letters of Credit"). The sum of Domestic Letter of Credit
Exposure plus the Revolving Loan plus the Canadian Letter of Credit
Exposure plus the Canadian Revolving Loan shall in no event exceed the
Maximum Amount of Revolving Credit. Domestic Letter of Credit Exposure
shall in no event exceed $5,000,000 and Letter of Credit Exposure
attributable to the sum of standby Domestic Letters of Credit shall not
exceed $5,000,000.
2.3.2. Requests for Letters of Credit. The Domestic Borrower may
from time to time request a Domestic Letter of Credit to be issued by
providing to the Domestic Letter of Credit Issuer a notice which is
actually received by the Domestic Agent not less than five Banking Days
(for standby Domestic Letters of Credit) and one Banking Day (for
documentary Domestic Letters of Credit) prior to the requested Closing
Date for such Domestic Letter of Credit specifying (a) the amount of the
requested Domestic Letter of Credit, (b) the beneficiary thereof, (c) the
requested Closing Date and (d) a summary of the principal terms of the
text for such Domestic Letter of Credit, together with the customary
application form required by the Domestic Letter of Credit Issuer. The
standby Domestic Letters of Credit may include a provision providing that
the maturity date will be automatically extended each year for an
additional year unless the Domestic Letter of Credit Issuer or the
Domestic Agent gives written notice to the contrary. In the event of any
inconsistency between such application form and this Agreement, this
Agreement shall govern. Each Domestic Letter of Credit will be issued by
forwarding it to the beneficiary as directed in writing by the Domestic
Borrower. In connection with the issuance of any Domestic Letter of
Credit, the Domestic Borrower shall furnish to the Domestic Letter of
Credit Issuer (and the Domestic Agent if the Domestic Letter of Credit
Issuer is not the Domestic Agent) a certificate in substantially the form
of Exhibit 5.2.1(a).
2.3.3. Form and Expiration of Domestic Letters of Credit. Each
Domestic Letter of Credit and each draft accepted or paid under a Domestic
Letter of Credit shall be issued, accepted or paid, as the case may be, by
the Domestic Letter of Credit Issuer at its principal office. No Domestic
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Letter of Credit shall provide for the payment of drafts drawn thereunder,
and no draft shall be payable, at a date which is later than the earlier
of (a) except for certain standby Domestic Letters of Credit as noted in
Section 2.3.2, the date 12 months after the date of issuance (which
expiration date may be extended at the option of the Domestic Letter of
Credit Issuer for additional 12-month periods ending prior to the date
referred to in clause (b) below) or (b) five Banking Days prior to the
Final Maturity Date. Each Domestic Letter of Credit and each draft
accepted under a Domestic Letter of Credit shall be in such form and
minimum amount, and shall contain such terms, as the Domestic Letter of
Credit Issuer and the Domestic Borrower may agree upon at the time such
Domestic Letter of Credit is issued.
2.3.4. Domestic Lenders' Participation in Domestic Letters of
Credit. Upon the issuance of any Domestic Letter of Credit, a
participation therein, in an amount equal to each Domestic Lender's
Percentage Interest in the Domestic Revolving Loan, shall automatically be
deemed granted by the Domestic Letter of Credit Issuer to each such
Domestic Lender on the date of such issuance and such Domestic Lenders
shall automatically be obligated, as set forth in Section 10.5, to
reimburse the Domestic Letter of Credit Issuer to the extent of their
respective Percentage Interests in the Domestic Revolving Loan for all
obligations incurred by the Domestic Letter of Credit Issuer to third
parties in respect of such Domestic Letter of Credit not reimbursed by the
Domestic Borrower. The Domestic Letter of Credit Issuer will send to each
Domestic Lender (and the Domestic Agent if the Domestic Letter of Credit
Issuer is not the Domestic Agent) a confirmation regarding the
participations in Domestic Letters of Credit outstanding during such
month.
2.3.5. Reimbursement of Payment. At such time as a Domestic Letter
of Credit Issuer makes any payment on a draft presented or accepted under
a Domestic Letter of Credit, the amount of such payment shall be
considered a loan under Section 2.1.1 (regardless of whether the
conditions set forth in Section 5.2 are satisfied) and part of the
Domestic Revolving Loan as if the Domestic Borrower had paid in full the
amount required with respect to the Domestic Letter of Credit by borrowing
such amount under Section 2.1.1, except as provided below. In the event
such amount would cause the Domestic Revolving Loan to exceed the Maximum
Amount of Revolving Credit or if during the existence of an Event of
Default the Domestic Agent provides written notice to the Domestic
Borrower that Domestic Letter of Credit payments will no longer be
considered loans under Section 2.1.1, the Domestic Borrower will on demand
pay to the Domestic Agent in immediately available funds the amount of
such payment.
2.3.6. Subrogation. Upon any payment by a Domestic Letter of Credit
Issuer under any Domestic Letter of Credit and until the reimbursement of
such Domestic Letter of Credit Issuer by the Domestic Borrower with
respect to such payment (whether by cash payment or refinancing with
proceeds of the Domestic Revolving Loan), the Domestic Letter of Credit
Issuer shall be entitled to be subrogated to, and to acquire and retain,
the rights which the Person to whom such payment is made may have against
the Domestic Borrower, all for the benefit of the Domestic Lenders. The
Domestic Borrower will take such action as the Domestic Letter of Credit
Issuer may reasonably request, including requiring the beneficiary of any
Domestic Letter of Credit to execute such documents as the Domestic Letter
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of Credit Issuer may reasonably request, to assure and confirm to the
Domestic Letter of Credit Issuer such subrogation and such rights,
including the rights, if any, of the beneficiary to whom such payment is
made in accounts receivable, inventory and other properties and assets of
any Obligor of the Domestic Borrower.
2.3.7. Modification, Consent, etc. If the Domestic Borrower requests
or consents in writing to any modification or extension of any Domestic
Letter of Credit, or waives any failure of any draft, certificate or other
document to comply with the terms of such Domestic Letter of Credit, the
Domestic Letter of Credit Issuer shall be entitled to rely on such
request, consent or waiver. This Agreement shall be binding upon the
Domestic Borrower with respect to such Domestic Letter of Credit as so
modified or extended, and with respect to any action taken or omitted by
such Domestic Letter of Credit Issuer pursuant to any such request,
consent or waiver.
2.4. Canadian Letters of Credit.
2.4.1. Issuance of Canadian Letters of Credit. Subject to all the
terms and conditions of this Agreement and so long as no Default exists,
from time to time on and after the Initial Closing Date and prior to the
date five Banking Days preceding the Final Maturity Date, the Canadian
Letter of Credit Issuer will issue for the account of the Canadian
Borrower one or more irrevocable documentary or standby letters of credit
(the "Canadian Letters of Credit"). The sum of Canadian Letter of Credit
Exposure plus the Canadian Revolving Loan shall in no event exceed the
Maximum Amount of Canadian Revolving Credit. Canadian Letter of Credit
Exposure shall in no event exceed $1,000,000. At the request of the
Canadian Borrower, Canadian Letters of Credit may be issued in either
United States dollars or Canadian dollars, provided that for purposes of
determining the amount of Canadian Letter of Credit Exposure, any
outstanding Canadian Letters of Credit denominated in Canadian dollars
shall, solely for purposes of making such determination, be converted into
United States dollars at the prevailing foreign exchange spot rate of the
Canadian Agent on the date the applicable Canadian Letter of Credit was
issued.
2.4.2. Requests for Letters of Credit. The Canadian Borrower may
from time to time request a Canadian Letter of Credit to be issued by
providing to the Canadian Letter of Credit Issuer a notice which is
actually received by the Canadian Agent not less than five Banking Days
(for standby Canadian Letters of Credit) and two Banking Days (for
documentary Canadian Letters of Credit) prior to the requested Closing
Date for such Canadian Letter of Credit specifying (a) the amount of the
requested Canadian Letter of Credit, (b) the beneficiary thereof, (c) the
requested Closing Date and (d) a summary of the principal terms of the
text for such Canadian Letter of Credit, together with the customary
application form required by the Canadian Letter of Credit Issuer. The
standby Canadian Letters of Credit may include a provision providing that
the maturity date will be automatically extended each year for an
additional year unless the Canadian Letter of Credit Issuer or the
Canadian Agent gives written notice to the contrary. In the event of any
inconsistency between such application form and this Agreement, this
Agreement shall govern. Each Canadian Letter of Credit will be issued by
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forwarding it to the beneficiary as directed in writing by the Canadian
Borrower. In connection with the issuance of any Canadian Letter of
Credit, the Canadian Borrower shall furnish to the Canadian Letter of
Credit Issuer and the Agent a certificate in substantially the form of
Exhibit 5.2.1(b).
2.4.3. Form and Expiration of Canadian Letters of Credit. Each
Canadian Letter of Credit and each draft accepted or paid under a Canadian
Letter of Credit shall be issued, accepted or paid, as the case may be, by
the Canadian Letter of Credit Issuer at its principal office. No Canadian
Letter of Credit shall provide for the payment of drafts drawn thereunder,
and no draft shall be payable, at a date which is later than the earlier
of (a) except for certain standby Canadian Letters of Credit as noted in
Section 2.4.2, the date 12 months after the date of issuance (which
expiration date may be extended at the option of the Canadian Letter of
Credit Issuer for additional 12-month periods ending prior to the date
referred to in clause (b) below) or (b) five Banking Days prior to the
Final Maturity Date. Each Canadian Letter of Credit and each draft
accepted under a Canadian Letter of Credit shall be in such form and
minimum amount, and shall contain such terms, as the Canadian Letter of
Credit Issuer and the Canadian Borrower may agree upon at the time such
Canadian Letter of Credit is issued.
2.4.4. Canadian Lenders' Participation in Canadian Letters of
Credit. Upon the issuance of any Canadian Letter of Credit, a
participation therein, in an amount equal to each Canadian Lender's
Percentage Interest in the Canadian Revolving Loan, shall automatically be
deemed granted by the Canadian Letter of Credit Issuer to each such
Canadian Lender on the date of such issuance and such Canadian Lenders
shall automatically be obligated, as set forth in Section 10.5, to
reimburse the Canadian Letter of Credit Issuer to the extent of their
respective Percentage Interests in the Canadian Revolving Loan for all
obligations incurred by the Canadian Letter of Credit Issuer to third
parties in respect of such Canadian Letter of Credit not reimbursed by the
Canadian Borrower. The Canadian Letter of Credit Issuer will send to each
Canadian Lender and the Canadian Agent a confirmation regarding the
participations in Canadian Letters of Credit outstanding during such
month.
2.4.5. Reimbursement of Payment. At such time as a Canadian Letter
of Credit Issuer makes any payment on a draft presented or accepted under
a Canadian Letter of Credit, the amount of such payment shall be
considered a loan under Section 2.2.1 (regardless of whether the
conditions set forth in Section 5.2 are satisfied) and part of the
Canadian Revolving Loan as if the Canadian Borrower had paid in full the
amount required with respect to the Canadian Letter of Credit by borrowing
such amount under Section 2.2.1, except as provided below. In the event
such amount would cause the Canadian Revolving Loan to exceed the Maximum
Amount of Canadian Revolving Credit or if during the existence of an Event
of Default the Canadian Agent provides written notice to the Canadian
Borrower that Canadian Letter of Credit payments will no longer be
considered loans under Section 2.2.1, the Canadian Borrower will on demand
pay to the Canadian Agent in immediately available funds the amount of
such payment.
2.4.6. Subrogation. Upon any payment by a Canadian Letter of Credit
Issuer under any Canadian Letter of Credit and until the reimbursement of
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such Canadian Letter of Credit Issuer by the Canadian Borrower with
respect to such payment (whether by cash payment or refinancing with
proceeds of the Canadian Revolving Loan), the Canadian Letter of Credit
Issuer shall be entitled to be subrogated to, and to acquire and retain,
the rights which the Person to whom such payment is made may have against
the Canadian Borrower, all for the benefit of the Canadian Lenders. The
Canadian Borrower will take such action as the Canadian Letter of Credit
Issuer may reasonably request, including requiring the beneficiary of any
Canadian Letter of Credit to execute such documents as the Canadian Letter
of Credit Issuer may reasonably request, to assure and confirm to the
Canadian Letter of Credit Issuer such subrogation and such rights,
including the rights, if any, of the beneficiary to whom such payment is
made in accounts receivable, inventory and other properties and assets of
any Obligor of the Canadian Borrower.
2.4.7. Modification, Consent, etc. If the Canadian Borrower requests
or consents in writing to any modification or extension of any Canadian
Letter of Credit, or waives any failure of any draft, certificate or other
document to comply with the terms of such Canadian Letter of Credit, the
Canadian Letter of Credit Issuer shall be entitled to rely on such
request, consent or waiver. This Agreement shall be binding upon the
Canadian Borrower with respect to such Canadian Letter of Credit as so
modified or extended, and with respect to any action taken or omitted by
such Canadian Letter of Credit Issuer pursuant to any such request,
consent or waiver.
2.5. Term Credit.
2.5.1. Term Loan. Subject to all the terms and conditions of this
Agreement, on the Initial Closing Date the Domestic Lenders will, in
accordance with their respective Percentage Interests therein, severally
lend to the Domestic Borrower as a term loan, an aggregate amount of
$10,000,000. The aggregate principal amount of the loans made pursuant to
this Section 2.5 at any one time outstanding is referred to as the "Term
Loan."
2.5.2. Term Notes. The Term Loan shall be made at the Boston Office
by crediting the amount of such loan to the general account of the
Domestic Borrower with the Domestic Agent. The Domestic Agent shall keep a
record of the Term Loan and the respective interests of the Lenders
therein as part of the Register, which shall evidence the Term Loan. The
Term Loan shall be deemed owed to each Domestic Lender severally in
accordance with such Domestic Lender's Percentage Interest therein, and
all payments thereon shall be for the account of each Domestic Lender in
accordance with its Percentage Interest therein. Upon written request of
any Domestic Lender, the Domestic Borrower's obligations to pay such
Domestic Lender's Percentage Interest in the Term Loan shall be further
evidenced by a separate note of the Domestic Borrower in substantially the
form of Exhibit 2.5.2 (each, a "Term Note"), payable to such Domestic
Lender in accordance with such Domestic Lender's Percentage Interest in
the Term Loan.
2.6. Application of Proceeds.
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2.6.1. Domestic Revolving Loan. Subject to Section 2.6.6, the
Domestic Borrower will apply the proceeds of the Domestic Revolving Loan
for working capital and other lawful corporate purposes of the Company and
its Subsidiaries.
2.6.2. Canadian Revolving Loan. Subject to Section 2.6.6, the
Canadian Borrower will apply the proceeds of the Canadian Revolving Loan
for working capital and other lawful corporate purposes of the Canadian
Borrower and its Subsidiaries.
2.6.3. Letters of Credit. Domestic Letters of Credit shall be issued
only for such lawful corporate purposes as the Domestic Borrower has
requested in writing and to which the Domestic Letter of Credit Issuer
agrees.
2.6.4. Canadian Letters of Credit. Canadian Letters of Credit shall
be issued only for such lawful corporate purposes as the Canadian Borrower
has requested in writing and to which the Canadian Letter of Credit Issuer
agrees.
2.6.5. Term Loan. The Domestic Borrower will apply the proceeds of
the Term Loan only to (a) pay off the Domestic Borrower's existing
outstanding notes issued under the Note Purchase Agreement, together with
any accrued interest thereon, Yield Maintenance Amount (as defined in the
Note Purchase Agreement) and fees and expenses incurred by the Company in
connection therewith, it being understood that the Agent and the Lenders
have consented to the foregoing payoff, and (b) operations of the Domestic
Borrower.
2.6.6. Specifically Prohibited Applications. The Domestic Borrower
will not, directly or indirectly, apply any part of the proceeds of any
extension of credit made pursuant to the Credit Documents to purchase or
to carry Margin Stock or to any transaction prohibited by the Credit
Documents or by Legal Requirements applicable to the Lenders and known by
the Borrower.
3. Interest; Pricing Options; Fees.
3.1. Interest. The Term Loan, Domestic Revolving Loan and Canadian
Revolving Loan shall each accrue and bear interest at a rate per annum which
shall at all times equal the Applicable Rate. Prior to any stated or accelerated
maturity of the Term Loan, Domestic Revolving Loan or the Canadian Revolving
Loan, the Domestic Borrower or the Canadian Borrower, as the case may be, will,
on each Payment Date, pay the accrued and unpaid interest on the portion of the
Term Loan, Domestic Revolving Loan or Canadian Revolving Loan which was not
subject to a Pricing Option. On the last day of each Interest Period or on any
earlier termination of any Pricing Option, the Domestic Borrower or the Canadian
Borrower, as the case may be, will pay the accrued and unpaid interest on the
portion of the Term Loan, Domestic Revolving Loan or the Canadian Revolving Loan
which was subject to the Pricing Option which expired or terminated on such
date. In the case of any Interest Period longer than three months, the Domestic
Borrower or the Canadian Borrower, as the case may be, will also pay the accrued
and unpaid interest on the portion of the Term Loan, Domestic Revolving Loan or
the Canadian Revolving Loan subject to the Pricing Option having such Interest
Period at three-month intervals, the first such payment to be made on the last
Banking Day of the three-month period which begins on the first day of such
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Interest Period. On the stated or any accelerated maturity of the Term Loan,
Domestic Revolving Loan or the Canadian Revolving Loan, the Domestic Borrower or
the Canadian Borrower, as the case may be, will pay all accrued and unpaid
interest on the Term Loan, Domestic Revolving Loan or the Canadian Revolving
Loan, including any accrued and unpaid interest on any portion of the Term Loan,
Domestic Revolving Loan or the Canadian Revolving Loan which is subject to a
Pricing Option. Upon the occurrence and during the continuance of an Event of
Default, the Domestic Lenders or the Canadian Lenders, as the case may be, may
require accrued interest to be payable on demand or at regular intervals more
frequent than each Payment Date. All payments of interest hereunder shall be
made to the Domestic Agent for the account of each Domestic Lender or to the
Canadian Agent for the account of each Canadian Lender, as the case may be, in
accordance with such Domestic Lender or such Canadian Lender's Percentage
Interest therein.
3.2. LIBOR Pricing Options.
3.2.1. Election of LIBOR Pricing Options. Subject to all of the
terms and conditions hereof and so long as no Default exists, the Domestic
Borrower or the Canadian Borrower, as the case may be, may from time to
time, by irrevocable notice to the Domestic Agent or the Canadian Agent,
as the case may be, actually received by noon (Boston time or Toronto
time, as the case may be) not less than three Banking Days prior to the
commencement of the LIBOR Interest Period selected in such notice, elect
to have such portion of the Loan as the Domestic Borrower or the Canadian
Borrower, as the case may be, may specify in such notice accrue and bear
interest during the LIBOR Interest Period so selected at the Applicable
Rate computed on the basis of the applicable LIBOR Rate. In the event the
Domestic Borrower or the Canadian Borrower, as the case may be, at any
time does not elect a LIBOR Pricing Option under this Section 3.2.1 or a
Fixed Rate Pricing Option under Section 3.3.1 for any portion of the Loan
(upon termination of a LIBOR Pricing Option or otherwise), then such
portion of the Loan will accrue and bear interest at the Applicable Rate
based on the appropriate Base Rate. No election of a LIBOR Pricing Option
shall become effective:
(a) if, prior to the commencement of any such LIBOR Interest
Period, the Domestic Agent or the Canadian Agent, as applicable,
reasonably determines that (i) the electing or granting of the LIBOR
Pricing Option in question would violate a Legal Requirement, (ii)
eurodollar deposits in an amount comparable to the amount of the
Loan as to which such LIBOR Pricing Option has been elected and
which have a term corresponding to the proposed LIBOR Interest
Period are not readily available in the inter-bank eurodollar
market, or (iii) by reason of circumstances affecting the inter-bank
eurodollar market, adequate and reasonable methods do not exist for
ascertaining the interest rate applicable to such deposits for the
proposed LIBOR Interest Period; or
(b) if the Required Lenders shall have advised the Domestic
Agent or the Canadian Agent, as applicable, by telephone or
otherwise at or prior to noon (Boston time) on the second Banking
Day prior to the commencement of such proposed LIBOR Interest Period
(and shall have subsequently confirmed in writing) that, after
reasonable efforts to determine the availability of such eurodollar
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deposits, the Required Lenders reasonably anticipate that eurodollar
deposits in an amount equal to the Percentage Interest of the
Required Lenders in the portion of the Loan as to which such LIBOR
Pricing Option has been elected and which have a term corresponding
to the LIBOR Interest Period in question will not be offered in the
eurodollar market to the Required Lenders at a rate of interest that
does not exceed the anticipated LIBOR Basic Rate.
3.2.2. Notice to Lenders and Borrower. The Domestic Agent or
Canadian Agent will promptly inform each Domestic Lender or Canadian
Lender, as the case may be, (by telephone or otherwise) of each notice
received by it from the Domestic Borrower or the Canadian Borrower
pursuant to Section 3.2.1 and of the LIBOR Interest Period specified in
such notice. Upon determination by the Domestic Agent or the Canadian
Agent, as the case may be, of the applicable LIBOR Rate for such LIBOR
Interest Period or in the event such election shall not become effective,
the Domestic Agent or the Canadian Agent will promptly notify the
applicable Borrower and each Domestic Lender or Canadian Lender, as the
case may be, (by telephone or otherwise) of the LIBOR Rate so determined
or why such election did not become effective, as the case may be.
3.2.3. Selection of LIBOR Interest Periods. LIBOR Interest Periods
shall be selected so that:
(a) the minimum portion of the Loan subject to any LIBOR
Pricing Option shall be $500,000 and an integral multiple of
$100,000;
(b) no more than 15 LIBOR Pricing Options shall be outstanding
at any one time; and
(c) no LIBOR Interest Period shall expire later than the Final
Maturity Date.
3.2.4. Additional Interest. If any portion of the Loan subject to a
LIBOR Pricing Option is repaid, or any LIBOR Pricing Option is terminated
for any reason (including acceleration of maturity), on a date which is
prior to the last Banking Day of the LIBOR Interest Period applicable to
such LIBOR Pricing Option, the Domestic Borrower will pay to the Domestic
Agent or the Canadian Borrower will pay to the Canadian Agent, as the case
may be, for the account of each Domestic Lender or Canadian Lender, as the
case may be, in accordance with such Lender's Percentage Interest, in
addition to any amounts of interest otherwise payable hereunder, an amount
equal to the losses (including lost profits) incurred by such Lender as a
result of such early prepayment or termination. The determination by the
Domestic Agent or Canadian Agent, as the case may be, of such amount of
such losses shall, in the absence of manifest error, be conclusive. For
purposes of this Section 3.2.4, if any portion of the Loan which was to
have been subject to a LIBOR Pricing Option is not outstanding on the
first day of the LIBOR Interest Period applicable to such LIBOR Pricing
Option other than for reasons described in Section 3.2.1 or as a result of
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the failure of any Lender to perform its obligations under Section 2, the
applicable Borrower shall be deemed to have terminated such LIBOR Pricing
Option.
3.2.5. Violation of Legal Requirements. If any mandatory Legal
Requirement shall prevent any Lender from funding or maintaining through
the purchase of deposits in the interbank Eurodollar market any portion of
the Loan subject to a LIBOR Pricing Option or otherwise from giving effect
to such Lender's obligations as contemplated by Section 3.2, (a) the
Domestic Agent or Canadian Agent may by notice to the applicable Borrower
terminate all of the affected LIBOR Pricing Options of such Lender, (b)
the portion of the Loan subject to such terminated LIBOR Pricing Options
shall immediately bear interest thereafter at the Applicable Rate computed
on the basis of the Base Rate and (c) the Domestic Borrower or the
Canadian Borrower, as the case may be, shall make any payment required by
Section 3.2.4.
3.2.6. Funding Procedure. The Lenders may fund any portion of the
Loan subject to a LIBOR Pricing Option out of any funds available to the
Lenders. Regardless of the source of the funds actually used by any of the
Lenders to fund any portion of the Loan subject to a LIBOR Pricing Option,
however, all amounts payable hereunder, including the interest rate
applicable to any such portion of the Loan and the amounts payable under
Section 3.3.4, shall be computed as if each Lender had actually funded
such Lender's Percentage Interest in such portion of the Loan through the
purchase of deposits in such amount of the type by which the LIBOR Basic
Rate was determined with a maturity the same as the applicable LIBOR
Interest Period relating thereto and through the transfer of such deposits
from an office of the Lender having the same location as the applicable
LIBOR Office to one of such Lender's offices in the United States of
America or Canada, as applicable.
3.3. Fixed Rate Pricing Options.
3.3.1. Election of Fixed Rate Pricing Options. Subject to all of the
terms and conditions hereof and so long as no Default exists, if the
Domestic Agent decides in its sole discretion to make such Fixed Rate
Pricing Options available, then the Domestic Borrower may from time to
time, by irrevocable notice to the Domestic Agent actually received by
noon (Boston time) on the Banking Day on which such Fixed Rate Interest
Period selected in such notice is to commence, elect to have such portion
of the Loan as the Domestic Borrower may specify in such notice accrue and
bear interest during the Fixed Rate Interest Period so selected at the
Applicable Rate computed on the basis of the Fixed Rate. In the event the
Domestic Borrower at any time does not elect a Fixed Rate Pricing Option
under this Section 3.3.1 or a LIBOR Pricing Option under Section 3.2.1 for
any portion of the Loan, then such portion of the Loan will accrue and
bear interest at the Applicable Rate based on the Base Rate.
3.4. Unused Line Fees. In consideration of the Lenders' commitments to
make the extensions of credit provided for in Section 2.1, while such
commitments are outstanding, 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 Commitments in the Revolving Loan, on each Payment Date, an
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amount equal to the percentage in the table below set opposite the Reference
Leverage Ratio for such date computed at a rate per annum on the amount by which
(a) the daily Maximum Amount of Revolving Credit during the three-month period
or portion thereof ending on such Payment Date exceeded (b) the sum of (i) the
daily Revolving Loan during such period or portion thereof plus (ii) the daily
Letter of Credit Exposure during such period or portion thereof.
--------------------------------------------------------------------------
Reference Leverage Ratio Unused Line Fee
--------------------------------------------------------------------------
> 300% 0.625%
-
--------------------------------------------------------------------------
> 250% < 300% 0.50%
-
--------------------------------------------------------------------------
> 200% < 250% 0.375%
-
--------------------------------------------------------------------------
> 100% < 200% 0.25%
-
--------------------------------------------------------------------------
< 100% 0.125%
--------------------------------------------------------------------------
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
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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
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
Term Loan or 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
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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.
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. Scheduled Required Prepayments. On each Payment Date set forth below,
the Domestic Borrower will pay to the Domestic Agent as a prepayment of the Term
Loan the lesser of (a) the amount set forth below for such date or (b) the
amount of the Term Loan then outstanding:
--------------------------------------------------------------------------
Payment Date Amount
--------------------------------------------------------------------------
December 31, 2006 and each fiscal $500,000 plus interest at the
quarter thereafter up to and Applicable Rate on the outstanding
including the fiscal quarter ending balance
September 30, 2011 of the Term Loan
--------------------------------------------------------------------------
4.3. 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 Term Loan, Domestic Revolving Loan
or the Canadian Revolving Loan under this Section 4.3, specifying the date of
payment and the total amount of the Term Loan, Domestic Revolving Loan or the
Canadian Revolving Loan to be paid on such date.
-41-
4.4. 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.
4.5. Reborrowing; Application of Payments, etc.
4.5.1. Reborrowing. The amounts of the Domestic Revolving Loan or
the Canadian Revolving Loan prepaid pursuant to Section 4.3 may be
reborrowed from time to time prior to the Final Maturity Date in
accordance with Sections 2.1 and 2.2, subject to the limits set forth
therein.
4.5.2. 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.
4.5.3. 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 or waiver, on or before the Initial Closing Date, of the
conditions set forth in this Section 5.1 (except for Section 5.1.2). If the
conditions set forth in this Section 5.1 are not met or waived on or prior to
the Initial Closing Date, the Lenders shall have no obligation to make any
extensions of credit hereunder.
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5.1.1. Notes. The Domestic Borrower shall have duly executed and
delivered to the Domestic Agent a Revolving Note and a Term Note for each
Domestic Lender having a Commitment with respect thereto who has requested
delivery of such Notes prior to the Initial Closing Date, provided that it
is understood that (a) the Term Note to be delivered on the Initial
Closing Date shall be dated September 29, 2006 (the "Term Loan Funding
Date"), (b) the Domestic Lenders will not fund the Term Loan until the
Term Loan Funding Date and (c) the Borrower will not begin to incur any
obligations in respect of the Term Loan, including without limitation, any
payment obligations or accrual of interest in respect of the Term Loan,
until the Term Loan Funding Date
5.1.2. Legal Opinions. On or before the Term Loan Funding Date, the
Lenders shall have received (a) an opinion from Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP, outside counsel for the Company with respect to the
transactions contemplated by the Credit Documents, and (b) an opinion from
Davies Xxxx Xxxxxxxx & Xxxxxxxx LLP, outside counsel for the Canadian
Borrower with respect to the transactions contemplated by the Credit
Documents, which opinions shall be in form and substance reasonably
satisfactory to the Required Lenders.
5.1.3. Domestic Security Agreement. Each of the Domestic Borrower,
K&M, the Guarantors shall have duly authorized, executed and delivered,
and the Domestic Agent shall have acknowledged, a reaffirmation of (a) the
security interest granted under the Domestic Security Agreement and (b)
the guarantees granted under the Guarantee Agreement, in substantially the
form of Exhibit 5.1.3(b) (the "Domestic Reaffirmation Agreement").
5.1.4. Canadian Security Agreement. The Canadian Borrower shall have
duly authorized, executed and delivered to the Canadian Agent a
reaffirmation of the security interest granted under the Canadian Security
Agreement in substantially the form attached as Exhibit 5.1.4(b) (the
"Canadian Security Agreement Reaffirmation").
5.1.5. Extension Fee. The Domestic Borrower shall have paid to the
Domestic Agent an extension fee of $150,000.
5.1.6. 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.
5.1.7. 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.
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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, if otherwise qualified by materiality,
true and correct or if not so qualified, true and correct in all material
respects on and as of such Closing Date with the same force and effect as
though made on and as of such date (except to the extent that any such
representation and warranty expressly relates to an earlier date, in which
case such representation and warranty shall be, if otherwise qualified by
materiality, true and correct or if not so qualified, true and correct in
all material respects, as of such 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, 2005; 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
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 so long as the Lenders' commitments
to extend credit under this Agreement and any other Credit Document shall be
available, 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 material 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
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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 material 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 (a) the businesses they are currently engaged in on the
Closing Date and similar or related businesses, and (b) such other lines
of business as may be consented to by the Required Lenders, in each case
also including other activities related thereto.
6.2.2. Maintenance of Properties. Each of the Borrower and its
Subsidiaries:
(a) (i) shall keep its properties in such repair, working
order and condition, ordinary wear and tear excepted, (ii) shall
from time to time make such repairs, replacements, additions and
improvements thereto, as are necessary for the efficient operation
of its businesses, except to the extent the failure to do so does
not create a material risk of resulting, in the aggregate, in any
Material Adverse Change, and (iii) shall comply at all times in all
material respects with all material franchises, 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, except as permitted under this Section 6.
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.
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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). Except as contemplated by the
Congoleum Plan, the Congoleum Plan Note or the Congoleum Plan Trust,
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.
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 (it being agreed that the obligation of
the Company to deliver the financial statements referred to in this
paragraph may be satisfied by the delivery of annual reports of the
Company to the Securities and Exchange Commission on Form 10-K containing
such statements), all accompanied by:
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(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 (it being agreed that the
obligation of the Company to deliver the financial statements referred to
in this paragraph may be satisfied by the delivery of quarterly reports of
the Company to the Securities and Exchange Commission on Form 10-Q
containing such statements), all accompanied by:
(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.
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(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 past practice.
(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.
(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 X-0, X-0, X-0, X-0, 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 (it being understood that the
obligation of the Company to deliver registration statements, proxy
statements and reports may be satisfied by the delivery of
registration statements, proxy statements and reports to the
Securities and Exchange Commission).
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(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. The Domestic Agent's and the Canadian Agent's, and
after the occurrence and during the continuation of an Event of Default,
each Lender's authorized officers and representatives shall have the right
during normal business hours upon reasonable advance 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.
Quarter Ending Percentage
-------------- ----------
9/30/06 and thereafter 200%
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6.5.2. Consolidated Tangible Net Worth. Consolidated Tangible Net
Worth shall on each quarter end exceed the sum of (a) $50,000,000 plus (b)
33?% of Consolidated Net Income (if positive) for each fiscal quarter of
the Company ending September 30, 2006 and thereafter.
6.5.3. 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 September 30, 2006 and
thereafter.
6.5.4. Capital Expenditures. The aggregate amount of Capital
Expenditures in any fiscal year of the Borrower ending after December 31,
2005 shall not exceed $5,000,000.
6.5.5. Consolidated Adjusted EBITDA to Consolidated Fixed Charges.
On and after September 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 100% of Consolidated
Fixed Charges for the 12-month period ending on such date, provided,
however, that the $4,000,000 principal payment by the Company to
Prudential under the Note Purchase Agreement on August 28, 2006 shall be
excluded for purposes of such calculation.
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.
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.
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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, which amount includes interest, principal and fees.
6.6.10. The obligation of the Company to contribute cash in the
amount of $250,000 to the Congoleum Plan Trust.
6.6.11. Indebtedness contemplated by the Congoleum Plan, Congoleum
Plan Note or Congoleum Plan Trust.
6.6.12. Indebtedness under the Lease Line, provided, however, that
the aggregate amount of all such Indebtedness at any one time outstanding
shall not exceed $4,000,000.
6.6.13. Indebtedness in respect of netting services, overdraft
protections and otherwise in connection with deposit accounts in the
ordinary course of the banking business of the Borrower or any Subsidiary.
6.6.14. Until October 10, 2006, Indebtedness in connection with the
Note Purchase Agreement, not to exceed $18,000,000.
6.6.15. Indebtedness 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.
6.7. 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), other than Liens that secure the
Credit Obligations, 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
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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 and,
to the extent such Liens relate to Indebtedness permitted by Section
6.6.12, 6.6.12.
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. 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.
6.7.6. Encumbrances in the nature of 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 6.13.
6.7.7. Statutory Liens of banks (and rights of set-off) and other
Liens imposed by law (other than as set forth in Section 6.7.2).
6.7.8. Purported Liens evidenced by the filing of precautionary UCC
financing statements relating solely to operating leases of personal
property entered into in the ordinary course of business.
6.7.9. Liens securing judgments which do not constitute an Event of
Default.
6.7.10. Liens incurred in the ordinary course of business in
connection with (i) workers' compensation, unemployment insurance and
other types of social security, (ii) deposits securing liability to
insurance carriers under insurance or self-insurance arrangements or (iii)
securing the performance of tenders, statutory obligations, surety and
return-of-money bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money or other Indebtedness).
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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.
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.
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(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.
6.8.11. Investments by any Foreign Subsidiary in any other Foreign
Subsidiary, in each case other than any Foreign Subsidiary that is an
Unrestricted Subsidiary.
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. Subsidiaries of the Borrower may make Distributions to the
Borrower or any Unrestricted Subsidiary of the Borrower.
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
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 Subsidiary of the Company (other than the Borrower) may
merge, consolidate or be liquidated into the Company or any Wholly Owned
Subsidiary of the Company so long as after giving effect to any such
merger with or into the Company, the Company shall be the surviving or
resulting Person and so long as any merger with a Subsidiary that is not a
Wholly Owned Subsidiary is permitted under Section 6.8.
6.9.4. The Borrower and its Subsidiaries may make Investments
permitted by Section 6.8.
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 (other than directors' qualifying
shares and, in the case of Foreign Subsidiaries, shares required by Legal
Requirements to be held by foreign nationals).
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6.10.2. No Restrictions on Subsidiary Distributions. Except for this
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. Derivative Contracts. Neither the Company nor any of its
Subsidiaries shall enter into any Hedge Agreement or other financial or
commodity derivative contracts except to provide hedge protection for an
underlying economic transaction in the ordinary course of business.
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 6.7.6 hereof and except as set
forth in the Credit Documents.
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
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 materially increase the
obligations of the Borrowers or any of their Subsidiaries.
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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 property,
and 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
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 2001, 2002, 2003, 2004 and 2005 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.
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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 to which the
Company or any of its Subsidiaries is a party, 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 $50,000 or more of the Borrower and its Subsidiaries
and all material agreements, Liens and Guarantees, if any, which relate to
such Financing Debt.
7.3.2. All agreements which directly or indirectly require the
Borrower or any Subsidiary to make any material Investment.
7.4. Changes in Condition. Since December 31, 2005, 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, 2005), and between December 31,
2005 and the date hereof, neither the Borrower nor any Subsidiary of the
Borrower has entered into any material transaction outside the ordinary course
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 material 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 material 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
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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
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;
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(c) except for Liens under the Credit Documents or permitted
thereunder, 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 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.
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 reasonably be expected
to 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 Xxxxxxxxxxx Xxx,
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XXXX, XXXXXX 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 Investment Company 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. Not more than 1% of the consolidated assets of
the Company and its Subsidiaries consists of 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,
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.
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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.
(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;
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(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
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, except as permitted under this
Agreement.
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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, bonded or discharged 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 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
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(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 (other than Hedge Agreements) or in any instrument or assignment
delivered to such Lenders pursuant to this Agreement or any other Credit
Document (other than Hedge Agreements), or in aid of the exercise of any
power granted in this Agreement or any other Credit Document (other than
Hedge Agreements) 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 (other than
amounts under Hedge Agreements) 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 4.4), 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 Bankruptcy Default shall have
occurred, the unpaid balance of the Credit Obligations (other than amounts
under Hedge Agreements) 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
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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 (other than Hedge Agreements) 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.
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
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Agreement and each other Credit Document, examinations by, and reports of,
the Agent's commercial financial examiners, fixed asset appraisers and
environmental consultants, 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.
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, xxxx of
lading, warehouse receipt or other document at any time held by the Agent, such
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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
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
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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
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.
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(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
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.
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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 Bank of America 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 (other than Hedge Agreements) 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 (other than payments under Hedge Agreements) 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 (other than Hedge
Agreements).
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
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
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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
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
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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
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"),
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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
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.
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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
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
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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, facsimile, 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, Bank of America 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 Bank of America 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 Bank of America and Bank
of America Canada and its Affiliates shall be included in any computations of
Percentage Interests. Bank of America 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 Bank of America 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.
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
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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.
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
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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).
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:
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(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
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.
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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. Termination or Replacement of Lender. Anything contained
herein to the contrary notwithstanding, in the event that in connection
with any proposed amendment, modification, termination, waiver or consent
with respect to any of the provisions under this Agreement or under any
other Credit Document as contemplated by Section 14, the consent of
Lenders shall have been obtained but the consent of one or more of such
other Lenders (each a "Non Consenting Lender") whose consent is required
shall not have been obtained; then, with respect to each such Non
Consenting Lender (the "Terminated Lender"), the Borrower may, by giving
written notice to the Agent and any Terminated Lender of its election to
do so, elect to cause such Terminated Lender (and such Terminated Lender
hereby irrevocably agrees) to assign all of its interests, rights and
obligations under this Agreement and the other Credit Documents, including
all of its Commitment and the portion of the Loan and Letter of Credit
Exposure at the time owing to it and any Notes held by it, in full to one
or more Assignees (each a "Replacement Lender") in accordance with the
applicable provisions of this Section 11; provided, however, that (a) on
the date of such assignment, the Replacement Lender shall pay to
Terminated Lender an amount equal to the sum of (i) an amount equal to the
principal of, and all accrued and unpaid interest on, such Terminated
Lender's portion of the outstanding Loan as of the time of such assignment
and (ii) an amount equal to all accrued, but theretofore unpaid fees owing
to such Terminated Lender at the time of such assignment with respect to
the Loan and all other Credit Obligations, (b) each Replacement Lender
shall consent, at the time of such assignment, to each matter in respect
of which such Terminated Lender was a Non Consenting Lender and (c) on and
after the time of such assignment, the Terminated Lender will not be
entitled to any further benefits under this Agreement or any other Credit
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Document other than the right to receive the payments set forth in clauses
(a) and (b) above and the benefits under Section 9.2. Upon the prepayment
of all amounts owing to any Terminated Lender in accordance with the
foregoing, such Terminated Lender shall no longer constitute a "Lender"
for purposes of this Agreement or any other Credit Document.
11.1.7. 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;
(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).
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
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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
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
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(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
facsimile) 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.
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 Term Loan, Domestic Revolving Loan, 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 (other than a Hedge Agreement), 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 (other than a Hedge Agreement) or any Default or Event of Default, all
of which actions shall be binding upon all of the Lenders; provided, however,
that:
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(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
(other than a Hedge Agreement) 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.
(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
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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
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:
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(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,
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,
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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.
[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/ Xxxxxx X. Xxxxx III
----------------------------------------------
Name: Xxxxxx X. Xxxxx III
Title: Vice President and Chief Financial Officer
K&M ASSOCIATES L.P.
By: AIMPAR, INC., its General Partner
By /s/ Xxxxxx X. Xxxxx III
----------------------------------------------
Name: Xxxxxx X. Xxxxx III
Title: Vice President
AMERICAN BILTRITE (CANADA) LTD.
By /s/ Xxxxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
Domestic Lender:
BANK OF AMERICA, NATIONAL ASSOCIATION
By /s/ Xxxxxxx X. XxxXxxxxx
----------------------------------------------
Name: Xxxxxxx X. XxxXxxxxx
Title: Vice President
Bank of America, N.A.
Massachusetts Middle Market Division
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: (000) 000-0000
Canadian Lender:
BANK OF AMERICA, NATIONAL ASSOCIATION, ACTING THROUGH ITS CANADA BRANCH
Bank of America, National Association, acting through its Canada branch
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx
X0X 0X0 Xxxxxx
By /s/ Xxxxxx Sales Xx Xxxxxxx
----------------------------------------
Name: Xxxxxx Sales Xx Xxxxxxx
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 Notes
2.5.2 - Term Notes
5.1.3(a) - Domestic Security Agreement
5.1.3(b) - Domestic Reaffirmation Agreement
5.1.4(a) - Canadian Security Agreement
5.1.4(b) - Canadian Security Agreement Reaffirmation
5.2.1(a) - Domestic Form of Borrowing Request
5.2.1(b) - Canadian Form of Borrowing Request
6.4 - Compliance Certificate
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:
Bank of America, National Association $40,000,000 100%
Canadian Lender:
Bank of America, National Association, $12,000,000 100%
acting through its Canada branch
