Exhibit 4
AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF NOVEMBER 5, 2003
AMONG
PARK-OHIO INDUSTRIES, INC.,
THE OTHER LOAN PARTIES PARTY HERETO,
THE LENDERS PARTY HERETO FROM TIME TO TIME,
BANK ONE, NA,
AS AGENT AND LC ISSUER
AND
KEYBANK NATIONAL ASSOCIATION,
AS SYNDICATION AGENT
AND
BANC ONE CAPITAL MARKETS, INC.,
AS LEAD ARRANGER AND SOLE BOOK RUNNER
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS.................................................................................1
ARTICLE II. THE FACILITY...............................................................................36
2.1. The Facility...........................................................................................36
2.2. Ratable Loans; Risk Participation......................................................................47
2.3. Payment of the Obligations; Currency...................................................................48
2.4. Minimum Amount of Each Advance.........................................................................48
2.5. Funding Account........................................................................................48
2.6. Reliance Upon Authority; No Liability..................................................................48
2.7. Conversion and Continuation of Outstanding Advances....................................................48
2.8. Telephonic Notices.....................................................................................49
2.9. Notification of Advances, Interest Rates, Prepayments and Commitment Reductions........................49
2.10. Fees...................................................................................................50
2.11. Interest Rates.........................................................................................50
2.12. Fixed Rate Advances Post Default; Default Rates........................................................51
2.13. Interest Payment Dates; Interest and Fee Basis.........................................................52
2.14. Voluntary Prepayments..................................................................................52
2.15. Mandatory Prepayments..................................................................................53
2.16. Termination of the Facility............................................................................54
2.17. Method of Payment......................................................................................55
2.18. Apportionment, Application and Reversal of Payments....................................................57
2.19. Settlement.............................................................................................58
2.20. Indemnity for Returned Payments........................................................................58
2.21. Notes; Evidence of Indebtedness........................................................................58
2.22. Lending Installations..................................................................................59
2.23. Non-Receipt of Funds by the Agent......................................................................59
2.24. Fixed Charge Coverage Ratio Condition..................................................................59
2.25. Designated Senior Indebtedness.........................................................................61
2.26 Change of Currency.....................................................................................61
2.27 Exchange Rate Fluctuations.............................................................................61
ARTICLE III. YIELD PROTECTION; TAXES....................................................................62
3.1. Yield Protection.......................................................................................62
3.2. Changes in Capital Adequacy Regulations................................................................63
3.3. Availability of Types of Advances......................................................................63
3.4. Funding Indemnification................................................................................63
3.5. Taxes..................................................................................................63
3.6. Lender Statements; Survival of Indemnity...............................................................67
ARTICLE IV. CONDITIONS PRECEDENT.......................................................................67
4.1. Effectiveness..........................................................................................67
4.2. Each Credit Extension..................................................................................69
4.3. Post-Closing Conditions................................................................................70
ARTICLE V. REPRESENTATIONS AND WARRANTIES.............................................................70
5.1. Existence and Standing.................................................................................70
5.2. Authorization and Validity.............................................................................71
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5.3. No Conflict; Government Consent........................................................................71
5.4. Security Interest in Collateral........................................................................71
5.5 Financial Statements...................................................................................72
5.6. Material Adverse Change................................................................................72
5.7. Taxes..................................................................................................72
5.8. Litigation and Contingent Obligations..................................................................72
5.9. Capitalization and Subsidiaries........................................................................73
5.10. ERISA..................................................................................................73
5.11. Accuracy of Information................................................................................73
5.12. Names; Prior Transactions..............................................................................73
5.13. Regulation U...........................................................................................73
5.14. Material Agreements....................................................................................74
5.15. Compliance With Laws...................................................................................74
5.16. Ownership of Properties................................................................................74
5.17. Plan Assets; Prohibited Transactions...................................................................74
5.18. Environmental Matters..................................................................................74
5.19. Investment Company Act.................................................................................75
5.20. Public Utility Holding Company Act.....................................................................75
5.21. Bank Accounts..........................................................................................75
5.22. Indebtedness...........................................................................................75
5.23. Affiliate Transactions.................................................................................75
5.24. Real Property; Leases..................................................................................75
5.25. Intellectual Property Rights...........................................................................75
5.26. Insurance..............................................................................................76
5.27. Solvency...............................................................................................76
5.28. Subordinated Indebtedness..............................................................................76
5.29. Common Enterprise......................................................................................77
5.30. Reportable Transaction.................................................................................77
5.31. Indenture..............................................................................................77
5.32. Permitted Indebtedness.................................................................................77
5.33. Specifically Designated National and Blocked Persons...................................................77
ARTICLE VI. COVENANTS..................................................................................77
6.1. Financial and Collateral Reporting.....................................................................77
6.2. Use of Proceeds........................................................................................81
6.3 Notices................................................................................................81
6.4. Conduct of Business....................................................................................82
6.5. Taxes..................................................................................................83
6.6. Payment of Indebtedness and Other Liabilities..........................................................83
6.7. Insurance..............................................................................................83
6.8. Compliance with Laws...................................................................................85
6.9. Inspection.............................................................................................85
6.10. Appraisals.............................................................................................85
6.11. Communications with Accountants........................................................................85
6.12. Collateral Access Agreements and Real Estate Purchases.................................................85
6.13. Deposit Account Control Agreements.....................................................................86
6.14 Additional Collateral; Further Assurances..............................................................86
6.15. Dividends..............................................................................................88
6.16. Indebtedness...........................................................................................88
6.17. Capital Structure......................................................................................90
6.18. Merger.................................................................................................90
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6.19. Sale of Assets.........................................................................................90
6.20. Investments and Acquisitions...........................................................................90
6.21. Liens..................................................................................................91
6.22. Change of Name or Location; Change of Fiscal Year......................................................93
6.23. Affiliate Transactions.................................................................................93
6.24. Amendments to Agreements...............................................................................93
6.25. Prepayment of Indebtedness; Subordinated Indebtedness..................................................93
6.26. Letters of Credit......................................................................................94
6.27. Financial Contracts....................................................................................94
6.28. Capital Expenditures...................................................................................94
6.29. Debt Service Coverage Ratio............................................................................94
6.30. Depository Banks.......................................................................................94
6.31. Sale of Accounts.......................................................................................94
6.32. Off-Balance Sheet Liabilities; Sale and Leaseback Transactions.........................................94
6.33. Subordination of Intercompany Notes....................................................................94
6.34. Post-Closing Mortgages.................................................................................95
ARTICLE VII. DEFAULTS...................................................................................95
ARTICLE VIII. REMEDIES; WAIVERS AND AMENDMENTS...........................................................99
8.1. Remedies...............................................................................................99
8.2. Waivers by Loan Parties...............................................................................100
8.3. Amendments............................................................................................101
8.4. Preservation of Rights................................................................................102
ARTICLE IX. GENERAL PROVISIONS........................................................................102
9.1. Survival of Representations...........................................................................102
9.2. Governmental Regulation...............................................................................102
9.3. Headings..............................................................................................102
9.4. Entire Agreement......................................................................................102
9.5. Several Obligations; Benefits of this Agreement.......................................................102
9.6. Expenses; Indemnification.............................................................................103
9.7. Numbers of Documents..................................................................................104
9.8. Accounting............................................................................................104
9.9. Severability of Provisions............................................................................104
9.10. Nonliability of Lenders...............................................................................104
9.11. Confidentiality.......................................................................................106
9.12. Nonreliance...........................................................................................106
9.13. Disclosure............................................................................................106
9.14. Judgment Currency.....................................................................................106
9.15. Currency Equivalent Generally.........................................................................106
9.16. No Cross Collateralization............................................................................106
9.17. Effect of Amendment and Restatement...................................................................106
ARTICLE X. THE AGENT.................................................................................107
10.1. Appointment; Nature of Relationship...................................................................107
10.2. Powers................................................................................................108
10.3. General Immunity......................................................................................108
10.4. No Responsibility for Credit Extensions, Recitals, etc................................................108
10.5. Action on Instructions of the Lenders.................................................................108
10.6. Employment of Agents and Counsel......................................................................109
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10.7. Reliance on Documents; Counsel........................................................................109
10.8. Agent's Reimbursement and Indemnification.............................................................109
10.9. Notice of Default.....................................................................................109
10.10. Rights as a Lender....................................................................................110
10.11. Lender Credit Decision................................................................................110
10.12. Successor Agent.......................................................................................110
10.13. Agent and Arranger Fees...............................................................................111
10.14. Delegation to Affiliates..............................................................................111
10.15. Execution of Loan Documents...........................................................................111
10.16. Collateral Matters....................................................................................111
10.17. Syndication Agent.....................................................................................113
10.18. Authority with Respect to Quebec......................................................................113
ARTICLE XI. SETOFF; RATABLE PAYMENTS..................................................................114
11.1. Setoff................................................................................................114
11.2. Ratable Payments......................................................................................114
ARTICLE XII. BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS.........................................114
12.1. Successors and Assigns................................................................................115
12.2. Participations........................................................................................115
12.3. Assignments...........................................................................................116
12.4. Dissemination of Information..........................................................................118
12.5. Tax Treatment.........................................................................................118
12.6. Assignment by LC Issuer...............................................................................118
ARTICLE XIII. NOTICES...................................................................................118
13.1. Notices; Effectiveness; Electronic Communication......................................................118
13.2. Change of Address, Etc................................................................................119
ARTICLE XIV. COUNTERPARTS..............................................................................120
ARTICLE XV. GUARANTY..................................................................................120
15.1. Guaranty..............................................................................................120
15.2. Guaranty of Payment...................................................................................120
15.3. No Discharge or Diminishment of Guaranty..............................................................121
15.4. Defenses Waived.......................................................................................122
15.5. Rights of Subrogation.................................................................................122
15.6. Reinstatement; Stay of Acceleration...................................................................122
15.7. Information...........................................................................................123
15.8. [Intentionally Deleted.]..............................................................................123
15.10. Contribution..........................................................................................123
15.11. Lending Installations.................................................................................124
15.12. Liability Cumulative..................................................................................124
15.13. Fraudulent Conveyance Matters.........................................................................124
ARTICLE XVI. CASH MANAGEMENT...........................................................................125
16.1. Lockbox and Cash Management Account...................................................................125
16.2. Application of Payments...............................................................................126
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ARTICLE XVII. RELATIONSHIP OF THE DOMESTIC BORROWER AND THE OTHER LOAN PARTIES..........................128
17.1. Notices...............................................................................................128
17.2. Execution of Loan Documents; Borrowing Base Certificate...............................................128
17.3. Reporting.............................................................................................128
17.4. Disbursement of Loan Proceeds.........................................................................128
17.5. Authorization of Domestic Borrower as Representative..................................................128
ARTICLE XVIII. USA PATRIOT ACT NOTIFICATION..............................................................129
18.1. USA Patriot Act Notification..........................................................................129
ARTICLE XIX. CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL; CONFESSION OF JUDGMENT......129
19.1. CHOICE OF LAW.........................................................................................129
19.2. CONSENT TO JURISDICTION...............................................................................130
19.3. WAIVER OF JURY TRIAL..................................................................................130
19.4. CONFESSION OF JUDGMENT................................................................................130
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AMENDED AND RESTATED CREDIT AGREEMENT
This Amended and Restated Credit Agreement, dated as of November 5,
2003, is among Park-Ohio Industries, Inc., an Ohio corporation (the "DOMESTIC
BORROWER"), the other Loan Parties, the Lenders and Bank One, NA, a national
banking association, having its principal office in Chicago, Illinois, as LC
Issuer and as the Agent.
RECITALS
WHEREAS, the Domestic Borrower, certain of the other Loan Parties,
certain of the Lenders, and the Agent entered into the Original Loan Documents
(as defined below); and
WHEREAS, the Domestic Borrower, the other Loan Parties, the Lenders,
and the Agent have agreed to amend and restate the Original Loan Documents as
set forth herein, and the Guarantors have acknowledged and agreed to such
amendment and restatement.
NOW, THEREFORE, in consideration of these premises and the terms and
conditions set forth in this Agreement, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto
hereby agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Account" shall have the meaning given to such term in the Security
Agreement.
"Account Debtor" means any Person obligated on an Account.
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the Closing Date, by which any Loan Party
(a) acquires any going business or all or substantially all of the assets of any
Person, whether through purchase of assets, merger or otherwise or (b) directly
or indirectly acquires (in one transaction or as the most recent transaction in
a series of transactions) at least a majority (in number of votes) of the
Capital Stock of a Person which has ordinary voting power for the election of
directors or other similar management personnel of a Person (other than Capital
Stock having such power only by reason of the happening of a contingency) or a
majority of the outstanding Capital Stock of a Person.
"Advance" means a borrowing hereunder, (a) made to the same Borrower on
the same Borrowing Date, or (b) converted or continued on the same date of
conversion or continuation, consisting, in either case, of the aggregate amount
of the several Loans of the same Type and currency and, in the case of Fixed
Rate Loans, for the same Interest Period. The term Advance
shall include Non-Ratable Loans, Overadvances, Protective Advances, and UK
Overdraft Advances, unless otherwise expressly provided.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of the voting Capital Stock of the controlled Person or
possesses, directly or indirectly, the power to direct or cause the direction of
the management or policies of the controlled Person, whether through ownership
of Capital Stock, by contract or otherwise.
"Agent" means Bank One in its capacity as contractual representative of
the Lenders pursuant to Article X, and not in its individual capacity as a
Lender, and any successor Agent appointed pursuant to Article X.
"Aggregate Borrowing Base" means, at any time, the aggregate of the
Domestic Borrowing Base, the Canadian Borrowing Base and the UK Borrowing Base.
"Aggregate Borrowing Base Certificate" means a certificate signed by an
Authorized Officer, in the form of EXHIBIT H or another form which is acceptable
to the Agent in its sole discretion.
"Aggregate Canadian Commitment" means the aggregate of the Canadian
Commitments of all Canadian Lenders, as reduced from time to time pursuant to
the terms hereof, which Aggregate Canadian Commitment shall initially be in the
amount of Twelve Million Dollars ($12,000,000).
"Aggregate Canadian Exposure" means, at any time, the aggregate of the
Canadian Exposure of all Canadian Lenders at such time.
"Aggregate Commitment" means the amount of $165,000,000, as reduced
from time to time pursuant to the terms hereof.
"Aggregate Credit Exposure" means, at any time, the aggregate of the
Aggregate Domestic Exposure, the Aggregate Canadian Exposure and the Aggregate
UK Exposure at such time.
"Aggregate Domestic Exposure" means, at any time, the aggregate of the
Domestic Exposure of all Domestic Lenders at such time.
"Aggregate UK Commitment" means the aggregate of the UK Commitments of
all UK Lenders, as reduced from time to time pursuant to the terms hereof, which
Aggregate UK Commitment shall initially be in the amount of Ten Million Dollars
($10,000,000).
"Aggregate UK Exposure" means, at any time, the aggregate of the UK
Exposure of all UK Lenders at such time.
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"Agreement" means this Amended and Restated Credit Agreement, as it may
be amended or modified and in effect from time to time.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (a) the Prime Rate for such day and (b) the sum of the
Federal Funds Effective Rate for such day plus 1/2% per annum.
"Applicable Agent" means the Agent, the Canadian Correspondent Lender
or the UK Correspondent Lender, as the context may require.
"Applicable Fee Rate" means, at any time, the percentage rate per annum
at which fees accrue on Available Commitment at such time as set forth in the
Pricing Schedule.
"Applicable Margin" means, with respect to Advances of any Type at any
time, the percentage rate per annum which is applicable at such time with
respect to Advances of such Type as set forth in the Pricing Schedule.
"Arranger" means Banc One Capital Markets, Inc., a Delaware
corporation, and its successors, in its capacity as Lead Arranger and Sole Book
Runner.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Assignment Agreement" is defined in Section 12.3(a).
"Associated Cost Rate" means the percentage rate per annum calculated
by the UK Correspondent Lender in accordance with EXHIBIT N.
"Authorized Officer" means any of the chief executive officer, chief
operating officer, President, Vice President, Secretary or the chief financial
officer, acting singly.
"Availability" means at any time, an amount equal to (a) the Maximum
Borrowing Amount, minus (b) the Aggregate Credit Exposure.
"Available Commitment" means, at any time, the Aggregate Commitment
then in effect minus the Aggregate Credit Exposure at such time.
"Bank One" means Bank One, NA, a national banking association, in its
individual capacity, and its successors.
"Banking Services" means each and any of the following bank services
provided to any Loan Party by the Lenders, or any of their Affiliates: (a)
commercial credit cards, (b) stored value cards, (c) treasury management
services (including, without limitation, controlled disbursement, automated
clearinghouse transactions, return items, overdrafts and interstate depository
network services), (d) leasing services, and (e) Rate Management Transactions.
3
"Banking Services Obligations" of the Loan Parties means any and all
obligations of the Loan Parties, whether absolute or contingent and howsoever
and whensoever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor) in connection
with Banking Services.
"Banking Services Reserves" means all Reserves which the Agent from
time to time establishes in its sole discretion for Banking Services then
provided or outstanding.
"Bankruptcy Code" means, as applicable, Title 11 of the U.S. Code (11
U.S.C. Section 101 et seq.), or under any other bankruptcy insolvency,
liquidation, winding-up, corporate or similar statute or law, foreign, federal,
state or provincial, in any applicable jurisdiction, now or hereafter existing,
as any of the foregoing may be amended from time to time, or other applicable
statute for jurisdictions outside of the United States, as the case may be,
including, without limitation, the Bankruptcy and Insolvency Act (Canada), the
Companies' Creditors Arrangement Act (Canada), and the Insolvency Act of 1986
(UK) and any rule or regulation issued thereunder.
"Borrower" means, collectively or individually, as the context may
require, the Domestic Borrower, the Canadian Borrower, the UK Borrowers (or
either of them), and their successors and assigns.
"Borrowing Base" means, at any time, with respect to the Domestic
Borrower and the Domestic Loan Parties, the sum of (a) up to 85% of such Loan
Parties' Eligible Accounts at such time, plus (b) the least of (i) up to 65% of
such Loan Parties' Eligible Inventory, valued at the lower of cost or market
value, determined on a first-in-first-out basis, at such time, (ii) (A) 85%
multiplied by (B) the Orderly Liquidation Percentage multiplied by (C) the value
of such Loan Party's Inventory, or (iii) $100,000,000, plus (c) the Capex
Borrowing Base, plus (d) the Fixed Asset Borrowing Base, minus (e) Reserves
related to such Domestic Loan Parties. The Agent may, in its Permitted
Discretion, reduce the advance rates set forth above or reduce one or more of
the other elements used in computing the Domestic Borrowing Base. The parties
agree that the Reserves related to the Domestic Borrowing Base shall include,
among other things, a Reserve in the amount of $150,000, which is required as a
result of the deficiency as of the Effective Date in the valuation of the real
Property secured by the Mortgages, until such time as the Domestic Borrower has
granted security over real Property such that 75% of the appraised value of all
such real Property equals $3,900,000.
"Borrowing Base Certificate" means a certificate in the form of EXHIBIT
H or another form which is acceptable to the Agent in its sole discretion.
"Borrowing Base Report" means a certificate in the form of EXHIBIT H or
another form which is acceptable to the Agent in its sole discretion.
"Borrowing Date" means a date on which an Advance or a Loan is made
hereunder.
"Borrowing Loan Party" means each Loan Party that owns Collateral used
in the calculation of the Aggregate Borrowing Base.
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"Borrowing Notice" is defined in Section 2.1.1(b).
"Business Day" means (a) with respect to any borrowing, payment or rate
selection of Fixed Rate Advances provided by the Domestic Lenders or UK Lenders,
a day (other than a Saturday or Sunday) on which banks generally are open in
Chicago and New York City for the conduct of substantially all of their
commercial lending activities, interbank wire transfers can be made on the
Fedwire system, and dealings in Dollars and Pounds Sterling are carried on in
the London interbank market, (b) with respect to any borrowing, payment or rate
selection of Fixed Rate Advances provided by the Canadian Lenders, a day (other
than a Saturday or Sunday) on which banks generally are open in Chicago, New
York City, and Toronto for the conduct of substantially all of their commercial
lending activities, interbank wire transfers can be made on the Fedwire system,
and dealings in Dollars and CAD are carried on in the London interbank market,
and (c) for all other purposes, a day (other than a Saturday or Sunday) on which
banks generally are open in Chicago for the conduct of substantially all of
their commercial lending activities and interbank wire transfers can be made on
the Fedwire system.
"Canadian Advance" means a borrowing hereunder (a) made by some or all
of the Canadian Lenders on the same Borrowing Date or (b) converted or continued
by the Canadian Lenders on the same date of conversion or continuation,
consisting, in either case, of the aggregate amount of the Canadian Revolving
Loans of the same Type and, in the case of the Canadian Fixed Rate Loans, for
the same Interest Period. The term "Canadian Advance" shall include Protective
Advances made by the Canadian Correspondent Lender.
"Canadian Affiliate" means a financial institution organized under the
laws of Canada, or a province or territory thereof that is affiliated with a
Lender.
"Canadian Availability" means, at any time, an amount equal to (a) the
Canadian Maximum Borrowing Amount, minus (b) the Aggregate Canadian Exposure.
"Canadian Base Rate" means the per annum interest rate established from
time to time by the Canadian Correspondent Lender as the Canadian Correspondent
Lender's "prime rate" for loans in Canadian Dollars or similar index, whether or
not such rate is publicly announced; the Canadian Base Rate may not be the
lowest interest rate charged by Canadian Correspondent Lender for commercial or
other extensions of credit in Canadian Dollars. Each change in the Canadian Base
Rate shall be effective immediately from and after such change.
"Canadian Borrower" means RB&W Corporation of Canada, an Ontario
corporation.
"Canadian Borrowing Base" means, at any time, with respect to the
Canadian Loan Parties, the sum of (a) up to 85% of such Loan Parties' Eligible
Accounts at such time, plus (b) the least of (i) up to 65% of such Loan Parties'
Eligible Inventory, valued at the lower of cost or market value, determined on a
first-in-first-out basis, at such time, (ii) (A) 85% multiplied by (B) the
Orderly Liquidation Percentage multiplied by (C) the value of such Loan Parties'
Inventory, or (iii) $6,000,000, minus (c) Reserves related to the Canadian Loan
Parties. The Canadian Borrowing Base shall be calculated and reported in
Dollars. The Agent may, in its Permitted
5
Discretion, reduce the advance rates set forth above or reduce one or more of
the other elements used in computing the Canadian Borrowing Base.
"Canadian Commitment" means, for each Canadian Lender, the obligation
of such Lender to make Canadian Revolving Loans and to participate in Canadian
LC Obligations in an aggregate amount not exceeding the amount set forth in the
Commitment Schedule or as set forth in any Assignment Agreement that has become
effective pursuant to Section 12.3(a), as such amount may be modified from time
to time pursuant to the terms hereof.
"Canadian Correspondent Lender" means Xxxx Xxx, XX, Xxxxxx Branch, or
such other financial institution organized under the laws of Canada (or any
province or territory thereof) or otherwise a Canadian Taxable Lender as may be
designated by the Agent from time to time.
"Canadian Deposit Offered Rate" means on any date the annual rate of
interest which is the rate determined as being the arithmetic average of the
quotations of all institutions listed in respect of the "BA 1 Month" Rate for
Canadian Dollar denominated bankers' acceptances displayed and identified as
such on the "Reuters Screen CDOR Page" as defined in the International Swap
Dealer Association, Inc. definitions, as modified and amended from time to time
as of 10:00 a.m. (Toronto time) on such day and, if such day is not a Business
Day, then on the immediately preceding Business Day (as adjusted by the Canadian
Correspondent Lender after 10:00 a.m. (Toronto time) to reflect any error in the
posted rate of interest or in the posted average annual rate of interest); and
if such rates are not available on the Reuters Screen CDOR Page on any
particular day, then the Canadian Deposit Offered Rate on that day shall be
calculated as the cost of funds quoted by the Agent to raise Canadian Dollars
for the applicable Interest Period as of 10:00 a.m. (Toronto time) on such day
for commercial loans or other extensions of credit to businesses of comparable
credit risk; or if such day is not a Business Day, then as quoted by the
Canadian Correspondent Lender on the immediately preceding Business Day.
"Canadian Derived Fixed Rate" means a per annum rate equal to the
Canadian Domestic Rate plus the Applicable Margin related to Domestic Revolving
Loans other than for Fixed Asset and Capex Advances.
"Canadian Derived Floating Rate" means a per annum rate equal to the
Canadian Base Rate plus the Applicable Margin related to Floating Rate Loans,
plus three quarters of one percent (0.75%).
"Canadian Dollars" and "CAD" means the lawful currency of Canada.
"Canadian Domestic Rate" means, the per annum rate that is equal to the
cost of raising Canadian Dollars for the applicable Interest Period as
determined by the Canadian Correspondent Lender; provided that such cost of
funds shall not exceed the Canadian Deposit Offered Rate plus 10 basis points.
"Canadian Exposure" means, with respect to any Canadian Lender, at any
time, the sum of the Dollar Equivalent of the aggregate principal amount of its
Canadian Revolving Loans
6
outstanding at such time, plus an amount equal to its Pro Rata Share of the
Dollar Equivalent of the aggregate amount of Canadian LC Obligations outstanding
at such time, plus an amount equal to its Pro Rata Share of the Dollar
Equivalent of the aggregate principal amount of Protective Advances made by the
Canadian Correspondent Lender and outstanding at such time.
"Canadian Facility LCs" means Facility LCs issued upon the application
of a Canadian Loan Party.
"Canadian Fixed Rate Advance" means an Advance which, except as
provided in Section 2.12, bears interest at the Canadian Derived Fixed Rate.
"Canadian Fixed Rate Loan" means a Loan which, except as provided in
Section 2.12, bears interest at the Canadian Derived Fixed Rate.
"Canadian Floating Rate Advance" means an Advance which, except as
provided in Section 2.12, bears interest at the Canadian Derived Floating Rate.
"Canadian Floating Rate Loan" means a Loan which, except as provided in
Section 2.12, bears interest at the Canadian Derived Floating Rate.
"Canadian LC Obligations" means, at any time, with respect to Canadian
Facility LCs, the sum, without duplication, of (a) the aggregate undrawn stated
amount under all Canadian Facility LCs outstanding at such time plus (b) the
aggregate unpaid amount at such time of all Reimbursement Obligations related to
Canadian Facility LCs.
"Canadian Lenders" means, collectively (a) the Canadian Correspondent
Lender (a "CAD Designated Bank"), and (b) the Canadian Affiliate of a CAD
Designated Bank; provided that (i) any Canadian Revolving Loan made by such
Canadian Lender shall be actually made, issued or participated in, as the case
may be, by its Canadian Affiliate, and (ii) the Canadian Commitment for such
Canadian Lender shall each be deemed to apply to it and its Canadian Affiliate
collectively, provided that any Canadian Lender shall be a Canadian Taxable
Lender.
"Canadian Loan Parties" means the Canadian Borrower and the Canadian
Subsidiaries, and "Canadian Loan Party" means any one of them.
"Canadian Maximum Borrowing Amount" means, at any time, an amount equal
to the lesser of (i) the Aggregate Canadian Commitment minus all Reserves then
in effect related to the Canadian Loan Parties, or (ii) the Canadian Borrowing
Base.
"Canadian Obligations" means all unpaid principal and accrued and
unpaid interest on the Canadian Revolving Loans, all Canadian LC Obligations,
all Protective Advances made by the Canadian Correspondent Lender, all Rate
Management Obligations of the Canadian Loan Parties, all accrued and unpaid fees
and all expenses, reimbursements, indemnities, and other obligations of the
Canadian Loan Parties to the Canadian Lenders or to any Canadian Lender, the
Canadian Correspondent Lender, the applicable LC Issuer or any indemnified party
(with respect to the Canadian Revolving Loans) arising under the Loan Documents.
7
"Canadian Revolving Loans" means the revolving loans extended by the
Canadian Lenders to the Canadian Borrower pursuant to Section 2.1.1 hereof.
"Canadian Revolving Note" means any Canadian Revolving Note executed
and delivered pursuant to Section 2.1.1 hereof.
"Canadian Subsidiary" means any Subsidiary of the Domestic Borrower
(other than the Canadian Borrower) or the Canadian Borrower that is organized
under the laws of Canada or any province or territory of Canada and that is
either party to this Agreement on the date hereof or is added as a party to this
Agreement pursuant to a Joinder Agreement.
"Canadian Taxable Lender" means a business organization under the laws
of any applicable jurisdiction which is permitted under Canadian law to lend
money in Canada, and is either (a) resident in Canada for the purposes of the
Income Tax Act (Canada) (the "ITA") or (b) an authorized foreign bank for the
purposes of the Bank Act (Canada) for which the Canadian Obligations are in
respect of its Canadian banking business as defined in subsection 248(I) of the
ITA, and which is accordingly deemed resident in Canada pursuant to subsection
212(13.3) of the ITA for purposes of withholding tax on the Canadian
Obligations.
"Capex Advance" means a portion of the Domestic Revolving Loans equal
to the then current Capex Borrowing Base.
"Capex Advance Period" means that period of time from the date of this
Agreement until the earlier of (i) the date the Capex Borrowing Base first
equals $10,000,000 or (ii) July 30, 2005.
"Capex Borrowing Base" means (a) during the Capex Advance Period, the
lesser of (i) $10,000,000 and (ii) 80% of the Invoice Value of all Capital
Expenditures requested by the Domestic Borrower as part of the Capex Borrowing
Base to be incurred by the Loan Parties; and (b) after the Capex Advance Period,
an amount equal to the Capex Borrowing Base on the last day of the Capex Advance
Period; provided that (x) if the Capex Advance Period ends prior to July 30,
2004, then beginning with the first day of each Fiscal Quarter after the Capex
Advance Period, the Capex Borrowing Base shall be reduced by an amount equal to
1/20th of the Capex Borrowing Base, or (y) if the Capex Advance Period ends on
or after July 30, 2004, then beginning with the first day of the fifth, sixth,
seventh and eighth Fiscal Quarters after the Closing Date, the Capex Borrowing
Base will be reduced by an amount equal to 1/20th of the Capex Borrowing Base as
of the first anniversary of the Closing Date and, on the first day of the ninth
Fiscal Quarter after the Closing Date and each Fiscal Quarter thereafter, an
amount equal to 1/20th of the Capex Borrowing Base at the end of the Capex
Advance Period.
"Capital Expenditures" means, without duplication, any expenditures for
any purchase or other acquisition or development of any asset which would be
classified as a fixed or capital asset on a consolidated balance sheet of the
Domestic Borrower and its Subsidiaries prepared in accordance with GAAP.
8
"Capital Stock" means any and all corporate stock, units, shares,
partnership interests, membership interests, equity interests, rights,
securities, or other equivalent evidences of ownership (howsoever designated)
issued by any Person.
"Capitalized Lease" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with GAAP.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with GAAP.
"Cash Equivalent Investments" means (a) short-term obligations of, or
fully guaranteed by, the U.S., (b) commercial paper rated A-1 or better by S&P
or P-1 or better by Xxxxx'x, (c) demand deposit accounts maintained in the
ordinary course of business, and (d) certificates of deposit issued by and time
deposits with any Domestic Lender or any commercial bank (whether domestic or
foreign) having capital and surplus in excess of $100,000,000; provided that, in
each case, the same provides for payment of both principal and interest (and not
principal alone or interest alone) and is not subject to any contingency
regarding the payment of principal or interest and any Canadian or UK
equivalent.
"Cash Management Account" is defined in Section 16.1.
"Certified Acquisition Amount" means the amount of borrowings by the
Loan Parties used for acquisitions for the period from November 25, 1997 through
the Closing Date, which were refinanced with a portion of the initial Credit
Extensions made hereunder, as certified to the Agent and the Domestic Lenders in
a certificate signed by an Authorized Officer of the Domestic Borrower on the
Closing Date.
"Change" is defined in Section 3.2.
"Change in Control" means (a) the acquisition by any Person (other than
the Permitted Holders), or two or more Persons acting in concert, of beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934) of 20% or more of the
outstanding voting Capital Stock of any Loan Party; (b) the Permitted Holders
shall collectively cease to own, free and clear of all Liens or other
encumbrances, at least 15% of the outstanding voting Capital Stock of the Parent
on a fully diluted basis, or if they own less than 15%, either Xxxxxx X.
Xxxxxxxx or Xxxxxx X. Xxxxxxxx shall cease to hold the office of chairman, chief
executive officer, or president of the Domestic Borrower or the Parent; (c)
Parent shall cease to own 100% of the Capital Stock of the Domestic Borrower; or
(d) the occurrence of a Change in Control, as defined in the Indenture.
"Closing Date" means the date of the Original Loan Agreement.
"Closing Date LC" is defined in Section 2.1.2(a).
9
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time, and any rule or regulation issued
thereunder, or the Canadian or UK equivalent, if applicable.
"Collateral" means any and all property covered by the Collateral
Documents and any and all other property, real or personal, tangible or
intangible of any Loan Party, now existing or hereafter acquired, that may at
any time be or become subject to a security interest or Lien in favor of the
Agent, the Canadian Correspondent Lender or the UK Correspondent Lender, as the
case may be, for the benefit of each of such parties and the applicable Lenders,
to secure the Secured Obligations, or any portion thereof.
"Collateral Access Agreement" means any landlord waiver or other
agreement, in form and substance satisfactory to the Agent, between the Agent
and any third party (including any bailee, consignee, customs broker, or other
similar Person) in possession of any Collateral or any landlord of any Loan
Party for any real Property where any Collateral is located, as such landlord
waiver or other agreement may be amended, restated, or otherwise modified from
time to time.
"Collateral Documents" means, collectively, the Security Agreement, the
Mortgages, the Pledge Agreements, the Foreign Collateral Documents, and any
other documents granting a Lien upon the Collateral as security for payment of
the Secured Obligations, or any portion thereof as the case may be.
"Collateral Shortfall Amount" is defined in Section 2.1.2(l).
"Commitment" means, with respect to any Lender, individually or
collectively, as the context may require, its Domestic Commitment, its Canadian
Commitment, and its UK Commitment.
"Commitment Schedule" means the Schedule attached hereto identified as
such and as it may be amended pursuant to the terms of this Agreement.
"Compliance Certificate" is defined in Section 6.1(e).
"Consolidated Capital Expenditures" means, with reference to any
period, the Capital Expenditures of the Domestic Borrower and its Subsidiaries
calculated on a consolidated basis for such period.
"Consolidated Debt Charges" means, with reference to any period,
without duplication, Consolidated Interest Expense to the extent paid in cash in
such period, plus scheduled principal payments on Indebtedness made during such
period, plus any scheduled reductions in the Capex Borrowing Base and the Fixed
Asset Borrowing Base during such period, all calculated for the Domestic
Borrower and its Subsidiaries on a consolidated basis.
"Consolidated EBITDA" means Consolidated Net Income plus, to the extent
deducted from revenues in determining Consolidated Net Income, (a) Consolidated
Interest Expense, (b)
10
Consolidated Tax Expense, (c) depreciation, (d) amortization, and (e) other
non-cash expenses, all calculated for the Domestic Borrower and its Subsidiaries
on a consolidated basis.
"Consolidated Interest Expense" means, with reference to any period,
the interest expense of the Domestic Borrower and its Subsidiaries calculated on
a consolidated basis for such period.
"Consolidated Net Income" means, with reference to any period, the net
income or loss of the Domestic Borrower and its Subsidiaries calculated on a
consolidated basis for such period.
"Consolidated Tax Expense" means, with reference to any period, the tax
expense of the Domestic Borrower and its Subsidiaries calculated on a
consolidated basis for such period.
"Contention Account" means any Account which is owing by an Account
Debtor to ILS and which is classified by ILS, on its books or otherwise, as a
"contention" Account.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or the obligations of any such Person as general
partner of a partnership with respect to the liabilities of the partnership.
"Conversion/Continuation Notice" is defined in Section 2.7.
"Controlled Group" means all members of a controlled group of
corporations or other business entities and all trades or businesses (whether or
not incorporated) under common control which, together with a Loan Party or any
of its Subsidiaries, are treated as a single employer under Section 414 of the
Code.
"Copyrights" shall have the meaning given to such term in the Security
Agreement.
"Credit Exposure" means, with respect to any Lender, its Domestic
Exposure, Canadian Exposure or the UK Exposure, as the context may require.
"Credit Extension" means the making of an Advance or the issuance of a
Facility LC hereunder.
"Credit Extension Date" means the Borrowing Date for an Advance or the
issuance date for a Facility LC.
"Customer List" means, as at any date, a list of each Loan Party's
customers within the last 120 days prior to such date, specifying each
customer's name, mailing address and phone number.
11
"Debt Service Coverage Ratio" means, the ratio, determined as of the
end of each of Fiscal Quarter of the Domestic Borrower for the then
most-recently ended four Fiscal Quarters, of (a) Consolidated EBITDA minus cash
taxes paid, minus unfunded Capital Expenditures, minus cash dividends, plus cash
tax refunds to (b) Consolidated Debt Charges, all calculated for the Domestic
Borrower and its Subsidiaries on a consolidated basis for such period.
"Default" means an event described in Article VII.
"Deposit Account Control Agreement" means an agreement, in form and
substance satisfactory to the Agent, among any Loan Party, a banking institution
holding such Loan Party's funds, and the Agent with respect to collection and
control of all deposits and balances held in a deposit account maintained by any
Loan Party with such banking institution.
"Designated Account Debtors" shall mean those parties listed on
Schedule 1, which Schedule may be updated from time to time with the Agent's
prior written consent.
"Document" shall have the meaning given to such term in the Security
Agreement.
"Dollar" and the sign "$" mean lawful money of the United States of
America.
"Dollar Equivalent" means (a) with respect to any Canadian Revolving
Loan, Canadian Facility LC, UK Fixed Rate Loan, UK Facility LC, UK Overdraft
Advance, or Protective Advance made by the Canadian Correspondent Lender or the
UK Correspondent Lender, the amount denominated in CAD or Pounds Sterling, as
the case may be, as of any date of determination, that could be purchased with
the amount of Dollars at the most favorable spot exchange rate quoted by the
Agent at approximately 11:00 a.m. (Chicago time) on such date, and (b) with
respect to any other amount, if such amount is determined in Dollars, then such
amount in Dollars and, if such amount is not determined in Dollars, the Dollar
equivalent of such amount, determined by the Agent on the basis of its spot rate
at 11:00 a.m. (Chicago time) on the date for which the Dollar equivalent amount
of such amount is being determined.
"Domestic Availability" means, at any time, an amount equal to (a) the
Domestic Maximum Borrowing Amount, minus (b) the Aggregate Domestic Exposure.
"Domestic Borrower" means Park-Ohio Industries, Inc., and its
successors and assigns.
"Domestic Borrowing Base" means the Borrowing Base.
"Domestic Commitment" means, for each Domestic Lender, the obligation
of such Lender to make Domestic Revolving Loans and to participate in LC
Obligations in an aggregate amount not exceeding the amount set forth in the
Commitment Schedule or as set forth in any Assignment Agreement that has become
effective pursuant to Section 12.3(a), as such amount may be modified from time
to time pursuant to the terms hereof.
"Domestic Exposure" means, with respect to any Domestic Lender, at any
time, the sum of the aggregate principal amount of its Domestic Revolving Loans
outstanding at such time,
12
plus an amount equal to its Pro Rata Share of any Domestic LC Obligations
outstanding at such time, plus an amount equal to its Pro Rata Share, if any, of
the aggregate principal amount of Non Ratable Loans, Overadvances, and
Protective Advances outstanding at such time, plus, if the Domestic Lender is a
Non-Participating Lender, an amount equal to its Pro Rata Share of the aggregate
principal amount of the Canadian Revolving Loans, Canadian LC Obligations, UK
Fixed Rate Loans, UK Overadvances, UK LC Obligations, and the Protective
Advances made by the Canadian Correspondent Lender and the UK Correspondent
Lender, in each case, outstanding at such time.
"Domestic Facility LCs" means Facility LCs issued upon the application
of any Domestic Loan Party.
"Domestic Floating Rate Advance" means an Advance which, except as
otherwise provided in Section 2.12, bears interest at the Floating Rate.
"Domestic Floating Rate Loan" means a Loan which, except as otherwise
provided in Section 2.12, bears interest at the Floating Rate.
"Domestic LC Obligations" means, at any time, with respect to Domestic
Facility LCs, the sum, without duplication, of (a) the aggregate undrawn stated
amount under all Domestic Facility LCs outstanding at such time plus (b) the
aggregate unpaid amount at such time of all Reimbursement Obligations related to
Domestic Facility LCs.
"Domestic Lenders" means each Lender other than the Canadian Lenders
and the UK Lenders, and their respective successors and assigns.
"Domestic Loan Parties" means the Domestic Borrower and any Domestic
Subsidiary that is also a Loan Party, and "Domestic Loan Party" means any one of
them.
"Domestic Maximum Borrowing Amount" means, at any time, an amount equal
to the lesser of (i) the Aggregate Commitment minus all Reserves then in effect
related to the Domestic Loan Parties, or (ii) the Domestic Borrowing Base.
"Domestic Revolving Loans" means the revolving loans extended by the
Domestic Lenders to the Domestic Borrower pursuant to Section 2.1.1 hereof.
"Domestic Revolving Note" means any Domestic Revolving Note executed
and delivered pursuant to Section 2.1.1.
"Domestic Subsidiary" means any Subsidiary which is organized under the
laws of the U.S. or any state, protectorate or territory of the U.S.
"Effective Date" means the date of this Agreement
"Eligible Accounts" means, at any time, the Accounts of a Loan Party,
which the Agent determines in its Permitted Discretion are eligible as the basis
for Credit Extensions hereunder.
13
Without limiting the Agent's discretion provided herein, Eligible Accounts shall
not include any Account:
(a) which is not subject to a first priority perfected
security interest for the benefit of the Applicable Agent and Lenders
or is not subject to a legal or equitable assignment in favor of the
Applicable Agent and Lenders, notice in respect of which has been
served on the applicable Account Debtors;
(b) which is subject to any Lien other than (i) Liens for the
benefit of the Applicable Agent and Lenders, and (ii) a Permitted Lien
which does not have priority over the Liens for the benefit of the
Applicable Agent and Lenders;
(c) with respect to which (i) more than 60 days have elapsed
since the due date for payment, (ii) more than 120 days have elapsed
since the date of the original invoice therefor, or (iii) with respect
to the Designated Account Debtors, more than 60 days have elapsed since
the due date for payment, which shall in no event exceed 150 days;
(d) which is owing by an Account Debtor to a Loan Party for
which more than 50% of the Accounts owing from such Account Debtor to
that Loan Party are ineligible hereunder;
(e) which is owing by an Account Debtor to a Loan Party to the
extent the aggregate amount of Eligible Accounts owing from such
Account Debtor to such Loan Party exceeds 25% of the aggregate Eligible
Accounts;
(f) with respect to which any covenant, representation, or
warranty contained in this Agreement or in the Security Agreement has
been breached or is not true;
(g) which (i) does not arise from the sale of goods or
performance of services in the ordinary course of business, (ii) is not
evidenced by an invoice or other documentation satisfactory to the
Agent which has been sent to the Account Debtor, (iii) represents a
progress billing, (iv) is contingent upon such Loan Party's completion
of any further performance, or (v) represents a sale on a
xxxx-and-hold, guaranteed sale, sale-and-return, sale on approval,
consignment, or any other repurchase or return basis;
(h) for which the goods giving rise to such Account have not
been shipped to the Account Debtor or for which the services giving
rise to such Account have not been performed by such Loan Party;
(i) with respect to which any check or other instrument of
payment has been returned uncollected for any reason;
(j) which is owed by an Account Debtor which has (i) applied
for, suffered, or consented to the appointment of any receiver,
custodian, trustee, or liquidator of its assets, (ii) has had
possession of all or a material part of its property taken by any
14
receiver, custodian, trustee or liquidator, (iii) filed, or had filed
against it, any request or petition for liquidation, reorganization,
arrangement, adjustment of debts, adjudication as bankrupt, winding-up,
or voluntary or involuntary case under any state or federal bankruptcy
laws; provided, however, that Accounts of a "Post-Petition" Account
Debtor shall be Eligible Accounts if such Accounts are paid within the
earlier of (A) 30 days, or (B) the amount of time specified in the
Post-Petition Order, (iv) has admitted in writing its inability, or is
generally unable to, pay its debts as they become due, (v) become
insolvent, or (vi) ceased operation of its business;
(k) which is owed by an Account Debtor that (i) does not
maintain its principal place of business in the U.S., Canada or the
United Kingdom, or (ii) is not organized under the applicable laws of
the U.S., any state or territory of the U.S., the District of Columbia,
Canada, any province or territory of Canada, the United Kingdom, unless
such Account is backed by a Letter of Credit or foreign credit
insurance acceptable to the Agent which is in the possession of the
Agent;
(l) which is owed in any currency other than Dollars, Canadian
Dollars, Pounds Sterling, or Euros;
(m) which is owed by (i) the government (or any department,
agency, public corporation, or instrumentality thereof) of any country
other than the U.S. unless such Account is backed by a Letter of Credit
acceptable to the Agent which is in the possession of the Agent, or
(ii) the government of the U.S., or any department, agency, public
corporation, or instrumentality thereof, in an aggregate amount
exceeding $750,000, unless the Federal Assignment of Claims Act of
1940, as amended (31 U.S.C. Section 3727 et seq. and 41 U.S.C. Section
15 et seq.), and any other steps necessary to perfect the Liens for the
benefit of the Applicable Agent and Lenders in such Account have been
complied with to the Agent's satisfaction;
(n) which is owed by any Affiliate, employee, or director of
any Loan Party;
(o) which, for any Account Debtor, exceeds a credit limit
determined by the Agent, in its Permitted Discretion, to the extent of
such excess;
(p) which is owed by an Account Debtor or any Affiliate of
such Account Debtor to which any Loan Party is indebted, but only to
the extent of such indebtedness;
(q) which is subject to any counterclaim, deduction, defense,
setoff or dispute to the extent of such counterclaim, deduction,
defense, set-off or dispute, unless such Account is a Contention
Account;
(r) which is evidenced by any promissory note, chattel paper,
or instrument;
(s) which is owed by an Account Debtor located in any
jurisdiction which requires filing of a "Notice of Business Activities
Report" or other similar report in order to permit such Loan Party to
seek judicial enforcement in such jurisdiction of payment of
15
such Account, unless such Loan Party has filed such report or qualified
to do business in such jurisdiction;
(t) with respect to which such Loan Party has made any
agreement with the Account Debtor for any reduction thereof, other than
discounts and adjustments given in the ordinary course of business;
(u) which is a Contention Account, but only to the extent that
such Contention Account when added together with the aggregate of all
of ILS' Contention Accounts exceeds $750,000; or
(v) which the Agent determines in its Permitted Discretion may
not be paid by reason of the Account Debtor's inability to pay.
In the event that an Account which was previously an Eligible Account ceases to
be an Eligible Account hereunder, the Domestic Borrower shall notify the Agent
thereof (i) within three Business Days of the date the Domestic Borrower has
obtained knowledge thereof if any such Account is in excess of $1,000,000 in the
aggregate for such Account Debtor and (ii) on and at the time of submission by
the Domestic Borrower to the Agent of the next Aggregate Borrowing Base
Certificate in all other cases.
"Eligible Inventory" means, at any time, the Inventory of a Loan Party,
which the Agent determines in its Permitted Discretion is eligible as the basis
for Credit Extensions hereunder. Without limiting the Agent's discretion
provided herein, Eligible Inventory shall not include any Inventory:
(a) which is not subject to a first priority perfected
security interest, or in the case of UK Inventory a floating charge,
for the benefit of the Applicable Agent and Lenders;
(b) which is subject to any Lien other than (i) Liens for the
benefit of the Applicable Agent and Lenders and (ii) a Permitted Lien
which does not have priority over the Liens for the benefit of the
Applicable Agent and Lenders;
(c) which is, in the Agent's opinion, slow moving, obsolete,
unmerchantable, defective, unfit for sale, not salable at prices
approximating at least the cost of such Inventory in the ordinary
course of business or unacceptable due to age, type, category and/or
quantity;
(d) with respect to which any covenant, representation, or
warranty contained in this Agreement or the Security Agreement has been
breached or is not true;
(e) which does not conform to all material standards imposed
by any governmental authority;
16
(f) which constitutes work-in-process, subassemblies,
packaging and shipping material, manufacturing supplies, display items,
xxxx-and-hold goods, returned or repossessed goods, defective goods,
goods held on consignment, or goods which are not of a type held for
sale in the ordinary course of business;
(g) which is not located in the U.S., Canada, the United
Kingdom or Puerto Rico or is in transit with a common carrier from
vendors and suppliers, provided that Inventory in transit may be
included as eligible despite this clause (g) so long as (i) the Agent
shall have received (A) a true and correct copy of the non-negotiable
xxxx of lading and other shipping documents for such Inventory, (B)
evidence that such Inventory is insured pursuant to casualty insurance
naming the Agent as loss payee and otherwise covering such risks as the
Agent may reasonably request, and (C) such other duly executed
documents as reasonably requested by the Agent for such Inventory and
(ii) the common carrier is not an Affiliate of the applicable vendor or
supplier;
(h) which is located in any location leased by such Loan Party
unless the lessor has delivered to the Agent a Collateral Access
Agreement or, with respect to any such location for which the Agent
does not receive a Collateral Access Agreement the Inventory located
there will continue to be Eligible Inventory, but the Agent shall
establish a Reserve in an amount equal to three (3) months rent for
such location; provided, however, that with respect to Inventory
located at a leased location for which the Agent shall not have
received a Collateral Access Agreement on the Closing Date, such
Inventory shall be Eligible Inventory under this subpart (h) for a
period of 45 days after the Closing Date;
(i) which is located in any third party warehouse or is in the
possession of a bailee and is not evidenced by a Document (other than
non-negotiable bills of lading to the extent permitted pursuant to
clause (g) above), unless such warehouseman or bailee has delivered to
the Agent a Collateral Access Agreement and such other documentation as
the Agent may require;
(j) which is the subject of a consignment by such Loan Party
as consignor;
(k) which contains or bears any Intellectual Property Rights
licensed to such Loan Party unless the Agent is satisfied that it may
sell or otherwise dispose of such Inventory without (i) infringing the
rights of such licensor, (ii) violating any contract with such
licensor, or (iii) incurring any liability with respect to payment of
royalties other than royalties incurred pursuant to sale of such
Inventory under the current licensing agreement;
(l) which is not reflected in a current perpetual inventory
report of such Loan Party (unless such Inventory is reflected in an
acceptable separate report to the Agent, reflecting such Inventory as
"in transit," "work in process," "outside processing," or any other
category (as is acceptable to the Agent) of Inventory);
(m) which, with respect to the Canadian Loan Parties, is
considered "30-day goods" within the meaning of the Bankruptcy and
Insolvency Act (Canada); or
17
(n) which the Agent otherwise determines is unacceptable in its
Permitted Discretion.
In the event that Inventory which was previously Eligible Inventory ceases to be
Eligible Inventory hereunder, the Domestic Borrower shall notify the Agent
thereof (i) within three Business Days of the date the Domestic Borrower has
obtained knowledge thereof if any such Inventory has a value (based on the lower
of cost, determined on a first-in, first-out basis, or market) in excess of
$2,000,000 in the aggregate and (ii) on and at the time of submission by the
Domestic Borrower to the Agent of the next Aggregate Borrowing Base Certificate
in all other cases.
"Environmental Laws" means any and all federal, state, provincial, local
and foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other legally enforceable governmental
restrictions relating to (a) the protection of the environment, (b) the effect
of the environment on human health, (c) emissions, discharges or releases of
pollutants, contaminants, hazardous substances or wastes into surface water,
ground water or land, or (d) the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of pollutants, contaminants,
hazardous substances or wastes or the clean-up or other remediation thereof.
"Equipment" has the meaning specified in the Security Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"ERISA Plan" means each "employee benefit plan" (within the meaning of
ERISA Section 3(3)) that a Loan Party or any member of its Controlled Group at
any time sponsors, maintains, contributes to, has liability with respect to or
has an obligation to contribute to such plan.
"Eurodollar Advance" means an Advance which, except as otherwise provided
in Section 2.12, bears interest at the applicable Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the applicable British Bankers' Association LIBOR rate
for deposits in Dollars as reported by any generally recognized financial
information service as of 11:00 a.m. (London time) two Business Days prior to
the first day of such Interest Period, and having a maturity equal to such
Interest Period, provided that, if no such British Bankers' Association LIBOR
rate is available to the Agent, the applicable Eurodollar Base Rate for the
relevant Interest Period shall instead be the rate determined by the Agent to be
the rate at which Bank One or one of its Affiliate banks offers to place
deposits in Dollars with first-class banks in the interbank market at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period, in the approximate amount of Bank One's relevant
Eurodollar Loan and having a maturity equal to such Interest Period.
18
"Eurodollar Loan" means a Loan which, except as otherwise provided in
Section 2.12, bears interest at the applicable Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (a) the quotient of (i) the Eurodollar Base
Rate applicable to such Interest Period, divided by (ii) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(b) the Applicable Margin.
"Excluded Taxes" means, in the case of each Lender or applicable Lending
Installation and the Agent, taxes imposed on its overall revenue or net income
or overall capital or net worth, and franchise taxes imposed on it, by (a) the
jurisdiction under the laws of which such Lender or the Agent is incorporated or
organized or doing business or (b) the jurisdiction in which the Agent's or such
Lender's principal executive office or such Lender's applicable Lending
Installation is located.
"Exhibit" refers to an exhibit to this Agreement, unless another document
is specifically referenced.
"Facility" means the credit facility described in Section 2.1 hereof to be
provided to the Borrowers on the terms and conditions set forth in this
Agreement.
"Facility LC" means a Letter of Credit issued pursuant to Section 2.1.2
hereof.
"Facility LC Application" is defined in Section 2.1.2(c).
"Facility LC Collateral Account" is defined in Section 2.1.2(j).
"Facility Termination Date" means July 30, 2007 or any earlier date on
which the Aggregate Commitment is reduced to zero or otherwise terminated
pursuant to the terms hereof.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
"Fee Letter" is defined in Section 2.10(c).
"Financial Contract" of a Person means (a) any exchange-traded or
over-the-counter futures, forward, swap or option contract or other financial
instrument with similar characteristics, or (b) any Rate Management Transaction.
19
"Fiscal Month" means any of the monthly accounting periods of the Domestic
Borrower.
"Fiscal Quarter" means any of the quarterly accounting periods of the
Domestic Borrower, ending on the last day of March, June, September and December
of each year.
"Fiscal Year" means any of the annual accounting periods of the Domestic
Borrower, ending on December 31 of each year.
"Fixed Asset Advance" means a portion of the Domestic Revolving Loans equal
to the then current Fixed Asset Borrowing Base.
"Fixed Asset Borrowing Base" means, from the Closing Date until September
30, 2003, $25,000,000, which amount shall be reduced by $892,857.15 on the first
day of each Fiscal Quarter beginning on October 1, 2003.
"Fixed Charge Condition Period" means the period (a) commencing on the
Closing Date and ending on the date when Domestic Borrower shall have presented
evidence satisfactory to the Agent, in its sole discretion, that the Fixed
Charge Coverage Ratio Condition no longer exists and, within the next three (3)
months will not be reasonably likely to exist, and (b) thereafter, commencing on
the date that the determination is made that the Fixed Charge Coverage Ratio
Condition exists or, within the next three (3) months, is reasonably likely to
exist, until the date when the Domestic Borrower shall have presented evidence
to the Agent, satisfactory to the Agent in its sole discretion, that the Fixed
Charge Coverage Ratio Condition no longer exists and, within the next three (3)
months, will not be reasonably likely to exist.
"Fixed Charge Coverage Ratio Condition" means any time that (a) the
Domestic Borrower's Consolidated Fixed Charge Coverage Ratio (as defined in the
Indenture) is less than 2.25 to 1.00, as calculated in accordance with the terms
and conditions of the Indenture, or (b) the Consolidated Fixed Charge Coverage
Ratio (as defined in the Indenture) of any Subsidiary (as defined in the
Indenture) of the Domestic Borrower is less than 2.50 to 1.00, as calculated in
accordance with the terms and conditions of the Indenture.
"Fixed Rate Advances" means Eurodollar Advances, Canadian Fixed Rate
Advances, and/or UK Fixed Rate Advances.
"Fixed Rate Loans" means Eurodollar Loans, Canadian Fixed Rate Loans and/or
UK Fixed Rate Loans.
"Fixture" has the meaning specified in the Security Agreement.
"Floating Rate" means, for any day, a rate per annum equal to (a) the
Alternate Base Rate for such day plus (b) the Applicable Margin, in each case
changing when and as the Alternate Base Rate changes.
"Floating Rate Advances" means Domestic Floating Rate Advances and/or
Canadian Floating Rate Advances.
20
"Floating Rate Loans" means Domestic Floating Rate Loans and/or Canadian
Floating Rate Loans.
"Foreign Collateral Documents" means, collectively, the documents granting
a Lien upon the Collateral of the Canadian Loan Parties or the UK Loan Parties
as security for payment of the Canadian Obligations or the UK Obligations,
respectively.
"Foreign Subsidiary" means any Subsidiary which is not a Domestic
Subsidiary.
"Funding Account" means a deposit account of (a) the Domestic Borrower
maintained with the Agent (b) the Canadian Borrower maintained with Canadian
Correspondent Lender in Canada, or (c) the UK Borrower maintained with UK
Correspondent Lender in the UK, in which the Agent, the Canadian Lenders, or the
UK Lenders, as the case may be, are authorized by such Borrower to deposit the
proceeds of Loans.
"GAAP" means U.S. generally accepted accounting principles as in effect
from time to time, applied in a manner consistent with that used in preparing
the financial statements referred to in Section 5.5.
"Guaranteed Obligations" is defined in Section 15.1.
"Guarantor" means each Loan Party (other than a Borrower) and any other
Person who becomes a party to the Guaranty pursuant to a Joinder Agreement,
together with their successors and assigns.
"Guaranty" means Article XV of this Agreement and each separate guaranty,
if any, in form and substance satisfactory to the Agent, delivered by each
Guarantor that is a Foreign Subsidiary (which guaranty shall be governed by the
laws of the country in which such Foreign Subsidiary is located), in each case,
as it may be amended or modified and in effect from time to time.
"ILS" means each of the "ILS" and "Integrated Logistics Solutions" Loan
Parties.
"Indebtedness" of a Person means such Person's (a) obligations for borrowed
money, (b) obligations representing the deferred purchase price of Property or
services (other than accounts payable arising in the ordinary course of such
Person's business payable on terms customary in the trade), (c) obligations,
whether or not assumed, secured by Liens or payable out of the proceeds or
production from Property now or hereafter owned or acquired by such Person, (d)
obligations which are evidenced by notes, acceptances, or other instruments, (e)
obligations of such Person to purchase securities or other Property arising out
of or in connection with the sale of the same or substantially similar
securities or Property or any other Off-Balance Sheet Liabilities, (f)
Capitalized Lease Obligations, (g) Contingent Obligations for which the
underlying transaction constitutes Indebtedness under this definition, (h) the
maximum available stated amount of all letters of credit or bankers' acceptances
created for the account of such Person and, without duplication, all
reimbursement obligations with respect to letters of credit, (i) any and all
obligations, contingent or otherwise, whether now existing or hereafter arising,
21
under or in connection with Rate Management Transactions, including, without
limitation, Net Xxxx to Market Exposure, and (j) obligations of such Person
under any Sale and Leaseback Transaction.
"Indenture" means that certain Indenture dated as of June 2, 1999, between
the Domestic Borrower, as Issuer, and Norwest Bank Minnesota, National
Association, as Trustee, pursuant to which the Senior Subordinated Notes were
issued to the Senior Subordinated Noteholders, as the same may, with the prior
written consent of the Agent and the Required Lenders, be from time to time
amended, restated or otherwise modified.
"Indenture Certificate" means a certificate substantially in the form of
EXHIBIT I attached hereto.
"Intellectual Property Rights" means, with respect to any Person, all of
such Person's Patents, Copyrights, Trademarks, and Licenses all other rights
under any of the foregoing, all extensions, renewals, reissues, divisions,
continuations and continuations-in-part of any of the foregoing.
"Intercompany Notes" is defined in Section 6.16.
"Interest Period" means, with respect to a Fixed Rate Loan, a period of
one, two, three or six months commencing on a Business Day selected by the
Domestic Borrower pursuant to this Agreement. Such Interest Period shall end on
the day which corresponds numerically to such date one, two, three or six months
thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second, third or sixth succeeding month, such
Interest Period shall end on the last Business Day of such next, second, third
or sixth succeeding month. If an Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the next
succeeding Business Day, provided, however, that, if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.
"Inventory" has the meaning specified in the Security Agreement.
"Investment" of a Person means any (a) loan or advance, (b) extension of
credit (other than accounts receivable arising in the ordinary course of
business on terms customary in the trade), (c) contribution of capital by such
Person, (d) stocks, bonds, mutual funds, partnership interests, notes,
debentures, securities or other Capital Stock owned by such Person, (e) any
certificate of deposit owned by such Person, and (f) structured notes,
derivative financial instruments and other similar instruments or contracts
owned by such Person.
"Invoice Value" means the actual invoice cost of the equipment purchased
and shall not be deemed to include costs related to the design, transportation,
installation, taxes and testing of such equipment, modification or other
equipment or other "soft" costs related thereto.
"Joinder Agreement" is defined in Section 6.14(a).
22
"Judgment Amount" is defined in Section 9.14.
"KeyBank" means KeyBank National Association, a national banking
association, in its individual capacity, and its successors.
"LC Fee" is defined in Section 2.10(b).
"LC Issuer" means (a) with respect to Domestic Facility LCs, Bank One (or
any subsidiary or Affiliate of Bank One designated by Bank One) in its capacity
as issuer of Domestic Facility LCs hereunder, and, solely for the purposes
specifically set forth in Section 2.1.2(a), KeyBank, (b) with respect to
Canadian Facility LCs, the Canadian Correspondent Lender (or any subsidiary or
Affiliate of the Canadian Correspondent Lender that is a Canadian Taxable Lender
designated by the Canadian Correspondent Lender) in its capacity as issuer of
Canadian Facility LCs hereunder, and (c) with respect to UK Facility LCs, the UK
Correspondent Lender (or any subsidiary or Affiliate of the UK Correspondent
Lender designated by the UK Correspondent Lender) in its capacity as issuer of
UK Facility LCs hereunder.
"LC Obligations" means the Canadian LC Obligations, the Domestic LC
Obligations, and the UK LC Obligations.
"LC Payment Date" is defined in Section 2.1.2(d).
"Lenders" means the lending institutions listed on the signature pages of
this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender, any LC Issuer or
the Agent, the office, branch, subsidiary or Affiliate of such Lender, LC Issuer
or the Agent listed on the signature pages hereof or on a Schedule or otherwise
selected by such Lender, any LC Issuer or the Agent pursuant to Section 2.22,
which, in the case of (i) the Canadian Lender, shall be located in Canada or
(ii) the UK Lender, shall be located in the UK.
"Letter of Credit" of a Person means a standby or commercial letter of
credit or similar instrument which is issued upon the application of such Person
or upon which such Person is an account party or for which such Person is in any
way liable.
"Lien" means any lien (statutory or other), mortgage, security interest,
pledge, hypothecation, assignment, deposit arrangement, encumbrance or
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including, without limitation, the interest of a
vendor or lessor under any conditional sale, Capitalized Lease or other title
retention agreement).
"Licenses" has the meaning given to such term in the Security Agreement.
23
"Loans" means, with respect to a Lender, such Lender's loans made pursuant
to Article II (or any conversion or continuation thereof), including Non-Ratable
Loans, Overadvances, Protective Advances and UK Overdraft Advances.
"Loan Documents" means this Agreement, the Revolving Notes, the Facility LC
Applications, the Collateral Documents, the Guaranty, the UK Overdraft
Agreement, and all other agreements, instruments, documents and certificates
identified in Section 4.1 executed and delivered to, or in favor of, Agent or
any Lenders and including all other pledges, powers of attorney, consents,
assignments, contracts, notices, letter of credit agreements and all other
written matter whether heretofore, now or hereafter executed by or on behalf of
any Loan Party, and delivered to the Agent or any Lender in connection with the
Agreement or the transactions contemplated thereby. Any reference in the
Agreement or any other Loan Document to a Loan Document shall include all
appendices, exhibits or schedules thereto, and all amendments, restatements,
supplements or other modifications thereto, and shall refer to the Agreement or
such Loan Document as the same may be in effect at any and all times such
reference becomes operative.
"Loan Parties" means the Domestic Loan Parties, the Canadian Loan Parties,
the UK Loan Parties, and any other Person who becomes a party to this Agreement
pursuant to a Joinder Agreement, and "Loan Party" means any one of them.
"Locked Box" is defined in Section 16.1.
"Loss" is defined in Section 9.14.
"Margin Stock" is defined in Section 5.13.
"Material Adverse Effect" means a material adverse effect on (a) the
business, Property, condition (financial or otherwise), or results of operations
of the Domestic Borrower and its Subsidiaries taken as a whole, (b) the ability
of any Loan Party to perform its material obligations under the Loan Documents
to which it is a party, (c) a material portion of the Collateral, or the Liens
(on the Collateral for the benefit of the Applicable Agent and Lenders) or the
priority of such Liens or (d) the validity or enforceability of any of the Loan
Documents or the rights or remedies of the Agent, the LC Issuer or the Lenders
thereunder.
"Material Indebtedness" means Indebtedness in an outstanding principal
amount of $5,000,000 or more in the aggregate (or the equivalent thereof in any
currency other than Dollars).
"Material Indebtedness Agreement" means any agreement under which any
Material Indebtedness was created or is governed or which provides for the
incurrence of Indebtedness in an amount which would constitute Material
Indebtedness (whether or not an amount of Indebtedness constituting Material
Indebtedness is outstanding thereunder).
24
"Maximum Borrowing Amount" means, at any time, an amount equal to the
lesser of (i) the Aggregate Commitment minus all Reserves then in effect, or
(ii) the Aggregate Borrowing Base.
"Modify" and "Modification" are defined in Section 2.1.2(a).
"Moody's" means Xxxxx'x Investors Service, Inc.
"Mortgages" means any mortgage, deed of trust or other agreement which
conveys or evidences a Lien, for the benefit of the Applicable Agent and
Lenders, on real Property of the Loan Parties, including any amendment,
modification or supplement thereto.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which a Loan Party or any
member of a Controlled Group is a party to which more than one employer is
obligated to make contributions.
"Net Cash Proceeds" means, if in connection with an asset disposition by
any Domestic Loan Party, cash proceeds net of (i) commissions and other
reasonable and customary transaction costs, fees and expenses properly
attributable to such transaction and payable by such Loan Party in connection
therewith (in each case, paid to non-Affiliates), (ii) transfer taxes, (iii)
amounts payable to holders of Permitted Liens on such asset), if any, and (iv)
an appropriate reserve for income taxes in accordance with GAAP established in
connection therewith or, if in connection with an equity issuance, cash proceeds
net of underwriting discounts and commissions and other reasonable costs paid to
non-Affiliates in connection therewith.
"Net Xxxx-to-Market Exposure" of a Person means, as of any date of
determination, the excess (if any) of all unrealized losses over all unrealized
profits of such Person arising from Rate Management Transactions. As used in
this definition, "unrealized losses" means the fair market value of the cost to
such Person of replacing such Rate Management Transaction as of the date of
determination (assuming the Rate Management Transaction were to be terminated as
of that date), and "unrealized profits" means the fair market value of the gain
to such Person of replacing such Rate Management Transaction as of the date of
determination (assuming such Rate Management Transaction were to be terminated
as of that date).
"Non-Participating Lender" is defined in Section 2.2.
"Non-Paying Guarantor" is defined in Section 15.11.
"Non-Ratable Loan" and "Non-Ratable Loans" are defined in Section 2.1.3.
"Non-U.S. Lender" is defined in Section 3.5(d).
"Obligations" means all unpaid principal of and accrued and unpaid interest
on the Loans, all LC Obligations, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Loan Parties to the
Lenders or to any Lender, the Agent,
25
the Canadian Correspondent Lender, the UK Correspondent Lender, the LC Issuer or
any indemnified party arising under the Loan Documents.
"Off-Balance Sheet Liability" of a Person means (a) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (b) any indebtedness, liability or obligation
under any Sale and Leaseback Transaction which is not a Capitalized Lease, (c)
any indebtedness, liability or obligation under any so-called "synthetic lease"
transaction entered into by such Person, or (d) any indebtedness, liability or
obligation arising with respect to any other transaction which is the functional
equivalent of or takes the place of borrowing but which does not constitute a
liability on the balance sheets of such Person, but excluding (d) Operating
Leases from this clause.
"Operating Lease" of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of the
lessor) of one year or more.
"Operating Lease Obligations" means, as at any date of determination, the
amount obtained by aggregating the present values, determined in the case of
each particular Operating Lease by applying a discount rate (which discount rate
shall equal the discount rate which would be applied under GAAP if such
Operating Lease were a Capitalized Lease) from the date on which each fixed
lease payment is due under such Operating Lease to such date of determination,
of all fixed lease payments due under all Operating Leases of the Domestic
Borrower and its Subsidiaries.
"Orderly Liquidation Percentage" means, with respect to Inventory of any
Person, (a) the net recovery dollars of such Inventory divided by (b) the gross
value of such Inventory, determined in a manner acceptable to the Agent by an
appraiser acceptable to the Agent, net of all costs of liquidation thereof. As
of the Closing Date, the Orderly Liquidation Percentage will be determined as
set forth in Exhibit J, and such percentage will thereafter be computed in a
manner reasonably consistent with the methodology set forth on Exhibit J.
"Original Loan Agreement" is defined in Section 9.17.
"Original Loan Documents" means the Original Loan Agreement and all of the
other "Loan Documents" as defined in the Original Loan Agreement.
"Other Taxes" is defined in Section 3.5(b).
"Overadvances" is defined in Section 2.1.4(b).
"Parent" means Park-Ohio Holdings Corp., an Ohio corporation.
"Participants" is defined in Section 12.2(a).
"Participating Lender" is defined in Section 2.2.
26
"Patents" has the meaning given to such term in the Security Agreement.
"Paying Guarantor" is defined in Section 15.11.
"Payment Date" means (a) with respect to interest payments due on any
Floating Rate Loan, the first day of each Fiscal Month and the Facility
Termination Date, (b) with respect to interest payments due on any Fixed Rate
Loan, (i) the last day of the applicable Interest Period, and (ii) in the case
of any Interest Period in excess of three months, the day which is three months
after the first day of such Interest Period, and (iii) the Facility Termination
Date, and (c) with respect to any payment of LC Fees or Unused Commitment Fees,
the first day of each Fiscal Quarter and the Facility Termination Date.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Permitted Discretion" means a determination made in good faith and in the
exercise of reasonable (from the perspective of a secured asset-based lender)
credit judgment.
"Permitted Holders" means (a) Xxxxxx X. Xxxxxxxx and Xxxxxx X. Xxxxxxxx,
either of their spouses, lineal descendants, or the probate estate of any such
person, (b) any trust, so long as one or more of the foregoing is the
beneficiary thereof, and (c) any other corporation, partnership, limited
liability company, or other similar entity, all of the shareholders, partners,
members, or owners of which are any of the foregoing.
"Permitted Liens" is defined in Section 6.21.
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which a Loan Party or any member of a Controlled Group may have any
liability.
"Pledge Agreement" means each of the Pledge Agreements executed and
delivered to the Agent, for the benefit of the Agent and the Lenders, by the
Parent or a Loan Party, on or after the Closing Date, as the same may be
amended, restated or otherwise modified from time to time.
"Pounds Sterling" and "(pound)" means the lawful currency of the United
Kingdom.
"Prepayment Fee" is defined in Section 2.16(b).
"Pricing Schedule" means the Schedule attached hereto identified as such.
"Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.
27
"Projections" is defined in Section 6.1(d).
"Property" of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.
"Pro Rata Share" means, (a) as to any Lender with respect to the Aggregate
Commitment or Aggregate Credit Exposure, a fraction expressed as a percentage
the numerator of which is such Lender's Domestic Commitment and the denominator
of which is the Aggregate Commitment, (b) as to any Canadian Lender with respect
to the Aggregate Canadian Commitment, a fraction expressed as a percentage the
numerator of which is such Lender's Canadian Commitment and the denominator of
which is the Aggregate Canadian Commitment, and (c) as to any UK Lender with
respect to the Aggregate UK Commitment, a fraction expressed as a percentage the
numerator of which is such Lender's UK Commitment and the denominator of which
is the Aggregate UK Commitment.
"Protective Advances" is defined in Section 2.1.4.
"Purchasers" is defined in Section 12.3(a).
"Rate Management Obligations" of a Person means any and all obligations of
such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (a) any and all Rate
Management Transactions, and (b) any and all cancellations, buy backs,
reversals, terminations or assignments of any Rate Management Transactions.
"Rate Management Transaction" means any transaction (including an agreement
with respect thereto) now existing or hereafter entered into by any Loan Party
which is a rate swap, basis swap, forward rate transaction, commodity swap,
commodity option, equity or equity index swap, equity or equity index option,
bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, forward transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
these transactions) or any combination thereof, whether linked to one or more
interest rates, foreign currencies, commodity prices, equity prices or other
financial measures.
"Register" is defined in Section 12.3(d).
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official
28
interpretation of said Board of Governors relating to the extension of credit by
banks for the purpose of purchasing or carrying margin stocks applicable to
member banks of the Federal Reserve System.
"Reimbursement Obligations" means, at any time, the aggregate of all
obligations of the Domestic Borrower, the Canadian Borrower, or the UK Borrower,
as the case may be, then outstanding under Section 2.1.2 to reimburse the
applicable LC Issuer for amounts paid by such LC Issuer in respect of any one or
more drawings under Domestic Facility LCs, Canadian Facility LCs or UK Facility
LCs, respectively.
"Reportable Event" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within thirty
days of the occurrence of such event, provided however, that a failure to meet
the minimum funding standard of Section 412 of the Code and of Section 302 of
ERISA shall be a Reportable Event regardless of the issuance of any such waiver
of the notice requirement in accordance with either Section 4043(a) of ERISA or
Section 412(d) of the Code.
"Reports" is defined in Section 9.6(a)(i).
"Required Lenders" means the Domestic Lenders in the aggregate having at
least 66 2/3% of the Aggregate Commitment or, if the Aggregate Commitment has
been terminated, the Domestic Lenders in the aggregate holding at least 66 2/3%
of the Aggregate Credit Exposure.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"Reserved Commitment Amount" is defined in Section 2.1.1(a).
"Reserves" means any and all reserves which the Agent deems necessary,
without duplication of any other reserve or adjustment made under the definition
of Eligible Accounts or Eligible Inventory, in its Permitted Discretion, to
maintain (including, without limitation, the Reserved Commitment Amount,
reserves for accrued and unpaid interest on the Secured Obligations, Banking
Services Reserves, reserves for rent at locations leased by any Loan Party and
for consignee's, warehousemen's and bailee's charges, reserves for dilution of
Accounts, reserves for Inventory shrinkage, reserves for customs charges and
shipping charges related to any Inventory in transit, reserves for Rate
Management Transactions, and reserves for taxes, fees, assessments, and other
governmental charges) with respect to the Collateral or any Loan Party. The
parties agree that the Reserves related to the UK Borrowing Base shall include,
without limitation, (a) a Reserve for each UK Borrower in an amount equal to the
least of (i) the gross book value of the UK accounts payable of such UK
Borrower, (ii) twenty percent (20%) of the gross book value of each such UK
Borrower's Accounts and Inventory, and (iii) (pound)600,000, and (b) a Reserve
equal to the UK Overdraft Commitment.
29
"Revolving Loans" means the Domestic Revolving Loans, the Canadian
Revolving Loans and/or the UK Fixed Rate Loans, as the context may require.
"Revolving Notes" means the Domestic Revolving Notes, the Canadian
Revolving Notes, and the UK Revolving Notes.
"Risk-Based Capital Guidelines" is defined in Section 3.2.
"S&P" means Standard and Poor's Ratings Services, a division of The McGraw
Hill Companies, Inc.
"Sale and Leaseback Transaction" means any sale or other transfer of
Property by any Person with the intent to lease such Property as lessee.
"Schedule" refers to a specific schedule to this Agreement, unless another
document is specifically referenced.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Secured Foreign Obligations" means, collectively, the Canadian Obligations
and the UK Obligations.
"Secured Obligations" means, collectively, (i) the Obligations; (ii) all
Banking Services Obligations; and (iii) all Rate Management Obligations owing to
one or more Lenders, provided that, at or prior to the time that any Rate
Management Transaction relating to such Rate Management Obligation is executed,
the Lender party thereto (if other than Bank One) shall have delivered written
notice to the Agent that such a Rate Management Transaction has been entered
into and that it constitutes a Secured Obligation entitled to the benefits of
the Collateral Documents.
"Security Agreement" means that certain Security Agreement, dated as of the
Closing Date between the Domestic Loan Parties and the Agent, for the benefit of
the Agent and the Lenders, and any other pledge or security agreement entered
into after the Closing Date by any other Domestic Loan Party (as required by
this Agreement or any other Loan Document), or any other Person, as the same may
be amended, restated or otherwise modified from time to time.
"Senior Subordinated Noteholder" shall mean the holder or purchaser of any
Note (as defined in the Indenture) under the Indenture.
"Senior Subordinated Notes" shall mean the Notes (as defined in the
Indenture) issued pursuant to the Indenture.
"Settlement" is defined in Section 2.19.
"Settlement Date" is defined in Section 2.9(a).
30
"Single Employer Plan" means a Plan maintained by a Loan Party or any
member of a Controlled Group for employees of such Loan Party or any member of a
Controlled Group.
"Subordinated Indebtedness" of a Person means any Indebtedness of such
Person the payment of which is subordinated to payment of the Guaranteed
Obligations to the written satisfaction of the Agent.
"Subsidiary" of a Person means any corporation, partnership, limited
liability company, association, joint venture or similar business organization
more than 50% of the outstanding Capital Stock having ordinary voting power of
which shall at the time be owned or controlled by such Person. Unless otherwise
expressly provided, all references herein to a "Subsidiary" shall mean a
Subsidiary of the Domestic Borrower.
"Substantial Portion" means, with respect to the Property of the Domestic
Borrower and its Subsidiaries, Property which represents more than 10% of the
consolidated assets of the Domestic Borrower and its Subsidiaries or property
which is responsible for more than 10% of the consolidated net sales or of the
consolidated net income of the Domestic Borrower and its Subsidiaries, in each
case, as would be shown in the consolidated financial statements of the Domestic
Borrower and its Subsidiaries as at the beginning of the twelve-month period
ending with the month in which such determination is made (or if financial
statements have not been delivered hereunder for that month which begins the
twelve-month period, then the financial statements delivered hereunder for the
quarter ending immediately prior to that month).
"Supporting Letter of Credit" is defined in Section 2.1.2(l).
"Taxes" means any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings, and any and all liabilities with respect to
the foregoing, but excluding Excluded Taxes and Other Taxes.
"Tax Credit" means a credit against, relief or remission for, or repayment
of any Tax.
"Tax Deduction" means a deduction or withholding for or on account of Tax
from a payment in respect of an Advance.
"Tax Payment" means either the increase in a payment made by a Borrower to
a Lender under Section 3.5(a) or (c).
"Trademarks" shall have the meaning given to such term in the Security
Agreement.
"Transferee" is defined in Section 12.4.
"Type" means, with respect to any Advance, its nature as a Floating Rate
Advance or Fixed Rate Advance, and with respect to any Loan, its nature as a
Floating Rate Loan or a Fixed Rate Loan.
31
"UCC" means the Uniform Commercial Code as in effect from time to time in
the State of Ohio or any other state the laws of which are required to be
applied in connection with the issue of perfection of security interests, and,
with respect to Canada, the Personal Property Security Act in effect from time
to time in the Province of Ontario or its equivalent in any other province in
which security is being taken and a security interest is being registered.
"UK" means the United Kingdom.
"UK Advance" means a borrowing hereunder (a) made by some or all of the UK
Lenders on the same Borrowing Date or (b) continued by the UK Lenders on the
same date of continuation, consisting of the aggregate amount of the UK Fixed
Rate Loans of the same Type for the same Interest Period. The term "UK Advance"
shall include Protective Advances made by the UK Correspondent Lender and UK
Overdraft Advances.
"UK Affiliate" means a financial institution organized under the laws of
England or Wales that is affiliated with a Lender.
"UK Availability" means, at any time, an amount equal to (a) the UK Maximum
Borrowing Amount, minus (b) the Aggregate UK Exposure.
"UK Borrower" means, collectively or individually, as the context may
require, Ajax Tocco International Limited and Integrated Logistics Solutions
Limited.
"UK Borrowing Base" means, at any time, with respect to the UK Loan
Parties, the sum of (a) up to 85% of such Loan Parties' Eligible Accounts at
such time, plus (b) the least of (i) up to 65% of such Loan Parties' Eligible
Inventory, valued at the lower of cost or market value, determined on a
first-in-first-out basis, at such time, (ii) (A) 85% multiplied by (B) the
Orderly Liquidation Percentage multiplied by (C) the value of such Loan Parties'
Inventory, or (iii) $5,000,000, minus (c) Reserves related to the UK Loan
Parties. The UK Borrowing Base shall be calculated and reported in Dollars. The
Agent may, in its Permitted Discretion, reduce the advance rates set forth above
or reduce one or more of the other elements used in computing the UK Borrowing
Base.
"UK Commitment" means, for each UK Lender, the obligation of such Lender to
make UK Fixed Rate Loans, to make UK Overdraft Advances, and to participate in
UK LC Obligations in an aggregate amount not exceeding the amount set forth in
the Commitment Schedule or as set forth in any Assignment Agreement that has
become effective pursuant to Section 12.3(a), as such amount may be modified
from time to time pursuant to the terms hereof.
"UK Correspondent Lender" means Bank One NA, London Branch, or such other
financial institution organized under the laws of United Kingdom as may be
designated by the Agent from time to time.
"UK Derived Fixed Rate" means a rate per annum equal to the UK Domestic
Rate plus the Applicable Margin related to Eurodollar Loans plus the Associated
Cost Rate.
32
"UK Domestic Rate" means, with respect to a UK Fixed Rate Loan for the
relevant Interest Period, the applicable British Bankers' Association LIBOR rate
for deposits in Pounds Sterling as reported by any generally recognized
financial information service as of 11:00 a.m. (London time) on the first day of
such Interest Period, and having a maturity equal to such Interest Period,
provided that, if no such British Bankers' Association LIBOR rate is available
to the Agent, the applicable the UK Domestic Rate for the relevant Interest
Period shall instead be the rate determined by UK Correspondent Lender to be the
rate at which Bank One or one of its Affiliate banks offers to place deposits in
Pounds Sterling with first-class banks in the interbank market at approximately
12:00 noon (London time) on the first day of such Interest Period, in the
approximate amount of the relevant UK Fixed Rate Loan and having a maturity
equal to such Interest Period.
"UK Exposure" means, with respect to any UK Lender, at any time, the sum of
the Dolllar Equivalent of the aggregate principal amount of its UK Fixed Rate
Loans outstanding at such time, plus an amount equal to its Pro Rata Share of
the Dollar Equivalent of the UK Overdraft Commitment, plus an amount equal to
its Pro Rata Share of the Dollar Equivalent of the UK LC Obligations outstanding
at such time, plus an amount equal to its Pro Rata Share of the Dollar
Equivalent of the aggregate principal amount of Protective Advances outstanding
made by the UK Correspondent Lender and outstanding at such time.
"UK Facility LCs" means Facility LCs and UK Letter Guarantees issued upon
the application of any UK Loan Party.
"UK Fixed Rate Advance" means an Advance which, except as provided in
Section 2.12, bears interest at the UK Derived Fixed Rate.
"UK Fixed Rate Loan" means a Loan which, except as provided in Section
2.12, bears interest at the UK Derived Fixed Rate.
"UK LC Obligations" means, at any time, with respect to UK Facility LCs,
the sum, without duplication, of (a) the aggregate undrawn stated amount under
all UK Facility LCs outstanding at such time plus (b) the aggregate unpaid
amount at such time of all Reimbursement Obligations related to UK Facility LCs.
"UK Lenders" means, collectively (a) UK Correspondent Lender (a "UK
Designated Bank"), and (b) the UK Affiliate of a UK Designated Bank; provided
that (i) any UK Fixed Rate Loan made by such UK Lender shall be actually made,
issued or participated in, as the case may be, by its UK Affiliate, and (ii) the
UK Commitment for such UK Lender shall each be deemed to apply to it and its UK
Affiliate collectively.
"UK Letter Guarantees" means letter guarantees issued on the application of
a UK Loan Party pursuant to Section 2.1.2 hereof.
"UK Letters of Credit" means Letters of Credit issued on the application of
a UK Loan Party.
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"UK Loan Parties" means the UK Borrower and the UK Subsidiaries, and "UK
Loan Party" means any one of them.
"UK Maximum Borrowing Amount" means, at any time, an amount equal to the
lesser of (i) the Aggregate UK Commitment minus all Reserves then in effect
related to the UK Loan Parties, or (ii) the UK Borrowing Base.
"UK Non-Bank Lender" means:
(i) in the case of a Lender that is a party to this Agreement on the
Effective Date, a Lender named as such on the signature pages of this
Agreement; and
(ii) in the case of a Lender that becomes a party to this Agreement after
the Effective Date, a Lender that gives a UK Tax Confirmation in the
Assignment Agreement that it executed on becoming a party.
"UK Obligations" means all unpaid principal and accrued and unpaid interest
on the UK Fixed Rate Loans, the UK Overdraft Advances, all UK LC Obligations,
all Protective Advances made by the UK Correspondent Lender, all Rate Management
Obligations of the UK Loan Parties, all accrued and unpaid fees and all
expenses, reimbursements, indemnities, and other obligations of the UK Loan
Parties to the UK Lenders or to any UK Lender, the UK Correspondent Lender, the
applicable LC Issuer or any indemnified party (with respect to the UK Fixed Rate
Loans) arising under the Loan Documents.
"UK Overdraft Advance" means a borrowing under the UK Overdraft Agreement.
"UK Overdraft Agreement" means the agreement dated as of the Effective Date
setting forth the terms of the UK Overdraft Facility, as the same may be amended
or modified and in effect from time to time.
"UK Overdraft Commitment" means the obligation of the UK Lenders to permit
the UK Borrower to maintain a debit balance on its account with the UK
Correspondent Lender pursuant to the terms of the UK Overdraft Agreement, which
UK Overdraft Commitment shall not exceed (pound)200,000, permitting each UK
Borrower to maintain a debit balance of up to (pound)100,000, but if and only to
the extent the UK Overdraft Facility is actually available to the UK Borrowers.
"UK Overdraft Facility" means the overdraft facility made available by the
UK Lenders to the UK Borrower pursuant to the terms of the UK Overdraft
Agreement.
"UK Qualifying Lender" means a Person that is beneficially entitled to
interest payable to that Lender in respect of an Advance and is:
(i) a Lender:
(A) that is a bank (as defined for the purpose of section 349 of the
UK Taxes Act) making an Advance; or
34
(B) in respect of an Advance made by a Person that was a bank (as
defined for the purpose of section 349 of the UK Taxes Act) at
the time that that Advance was made,
and that is within the charge to United Kingdom corporation tax as respects any
payments of interest made in respect of that Advance; or
(ii) a Lender that is:
(A) a company resident in the United Kingdom for United Kingdom tax
purposes;
(B) a partnership each member of which is a company resident in the
United Kingdom for United Kingdom tax purposes; or
(C) a company not so resident in the United Kingdom that carries on a
trade in the United Kingdom through a branch or agency and that
brings into account interest payable in respect of that Advance
in computing its chargeable profits (within the meaning given by
section 11(2) of the UK Taxes Act); or
(iii) a UK Treaty Lender.
"UK Revolving Note" means any UK Revolving Note executed and delivered
pursuant to Section 2.1.1 hereof.
"UK Subsidiary" means any Subsidiary of the Domestic Borrower (other than
the UK Borrowers) or the UK Borrowers, that is organized under the laws of
England or Wales and that is either party to this Agreement on the date hereof
or is added as a party to this Agreement pursuant to a Joinder Agreement.
"UK Tax Confirmation" means a confirmation by a Lender that the Person
beneficially entitled to interest payable to that Lender in respect of an
Advance is either:
(i) a company resident in the United Kingdom, or a partnership each member
of which is a company resident in the United Kingdom, for United
Kingdom tax purposes; or
(ii) a company not so resident in the United Kingdom that carries on a
trade in the United Kingdom through a branch or agency and that
interest payable in respect of that Advance falls to be brought into
account in computing the chargeable profits of that company for the
purposes of section 11(2) of the UK Taxes Act.
"UK Taxes Act" means the Income and Corporation Taxes Xxx 0000, as amended.
35
"UK Treaty Lender" means a Lender that:
(i) is treated as a resident of a UK Treaty State for the purposes of the
relevant UK Treaty; and
(ii) does not carry on a business in the United Kingdom through a permanent
establishment with which that Lender's participation in the Loans is
effectively connected.
"UK Treaty State" means a jurisdiction having a double taxation agreement
(a "UK Treaty") with the United Kingdom that makes provision for full or partial
exemption from tax imposed by the United Kingdom on interest.
"Unfunded Liabilities" means the amount (if any) by which the present value
of all vested and unvested accrued benefits under all Single Employer Plans
exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.
"Unliquidated Secured Obligations" means, at any time, any Secured
Obligations (or portion thereof) that is contingent in nature or unliquidated at
such time, including any Secured Obligation that is: (i) an obligation to
reimburse a bank for drawings not yet made under a letter of credit issued by
it; (ii) any other obligation (including any guarantee) that is contingent in
nature at such time; or (iii) an obligation to provide collateral to secure any
of the foregoing types of obligations.
"Unmatured Default" means an event which but for the lapse of time or the
giving of notice, or both, would constitute a Default.
"Unused Commitment Fee" is defined in Section 2.10(a).
"U.S." means the United States of America.
"Wholly-Owned Subsidiary" of a Person means, any Subsidiary all of the
outstanding Capital Stock of which shall at the time be owned or controlled,
directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries
of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of
such Person.
The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms.
ARTICLE II
THE FACILITY
2.1. The Facility. Each Lender severally agrees, on the terms and
conditions set forth
36
in this Agreement, to (a) make Loans to the Borrowers as set forth below and (b)
participate in Facility LCs, provided that, after giving effect to the making of
each such Advance and the issuance of each such Facility LC, such Lender's
Credit Exposure shall not exceed its aggregate Commitment; provided further,
that the Aggregate Credit Exposure shall not exceed the Aggregate Commitment.
The LC Issuer will issue Facility LCs hereunder on the terms and conditions set
forth in Section 2.1.2. The Facility shall be composed of Domestic Revolving
Loans, Canadian Revolving Loans, UK Fixed Rate Loans, Non-Ratable Loans,
Protective Advances, Overadvances, Facility LCs, and UK Overdraft Advances as
set forth below:
2.1.1. Revolving Loans.
(a) Domestic Amount. From and including the Closing Date and prior to the
Facility Termination Date, subject to the terms and provisions of Section 2.24,
each Domestic Lender severally agrees, on the terms and conditions set forth in
this Agreement, to make revolving loans (the "Domestic Revolving Loans") to, and
participate in Domestic Facility LCs issued as set forth in Section 2.1.2 below
on behalf of, the Domestic Borrower, in aggregate amounts not to exceed such
Lender's Pro Rata Share of the Aggregate Commitment. If any Advance to the
Domestic Borrower, when aggregated with all Advances to the Domestic Borrower,
would exceed the Availability or the Domestic Availability, the Domestic Lenders
will refuse to make or may otherwise restrict the making of Domestic Revolving
Loans or the issuance of Domestic Facility LCs as the Domestic Lenders determine
until such excess has been eliminated, subject to the Agent's authority, in its
sole discretion, to make Protective Advances and Overadvances pursuant to the
terms of Section 2.1.4. The Domestic Revolving Loans may consist of Domestic
Floating Rate Advances or Eurodollar Advances, or a combination thereof,
selected by the Domestic Borrower in accordance with Sections 2.1.1(d) and 2.7.
Subject to the terms of this Agreement, the Domestic Borrower may borrow, repay
and reborrow Domestic Revolving Loans any time prior to the Facility Termination
Date. The Domestic Commitments to extend credit hereunder shall expire on the
Facility Termination Date. On the Closing Date, the Domestic Borrower will be
deemed to have borrowed the entire amount of the Fixed Asset Advance.
Proceeds of Domestic Revolving Loans will be available for any use
permitted under the applicable provisions of Section 6.2, provided that, in the
event that, as contemplated by Section 2.15(b), the Domestic Borrower prepays
Revolving Loans from the proceeds of an asset disposition hereunder, then an
amount of the Aggregate Commitment, as specified by the Domestic Borrower
pursuant to the next sentence, equal to the amount of such prepayment (the
"Reserved Commitment Amount") shall be reserved and will not be available for
borrowings except and to the extent that the proceeds of such borrowings are to
be applied to make reinvestments permitted under Section 2.15(b). The Domestic
Borrower agrees to advise the Agent at the time it requests any Advance whether
it is utilizing any Reserved Commitment Amount, identifying the amount of such
Advance that is to constitute such utilization, the reinvestments in respect of
which the proceeds of such Advance are to be applied and the reduced Reserved
Commitment Amount to be in effect after giving effect to such Advance.
(b) Canadian Amount. From and including the Effective Date and prior to the
Facility Termination Date, subject to the terms and provisions of Section 2.24,
each Canadian
37
Lender severally agrees, on the terms and conditions set forth in this
Agreement, to make revolving loans (the "Canadian Revolving Loans") to, and
participate in Canadian Facility LCs issued as set forth in Section 2.1.2 below
on behalf of, the Canadian Borrower, in aggregate amounts not to exceed such
Lender's Pro Rata Share of the Aggregate Canadian Commitment. If any Canadian
Advance, when aggregated with all Canadian Advances to the Canadian Borrower
would exceed the Availability or the Canadian Availability, the Canadian Lenders
will refuse to make or may otherwise restrict the making of Canadian Revolving
Loans as the Canadian Lenders determine until such excess has been eliminated,
subject to the Agent's authority, in its sole discretion, to direct the Canadian
Correspondent Lender to make Protective Advances pursuant to the terms of
Section 2.1.4. The Canadian Revolving Loans may consist of Canadian Floating
Rate Advances or Canadian Fixed Rate Advances, or a combination thereof,
selected by the Domestic Borrower in accordance with Sections 2.1.1(d) and 2.7.
Subject to the terms of this Agreement, the Canadian Borrower may borrow, repay
and reborrow Canadian Revolving Loans any time prior to the Facility Termination
Date. The Canadian Commitments to extend credit hereunder shall expire on the
Facility Termination Date. All Canadian Revolving Loans will be funded in
Canadian Dollars. The Canadian Advances made and Canadian Facility LCs issued
pursuant to this Section 2.1.1(b) are subject to the risk participation
provisions set forth in Section 2.2.
(c) UK Amount. From and including the Effective Date and prior to the
Facility Termination Date, subject to the terms and provisions of Section 2.24,
the UK Lenders agree, on the terms and conditions set forth in this Agreement,
to make fixed rate loans (the "UK Fixed Rate Loans") to, and participate in UK
Facility LCs issued as set forth in Section 2.1.2 below on behalf of, the UK
Borrower, in aggregate amounts not to exceed such Lender's Pro Rata Share of the
Aggregate UK Commitment. If any requested UK Fixed Rate Advance to the UK
Borrower would, when aggregated with all outstanding UK Fixed Rate Advances,
exceed the Availability or the UK Availability, the UK Lenders will refuse to
make or may otherwise restrict the making of UK Fixed Rate Loans as the UK
Lenders determine until such excess has been eliminated, subject to the Agent's
authority, in its sole discretion, to make Protective Advances pursuant to the
terms of Section 2.1.4. The UK Fixed Rate Advances may be selected by the
Domestic Borrower in accordance with Sections 2.1.1(d) and 2.7. Subject to the
terms of this Agreement, the UK Borrower may borrow, repay and reborrow UK Fixed
Rate Loans any time prior to the Facility Termination Date. The UK Fixed Rate
Commitments to extend credit hereunder shall expire on the Facility Termination
Date. All UK Fixed Rate Loans will be funded in Pounds Sterling. The UK Advances
made and UK Facility LCs issued pursuant to this Section 2.1.1(b) are subject to
the risk participation provisions set forth in Section 2.2.
(d) Borrowing Procedures. The Domestic Borrower shall select the Type of
Advance and, in the case of each Fixed Rate Advance, the Interest Period
applicable thereto, from time to time. The Domestic Borrower shall give the
Agent irrevocable notice (a "Borrowing Notice") (with a copy to the UK
Correspondent Lender in respect of each UK Fixed Rate Advance) not later than
10:00 a.m. (Chicago time) on the Borrowing Date of each Floating Rate Advance,
and not later than 10:00 a.m. (Chicago time) 3 Business Days before the
Borrowing Date for each Fixed Rate Advance, specifying (in the form of Exhibit
A): (1) the Borrower, (2) the Borrowing Date, which shall be a Business Day, of
such Advance, (3) the
38
aggregate amount of such Advance, (4) the Type of Advance selected; provided
that, if the Domestic Borrower fails to specify the Type of Advance requested,
such request (except in the case of a UK Fixed Rate Advance) shall be deemed a
request for a Floating Rate Advance, and (5) the duration of the Interest Period
if the Type of Advance requested is a Fixed Rate Advance, provided that, if the
Domestic Borrower fails to select the duration of the Interest Period for the
requested Fixed Rate Advance, the Domestic Borrower shall be deemed to have
requested that such Fixed Rate Advance be made with an Interest Period of one
month. Notwithstanding anything in this Agreement to the contrary, the UK
Lenders shall not make Loans to the UK Borrower based on the Floating Rate.
Notwithstanding the foregoing or anything else in this Agreement to the
contrary, the UK Borrowers shall not request UK Fixed Rate Loans until such time
as no Domestic Availability exists, and the Canadian Borrower shall not request
Canadian Revolving Loans until such time as no Domestic Availability or UK
Availability exists; however, the UK Borrowers may request UK Facility LCs and
UK Overdraft Advances at any time and the Canadian Borrower may request Canadian
LCs at any time.
(e) The Agent's Election. Promptly after receipt of a Borrowing Notice (or
telephonic notice in lieu thereof) of a requested Domestic Floating Rate
Advance, the Agent shall elect in its discretion to have the terms of Section
2.1.1(f) (pro rata advance by all Lenders) or Section 2.1.3 (advance by the
Agent, in the form of a Non-Ratable Loan, on behalf of the Lenders) apply to
such requested Advance.
(f) Pro Rata Advance. If a requested Advance is for a Domestic Floating
Rate Advance, unless the Agent elects to have the terms of Section 2.1.3 apply
to a requested Domestic Floating Rate Advance, or if a requested Advance is for
a Fixed Rate Advance, then promptly after receipt of a Borrowing Notice or
telephonic notice in lieu thereof as permitted by Section 2.8, the Agent shall
notify the Lenders by telecopy, telephone, or e-mail of the requested Advance.
Not later than 12:00 noon (local time) on each Borrowing Date (or, in the case
of Canadian Revolving Loans and UK Fixed Rate Loans, on the date specified in
Section 2.2), each Lender shall make available its Domestic Revolving Loan,
Canadian Revolving Loan, or UK Fixed Rate Loan, as the case may be, in funds
immediately available in Chicago to the Agent, the Canadian Correspondent
Lender, or the UK Correspondent Lender, as applicable, and the Agent, the
Canadian Correspondent Lender, or the UK Correspondent Lender, as applicable,
will make the funds so received from the Lenders available to the applicable
Borrower at the Funding Account as set forth in Section 2.5.
2.1.2. Facility LCs.
(a) Issuance. The LC Issuer hereby agrees, on the terms and
conditions set forth in this Agreement, to issue Facility LCs on behalf of any
Loan Party and to renew, extend, increase, decrease or otherwise modify each
Facility LC ("Modify," and each such action a "Modification"), from time to time
from and including the Closing Date and prior to the Facility Termination Date
upon the request of the Domestic Borrower.
(i) The maximum face amount of (A) each Facility LC to be issued
shall not exceed $20,000,000 (or the applicable foreign currency
equivalent thereof) minus the sum of (1) the aggregate undrawn amount
of all outstanding
39
Facility LCs at such time and, without duplication, (2) the aggregate
unpaid Reimbursement Obligations with respect to all Facility LCs
outstanding at such time; (B) each Canadian Facility LC to be issued
shall not exceed the Canadian Dollar equivalent of $1,000,000 minus
the sum of (1) the aggregate undrawn amount of all outstanding
Canadian Facility LCs at such time and, without duplication, (2) the
aggregate unpaid Reimbursement Obligations with respect to all
Canadian Facility LCs outstanding at such time; (C) each UK Letter of
Credit to be issued shall not exceed the Pounds Sterling equivalent of
$1,000,000 minus the sum of (1) the aggregate undrawn amount of all
outstanding UK Letters of Credit at such time and, without
duplication, (2) the aggregate unpaid Reimbursement Obligations with
respect to all UK Letter of Credit outstanding at such time; and (D)
each UK Letter Guarantee to be issued shall not exceed (pound)600,000
minus the sum of (1) the aggregate undrawn amount of all outstanding
UK Letter Guarantees at such time and, without duplication, (2) the
aggregate unpaid Reimbursement Obligations with respect to all UK
Letter Guarantees outstanding at such time.
(ii) The LC Issuer shall not be obligated to issue (A) any
Domestic Facility LC if at the time of the proposed issuance there is
no Domestic Availability, (B) any Canadian Facility LC if at the time
of the proposed issuance there is no Canadian Availability, or (C) any
UK Facility LC if at the time of the proposed issuance there is no UK
Availability.
(iii) All Canadian Facility LCs shall be issued in Canadian
Dollars, all UK Facility LCs shall be issued in Pounds Sterling,
Dollars, Euros, or any other currency agreed to by the applicable LC
Issuer, and all Domestic Facility LCs shall be issued in Dollars,
Canadian Dollars or Pounds Sterling.
(iv) No Facility LC (or any renewal thereof) shall have an expiry
date later than the earlier of (x) the fifth Business Day prior to the
Facility Termination Date and (y) one year after its issuance;
provided that each Facility LC with a one-year tenor may provide for
the renewal thereof for additional one-year periods.
(v) The Agent, the Domestic Lenders and the Domestic Loan Parties
hereby acknowledge and agree that the Letters of Credit listed on
Schedule 2.1.2 attached hereto ("Closing Date LCs") shall constitute
Domestic Facility LCs for all purposes hereunder. In no event shall
the Closing Date LCs be subject to Modification and, upon expiration
thereof, such Closing Date LCs shall be replaced (if necessary) by new
Domestic Facility LCs hereunder. Until the expiration of the Closing
Date LCs, KeyBank shall be a LC Issuer for purposes of this Agreement.
(b) Participations. With respect to the Closing Date LCs and upon the
issuance or Modification by the LC Issuer of a Domestic Facility LC in
accordance with this Section 2.1.2, the LC Issuer shall be deemed, without
further action by any party hereto, to have
40
unconditionally and irrevocably sold to each Domestic Lender, and each Domestic
Lender shall be deemed, without further action by any party hereto, to have
unconditionally and irrevocably purchased from the LC Issuer, a participation in
such Domestic Facility LC (and each Modification thereof) and the related
Domestic LC Obligations in proportion to its Pro Rata Share.
(c) Notice. Subject to Section 2.1.2(a), the Domestic Borrower, on
behalf of itself or the applicable Loan Party, shall give the applicable LC
Issuer (with a copy to the Agent if it is not the LC Issuer) notice prior to
10:00 a.m. (local time) at least three Business Days prior to the proposed date
of issuance or Modification of each Facility LC, specifying the beneficiary, the
proposed date of issuance (or Modification), the currency in which the Facility
LC is to be issued, the expiry date of such Facility LC, whether the Facility LC
is a Domestic Facility LC, a Canadian Facility LC or a UK Facility LC and
describing the proposed terms of such Facility LC and the nature of the
transactions proposed to be supported thereby. Upon receipt of such notice, the
applicable LC Issuer shall promptly notify the Agent, and the Agent shall
promptly notify each Lender, of the contents thereof and of the amount of such
Lender's participation in such proposed Facility LC, if any. The issuance or
Modification by the LC Issuer of any Facility LC shall, in addition to the
conditions precedent set forth in Article IV (the satisfaction of which the LC
Issuer shall have no duty to ascertain), be subject to the conditions precedent
that such Facility LC shall be satisfactory to the applicable LC Issuer and that
the applicable Borrower, on behalf of itself or the applicable Loan Party for
whose benefit the Facility LC is to be issued, shall have executed and delivered
such application agreement and/or such other instruments and agreements relating
to such Facility LC as the LC Issuer shall have reasonably requested (each, a
"Facility LC Application"). In the event of any conflict between the terms of
this Agreement and the terms of any Facility LC Application, the terms of this
Agreement shall control.
(d) Administration; Reimbursement by Lenders. Upon receipt from the
beneficiary of any Facility LC of any demand for payment under such Facility LC,
the LC Issuer shall notify the Agent and the Agent shall promptly notify the
Domestic Borrower and any other applicable Loan Party and each other Lender as
to the amount to be paid by the LC Issuer as a result of such demand and the
proposed payment date (the "LC Payment Date"). The responsibility of the LC
Issuer to the applicable Loan Parties, and each Lender shall be only to
determine that the documents (including each demand for payment) delivered under
each Facility LC in connection with such presentment shall be in conformity in
all material respects with such Facility LC. The LC Issuer shall endeavor to
exercise the same care in the issuance and administration of the Facility LCs as
it does with respect to letters of credit in which no participations are
granted, it being understood that in the absence of any gross negligence or
willful misconduct by the LC Issuer, each Lender shall be unconditionally and
irrevocably liable without regard to the occurrence of any Default or any
condition precedent whatsoever, to reimburse the LC Issuer on demand for (i)
such Lender's Pro Rata Share of the amount of each payment made by the LC Issuer
under each Facility LC, if any, to the extent such amount is not reimbursed by
the applicable Borrower pursuant to Section 2.1.2(e) below, plus (ii) interest
on the foregoing amount to be reimbursed by such Lenders, for each day from the
date of the LC Issuer's demand for such reimbursement (or, if such demand is
made after 11:00 a.m. (local time) on such date, from the next succeeding
Business Day) to the date on which such Lender pays the amount to be reimbursed
by it, at a rate of interest per annum equal to the Federal Funds
41
Effective Rate for the first three days and, thereafter, at a rate of interest
equal to the rate applicable to Floating Rate Advances (except in the UK, which
shall equal the rate applicable to Fixed Rate Advances) for the currency in
which the Facility LC was issued.
(e) Reimbursement by the Borrower. The applicable Borrower shall be
irrevocably and unconditionally obligated to reimburse the LC Issuer on or
before the applicable LC Payment Date for any amounts to be paid by the LC
Issuer upon any drawing under any Facility LC, without presentment, demand,
protest or other formalities of any kind; provided that, no Loan Party or Lender
shall hereby be precluded from asserting any claim for direct (but not
consequential) damages suffered by such Loan Party or such Lender to the extent,
but only to the extent, caused by (i) the willful misconduct or gross negligence
of the LC Issuer in determining whether a request presented under any Facility
LC issued by it complied with the terms of such Facility LC or (ii) the LC
Issuer's failure to pay under any Facility LC issued by it after the
presentation to it of a request strictly complying with the terms and conditions
of such Facility LC. All such amounts paid by the LC Issuer and remaining unpaid
by the applicable Borrower shall bear interest, payable on demand, for each day
until paid at a rate per annum equal to (x) the rate applicable to Floating Rate
Advances (except in the UK, which shall equal the rate applicable to UK Fixed
Rate Advances) for the currency in which the Facility LC was issued for such day
if such day falls on or before the applicable LC Payment Date and (y) the sum of
2% plus the rate applicable to Floating Rate Advances (except in the UK, which
shall equal the rate applicable to Fixed Rate Advances) for such day if such day
falls after such LC Payment Date. The LC Issuer will pay to each Lender ratably
in accordance with its Pro Rata Share all amounts received by it from such
Borrower for application in payment, in whole or in part, of the Reimbursement
Obligation in respect of any Facility LC issued by the LC Issuer, but only to
the extent such Lender has made payment to the LC Issuer in respect of such
Facility LC pursuant to Section 2.1.2(d). Subject to the terms and conditions of
this Agreement (including without limitation the submission of a Borrowing
Notice in compliance with Section 2.1.1(b) and the satisfaction of the
applicable conditions precedent set forth in Article IV), a Borrower may request
an Advance hereunder for the purpose of satisfying any Reimbursement Obligation.
(f) Obligations Absolute. The applicable Borrower's obligations under
this Section 2.1.2 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which such Borrower may have or have had against the LC Issuer, any Lender or
any beneficiary of a Facility LC. Such Borrower further agrees with the LC
Issuer and the Lenders that the LC Issuer and such Lenders shall not be
responsible for, and such Borrower's Reimbursement Obligation in respect of any
Facility LC shall not be affected by, among other things, the validity or
genuineness of documents or of any endorsements thereon, even if such documents
should in fact prove to be in any or all respects invalid, fraudulent or forged,
or any dispute between or among such Borrower, any of its Affiliates, the
beneficiary of any Facility LC or any financing institution or other party to
whom any Facility LC may be transferred or any claims or defenses whatsoever of
such Borrower or of any of its Affiliates against the beneficiary of any
Facility LC or any such transferee. The LC Issuer shall not be liable for any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with any Facility LC.
The applicable Borrower agrees that any action taken or omitted by the LC Issuer
or any Lender under or in connection with each Facility LC and the related
drafts and documents, if done
42
without gross negligence or willful misconduct, shall be binding upon such
Borrower and shall not put the LC Issuer or any Lender under any liability to
such Borrower. Nothing in this Section 2.1.2(f) is intended to limit the right
of such Borrower to make a claim against the LC Issuer for damages as
contemplated by the proviso to the first sentence of Section 2.1.2(e).
(g) Actions of LC Issuer. The LC Issuer shall be entitled to rely, and
shall be fully protected in relying, upon any Facility LC, draft, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document believed by it to be genuine and correct and to have been signed, sent
or made by the proper Person or Persons, and upon advice and statements of legal
counsel, independent accountants and other experts selected by the LC Issuer.
The LC Issuer shall be fully justified in failing or refusing to take any action
under this Agreement unless it shall first have received such advice or
concurrence of the Required Lenders as it reasonably deems appropriate or it
shall first be indemnified to its reasonable satisfaction by the Lenders against
any and all liability and expense which may be incurred by it by reason of
taking or continuing to take any such action. Notwithstanding any other
provision of this Section 2.1.2, the LC Issuer shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement in
accordance with a request of the Required Lenders, and such request and any
action taken or failure to act pursuant thereto shall be binding upon the
Lenders and any future holders of a participation in any Facility LC.
(h) Indemnification. The applicable Loan Parties hereby agree to
indemnify and hold harmless each Lender, the applicable LC Issuer and the Agent,
as the case may be, and their respective directors, officers, agents and
employees from and against any and all claims and damages, losses, liabilities,
costs or expenses which such Lender, the applicable LC Issuer or the Agent, may
incur (or which may be claimed against such Lender, the applicable LC Issuer or
the Agent, by any Person whatsoever) by reason of or in connection with the
issuance, execution and delivery or transfer of or payment or failure to pay
under any Facility LC or any actual or proposed use of any Facility LC,
including, without limitation, any claims, damages, losses, liabilities, costs
or expenses which the LC Issuer may incur by reason of or in connection with (i)
the failure of any other Lender to fulfill or comply with its obligations to the
LC Issuer hereunder (but nothing herein contained shall affect any rights such
Borrower may have against any defaulting Lender) or (ii) by reason of or on
account of the LC Issuer issuing any Facility LC which specifies that the term
"Beneficiary" included therein includes any successor by operation of law of the
named Beneficiary, but which Facility LC does not require that any drawing by
any such successor Beneficiary be accompanied by a copy of a legal document,
satisfactory to the LC Issuer, evidencing the appointment of such successor
Beneficiary; provided that, such Borrower shall not be required to indemnify any
Lender, the LC Issuer or the Agent for any claims, damages, losses, liabilities,
costs or expenses to the extent, but only to the extent, caused by (x) the
willful misconduct or gross negligence of the LC Issuer in determining whether a
request presented under any Facility LC complied with the terms of such Facility
LC or (y) the LC Issuer's failure to pay under any Facility LC after the
presentation to it of a request strictly complying with the terms and conditions
of such Facility LC. Nothing in this Section 2.1.2(h) is intended to limit the
obligations of such Borrower under any other provision of this Agreement.
43
(i) Lenders' Indemnification. Each Lender shall, ratably in accordance
with its Pro Rata Share, indemnify the LC Issuer, its Affiliates and their
respective directors, officers, agents and employees (to the extent not
reimbursed by the applicable Borrower) against any cost, expense (including
reasonable counsel fees and disbursements), claim, demand, action, loss or
liability (except such as result from such indemnitees' gross negligence or
willful misconduct or the LC Issuer's failure to pay under any Facility LC after
the presentation to it of a request strictly complying with the terms and
conditions of the Facility LC) that such indemnitees may suffer or incur in
connection with this Section 2.1.2 or any action taken or omitted by such
indemnitees hereunder. Following a Default each Lender shall, ratably in
accordance with its Pro Rata Share of the Aggregate Commitment, indemnify (a)
the UK Correspondent Lender, its Affiliates and their respective directors,
officers, agents and employees (to the extent not reimbursed by the applicable
Borrower) against any cost, expense (including reasonable counsel fees and
disbursements), claim, demand, action, loss or liability (except such as result
from such indemnitees' gross negligence or willful misconduct or the UK
Correspondent Lender's failure to pay under any UK Facility LC after the
presentation to it of a request strictly complying with the terms and conditions
of the UK Facility LC) that such indemnitees may suffer or incur in connection
with Section 2.1.1 or 2.1.2 or under the UK Overdraft Agreement or any action
taken or omitted by such indemnitees thereunder.
(j) Facility LC Collateral Account. Each Borrower agrees with respect
to its Facility LCs that it will, after the occurrence and during the
continuance of a Default, upon the request of the Agent or the Required Lenders
and until the final expiration date of any Facility LC and thereafter as long as
any amount is payable to the LC Issuer or the Lenders in respect of any Facility
LC, maintain a special collateral account pursuant to arrangements satisfactory
to the Agent (each, a "Facility LC Collateral Account") at, in the case of the
Domestic Borrower, the Agent's office at the address specified pursuant to
Article XIII (or such other office in the U.S. as the Agent may request), in the
case of the Canadian Borrower, at the Canadian Correspondent Lender's office at
the address specified pursuant to Article XIII (or such other office in Canada
as the Canadian Correspondent Lender may request) and, in the case of the UK
Borrowers, at the UK Correspondent Lender's office at the address specified
pursuant to Article XIII (or such other office in the UK as the UK Correspondent
Lender may request), in the name of such Borrower but under the sole dominion
and control of the Agent, the Canadian Correspondent Lender, or the UK
Correspondent Lender, as the case may be, for the benefit of the Lenders, and in
which such Borrower shall have no interest other than as set forth in Section
8.1. The applicable Borrower hereby pledges, assigns and grants to the Agent,
the Canadian Correspondent Lender, or the UK Correspondent Lender, as the case
may be, on behalf of and for the ratable benefit of the Lenders and the LC
Issuer, a security interest in all of such Borrower's right, title and interest
in and to all funds which may from time to time be on deposit in the applicable
Facility LC Collateral Account to secure the prompt and complete payment and
performance of the Secured Obligations or the applicable Secured Foreign
Obligations, as the case may be. The Agent, the Canadian Correspondent Lender,
or the UK Correspondent Lender, as the case may be, (i) will invest any funds on
deposit from time to time in any Facility LC Collateral Account in certificates
of deposit (or the Canadian or UK equivalent) having a maturity not exceeding
thirty days or (ii) pay to the applicable Borrower a competitive credit
interest. Nothing in this Section 2.1.2(j) shall either obligate the Agent, the
Canadian Correspondent Lender, or the UK Correspondent Lender, as the case may
be, to require such
44
Borrower to deposit any funds in the Facility LC Collateral Account or limit the
right of the Agent, the Canadian Correspondent Lender, or the UK Correspondent
Lender, as the case may be, to release any funds held in the Facility LC
Collateral Account in each case other than as required by Section 8.1.
(k) Rights as a Lender. In its capacity as a Lender, the LC Issuer
shall have the same rights and obligations as any other Lender.
(l) Termination of the Facility. If, notwithstanding the provisions of
this Section 2.1.2, any Facility LC is outstanding upon the termination of this
Agreement, then upon such termination the applicable Borrower shall deposit with
the Agent, the Canadian Correspondent Lender, or the UK Correspondent Lender, as
the case may be, for the benefit of the Lenders, with respect to all LC
Obligations, as the Agent in its discretion shall specify, either (i) a standby
letter of credit (a "Supporting Letter of Credit"), in form and substance
satisfactory to the Agent, issued by an issuer satisfactory to the Agent, in an
amount in immediately available funds equal to 105% of the difference of (x) the
amount of LC Obligations of such Borrower at such time, less (y) the amount on
deposit in such Borrower's Facility LC Collateral Account at such time which is
free and clear of all rights and claims of third parties and has not been
applied against the Obligations (such difference, the "Collateral Shortfall
Amount"), under which Supporting Letter of Credit the Agent, the Canadian
Correspondent Lender, or the UK Correspondent Lender, as the case may be, is
entitled to draw amounts necessary to reimburse the applicable LC Issuer for
payments to be made under any such Facility LC and any fees and expenses
associated with such Facility LC, or (ii) cash in an amount equal to 105% of the
Collateral Shortfall Amount (which funds shall be held in the Facility LC
Collateral Account). Such Supporting Letter of Credit or deposit of cash shall
be held by the Agent, the Canadian Correspondent Lender, or the UK Correspondent
Lender, as the case may be, for the benefit of the Applicable Agent and Lenders,
as security for, and to provide for the payment of, the aggregate undrawn amount
of such Facility LC remaining outstanding and all Reimbursement Obligations.
2.1.3. Non-Ratable Loans. Subject to the restrictions set forth in Section
2.1.1(a), the Agent may elect to have the terms of this Section 2.1.3 apply to
any requested Domestic Floating Rate Advance and Bank One shall thereafter make
an Advance, on behalf of the Domestic Lenders and in the amount requested,
available to the Domestic Borrower on the applicable Borrowing Date by
transferring same day funds to the appropriate Funding Account. Each Advance
made solely by Bank One pursuant to this Section 2.1.3 is referred to in this
Agreement as a "Non-Ratable Loan," and such Advances are referred to as the
"Non-Ratable Loans." Each Non-Ratable Loan shall be subject to all the terms and
conditions applicable to other Advances funded by the Domestic Lenders, except
that all payments thereon shall be payable to Bank One solely for its own
account. The aggregate amount of Non-Ratable Loans outstanding at any time shall
not exceed the lesser of (a) $5,000,000 and (b) the Domestic Availability
(before giving effect to such Non-Ratable Loan). Non-Ratable Loans may be made
even if a Default or Unmatured Default exists, but may not be made if the
conditions precedent set forth in Section 4.2 have not been satisfied. The
Non-Ratable Loans shall be secured by the Liens granted to the Agent for the
benefit of the Applicable Agent and Lenders and shall constitute Obligations
hereunder. All Non-Ratable Loans shall be Domestic Floating Rate Advances and
are subject to
45
the settlement provisions set forth in Section 2.19. Notwithstanding anything to
the contrary contained in this Agreement, each Non-Ratable Loan shall be repaid
by the Domestic Borrower within five Business Days after the date on which such
Non-Ratable Loan was made.
2.1.4. Protective Advances and Overadvances.
(a) Protective Advances. Subject to the limitations set forth below,
the Agent is authorized by the Borrowers and the Lenders, from time to time in
the Agent's sole discretion, to make Advances to the Domestic Borrower (or to
direct the Canadian Correspondent Lender to make Advances to the Canadian
Borrower or to direct the UK Correspondent Lender to make Advances to a UK
Borrower), on behalf of all of the Lenders, in an aggregate amount outstanding
at any time not to exceed the Dollar Equivalent of $5,000,000, which the Agent,
in its reasonable business judgment, deems necessary or desirable (i) to
preserve or protect the Collateral, or any portion thereof, (ii) to enhance the
likelihood of, or maximize the amount of, repayment of the Loans and other
Obligations, or (iii) to pay any other amount chargeable to or required to be
paid by the Borrowers pursuant to the terms of this Agreement, including costs,
fees, and expenses as described in Section 9.6 (any of such Advances are herein
referred to as "Protective Advances"); provided that, no Protective Advance
shall cause any Lender's Credit Exposure to exceed its aggregate Commitment, the
Aggregate Domestic Exposure to exceed the Aggregate Commitment, the Aggregate
Canadian Exposure to exceed the Aggregate Canadian Commitment, or the Aggregate
UK Exposure to exceed the Aggregate UK Commitment. Protective Advances may be
made even if the conditions precedent set forth in Section 4.2 have not been
satisfied. The Protective Advances made to the Domestic Borrower, the Canadian
Borrower and the UK Borrowers, as the case may be, shall be secured by the Liens
in favor of the Agent, the Canadian Correspondent Lender, or the UK
Correspondent Lender, as the case may be, in and to the Collateral and shall
constitute Obligations hereunder. All Protective Advances shall be Floating Rate
Advances (except in the UK, which Advances shall consist of UK Fixed Rate
Advances) and are subject to the settlement provisions set forth in Section
2.19.
(b) Overadvances. Any provision of this Agreement to the contrary
notwithstanding, at the request of the Domestic Borrower, the Agent may in its
sole discretion (but shall have absolutely no obligation to), make Advances to
the Domestic Borrower, on behalf of the Domestic Lenders, in amounts that exceed
Domestic Availability (any such excess Advances are herein referred to
collectively as "Overadvances"); provided that, (i) no such event or occurrence
shall cause or constitute a waiver of the Agent's or the Lenders' right to
refuse to make any further Overadvances, Loans or Non-Ratable Loans, or issue
Facility LCs, as the case may be, at any time that an Overadvance exists, (ii)
no Overadvance shall result in a Default or Unmatured Default due to the
Domestic Borrower's failure to comply with Section 2.1.1(a) for so long as the
Agent permits such Overadvance to remain outstanding, but solely with respect to
the amount of such Overadvance, and (iii) in no event shall Overadvances be
outstanding for more than 60 days (which days need not be consecutive) in any
120 day period. In addition, Overadvances may be made even if a Default or
Unmatured Default exists, but may not be made if the conditions precedent set
forth in Section 4.2 have not been satisfied (other than the condition regarding
availability). All Overadvances shall constitute Domestic Floating Rate
Advances, shall bear interest at the default rate set forth in Section 2.12 and
shall be payable on the earlier of demand or the Facility Termination Date. In
addition, all Overadvances are subject
46
to the settlement provisions set forth in Section 2.19. The authority of the
Agent to make Overadvances is limited to an aggregate amount not to exceed
$5,000,000 at any time and no Overadvance shall cause any Lender's Credit
Exposure to exceed its aggregate Commitment or the Domestic Exposure to exceed
the Domestic Commitment; provided that, the Required Lenders may at any time
revoke the Agent's authorization to make Overadvances. Any such revocation must
be in writing and shall become effective prospectively upon the Agent's receipt
thereof.
2.1.5 Security for Secured Foreign Obligations. Notwithstanding anything to
the contrary in this Agreement or in any other Loan Document, (i) the Canadian
Loan Parties shall be liable only for the Canadian Obligations and the UK
Obligations, and the Canadian Collateral shall secure only the Canadian
Obligations and the UK Obligations, and (ii) the UK Loan Parties shall be liable
only for the UK Obligations and the Canadian Obligations, and the UK Collateral
shall secure only the UK Obligations and the Canadian Obligations, but the
Domestic Loan Parties are liable for all Obligations and the domestic Collateral
secures all Obligations.
2.2. Ratable Loans; Risk Participation. Except as otherwise provided below,
each Advance made in connection with a Loan shall consist of Loans made by each
Lender in an amount equal to such Lender's then Pro Rata Share of the applicable
Commitment; provided that, with respect to Advances made in connection with
Canadian Revolving Loans or UK Fixed Rate Loans, such Advances shall consist of
Loans made solely by each Canadian Lender or each UK Lender, as the case may be,
in an amount equal to such Lender's Pro Rata Share of the Aggregate Canadian
Commitment or the Aggregate UK Commitment, as the case may be. Upon the making
of an Advance by the Agent in connection with a Non-Ratable Loan (whether before
or after the occurrence of a Default or an Unmatured Default and regardless of
whether the Agent has requested a Settlement with respect to such Non-Ratable
Loan) or an Overadvance, the Agent shall be deemed, without further action by
any party hereto, to have unconditionally and irrevocably sold to each Domestic
Lender and each such Lender shall be deemed, without further action by any party
hereto, to have unconditionally and irrevocably purchased from the Agent,
without recourse or warranty, an undivided interest and participation in such
Non-Ratable Loan or an Overadvance in proportion to its Pro Rata Share of the
Aggregate Commitment. Those Lenders that shall have actually made Canadian
Revolving Loans, UK Fixed Rate Loans, or UK Overdraft Advances, as the case may
be (each such Lender being referred to as a "Participating Lender"), shall be
deemed immediately upon the making of such Loan, without further action by any
party hereto, to have unconditionally and irrevocably sold to each Lender, as
the case may be, that did not make Canadian Advances, Canadian Facility LCs, UK
Advances, or UK Facility LCs, as the case may be (each such "non-lending" Lender
being referred to as a "Non-Participating Lender"), and each Non-Participating
Lender shall be deemed immediately upon the making of such Advance or Facility
LC, without further action by any party hereto, to have unconditionally and
irrevocably purchased from the Participating Lenders, an undivided interest and
unfunded participation in such Advances and Facility LCs, as the case may be, in
proportion to its Pro Rata Share of the Aggregate Commitment; provided that, (a)
beginning with the first day of each such Advance and Facility LC, the interest
that accrues with respect to each such Advance and Facility LC shall also be for
the account of each Non-Participating Lender in accordance with its Pro Rata
Share of such Advance and Facility LC, and (b) upon the occurrence of a Default,
at the Agent's sole and absolute discretion, which shall be
47
evidenced in a written notice to each Lender and the Domestic Borrower, each
Non-Participating Lender shall transfer the amount of such Lender's Pro Rata
Share of the outstanding principal amount of the applicable Advance or Facility
LC with respect to which settlement is requested to the Applicable Agent, to
such account of the Applicable Agent as the Applicable Agent may designate, not
later than 12:00 p.m. (local time), on the settlement date specified in the
notice.
2.3. Payment of the Obligations; Currency. The Borrowers shall repay the
outstanding principal balance of the Loans, together with all other Obligations,
including all accrued and unpaid interest thereon, on the Facility Termination
Date. Each Obligation related to the Domestic Revolving Loans shall be paid in
Dollars, each Obligation related to the Canadian Revolving Loans shall be paid
in Canadian Dollars, and each Obligation related to the UK Fixed Rate Loans
shall be paid in Pounds Sterling.
2.4. Minimum Amount of Each Advance. Each Fixed Rate Advance to be provided
by (a) the Domestic Lender shall be in the minimum amount of $5,000,000 and in
multiples of $1,000,000 in excess thereof, (b) the Canadian Lender shall be in
the minimum amount of CAD 100,000 and in multiples of CAD 100,000 in excess
thereof, and (c) the UK Lender shall be in the minimum amount of (pound)100,000
and in multiples of (pound)100,000 in excess thereof. Floating Rate Advances may
be in any amount.
2.5. Funding Account. Each Borrower shall have delivered or shall deliver
to the Agent, on the Closing Date or the Effective Date, as the case may be, a
notice setting forth the deposit account of such Borrower (each, a "Funding
Account") to which the Agent, the Canadian Correspondent Lender, or the UK
Correspondent Lender, as the case may be, are authorized by such Borrower to
transfer the proceeds of any Advances requested pursuant to this Agreement. The
Domestic Borrower may designate replacement Funding Accounts from time to time
by written notice to the Agent. Any designation by the Domestic Borrower of a
Funding Account must be reasonably acceptable to the Agent.
2.6. Reliance Upon Authority; No Liability. The Agent is entitled to rely
conclusively on any individual's request for Advances hereunder, so long as the
proceeds thereof are to be transferred to a Funding Account. The Agent shall
have no duty to verify the identity of any individual representing himself or
herself as a person authorized by the Domestic Borrower to make such requests on
the behalf of the Domestic Borrower. The Agent shall not incur any liability to
the Borrower as a result of acting upon any notice referred to in Section 2.1
which the Agent reasonably believes to have been given by an officer or other
person duly authorized by the Domestic Borrower to request Advances on behalf of
the Borrowers or for otherwise acting under this Agreement. The crediting of
Advances to any Funding Account shall conclusively establish the obligation of
the applicable Borrower to repay such Advances as provided herein.
2.7. Conversion and Continuation of Outstanding Advances.
(a) Floating Rate Advances shall continue as Floating Rate Advances unless
and until such Floating Rate Advances are converted into Fixed Rate Advances
pursuant to this Section 2.7 or are repaid in accordance with this Agreement.
Each Fixed Rate Advance shall continue as a Fixed Rate Advance until the end of
the then applicable Interest Period therefor, at which time such Fixed Rate
Advance shall be automatically converted into a Floating Rate Advance, other
48
than any UK Fixed Rate Advance, unless (a) such Fixed Rate Advance is or was
repaid in accordance with this Agreement or (b) the Domestic Borrower shall have
given the Agent a Conversion/Continuation Notice (as defined below) requesting
that, at the end of such Interest Period, such Fixed Rate Advance continues as a
Fixed Rate Advance for the same or another Interest Period. Each UK Fixed Rate
Advance shall at the end of the applicable Interest Period therefor, unless
repaid, be continued as a UK Fixed Rate Advance with an Interest Period with the
least number of days possible. Subject to the terms of Section 2.4, the Domestic
Borrower may elect from time to time to convert all or any part of a Floating
Rate Advance into a Fixed Rate Advance. The Domestic Borrower shall give the
Agent irrevocable notice in the form of EXHIBIT B (a "Conversion/Continuation
Notice") of each conversion of a Floating Rate Advance into a Fixed Rate Advance
or continuation of a Fixed Rate Advance not later than 10:00 a.m. (Chicago time)
at least three Business Days prior to the date of the requested conversion or
continuation, specifying (i) the requested date, which shall be a Business Day,
of such conversion or continuation, (ii) the aggregate amount and Type of the
Advance which is to be converted or continued, (iii) the amount of such Advance
which is to be converted into or continued as a Fixed Rate Advance (provided
that the amounts set forth in Section 2.4 shall be complied with), and (iv) the
duration of the Interest Period applicable thereto. In each
Conversion/Continuance Notice, the Domestic Borrower shall designate whether any
Advance is a Fixed Asset Advance or a Capex Advance.
(b) Each UK Fixed Rate Advance shall continue as a UK Fixed Rate Advance
until the end of the then applicable Interest Period therefor, at which time
such Fixed Rate Advance shall be repaid in accordance with this Agreement unless
the Domestic Borrower shall have given the Agent a Continuation Notice
requesting that, at the end of such Interest Period, such Fixed Rate Advance
continues as a UK Fixed Rate Advance for the same or another Interest Period.
The Domestic Borrower shall give the Agent irrevocable notice in the form of
EXHIBIT B of each continuation of a UK Fixed Rate Advance (with a copy to the UK
Correspondent Lender) not later than 10:00 a.m. (Chicago time) at least three
Business Days prior to the date of the requested continuation, specifying (i)
the requested date, which shall be a Business Day, of such continuation, (ii)
the aggregate amount of the UK Fixed Rate Advance which is to be continued
(provided that the amounts set forth in Section 2.4 shall be complied with), and
(iii) the duration of the Interest Period applicable thereto.
2.8. Telephonic Notices. The Borrower hereby authorizes the Lenders and the
Agent to extend, convert or continue Advances, effect selections of Types of
Advances and to transfer funds based on telephonic notices made by any person or
persons the Agent or any Lender in good faith believes to be acting on behalf of
the Domestic Borrower, it being understood that the foregoing authorization is
specifically intended to allow Borrowing Notices and Conversion/Continuation
Notices to be given telephonically. The Domestic Borrower agrees to deliver
promptly to the Agent a written confirmation, if such confirmation is requested
by the Agent or any Lender, of each telephonic notice signed by an Authorized
Officer. If the written confirmation differs in any material respect from the
action taken by the Agent and the Lenders, the records of the Agent and the
Lenders shall govern absent manifest error.
2.9. Notification of Advances, Interest Rates, Prepayments and Commitment
Reductions. Promptly after receipt thereof, the Agent will notify each Lender of
the contents of each Borrowing Notice, Conversion/Continuation Notice, and
repayment notice received by it
49
hereunder. Promptly after notice from the LC Issuer, the Agent will notify each
Lender of the contents of each request for issuance of a Facility LC hereunder.
The Agent will notify each Lender of the interest rate applicable to each Fixed
Rate Advance promptly upon determination of such interest rate and will give
each Lender prompt notice of each change in the Alternate Base Rate and Canadian
Base Rate.
2.10. Fees.
(a) Unused Commitment Fee. The Domestic Borrower agrees to pay to the
Agent, for the account of each Domestic Lender in accordance with such Lender's
Pro Rata Share of the Aggregate Commitment, an unused commitment fee at a per
annum rate equal to the Applicable Fee Rate on the average daily Available
Commitment from the date hereof to and including the Facility Termination Date,
payable on each Payment Date hereafter and on the Facility Termination Date (the
"Unused Commitment Fee").
(b) LC Fees. The applicable Borrower shall pay to the Agent, the Canadian
Correspondent Lender, or the UK Correspondent Lender, as the case may be, for
the account of the Lenders ratably in accordance with their respective Pro Rata
Shares of the applicable Commitment, a letter of credit fee at a per annum rate
equal to the Applicable Margin for Eurodollar Loans in effect from time to time
for Domestic Revolving Loans on the average daily undrawn stated amount under
each Facility LC, such fee to be payable in arrears on each Payment Date (the
"LC Fee"). The applicable Borrower shall also pay to the LC Issuer for its own
account (x) at the time of issuance or renewal of each standby Facility LC, a
fronting fee of .125% of the face amount of such Facility LC, and (y)
documentary and processing charges in connection with the issuance or
Modification of and draws under Facility LCs in accordance with the LC Issuer's
standard schedule for such charges as in effect from time to time.
(c) Agent; Arranger and Administration Fees. The Domestic Borrower agrees
to pay to the Agent and the Arranger such additional fees as are specified in
the fee letter dated as of June 24, 2003, among the Agent, the Arranger and the
Domestic Borrower (the "Fee Letter").
2.11. Interest Rates. (a) Each Floating Rate Advance shall bear interest on
the outstanding principal amount thereof, for each day from and including the
date such Advance is made or is automatically converted from a Fixed Rate Loan
into a Floating Rate Advance pursuant to Section 2.7, to but excluding the date
it is paid or is converted into a Fixed Rate Advance pursuant to Section 2.7
hereof, at a rate per annum equal to the Floating Rate or Canadian Derived
Floating Rate, as the case may be, for such day. Changes in the rate of interest
on that portion of any Advance maintained as a Floating Rate Advance will take
effect simultaneously with each change in the Alternate Base Rate or Canadian
Base Rate, as the case may be. Each Fixed Rate Advance shall bear interest on
the outstanding principal amount thereof from and including the first day of the
Interest Period applicable thereto to (but not including) the last day of such
Interest Period at the interest rate determined by the Applicable Agent as
applicable to such Fixed Rate Advance based upon the Domestic Borrower's
selections under Sections 2.1.1 and 2.7 and otherwise in accordance with the
terms hereof. No Interest Period may end after the Facility Termination Date.
Notwithstanding anything in this Agreement to the contrary, the Fixed Asset
Advance shall at all times bear interest at a rate per
50
annum equal to the Eurodollar Rate (determined on the basis of the Applicable
Margin applicable to Fixed Asset Advances).
(b) If any provision of this Agreement or any of the other Loan Documents
would obligate a Loan Party to make any payment of interest or other amount
payable to (including for the account of) any Lender in an amount, or calculated
at a rate, that would be prohibited by law or would result in a receipt by any
Lender of interest at a criminal rate (as such terms are construed under
applicable law, including, without limitation, the Criminal Code (Canada)),
then, notwithstanding such provision, such amount or rate shall be deemed to
have been adjusted with retroactive effect to the maximum amount or rate of
interest, as the case may be, as would not be so prohibited by law or so result
in a receipt by the Lenders of interest at a criminal rate, such adjustment to
be effected, to the extent necessary, as follows: (i) first, by reducing the
amount or rate of interest required to be paid to the Lenders under this Article
II or any other Loan Document; and (ii) thereafter, by reducing any fees,
commissions, premiums and other amounts required to be paid to the Lenders which
would constitute interest for purposes of applicable law, including, without
limitation, Section 347 of the Criminal Code (Canada). Notwithstanding the
foregoing, and after giving effect to all adjustments contemplated thereby, if
the Lenders shall have received an amount in excess of the maximum amount
permitted by applicable law, including, without limitation, such section of the
Criminal Code (Canada), then the Loan Parties shall be entitled, by notice in
writing to the Agent and the Canadian Lenders, to obtain reimbursement from the
Lenders in an amount equal to such excess, and pending such reimbursement, such
amount shall be deemed to be an amount payable by the Lenders to the applicable
Borrower. Any amount or rate of interest referred to in this Article II or any
other Loan Document shall be determined in accordance with generally accepted
actuarial practices and principles as an effective annual rate of interest over
the term that the Aggregate Commitment remains outstanding on the assumption
that any charges, fees or expenses that fall within the meaning of "interest"
(as defined in applicable law, including, without limitation, the Criminal Code
(Canada)) shall, if they relate to a specific period of time, be pro-rated over
that period of time and otherwise be pro-rated over the term of the Loans and,
in the event of a dispute with respect to the Aggregate Canadian Commitment, a
certificate of a Fellow of the Canadian Institute of Actuaries appointed by the
Agent and reasonably acceptable to the Company shall be conclusive for the
purposes of such determination. The terms and provisions of this Section shall
control every other provision of this Agreement and the Loan Documents.
2.12. Fixed Rate Advances Post Default; Default Rates. Notwithstanding
anything to the contrary contained hereunder, during the continuance of a
Default or Unmatured Default, the Agent or the Required Lenders may, at their
option, by notice to the Domestic Borrower (which notice may be revoked at the
option of the Required Lenders notwithstanding any provision of Section 8.3
requiring unanimous consent of the Lenders to reductions in interest rates),
declare that no Advance (other than the UK Fixed Rate Advances) may be made as,
converted into or continued as a Fixed Rate Advance. During the continuance of a
Default, the Agent or the Required Lenders may, at their option, by notice to
the Domestic Borrower (which notice may be revoked at the option of the Required
Lenders notwithstanding any provision of Section 8.3 requiring unanimous consent
of the Lenders to reductions in interest rates), declare that (i) each Fixed
Rate Advance, UK Fixed Rate Advance and Canadian Fixed Rate Advance shall bear
interest for the remainder of the applicable Interest Period at the rate
otherwise applicable to such
51
Interest Period plus 2% per annum, (ii) each Floating Rate Advance shall bear
interest at a rate per annum equal to the Floating Rate or Canadian Base Rate,
as the case may be, in effect from time to time plus 2% per annum and (iii) the
LC Fee shall be increased by 2% per annum, provided that, during the continuance
of a Default under subsection (g), (h) or (i) of Article VII, the interest rates
set forth in clauses (i) and (ii) above and the increase in the LC Fee set forth
in clause (iii) above shall be applicable to all Credit Extensions without any
election or action on the part of the Agent or any Lender.
2.13. Interest Payment Dates; Interest and Fee Basis. Interest accrued on
each Floating Rate Advance shall be payable on each Payment Date, commencing
with the first such date to occur after the date hereof and at maturity.
Interest accrued on each Fixed Rate Advance shall be payable on the last day of
its applicable Interest Period, on any date on which the Fixed Rate Advance is
prepaid, whether by acceleration or otherwise, and at maturity. Interest accrued
on each Fixed Rate Advance having an Interest Period longer than three months
shall also be payable on the last day of each three-month interval during such
Interest Period. Interest on all Advances, other than UK Advances, Unused
Commitment Fees and LC Fees, shall be calculated for actual days elapsed on the
basis of a 360-day year, and interest on all UK Advances shall be calculated for
actual days elapsed on the basis of a 365-day year. For the purposes of the
Interest Act (Canada), (i) whenever any interest under this Agreement is
calculated using a rate based on a year of 360 days, the rate determined
pursuant to such calculation, when expressed as an annual rate, is equivalent to
(x) the applicable rate based on a year of 360 days, (y) multiplied by the
actual number of days in the calendar year in which the period for such interest
is payable (or compounded) ends, and (z) divided by 360, (ii) the principle of
deemed reinvestment of interest does not apply to any interest calculation under
this Agreement, and (iii) the rates of interest stipulated in this Agreement are
intended to be nominal rates and not effective rates or yields. Interest shall
be payable for the day an Advance is made but not for the day of any payment on
the amount paid if payment is received prior to noon (local time) at the place
of payment. If any payment of principal of or interest on an Advance shall
become due on a day which is not a Business Day, such payment shall be made on
the next succeeding Business Day and, in the case of a principal payment, such
extension of time shall be included in computing interest in connection with
such payment. After giving effect to any Loan, Advance, continuation, or
conversion of any Fixed Rate Loan, there may not be (a) with respect to
Eurodollar Loans, more than 10 different Interest Periods in effect hereunder,
(b) with respect to Canadian Fixed Rate Loans, more than 8 different Interest
Periods in effect hereunder, and (c) with respect to UK Fixed Rate Loans, more
than 5 different Interest Periods in effect hereunder.
2.14. Voluntary Prepayments. The Borrowers may from time to time prepay,
without penalty or premium, all of the outstanding Floating Rate Advances, or in
a minimum aggregate amount of the applicable foreign currency equivalent of
$500,000, any portion of the outstanding Floating Rate Advances upon one
Business Day's prior notice to the Agent. The Borrowers may also from time to
time prepay, subject to the payment of any funding indemnification amounts
required by Section 3.4 but without penalty or premium, all outstanding Fixed
Rate Advances, or, in a minimum aggregate amount of the Dollar Equivalent of the
minimum borrowing amount thereof, any portion of the outstanding Fixed Rate
Advances upon three Business Days' prior notice to the Agent. The Domestic
Borrower shall have the right to instruct the Agent which Advances are being
repaid with any voluntary prepayment. To the extent the Domestic Borrower does
not specify which Advances are being repaid, the Agent shall (i) apply such
52
repayments to the Loans in the inverse order of the Loans made, (ii) apply
payments made by any Canadian Party solely to Canadian Obligations and (iii)
apply payments made by any UK Loan Party solely to UK Obligations; provided that
the repayments will be applied first to Floating Rate Advances and second to
Fixed Rate Advances.
2.15. Mandatory Prepayments.
(a) Borrowing Base Compliance. Except for Overadvances permitted pursuant
to Section 2.1.4(b), (i) the Domestic Borrower shall immediately repay the
Loans, Reimbursement Obligations or Non-Ratable Loans if at any time the
Aggregate Domestic Exposure exceeds the Domestic Maximum Borrowing Amount, (ii)
the Domestic Borrower and the Canadian Borrower shall immediately repay the
Canadian Revolving Loans if at any time the Aggregate Canadian Exposure exceeds
the Canadian Maximum Borrowing Amount other than solely as a consequence of
exchange rate fluctuations, as to which Section 2.27 applies, and (iii) the
Domestic Borrower and the UK Borrower shall immediately repay the UK Fixed Rate
Loans if at any time the Aggregate UK Exposure exceeds the UK Maximum Borrowing
Amount, other than solely as a consequence of exchange rate fluctuations, as to
which Section 2.27 applies, in each case to the extent required to eliminate
such excess. If any such excess remains after repayment in full of all
outstanding Loans and Reimbursement Obligations, the applicable Borrower shall
provide cash collateral or a Supporting Letter of Credit for the LC Obligations
in the manner set forth in Section 2.1.2(l) to the extent required to eliminate
such excess.
(b) Sale of Assets. Immediately upon receipt by the Domestic Borrower of
the Net Cash Proceeds of any asset disposition (other than an asset disposition
permitted by Section 6.19), the Domestic Borrower shall prepay the Obligations
in an amount equal to all such Net Cash Proceeds. Any such prepayment shall be
applied first, to pay the principal of the Protective Advances and the
Overadvances, second, to pay the principal of the Non-Ratable Loans, third, to
pay the principal of the Domestic Revolving Loans without a concomitant
reduction in the Aggregate Commitment, and fourth, to cash collateralize
outstanding Facility LCs. At the option of the Domestic Borrower, at the time
such Domestic Borrower is required to make any prepayment pursuant to this
Section 2.15(b), it may advise the Agent that it intends to reinvest such Net
Cash Proceeds in assets to be used in the business of such Borrower or any other
Domestic Loan Party (including through Capital Expenditures), and (y) such Net
Cash Proceeds will be applied by such Borrower to the prepayment of Revolving
Loans hereunder and, as contemplated by the second paragraph of Section
2.1.1(a), a portion of the Aggregate Commitment equal to the amount of such
prepayment will give rise to a Reserved Commitment Amount that will be available
hereunder for purposes of acquiring assets to be used in the business of the
Domestic Borrower and the other Domestic Loan Parties (including through Capital
Expenditures), and (z) the Net Cash Proceeds from any such asset disposition
must be so reinvested within 360 days of such asset disposition (it being
understood that, in the event Net Cash Proceeds from more than one asset
disposition are applied to the prepayment of Domestic Revolving Loans as
provided in clause (y) above, such Net Cash Proceeds shall be deemed to be
released (or, as the case may be, Domestic Revolving Loans utilizing the
Reserved Commitment Amount shall be deemed to be made) in the same order in
which such asset dispositions occurred; provided that, the Aggregate Commitment
will be automatically and permanently reduced in an amount equal to the amount
of any net cash proceeds not so reinvested after 360
53
days.
(c) Issuance of Debt or Equity. If the Domestic Borrower or any of its
Domestic Subsidiaries issues Capital Stock or any Domestic Loan Party issues
Indebtedness (other than Indebtedness permitted by Sections 6.16(a),(c),(e) and
(g)) or if any Domestic Loan Party receives any dividend or distribution from a
Person other than a Loan Party, no later than the Business Day following the
date of receipt of the Net Cash Proceeds of such issuance or receipt of such
dividend, distribution, loan or advance, the Borrower shall prepay the
Obligations in an amount equal to all such Net Cash Proceeds, dividends,
distributions, loans or advances. Any such prepayment shall be applied first, to
pay the principal of the Protective Advances and the Overadvances, second, to
pay the principal of the Non-Ratable Loans, third, to pay the principal of the
Loans without a concomitant reduction in the Aggregate Commitment, and fourth,
to cash collateralize outstanding Domestic Facility LCs.
(d) Insurance/Condemnation Proceeds. Any insurance or condemnation proceeds
to be applied to the Obligations in accordance with Section 6.7(c) shall be
applied as follows: (i) insurance proceeds from casualties or losses to cash or
Inventory shall be applied, first, to the Protective Advances and the
Overadvances pro rata, second, to the Non-Ratable Loans, third, to the Domestic
Revolving Loans and fourth, to cash collateralize outstanding Domestic Facility
LCs; and (ii) insurance or condemnation proceeds from casualties or losses to
Equipment, Fixtures and real Property shall be applied first, to pay the
principal of the Protective Advances, second, to pay the principal of the
Non-Ratable Loans, third, to pay the principal of the Domestic Revolving Loans,
and fourth, to cash collateralize outstanding Domestic Facility LCs. The
Aggregate Commitment shall not be permanently reduced by the amount of any such
prepayments.
(e) General. Without in any way limiting the foregoing, immediately upon
receipt by any Domestic Loan Party of proceeds of any sale of any Collateral,
other than as provided in Section 6.19, the Domestic Borrower shall cause such
Loan Party to deliver such proceeds to the Agent, or deposit such proceeds in a
deposit account subject to a Deposit Account Control Agreement. All of such
proceeds shall be applied as set forth above or otherwise as provided in Section
2.18. Nothing in this Section 2.15 shall be construed to constitute the Agent's
or any Lender's consent to any transaction that is not permitted by other
provisions of this Agreement or the other Loan Documents.
(f) Cash Management Account. Notwithstanding anything in this Agreement to
the contrary, if the application of proceeds contemplated by this Section 2.15
would reduce the Loans below the then Certified Acquisition Amount, then, at the
option of the Domestic Borrower, the Agent shall not apply such proceeds to
repay any Loans but shall instead place such proceeds into a separate cash
management account maintained by the Agent, which proceeds, so long as no
Default has occurred and is continuing, shall be released to the Borrowers on
request.
2.16. Termination of the Facility
(a) Without limiting Section 2.3 or Section 8.1, (a) the Aggregate
Commitments shall expire on the Facility Termination Date and (b) the Aggregate
Credit Exposure and all other
54
unpaid Obligations shall be paid in full by the applicable Borrower on the
Facility Termination Date.
(b) The Domestic Borrower may terminate this Agreement upon (i) at least 10
Business Days' prior written notice thereof to the Agent and the Lenders, (ii)
the payment in full of all outstanding Loans, together with accrued and unpaid
interest thereon, (iii) the cancellation and return of all outstanding Facility
LCs (or alternatively, with respect to each such Facility LC, the furnishing to
the Agent of a cash deposit or Supporting Letter of Credit as required by
Section 2.1.2(l)), (iv) the payment in full of the early termination fee set
forth in the following sentence (the "PREPAYMENT FEE"), (v) the payment in full
of all reimbursable expenses and other Obligations together with accrued and
unpaid interest thereon, and (vi) the payment in full of any amount due under
Section 3.4. If this Agreement is terminated at any time prior to the first
anniversary of the Closing Date, whether pursuant to this Section 2.16 or
pursuant to Section 8.1, the Domestic Borrower shall pay to the Agent, for the
account of the Lenders, an early termination fee in an amount equal to 1% of the
Aggregate Commitment. No such Prepayment Fee shall be payable in the event this
Agreement is terminated in connection with refinancing of the Obligations in a
transaction in which Bank One or one of its Affiliates that is a banking
institution provides or arranges a replacement bank credit facility for the
Borrower.
2.17. Method of Payment.
(a) All payments of the Obligations hereunder shall be made, without
setoff, deduction, or counterclaim, in immediately available funds to the Agent,
Canadian Correspondent Lender, or UK Correspondent Lender, as the case may be,
to such Lender's address specified pursuant to Article XIII, or at any other
Lending Installation of the Agent, Canadian Correspondent Lender, or UK
Correspondent Lender, as the case may be, specified in writing by the Agent to
the Domestic Borrower, by 12:00 noon (local time) on the date when due and shall
be applied ratably by such Applicable Agent among the Lenders. Any payment
received by the above-specified Lender after such time shall be deemed to have
been received on the following Business Day and any applicable interest or fee
shall continue to accrue. Each payment delivered to the above-specified Lender
for the account of any other Lender shall be delivered promptly by such Lender
to such other Lender in the same type of funds that such Lender received.
(b) At the election of the Agent, all payments of principal, interest,
reimbursement obligations in connection with Facility LCs, fees, premiums,
reimbursable expenses (including, without limitation, all reimbursement for fees
and expenses pursuant to Section 9.6), and other sums payable under the Loan
Documents, may be paid from the proceeds of Advances made hereunder whether made
following a request by the Domestic Borrower pursuant to Section 2.1 or a deemed
request as provided in this Section 2.17 or may be deducted from a Funding
Account or any other deposit account of a Borrower maintained with the Agent.
The Borrower hereby irrevocably authorizes (i) the Agent to make an Advance for
the purpose of paying each payment of principal, interest and fees as it becomes
due hereunder or any other amount due under the Loan Documents and agrees that
all such amounts charged shall constitute Loans (including Non-Ratable Loans,
Overadvances and Protective Advances) and that all such Advances shall be deemed
to have been requested pursuant to Section 2.1 and (ii) the Agent to charge any
Funding Account or any other deposit account of the applicable Borrower
maintained
55
with Bank One for each payment of principal, interest and fees as it becomes due
hereunder or any other amount due under the Loan Documents.
(c) Notwithstanding any other provision of this Agreement to the contrary,
all payments of Obligations hereunder by (i) a Domestic Loan Party shall be made
to the Agent, the Canadian Correspondent Lender, and/or the UK Correspondent
Lender (ii) a Canadian Loan Party shall be made to the Canadian Correspondent
Lender or the UK Correspondent Lender, and (iii) a UK Loan Party shall be made
to the UK Correspondent Lender or the Canadian Correspondent Lender.
2.18. Apportionment, Application and Reversal of Payments. Except as
otherwise required pursuant to the provisions of this Agreement, principal and
interest payments shall be apportioned ratably among the Lenders as set forth in
this Article II and payments of the fees shall, as applicable, be apportioned
ratably among the Lenders, except for fees payable solely to the Agent and the
LC Issuer and except as provided in this Article II. All payments (other than
those collected pursuant to Section 16.2) shall be remitted to the Agent,
Canadian Correspondent Lender or UK Correspondent Lender, as the case may be,
and all such payments not relating to principal or interest of specific Loans or
not constituting payment of specific fees as specified by the Domestic Borrower
or otherwise, and all proceeds of any Collateral received by the Agent, Canadian
Correspondent Lender, or UK Correspondent Lender, as the case may be, shall be
applied, ratably, subject to the provisions of this Agreement, first, to pay any
fees, indemnities, or expense reimbursements including amounts then due to the
Agent from the applicable Borrower (other than in connection with Banking
Services or Rate Management Obligations), second, to pay any fees or expense
reimbursements then due to the Lenders from the applicable Borrower (other than
in connection with Banking Services or Rate Management Obligations), third, to
pay interest due in respect of such Borrower's Loans, including Non-Ratable
Loans, Overadvances and Protective Advances, fourth, to pay or prepay principal
of the Non-Ratable Loans, Overadvances and Protective Advances, fifth, to pay or
prepay principal of the Loans (other than Non-Ratable Loans, Overadvances and
Protective Advances) and unpaid reimbursement obligations in respect of Facility
LCs, sixth, to pay an amount to the Agent equal to one hundred five percent
(105%) of the aggregate undrawn face amount of all outstanding Facility LCs and
the aggregate amount of any unpaid reimbursement obligations in respect of
Facility LCs, to be held as cash collateral for such Obligations, seventh, to
payment of any amounts owing with respect to Banking Services and Rate
Management Obligations, and eighth, to the payment of any other Obligation due
to the Agent or any Lender by the Borrower. Notwithstanding anything to the
contrary contained in this Agreement, unless so directed by the Domestic
Borrower, or unless a Default is in existence, neither the Agent nor any Lender
shall apply any payment which it receives to any Fixed Rate Loan, except (a) on
the expiration date of the Interest Period applicable to any such Fixed Rate
Loan or (b) in the event, and only to the extent, that there are no outstanding
Floating Rate Loans and, in any event, the applicable Borrower shall pay the
breakage losses in accordance with Section 3.4. The Agent and the Lenders shall
have the continuing and exclusive right to apply and reverse and reapply any and
all such proceeds and payments to any portion of the Obligations. Furthermore,
notwithstanding anything to the contrary contained in this Agreement, in no
event shall any payment made by a Canadian Loan Party or a UK Loan Party for any
reason whatsoever or any proceeds of
56
Collateral owned by the Canadian Borrower or the UK Borrower be applied to any
Obligation other than the Canadian Obligations or the UK Obligations.
2.19. Settlement Each Lender's funded portion of the Loans is intended by
the Lenders to be equal at all times to such Lender's Pro Rata Share of the
outstanding Loans. Notwithstanding such agreement, the Agent, Bank One, and the
Lenders agree (which agreement shall not be for the benefit of or enforceable by
the Loan Parties) that in order to facilitate the administration of this
Agreement and the other Loan Documents, settlement among them as to the Loans,
including the Non-Ratable Loans, Overadvances, and Protective Advances shall
take place on a periodic basis in accordance with the following provisions:
(a) The Agent shall, except as otherwise provided in Section 2.2, request
settlement (a "SETTLEMENT") with the Lenders on at least a weekly basis, or on a
more frequent basis at the Agent's election, (i) for itself, with respect to
each Non-Ratable Loan, Overadvance and Protective Advance, and (ii) with respect
to collections received, in each case, by notifying the Lenders of such
requested Settlement by telecopy, telephone, or e-mail no later than noon (local
time) on the date of such requested Settlement (the "SETTLEMENT DATE"). Each
Lender (other than the Agent, in the case of the Non-Ratable Loans, Overadvances
and Protective Advances) shall transfer the amount of such Lender's Pro Rata
Share of the outstanding principal amount of the applicable Loan with respect to
which Settlement is requested to the Agent, to such account of the Agent as the
Agent may designate, not later than 2:00 p.m. (local time), on the Settlement
Date applicable thereto. Settlements may occur during the existence of a Default
or an Unmatured Default and whether or not the applicable conditions precedent
set forth in Section 4.2 have then been satisfied. Such amounts transferred to
the Agent shall be applied against the amounts of the applicable Loan and,
together with Bank One's Pro Rata Share of such Non-Ratable Loan, Overadvances
or Protective Advance, shall constitute Loans of such Lenders, respectively. If
any such amount is not transferred to the Agent by any Lender on the Settlement
Date applicable thereto, the Agent shall be entitled to recover such amount on
demand from such Lender together with interest thereon as specified in Section
2.23.
(b) From and after the date, if any, on which any Lender is required to
fund its participation in any Non-Ratable Loan, Overadvances or Protective
Advance purchased pursuant to Section 2.2, the Agent shall promptly distribute
to such Lender, such Lender's Pro Rata Share of all payments of principal and
interest and all proceeds of Collateral received by the Agent in respect of such
Loan.
(c) The Agent shall pay all amounts it owes hereunder to the Lenders in
Dollars. The Canadian Correspondent Agent shall pay all amounts it owes
hereunder to the Lenders in Canadian Dollars. The UK Correspondent Lender shall
pay all amounts it owes hereunder to the Lenders in Pounds Sterling. To the
extent that any Lender is unable to accept any such amount in Canadian Dollars
or Pounds Sterling, the Canadian Correspondent Lender or UK Correspondent
Lender, as the case may be, may, in its sole discretion, convert such amount
into Dollars at its then existing exchange rate, which may not be the lowest
exchange rate available, and remit such amounts to such Lender. The Canadian
Correspondent Lender and the UK Correspondent Lender shall not be liable to any
Lender for action taken in connection with
57
converting currency pursuant to this subsection 2.19(c), except with respect to
mathematical miscalculations.
2.20. Indemnity for Returned Payments. If after receipt of any payment
which is applied to the payment of all or any part of the Obligations, the Agent
or any Lender is for any reason compelled to surrender such payment or proceeds
to any Person because such payment or application of proceeds is invalidated,
declared fraudulent, set aside, determined to be void or voidable as a
preference, impermissible setoff, or a diversion of trust funds, or for any
other reason, then the Obligations or part thereof intended to be satisfied
shall be revived and continued and this Agreement shall continue in full force
as if such payment or proceeds had not been received by the Agent or such Lender
and the Domestic Borrower, the Canadian Borrower, or UK Borrower, as the case
may be, shall be liable to pay to the Agent and/or the Lenders, and such
Borrower hereby indemnifies the Agent and/or the Lenders and holds the Agent
and/or the Lenders harmless for the amount of such payment or proceeds
surrendered. The provisions of this Section 2.20 shall be and remain effective
notwithstanding any contrary action which may have been taken by the Agent or
any Lender in reliance upon such payment or application of proceeds, and any
such contrary action so taken shall be without prejudice to the Agent's and the
Lenders' rights under this Agreement and shall be deemed to have been
conditioned upon such payment or application of proceeds having become final and
irrevocable. The provisions of this Section 2.20 shall survive the termination
of this Agreement.
2.21. Notes; Evidence of Indebtedness.
(a) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of each Borrower to such Lender
resulting from each Loan made by such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time hereunder.
(b) The Agent, the Canadian Correspondent Lender and the UK Correspondent
Lender shall also maintain accounts in which they will record (i) the amount of
each Loan extended hereunder, the Type thereof and the Interest Period with
respect thereto, (ii) the amount of any principal or interest due and payable or
to become due and payable from each Borrower to each Lender hereunder, (iii) the
original stated amount of each Facility LC and the amount of LC Obligations
outstanding at any time, and (iv) the amount of any sum received by the
Applicable Agent hereunder from each Borrower and each Lender's share thereof.
(c) The entries maintained in the accounts maintained pursuant to
paragraphs (a) and (b) above shall be prima facie evidence of the existence and
amounts of the Obligations therein recorded; provided however, that the failure
of the Agent or any Lender to maintain such accounts or any error therein shall
not in any manner affect the obligation of the Borrowers to repay their
respective Obligations in accordance with their terms.
(d) The Loans by each Lender will be evidenced by a promissory note in
substantially the form of (i) Exhibit C for Domestic Revolving Loans (each, a
"Domestic Revolving Note"), (ii) Exhibit L for Canadian Revolving Loans, (each,
a "Canadian Revolving Note," and (iii) Exhibit M for UK Fixed Rate Loans (each,
a "UK Revolving Note").
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2.22. Lending Installations. Subject to the other provisions of this
Agreement, each Lender may book its Loans and its participation in any LC
Obligations and the LC Issuer may book the Facility LCs at any Lending
Installation selected by such Lender or the LC Issuer, as the case may be, and
may change its Lending Installation from time to time, including, without
limitation, with respect to Xxxxxx Trust & Savings Bank, Bank of Montreal -
Toronto Branch and Bank of Montreal - London. All terms of this Agreement shall
apply to any such Lending Installation and the Loans, Facility LCs,
participations in LC Obligations and any Revolving Notes issued hereunder shall
be deemed held by each Lender or the LC Issuer, as the case may be, for the
benefit of any such Lending Installation. Each Lender and the LC Issuer may, by
written notice to the Agent and the Domestic Borrower in accordance with Article
XIII, designate replacement or additional Lending Installations through which
Loans will be made by it or Facility LCs will be issued by it and for whose
account Loan payments or payments with respect to Facility LCs are to be made.
2.23. Non-Receipt of Funds by the Agent Unless the Domestic Borrower, or a
Lender, as the case may be, notifies the Applicable Agent prior to the date on
which it is scheduled to make payment to the Applicable Agent of (i) in the case
of a Lender, the proceeds of a Loan or (ii) in the case of the Borrower, a
payment of principal, interest or fees to the Applicable Agent for the account
of the Lenders, that it does not intend to make such payment, the Applicable
Agent may assume that such payment has been made. The Applicable Agent may, but
shall not be obligated to, make the amount of such payment available to the
intended recipient in reliance upon such assumption. If such Lender or such
Borrower, as the case may be, has not in fact made such payment to the
Applicable Agent, the recipient of such payment shall, on demand by the
Applicable Agent, repay to the Applicable Agent the amount so made available
together with interest thereon in respect of each day during the period
commencing on the date such amount was so made available by the Applicable Agent
until the date the Applicable Agent recovers such amount at a rate per annum
equal to (x) in the case of payment by a Lender, the Federal Funds Effective
Rate for such day for the first three days and, thereafter, the interest rate
applicable to the relevant Loan or (y) in the case of payment by the Borrower,
the interest rate applicable to the relevant Loan.
2.24. Fixed Charge Coverage Ratio Condition.
(a) The Domestic Borrower hereby acknowledges and agrees that the Fixed
Charge Coverage Ratio Condition exists as of the Closing Date and hereby
certifies to the Agent and the Lenders that the Certified Acquisition Amount as
of the Closing Date is $106,500,000 Subsequent to the expiration of the initial
Fixed Charge Condition Period, the Domestic Borrower shall provide immediate
written notice to the Agent and the Lenders at any time that the Fixed Charge
Coverage Ratio Condition exists or, within the next three months, is reasonably
likely to exist. After the initial Revolving Loans shall have been made
hereunder on the Closing Date, during any Fixed Charge Condition Period, in
addition to the other requirements and conditions set forth in this Agreement,
the Borrower shall not request any Loan or Facility LC, and the Lenders or the
Agent shall not be obligated to make any Loan and the LC Issuer shall not be
obligated to issue any Facility LC on behalf of the Lenders, unless (A) the
Domestic Borrower shall have complied with the requirements of subpart (b)
below, (B) the proceeds of
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such Loan or the purpose of the Facility LC transaction and all other
Indebtedness incurred hereunder shall constitute Permitted Indebtedness (as
defined in the Indenture), and (C) upon request of the Agent, the Domestic
Borrower shall provide to the Lenders such evidence of use of proceeds of the
Loans or the purpose of such Facility LC transaction and such opinion of counsel
with respect to the Indenture, as the Agent may from time to time require in its
sole discretion.
(b) After the initial Revolving Loans have been made hereunder on the
Closing Date, during any Fixed Charge Condition Period, in addition to the other
requirements and conditions set forth in this Agreement:
(i) neither the Domestic Borrower nor any of its Subsidiaries shall
make, or commit to make, any Acquisition with the proceeds of the Loans,
unless, prior to any such Acquisition, the Domestic Borrower shall deliver
a written certification to the Agent, for the benefit of the Lenders, by an
Authorized Officer of the Domestic Borrower confirming that any
Indebtedness incurred in connection with such Acquisition (including, but
not limited to, any such Indebtedness incurred hereunder) is Permitted
Indebtedness (as defined under the Indenture) and that such Indebtedness
did not consist of proceeds of the Loans;
(ii) the use of proceeds of any Loan or Facility LC by the Domestic
Borrower and its Subsidiaries shall be for working capital purposes or
Capital Expenditures of the Domestic Borrower and its Subsidiaries, and (A)
with respect to working capital loans:
(1) after giving effect to the making of such Loan or the
issuance of such Facility LC, the Aggregate Credit Exposure on such
date (minus the then Certified Acquisition Amount) shall be less than
an amount equal to the greater of (i) $50,000,000, or (ii) the sum of
(A) forty-five percent (45%) of the book value of accounts receivable
of the Domestic Borrower and its Subsidiaries on a consolidated basis,
and (B) twenty-five percent (25%) of the book value of the inventory
of the Domestic Borrower and its Subsidiaries on a consolidated basis,
in each case as such terms are used in the Indenture,
(2) the Domestic Borrower shall have provided such evidence as
the Agent may require with respect to the actual use of the proceeds
of any Loan or Facility LC, certified by an Authorized Officer of the
Domestic Borrower and otherwise in form and substance satisfactory to
the Agent, and
(3) concurrently with the request for any Loan or Facility LC,
and in addition to the requirements set forth in Section 2.1.1(d)
hereof, the Domestic Borrower shall have submitted to the Agent an
Indenture Certificate certified by an Authorized Officer of the
Domestic Borrower, in the form of EXHIBIT I hereto and otherwise in
form and substance satisfactory to the Agent, certifying among other
things, compliance with this Section 2.24(b)(ii)(A), or
(B) with respect to Capital Expenditures:
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(1) any such Loan shall constitute Permitted Indebtedness (as
defined in the Indenture) pursuant to subpart (v) of the definition of
Permitted Indebtedness set forth in the Indenture,
(2) the aggregate principal amount of all such Loans the proceeds
of which are used for Capital Expenditures in accordance with this
subpart shall not exceed (when combined with all other loans and
capitalized leases used to finance Capital Expenditures, so long as
such other loans and capital leases are permitted pursuant to Sections
6.16 and 6.28 hereof) at any time outstanding do not exceed five
percent (5%) of the tangible consolidated total assets of the Domestic
Borrower and its Subsidiaries, and
(3) with respect to the capital asset being purchased with the
proceeds of such Loan, within five (5) Business Days after the
purchase of such asset, the appropriate Loan Party shall have executed
and delivered to the Agent, for the benefit of the Lenders, such
security agreements, UCC financing statements and other documents as
the Agent, in its sole discretion, shall require so that the Agent
shall have, for the benefit of the Lenders, a first priority security
interest and Lien on such asset.
(c) Notwithstanding anything in this Section 2.24 or elsewhere in this
Agreement to the contrary, if, at any time, the Agent, in its sole discretion,
shall be unable to agree with the Domestic Borrower that any Loan made or
Facility LC issued, or requested to be made or issued, during the Fixed Charge
Condition Period constitutes Permitted Indebtedness (as defined in the
Indenture), then the Lenders shall not be obligated to make any Loan and the
Agent shall not be obligated to issue any Facility LC until such time as any
uncertainty is resolved in a manner reasonably satisfactory to the Agent.
2.25. Designated Senior Indebtedness The Agent, Lenders and the LC Issuer
hereby designate all Indebtedness and all other obligations now or hereafter
incurred or otherwise outstanding under any Loan Document to be "Designated
Senior Indebtedness" as set forth and defined in the Indenture.
2.26 Change of Currency. If at any time the Euro becomes the lawful
currency unit in the United Kingdom, this Agreement will, to the extent the
Agent (acting reasonably and after consultation with the Domestic Borrower)
specifies to be necessary, be amended to comply with any generally accepted
conventions and market practice in the relevant inter bank market and otherwise
to reflect the change in currency.
2.27 Exchange Rate Fluctuations. The Agent shall at all times monitor the
Dollar Equivalent of all outstanding Canadian Advances and UK Advances, the
amount of the UK Overdraft Commitment, and the amount of the UK LC Obligations.
If due to changes in the exchange rate between Dollars and Canadian Dollars or
Dollars and Pounds Sterling, the Aggregate Canadian Exposure exceeds the
Aggregate Canadian Commitment or the Aggregate UK Exposure exceeds the Aggregate
UK Commitment, then the Agent may in its sole discretion,
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refuse to permit any further Canadian Revolving Loans or UK Fixed Rate Loans to
be borrowed, continued or converted, or may require that the Domestic Borrower,
the UK Borrower or the Canadian Borrower, as the case may be, to pay or prepay
such excess amounts in respect of any outstanding Loans as the Agent may request
in writing to the applicable Borrower (such payment to be made within 2 Business
Days of the Agent's request therefor).
ARTICLE III
YIELD PROTECTION; TAXES
3.1. Yield Protection. If, on or after the Closing Date, the adoption of
any law or any governmental or quasi-governmental rule, regulation, policy,
guideline or directive (whether or not having the force of law), or any change
in the interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender or
applicable Lending Installation or the LC Issuer with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency:
(a) subjects any Lender or any applicable Lending Installation or the LC
Issuer to any Taxes, or changes the basis of taxation of payments (other than
with respect to Excluded Taxes) to any Lender or the LC Issuer in respect of its
Fixed Rate Loans, Facility LCs or participations therein, or
(b) imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any Lender or any
applicable Lending Installation or the LC Issuer (other than reserves and
assessments taken into account in determining the interest rate applicable to
Fixed Rate Advances), or
(c) imposes any other condition the result of which is to increase the cost
to any Lender or any applicable Lending Installation or the LC Issuer of making,
funding or maintaining its Fixed Rate Loans, or of issuing or participating in
Facility LCs, or reduces any amount receivable by any Lender or any applicable
Lending Installation or the LC Issuer in connection with its Fixed Rate Loans,
Facility LCs or participations therein, or requires any Lender or any applicable
Lending Installation or the LC Issuer to make any payment calculated by
reference to the amount of Fixed Rate Loans, Facility LCs or participations
therein held or interest or LC Fees received by it, by an amount deemed material
by such Lender or the LC Issuer as the case may be, and the result of any of the
foregoing is to increase the cost to such Lender or applicable Lending
Installation or the LC Issuer, as the case may be, of making or maintaining its
Fixed Rate Loans or Commitment or of issuing or participating in Facility LCs or
to reduce the return received by such Lender or applicable Lending Installation
or the LC Issuer, as the case may be, in connection with such Fixed Rate Loans,
Commitment, Facility LCs or participations therein, then, within 15 days of
demand by such Lender or the LC Issuer, as the case may be, the Borrower shall
pay such Lender or the LC Issuer, as the case may be, such additional amount or
amounts as will compensate such Lender or the LC Issuer, as the case may be, for
such increased cost or reduction in amount received.
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3.2. Changes in Capital Adequacy Regulations If a Lender or the LC Issuer
determines the amount of capital required or expected to be maintained by such
Lender or the LC Issuer, any Lending Installation of such Lender or the LC
Issuer, or any corporation controlling such Lender or the LC Issuer is increased
as a result of a "CHANGE," then, within 15 days of demand by such Lender or the
LC Issuer, the Borrower shall pay such Lender or the LC Issuer the amount
necessary to compensate for any shortfall in the rate of return on the portion
of such increased capital which such Lender or the LC Issuer determines is
attributable to this Agreement, its Credit Exposure or its Commitment to make
Loans and issue or participate in Facility LCs, as the case may be, hereunder
(after taking into account such Lender's or the LC Issuer's policies as to
capital adequacy). "CHANGE" means (i) any change after the date of this
Agreement in the Risk-Based Capital Guidelines (as defined below) or (ii) any
adoption of or change in any other law, governmental or quasi-governmental rule,
regulation, policy, guideline, interpretation, or directive (whether or not
having the force of law) after the date of this Agreement which affects the
amount of capital required or expected to be maintained by any Lender or the LC
Issuer or any Lending Installation or any corporation controlling any Lender or
the LC Issuer. "RISK-BASED CAPITAL GUIDELINES" means (i) the risk-based capital
guidelines in effect in the U.S. on the date of this Agreement, including
transition rules, and (ii) the corresponding capital regulations promulgated by
regulatory authorities outside the U.S. implementing the July 1988 report of the
Basle Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations adopted prior
to the date of this Agreement.
3.3. Availability of Types of Advances. If any Lender determines that
maintenance of its Fixed Rate Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or if the Required Lenders determine that (i) deposits
of a type and maturity appropriate to match fund Fixed Rate Advances are not
available or (ii) the interest rate applicable to Fixed Rate Advances does not
accurately reflect the cost of making or maintaining Fixed Rate Advances, then
the Agent shall suspend the availability of Fixed Rate Advances and require any
affected Fixed Rate Advances to be repaid or converted to Floating Rate
Advances, subject to the payment of any funding indemnification amounts required
by Section 3.4.
3.4. Funding Indemnification. If any payment of a Fixed Rate Advance occurs
on a date which is not the last day of the applicable Interest Period, whether
because of acceleration, prepayment or otherwise, or a Fixed Rate Advance is not
made on the date specified by the Domestic Borrower, for any reason other than
default by the Lenders, the Borrower will indemnify each Lender for any loss or
cost incurred by it resulting therefrom, including, without limitation, any loss
or cost in liquidating or employing deposits acquired to fund or maintain such
Fixed Rate Advance.
3.5. Taxes.
(a) All payments by the Borrower to or for the account of any Lender, the
LC Issuer or the Agent hereunder or under any Revolving Note or Facility LC
Application shall be made
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free and clear of and without deduction for any and all Taxes. If the Borrower
shall be required by law to deduct any Taxes from or in respect of any sum
payable hereunder to any Lender, the LC Issuer or the Agent, (a) 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
3.5) such Lender, the LC Issuer or the Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(b) the Borrower shall make such deductions, (c) the Borrower shall pay the full
amount deducted to the relevant authority in accordance with applicable law, (d)
the Borrower shall furnish to the Agent the original copy of a receipt
evidencing payment thereof within thirty days after such payment is made, and
(e) and if any such Lender or LC Issuer receives a credit against, remission
for, or repayment of any tax paid or payable by it in respect of or calculated
with reference to the taxes giving rise to such payment, such Lender or LC
Issuer shall, within a reasonable time after it receives such credit, remission
or repayment, reimburse the Borrowers the amount of any such credit, remission
or repayment.
(b) In addition, the Borrower hereby agrees to pay any present or future
stamp or documentary taxes and any other excise or property taxes, charges or
similar levies which arise from any payment made by it hereunder or under any
Revolving Note or Facility LC Application or from the execution or delivery of,
or otherwise with respect to, this Agreement or any Revolving Note or Facility
LC Application ("Other Taxes").
(c) The Borrower hereby agrees to indemnify the Agent, the LC Issuer and
each Lender for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed on amounts payable under this
Section 3.5) paid by the Agent, the LC Issuer or such Lender as a result of its
Commitment, any Loans made by it hereunder, any Facility LC issued hereunder or
otherwise in connection with its participation in this Agreement and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto. Payments due under this indemnification shall be made within
thirty days of the date the Agent, the LC Issuer or such Lender makes demand
therefor pursuant to Section 3.6.
(d) Each Lender, other than Bank of Montreal, Toronto Branch and Bank of
Montreal, London Branch, that is not incorporated under the laws of the U.S. or
a state thereof (each a "Non-U.S. Lender") agrees that it will, not more than
five days after the date that it enters into this Agreement, (i) deliver to the
Domestic Borrower and the Agent two duly completed copies of U.S. Internal
Revenue Service Form W-8BEN or W-8ECI, certifying in either case that such
Lender is entitled to receive payments under this Agreement without deduction or
withholding of any U.S. federal income taxes, and (ii) deliver to the Agent a
U.S. Internal Revenue Form W-8 or W-9, as the case may be, and certify that it
is entitled to an exemption from U.S. backup withholding tax, along with any
additional certifications reasonably required by the Domestic Borrower attesting
to such Non-U.S. Lender's qualification for exemption from withholding tax. Each
Non-U.S. Lender further undertakes to deliver to each of the Domestic Borrower
and the Agent (x) renewals or additional copies of such form (or any successor
form) on or before the date that such form expires or becomes obsolete, and (y)
after the occurrence of any event requiring a change in the most recent forms so
delivered by it, such additional forms or amendments thereto as may be
reasonably requested by the Domestic Borrower or the Agent. All forms or
amendments described in the preceding sentence shall
64
certify that such Non-U.S. Lender is entitled to receive payments under this
Agreement without deduction or withholding of any U.S. federal income taxes,
unless an event (including without limitation any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Non-U.S. Lender from duly completing and delivering any such form
or amendment with respect to it and such Non-U.S. Lender advises the Domestic
Borrower and the Agent that it is not capable of receiving payments without any
deduction or withholding of U.S. federal income tax.
(e) For any period during which a Non-U.S. Lender has failed to provide the
Domestic Borrower with the form specified in the first sentence of Section
3.5(d) above (unless such failure is due to a change in treaty, law or
regulation, or any change in the interpretation or administration thereof by any
governmental authority, occurring subsequent to the date on which a form
originally was required to be provided), such Non-U.S. Lender shall not be
entitled to payment under this Section 3.5 with respect to Taxes imposed by the
U.S. attributable to such failure; provided that, should a Non-U.S. Lender which
is otherwise exempt from or subject to a reduced rate of withholding tax become
subject to Taxes because of its failure to deliver a form required under Section
3.5(d), above, the Domestic Borrower shall take such steps as such Non-U.S.
Lender shall reasonably request to assist such Non-U.S. Lender to recover such
Taxes.
(f) Any Lender that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement or any Revolving
Note pursuant to the law of any relevant jurisdiction or any treaty shall
deliver to the Domestic Borrower (with a copy to the Agent), at the time or
times prescribed by applicable law, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate. If any such Lender applies for
relief, as required by below, but is denied such relief, it shall deliver to the
Domestic Borrower (with a copy to the Agent), the appropriate documentation
setting forth the reason for such denial, and the Borrowers shall continue to
make the payments required pursuant to subsection 3.5(a).
(g) If the U.S. Internal Revenue Service or any other governmental
authority of the U.S. or any other country or any political subdivision thereof
asserts a claim that the Agent did not properly withhold tax from amounts paid
to or for the account of any Lender (because the appropriate form was not
delivered or properly completed, because such Lender failed to notify the Agent
of a change in circumstances which rendered its exemption from withholding
ineffective, or for any other reason), such Lender shall indemnify the Agent
fully for all amounts paid, directly or indirectly, by the Agent as tax,
withholding therefor, or otherwise, including penalties and interest, and
including taxes imposed by any jurisdiction on amounts payable to the Agent
under this subsection, together with all costs and expenses related thereto
(including attorneys fees and time charges of attorneys for the Agent, which
attorneys may be employees of the Agent). The obligations of the Lenders under
this Section 3.5(g) shall survive the payment of the Obligations and termination
of this Agreement.
(h) A Borrower is not required to make an increased payment to a Lender
under this Section 3.5 for a Tax Deduction in respect of tax imposed by the UK
from a payment of interest, if on the date on which the payment falls due:
65
(i) the payment could have been made to the relevant Lender without a
Tax Deduction if such Lender was a UK Qualifying Lender, but on that
date that Lender is not or has ceased to be a UK Qualifying Lender
other than as a result of any change after the date it became a Lender
under this Agreement in (or in the interpretation, administration, or
application of) any law or UK Treaty, or any published practice or
published concession of any relevant taxing authority; or
(ii) (A) the relevant Lender is a UK Non-Bank Lender, or would have
been a UK Non-Bank Lender were it not for any change after the
date it became a Lender under this Agreement in (or in the
interpretation, administration, or application of) any law or UK
Treaty, or any published practice or concession of any relevant
taxing authority; and
(B) the Board of the Inland Revenue has given (and not revoked)
a direction under section 349C of the UK Taxes Act (as that
provision has effect on the date on which the relevant Lender
became a party to this Agreement) that relates to that payment
and that a Borrower has notified that UK Non-Bank Lender of the
precise terms of that notice;
(iii) the relevant Lender is a UK Treaty Lender and the Borrower
making the payment is able to demonstrate that the payment could have
been made to the Lender without the Tax Deduction had that Lender
complied with its obligations under Subsection 3.5(i) below.
(i) Without limiting each Lender's rights to under subsection 3.5(a)
above, within a reasonable amount of time, each UK Treaty Lender, the Agent and
each Borrower that is required to or will make a payment to which that UK Treaty
Lender is entitled shall co-operate in completing and shall each complete any
procedural formalities necessary for that Borrower to obtain authorization to
make that payment without a Tax Deduction.
(j) A UK Non-Bank Lender shall promptly notify the Domestic Borrower and
the Agent if there is any change in the position from that set out in the UK Tax
Confirmation.
(k) If a Borrower makes a Tax Payment and the relevant Lender determines
that:
(i) a Tax Credit is attributable either to an increased payment of
which that Tax Payment forms part, or to that Tax Payment; and
(ii) that Lender has obtained, utilized or retained that Tax Credit,
the Lender shall pay an amount to the Borrower which that Lender determines will
leave it (after that payment) in the same after-Tax position as it would have
been in had the Tax Payment not been made by the Borrower.
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(m) Bank One, NA represents and warrants to, and covenants with, the
Borrowers that it is, as of the Effective Date (i) not a non-resident of Canada
within the meaning, for all purposes, of the Income Tax Act (Canada), or (ii) it
is a Schedule III Bank that will receive amounts under the Loan Documents in
connection with its Canadian banking business within the meaning of the Income
Tax Act (Canada) and such Lender covenants and agrees with the Borrowers and the
Agent that if its status changes it will notify the Borrowers and the Agent
within 3 Business Days of such change.
3.6. Lender Statements; Survival of Indemnity. To the extent reasonably
possible, each Lender shall designate an alternate Lending Installation with
respect to its Fixed Rate Loans to reduce any liability of the Borrower to such
Lender under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of Fixed
Rate Advances under Section 3.3, so long as such designation is not, in the
judgment of such Lender, disadvantageous to such Lender. Each Lender shall
deliver a written statement of such Lender to the Domestic Borrower (with a copy
to the Agent), as to the amount due, if any, under Section 3.1, 3.2, 3.4 or 3.5.
Such written statement shall set forth in reasonable detail the calculations
upon which such Lender determined such amount and shall be final, conclusive and
binding on the Borrower in the absence of manifest error. Determination of
amounts payable under such Sections in connection with a Fixed Rate Loan shall
be calculated as though each Lender funded its Fixed Rate Loan through the
purchase of a deposit of the type and maturity corresponding to the deposit used
as a reference in determining the interest rate applicable to such Loan, whether
in fact that is the case or not. Unless otherwise provided herein, the amount
specified in the written statement of any Lender shall be payable on demand
after receipt by the Domestic Borrower of such written statement. The
obligations of the Borrower under Sections 3.1, 3.2, 3.4 and 3.5 shall survive
payment of the Obligations and termination of this Agreement, and in the case of
obligations under Section 3.5, shall terminate upon the expiration of all
statute of limitation periods applicable to the final tax year in which this
Agreement is in effect.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. Effectiveness This Agreement will not become effective unless the Loan
Parties have satisfied each of the following conditions in a manner satisfactory
to the Agent and the Lenders, and with respect to any condition requiring
delivery of any agreement, certificate, document, or instrument, the Loan
Parties shall have furnished to the Agent the requested number of sufficient
copies of any such agreement, certificate, document, or instrument for
distribution to the Lenders.
(a) This Agreement or counterparts hereof shall have been duly executed by
each Loan Party, the Agent and the Lenders; and the Agent shall have received
duly executed copies of the Loan Documents and such other documents,
instruments, and agreements, including, without limitation, a new Intercompany
Note, as the Agent shall reasonably request in connection with the transactions
contemplated by this Agreement and the other Loan Documents, each in form and
substance reasonably satisfactory to the Agent.
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(b) Each Canadian Loan Party shall have delivered copies of its
organizational documents, together with all amendments, and a certificate of
good standing (or corresponding certificates) each certified by the appropriate
governmental officer in its jurisdiction of organization.
(c) Each UK Loan Party shall have delivered copies of their Memorandum and
Articles of Association, Certificates of Incorporation and Certificates of
Incorporation on Change of Name, each certified by a Director or the Company
Secretary to be a true, complete and up to date copy.
(d) The Canadian Loan Parties shall have delivered copies of its governing
documents, each certified by its Company Secretary or Assistant Secretary to be
a true, complete and up to date copy.
(e) The Canadian Loan Parties and the UK Loan Parties shall have delivered
copies, certified by their Company Secretary as being in full force and effect
and not amended or rescinded, of resolutions of the board of directors of each
such Loan Party in a form and substance suitable to the Agent, under which the
board authorized,
(i) such Loan Party to enter into the Loan Documents to which it is a
party; and
(ii) a specified person or persons to sign the Loan Documents to which
it is a party on behalf of such Loan Party.
(f) The Canadian Loan Parties and the UK Loan Parties shall have delivered
an incumbency certificate, executed by its Company Secretary or Assistant
Secretary, which shall identify by name and title and bear the signatures of the
Authorized Officers and any other officers such Loan Party authorized to sign
the Loan Documents to which such Loan Party is a party, upon which certificate
the Agent and the Lenders shall be entitled to rely until informed of any change
in writing by such Loan Party.
(g) The Canadian Loan Parties shall have delivered a written opinion of
such Loan Parties' counsel, and counsel to the Agent shall have delivered a
written opinion regarding matters of English law, in each case addressed to the
Agent and the Lenders covering such matters as the Agent may reasonably request.
(h) Each of the Canadian Borrower and the UK Borrower shall have delivered
the necessary Revolving Notes payable to the order of each Lender.
(i) The Agent shall have received all Lien and other searches that the
Agent deems necessary, the Canadian Borrower and the UK Borrower shall have
delivered lien termination statements or amendments to existing lien financing
statements with respect to any filings against the Collateral as may be
requested by the Agent to release Liens not permitted hereunder and shall have
authorized the filing of such termination statements or amendments, the Agent
shall have been authorized to file any lien financing statements that the Agent
deems necessary
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to perfect its Liens in the Collateral and Liens creating a first priority
security interest (subject to Permitted Liens) in the Collateral in favor of the
Applicable Agent shall have been perfected.
(j) The Borrower shall have paid all of the fees and expenses of the Agent
incurred in connection with this Agreement.
(k) The Agent shall have completed its business due diligence with respect
to the Canadian Borrower and the UK Borrower and the corporate structure,
capital structure, material accounts and governing documents of such Borrowers
shall be acceptable to the Agent. In addition, the terms and conditions of all
Indebtedness of each Loan Party (including, without limitation, the Indebtedness
relating to the Indenture) shall be acceptable to the Agent.
(l) The Loan Parties shall have delivered such other documents as the
Agent or its counsel may have reasonably requested, including, without
limitation, any information required by Section 326 of the USA Patriot Act or
otherwise necessary for the Agent or any Lender to verify the identity of each
Loan Party or required by Section 326 of the USA Patriot Act.
(m) The Loan Parties shall, with respect to the Foreign Collateral, have
delivered (i) Collateral audits, satisfactory to the Agent, and (ii) Inventory
and Equipment appraisals.
(n) The UK Borrowers and the Canadian Borrower shall have delivered
evidence of insurance coverage in form, scope, and substance reasonably
satisfactory to the Agent and otherwise in compliance with the terms of
Section 6.7.
4.2. Each Credit Extension Except as otherwise expressly provided herein,
the Lenders shall not be required to make any Credit Extension if on the
applicable Credit Extension Date:
(a) There exists any Default or Unmatured Default or any Default or
Unmatured Default shall result from any such Credit Extension and the Agent or
the Required Lenders shall have determined not to make any Credit Extension as a
result of such Default or Unmatured Default,
(b) Any representation or warranty contained in Article V is untrue or
incorrect as of such Credit Extension Date (except for representations and
warranties that are made as of another date, in which case such representation
and warranties are true and correct as of such date), and the Agent or the
Required Lenders shall have determined not to make any Credit Extension as a
result of the fact that such representation or warranty is untrue or incorrect,
(c) After giving effect to any Credit Extension, (i) if the applicable
Credit Extension is a Domestic Advance, there is no Domestic Availability, (ii)
if the applicable Credit Extension is a Canadian Advance, there is no Canadian
Availability, (iii) if the applicable Credit Extension is a UK Advance, there is
no UK Availability, as the case may be, or (iv) regardless of the type of
Advance, there is no Availability; or
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(d) Any legal matter incident to the making of such Credit Extension
shall not be satisfactory to the Agent, the Lenders and their respective
counsel.
Each Borrowing Notice or request for issuance of Facility LC with respect to
each such Credit Extension shall constitute a representation and warranty by the
Borrower that the conditions contained in Sections 4.1 (and Section 4.1 of the
Original Loan Agreement) have been satisfied and that none of the conditions set
forth in Section 4.2 exist as of any Credit Extension Date.
4.3. Post-Closing Conditions. Except as otherwise provided herein, the
Lenders shall not be required to make any Credit Extensions if:
(a) within one hundred fifty (150) days after the Closing Date the
Domestic Borrower has not delivered, with respect to the real Property required
to be subject to a Lien in favor of the Agent for the benefit of the Agent and
the Domestic Lenders on the Closing Date:
(i) ALTA or other mortgagee's title policy;
(ii) an ALTA survey prepared and certified to the Agent by a
surveyor acceptable to the Agent;
(iii) the Loan Parties shall have delivered any requested
environmental review reports from firm(s) satisfactory to the Agent,
which review reports shall be acceptable to the Agent. Any
environmental hazards or liabilities identified in any such
environmental review report shall indicate the Loan Parties' plans with
respect thereto;
(iv) evidence that a counterpart of the Mortgage has been
recorded in the place necessary, in the Agent's judgment, to create a
valid and enforceable first priority Lien in favor of the Agent for the
benefit of itself and the Lenders; and
(v) such other information, documentation, and certifications
as may be reasonably required by the Agent; and
(b) with reasonable promptness after the Effective Date, the UK
Borrowers shall have delivered to the UK Correspondent Lender and the Agent a
print out of the UK Loan Parties' mortgage registers from Companies House,
together with copies of executed deeds of release in respect of any prior
mortgages not permitted hereunder shown in such mortgage register, and forms
403a executed by a director of the Loan Party as appropriate.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Each Loan Party represents and warrants to the Lenders as follows:
5.1. Existence and Standing Each Loan Party is a corporation,
partnership (in the case of Subsidiaries only) or limited liability company duly
and properly incorporated or organized,
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as the case may be, validly existing and
(to the extent such concept applies to such entity) in good standing or in full
force and effect under the laws of its jurisdiction of incorporation or
organization and has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted, except where the failure to
have such requisite authority would not have or cause a Material Adverse Effect.
5.2. Authorization and Validity Each Loan Party has the corporate,
partnership or limited liability company, as the case may be, power and
authority and legal right to execute and deliver the Loan Documents to which it
is a party and to perform its obligations thereunder. The execution and delivery
by each Loan Party of the Loan Documents to which it is a party and the
performance of its obligations thereunder have been duly authorized by proper
corporate or other proper proceedings, as the case may be, and the Loan
Documents to which such Loan Party is a party constitute legal, valid and
binding obligations of such Loan Party enforceable against such Loan Party in
accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally.
5.3. No Conflict; Government Consent Neither the execution and delivery
by any Loan Party of the Loan Documents to which it is a party, nor the
consummation of the transactions therein contemplated, nor compliance with the
provisions thereof will violate (i) any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on such Loan Party, (ii) any Loan
Party's memorandum, articles or certificate of incorporation, partnership
agreement, certificate of partnership, articles or certificate of organization,
by-laws, code of regulations, or operating or other management agreement, as the
case may be, or (iii) the provisions of any material indenture (including,
without limitation, the Indenture), instrument or agreement to which any Loan
Party is a party or is subject, or by which it, or its Property, is bound, or
conflict with or constitute a default thereunder, or result in, or require, the
creation or imposition of any Lien (other than a Permitted Lien) in, of or on
the Property of such Loan Party pursuant to the terms of any such indenture
(including, without limitation, the Indenture), instrument or agreement. No
order, consent, adjudication, approval, license, authorization, or validation
of, or filing (other than the filing of the UK collateral documents, if
necessary, at Companies House in the UK), recording or registration with, or
exemption by, or other action in respect of any governmental or public body or
authority, or any subdivision thereof, which has not been obtained by a Loan
Party, is required to be obtained by any Loan Party in connection with the
execution and delivery of the Loan Documents, the borrowings under this
Agreement, the payment and performance by the Loan Parties of the Obligations or
the legality, validity, binding effect or enforceability of any of the Loan
Documents.
5.4. Security Interest in Collateral The provisions of this Agreement
and the other Loan Documents create legal and valid Liens on all the Collateral
in favor of the Applicable Agent, for the benefit of the Applicable Agent and
the Lenders, and such Liens constitute perfected and continuing Liens on the
Collateral, securing the Obligations, enforceable against the applicable Loan
Party and all third parties, and having priority over all other Liens on the
Collateral except in the case of (a) Permitted Liens, to the extent any such
Permitted Liens would have priority over the Liens for the benefit of the
Applicable Agent and Lenders pursuant to any applicable law or agreement and (b)
Liens perfected only by possession (including possession of
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any certificate of title) to the extent the Agent, the Canadian Correspondent
Lender or the UK Correspondent Lender has not obtained or does not maintain
possession of such Collateral.
5.5 Financial Statements.
(a) The audited consolidated financial statements of the Domestic
Borrower and its Subsidiaries for the period ending on December 31, 2002
heretofore delivered to the Domestic Lenders and each of the other financial
statements now or hereafter delivered pursuant to Section 6.1(a) were prepared
in accordance with GAAP (as in effect on the date such statements were prepared)
and fairly present in all material respects the consolidated financial condition
and operations of the Domestic Borrower and its Subsidiaries at such date and
the consolidated results of their operations for the period then ended. The
unaudited consolidated financial statements of the Domestic Borrower and its
Subsidiaries for the Fiscal Quarter ended June 30, 2003 heretofore now or
hereafter delivered by the Domestic Borrower to the Domestic Lenders and each of
the other financial statements delivered pursuant to Section 6.1(b) and (c) were
prepared in accordance with GAAP (as in effect on the date such statements were
prepared except for the presentation of footnotes and for applicable normal
year-end audit adjustments) and fairly present in all material respects the
consolidated financial condition and operations of the Domestic Borrower and its
Subsidiaries at such date and the consolidated results of their operations for
the period then ended.
(b) The most recent Projections when delivered to the Agent and the
Domestic Lenders, including Projections delivered pursuant to Section 6.1(d),
represent the Domestic Borrower's good faith estimate (based on assumptions that
the Domestic Borrower believed at the time to be reasonable) of the future
financial performance of the Domestic Borrower and its Subsidiaries for the
period(s) set forth therein.
5.6. Material Adverse Change Since December 31, 2002, there has been no
change in the business, Property, prospects, condition (financial or otherwise)
or results of operations of the Loan Parties which could reasonably be expected
to have a Material Adverse Effect.
5.7. Taxes The Loan Parties have filed all U.S. federal, state and
local tax returns and all other material tax returns which are required to be
filed and have paid all material taxes due pursuant to said returns or pursuant
to any assessment received by any Loan Party, except such taxes, if any, as are
being contested in good faith and as to which adequate reserves have been
provided in accordance with GAAP and as to which no Lien exists. No tax liens
have been filed and no claims are being asserted with respect to any such taxes.
The charges, accruals and reserves on the books of the Loan Parties in respect
of any taxes or other governmental charges are adequate.
5.8. Litigation and Contingent Obligations Except as set forth on
Schedule 5.8, there is no litigation, arbitration, governmental investigation,
proceeding or inquiry pending or, to the knowledge of any of their senior
officers, threatened against or affecting any Loan Party or ERISA Plan which
could reasonably be expected to have a Material Adverse Effect or which seeks to
prevent, enjoin or delay the making of any Credit Extensions. Other than any
liability incident to any litigation, arbitration or proceeding which (i) could
not reasonably be expected to
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have a Material Adverse Effect or (ii) is set forth on Schedule 5.8, no Loan
Party has any material contingent obligations not provided for or disclosed in
the financial statements referred to in Section 5.5.
5.9. Capitalization and Subsidiaries. Schedule 5.9 sets forth (a) a
correct and complete list of the name and relationship to each Loan Party of
each and all of the their Subsidiaries of each Loan Party, (b) the location of
the chief executive office of each Loan Party and each of their Subsidiaries and
each other location where any of them have maintained their chief executive
office in the past five years, (c) a true and complete listing of each class of
each of Loan Party's authorized Capital Stock, of which all of such issued
shares are validly issued, outstanding, fully paid and non-assessable, and owned
beneficially and of record by the Persons identified on Schedule 5.9, and (d)
the type of entity of each Loan Party and each of their Subsidiaries. With
respect to each Loan Party, Schedule 5.9 also sets forth the employer or
taxpayer identification number of each Loan Party and the organizational
identification number issued by the jurisdiction of organization of each Loan
Party or a statement that no such number has been issued. All of the issued and
outstanding Capital Stock owned by any Loan Party has been (to the extent such
concepts are relevant with respect to such ownership interests) duly authorized
and issued and is fully paid and non-assessable.
5.10. ERISA The Unfunded Liabilities of all Single Employer Plans do
not in the aggregate exceed $7,800,000. The aggregate withdrawal liability the
Loan Parties and each member of their Controlled Group would incur if all such
persons were to incur a "complete withdrawal" (within the meaning of ERISA
Section 4203) from the Multiemployer Plans as of the Borrowing Date does not
exceed $4,000,000. No Loan Party or any other member of the Controlled Group has
incurred, or is reasonably expected to incur, any excise tax or penalty relating
to an ERISA Plan, any material liability to the PBGC or any withdrawal liability
to Multiemployer Plans. Each ERISA Plan complies and has been administered in
all material respects with all applicable requirements of law and regulations,
no Reportable Event, prohibited transaction (as defined in ERISA Section 406 or
Code Section 4975) or breach of fiduciary duty under ERISA has occurred with
respect to any Plan, no Loan Party or any other member of a Controlled Group has
withdrawn from any Plan or initiated steps to do so, and no steps have been
taken to reorganize or terminate any Plan.
5.11. Accuracy of Information. No information, exhibit or report
furnished by any Loan Party to the Agent or to any Lender in connection with the
negotiation of, or compliance with, the Loan Documents taken as a whole
contained any material misstatement of fact or omitted to state a material fact
or any fact necessary to make the statements contained therein not misleading in
light of the circumstances in which such facts were presented.
5.12. Names; Prior Transactions Except as set forth on Schedule 5.12,
the Loan Parties have not, during the past five years, been known by or used any
other corporate or fictitious name, or been a party to any merger or
consolidation, or been a party to any Acquisition.
5.13. Regulation U No Loan Party is engaged, nor will it engage,
principally or as one of its important activities, in the business of extending
credit for the purpose of "purchasing" or "carrying" any "margin stock" as such
terms are defined in Regulation U of the Federal Reserve
73
Board as now and from time to time hereafter in effect (such securities being
referred to herein as "MARGIN STOCK"). No Loan Party owns any Margin Stock, and
none of the proceeds of the Loans or other extensions of credit under this
Agreement will be used, directly or indirectly, for the purpose of purchasing or
carrying any Margin Stock, for the purpose of reducing or retiring any
Indebtedness that was originally incurred to purchase or carry any Margin Stock
or for any other purpose that might cause any of the Loans or other extensions
of credit under this Agreement to be considered a "purpose credit" within the
meaning of Regulations T, U or X of the Federal Reserve Board. No Loan Party
will take or permit to be taken any action that might cause any Loan Document to
violate any regulation of the Federal Reserve Board.
5.14. Material Agreements Schedule 5.14 hereto sets forth as of the
Closing Date all material agreements and contracts to which any Loan Party is a
party or is bound as of the date hereof (defined as being required to be listed
in the Domestic Borrower's filings with the Securities and Exchange Commission).
No Loan Party is in default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in (i) any such material
agreement to which it is a party or (ii) any agreement or instrument evidencing
or governing Material Indebtedness.
5.15. Compliance With Laws The Loan Parties have complied with all
applicable statutes, rules, regulations, orders and legally enforceable
restrictions of any domestic or foreign government or any instrumentality or
agency thereof having jurisdiction over the conduct of their respective
businesses or the ownership of their respective Property.
5.16. Ownership of Properties Except as set forth on Schedule 5.16, on
the date of this Agreement, the Loan Parties will have good title, free of all
Liens other than those permitted by Section 6.21, to all of the Property
reflected in the Loan Parties' most recent consolidated financial statements
provided to the Agent as owned by the Loan Parties.
5.17. Plan Assets; Prohibited Transactions The Borrower is not an
entity deemed to hold "plan assets" within the meaning of 29 C.F.R. ss.
2510.3-101 of an employee benefit plan (as defined in Section 3(3) of ERISA)
which is subject to Title I of ERISA or any plan (within the meaning of Section
4975 of the Code), and neither the execution of this Agreement nor the making of
Credit Extensions hereunder gives rise to a prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975 of the Code. The Borrower is an
"operating company" as defined in 29 C.F.R 2510-101 (c).
5.18. Environmental Matters In the ordinary course of its business, the
officers of each Loan Party consider the effect of Environmental Laws on the
business of such Loan Party, in the course of which they identify and evaluate
potential risks and liabilities accruing to such Loan Party due to Environmental
Laws. The Loan Parties have complied with all Environmental Laws in all material
respects. Except as set forth on Schedule 5.18, no Loan Party has received any
notice to the effect that its operations are not in material compliance with any
of the requirements of applicable Environmental Laws or are the subject of any
federal or state investigation evaluating whether any material remedial action
is needed to respond to a release of any toxic or hazardous waste or substance
into the environment.
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5.19. Investment Company Act No Loan Party is an "investment company"
or a company "controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended.
5.20. Public Utility Holding Company Act No Loan Party is a "holding
company" or a "subsidiary company" of a "holding company," or an "Affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company," within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
5.21. Bank Accounts EXHIBIT B to the Security Agreement contains a
complete and accurate list of all bank accounts, other than xxxxx cash accounts
with a balance of less than $5,000, maintained by each Loan Party with any bank
or other financial institution.
5.22. Indebtedness The Loan Parties have no Indebtedness, except for
(a) the Obligations, and (b) any Indebtedness permitted under Section 6.16.
5.23. Affiliate Transactions Except for immaterial matters or as set
forth on Schedule 5.23, there are no existing or proposed agreements,
arrangements, understandings, or transactions between any Loan Party and any of
the officers, members, managers, directors, stockholders, parents, other
interest holders, employees, or Affiliates (other than Subsidiaries) of any Loan
Party or any members of their respective immediate families, and none of the
foregoing Persons are directly or indirectly indebted to or have any direct or
indirect ownership, partnership, or voting interest in any Affiliate of any Loan
Party or any Person with which any Loan Party has a business relationship or
which competes with any Loan Party.
5.24. Real Property; Leases Schedule 5.24 sets forth a correct and
complete list of all real Property owned by each Loan Party, all material leases
and subleases of real Property by each Loan Party as lessee or sublessee, and
all material leases and subleases of real Property by each Loan Party as lessor
or sublessor. For purposes of the foregoing sentence, "material" shall mean a
lease or sublease related to a location where Inventory in excess of $1,000,000
is located. Each of such leases and subleases is valid and enforceable in
accordance with its terms and is in full force and effect, and no default by any
party to any such lease or sublease exists. Each Loan Party has good and
indefeasible title in fee simple to the real Property identified on Schedule
5.24 as owned by such Loan Party, or valid leasehold interests in all real
Property designated therein as "leased" by such Loan Party.
5.25. Intellectual Property Rights (a) Schedule 5.25 sets forth a
correct and complete list of all registered Intellectual Property Rights of each
Loan Party; (b) none of the Intellectual Property Rights listed in Schedule 5.25
is subject to any material licensing agreement or similar arrangement except as
set forth in Schedule 5.25; (c) the Intellectual Property Rights described in
Schedule 5.25 constitute all of the material property of such type necessary to
the current and anticipated future conduct of the Loan Parties' business; (d) to
the best of each Loan Party's knowledge, no Intellectual Property Right, now
employed, or now contemplated to be employed, by any Loan Party infringes in any
material respect upon any rights held by any other Person; and (e) no claim or
litigation regarding any of the foregoing is pending or, to the knowledge of any
Loan Party, threatened.
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5.26. Insurance Each Loan Party maintains, with financially sound and
reputable insurers, insurance with coverage and limits as required by law and as
is customary with Persons engaged in the same businesses as such Loan Party.
Schedule 5.26 lists all insurance policies of any nature maintained, by each
Loan Party, as well as a summary of the terms of each such policy.
5.27. Solvency
(a) Immediately after the making of each Credit Extension, and after
giving effect to the application of the proceeds of such Credit Extensions, (a)
the fair value of the assets of each Loan Party, at a fair valuation, will
exceed the debts and liabilities, subordinated, contingent or otherwise, of each
Loan Party; (b) the present fair saleable value of the Property of each Loan
Party will be greater than the amount that will be required to pay the probable
liability of each Loan Party on its debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute and
matured; (c) each Loan Party will be able to pay its debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured; and (d) each Loan Party will not have unreasonably small
capital with which to conduct the businesses in which it is engaged as such
businesses are now conducted and are presently proposed to be conducted after
the date hereof.
(b) The Borrower does not intend to, or to permit any of its
Subsidiaries to, and does not believe that they or any of its Subsidiaries will,
incur debts beyond its ability to pay such debts as they mature, taking into
account the timing of and amounts of cash to be received by the Domestic
Borrower or any such Subsidiary and the timing of the amounts of cash to be
payable on or in respect of its Indebtedness or the Indebtedness of any such
Subsidiary.
5.28. Subordinated Indebtedness The Secured Obligations constitute
senior indebtedness which is entitled to the benefits of the subordination
provisions of all outstanding Subordinated Indebtedness.
5.29. Common Enterprise The successful operation and condition of each
of the Loan Parties and the Parent is dependent on the continued successful
performance of the functions of the group of the Loan Parties and the Parent as
a whole and the successful operation of each of the Loan Parties and the Parent
is dependent on the successful performance and operation of each other Loan
Party and the Parent. Each Loan Party and the Parent expects to derive benefit
(and its board of directors or other governing body has determined that it may
reasonably be expected to derive benefit), directly and indirectly, from (i)
successful operations of each of the other Loan Parties and the Parent and (ii)
the credit extended by the Lenders to the Borrowers hereunder, both in their
separate capacities and as members of the group of companies. Each Loan Party
and the Parent has determined that execution, delivery, and performance of this
Agreement and any other Loan Documents to be executed by such Loan Party or the
Parent is within its purpose, will be of direct and indirect benefit to such
Loan Party and the Parent, and is in its best interest.
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5.30. Reportable Transaction The Domestic Borrower does not intend to
treat the Advances and related transactions as being a "reportable transaction"
(within the meaning of Treasury Regulation Section 1.6011-4). In the event the
Domestic Borrower determines to take any action inconsistent with such
intention, it will promptly notify the Agent thereof.
5.31. Indenture (a) No Event of Default (as defined in the Indenture)
or Default (as defined in the Indenture) exists, nor will any such Event of
Default or Default exist immediately after the granting or continuation of any
Loan, under the Indenture, the Senior Subordinated Notes or any agreement
executed by the Domestic Borrower in connection therewith; (b) no Loan Party or
any of its Subsidiaries has incurred (as defined in the Indenture) any
Designated Senior Indebtedness (as defined in the Indenture) other than the
Secured Obligations; (c) no Loan Party or any of its Subsidiaries has incurred
(as defined in the Indenture) either prior to or after the granting of any Loan,
any Indebtedness (as defined in the Indenture) in violation of Section 4.06
(Limitation on Additional Indebtedness) of the Indenture; and (d) all of the
Secured Obligations constitutes both Senior Indebtedness (as defined in the
Indenture) and Designated Senior Indebtedness (as defined in the Indenture).
5.32. Permitted Indebtedness. The Secured Obligations constitute
indebtedness permitted under the terms of the Indenture and, during any Fixed
Charge Condition Period, constitute Permitted Indebtedness (as defined in the
Indenture).
5.33 Specifically Designated National and Blocked Persons. No Loan
Party or any of its Affiliates is a country, individual, or entity named on the
Specifically Designated National and Blocked Persons (SDN) list issued by the
Office of Foreign Asset Control of the Department of the Treasury of the United
States of America.
ARTICLE VI
COVENANTS
Each Loan Party executing this Agreement jointly and severally agrees
as to all Loan Parties that from and after the date hereof and until the
Facility Termination Date:
6.1. Financial and Collateral Reporting. The Domestic Borrower will
maintain, for itself and each of its Subsidiaries, a system of accounting
established and administered to produce financial statements that conform with
GAAP, and will, through the Agent, furnish to the Lenders:
(a) within 120 days after the close of each Fiscal Year of the Domestic
Borrower and its Subsidiaries, an unqualified (as to scope and without a going
concern or similar qualifier) audit report certified by independent certified
public accountants acceptable to the Agent, prepared in all material respects in
accordance with GAAP on a consolidated and consolidating basis (consolidating
statements need not be (1) prepared in accordance with GAAP or (2) certified by
such accountants), including balance sheets as of the end of such Fiscal Year
and a statement of profit and loss for the period then ended, and a consolidated
statement of changes in shareholders' equity and a consolidated statement of
cash flows, accompanied by (i) any
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management letter prepared by said accountants and (ii) a certificate of said
accountants that, in the course of their examination necessary for their
certification of the foregoing, they have obtained no knowledge of any Default
or Unmatured Default, or if, in the opinion of such accountants, any Default or
Unmatured Default shall exist, stating the nature and status thereof;
(b) within 50 days after the close of the first three quarterly periods
of each Fiscal Year of the Domestic Borrower and its Subsidiaries, consolidated
and consolidating unaudited balance sheets as at the close of each such Fiscal
Quarter and consolidated and consolidating (which consolidating statements need
not be prepared in accordance with GAAP) statements of profit and loss for the
period then ended, and a consolidated statement of changes in shareholders'
equity and a consolidated statement of cash flows for the period from the
beginning of the applicable Fiscal Year to the end of such Fiscal Quarter, all
certified by its chief financial officer and prepared in all material respects
in accordance with GAAP (except for consolidating statements need not be
prepared in accordance with GAAP and except for exclusion of footnotes and
subject to normal year-end audit adjustments);
(c) within 30 days after the close of each Fiscal Month of the Domestic
Borrower and its Subsidiaries, consolidated and consolidating unaudited balance
sheets as at the close of each such Fiscal Month and consolidated and
consolidating (which consolidating statements may not be prepared in accordance
with GAAP) statements of profit and loss for the period then ended, and a
consolidated statement of changes in shareholders' equity and a consolidated
statement of cash flows for the period from the beginning of the applicable
Fiscal Year to the end of such Fiscal Month, all prepared in all material
respects in accordance with GAAP (except for exclusion of footnotes and subject
to normal year-end audit adjustments) and certified by (1) its chief financial
officer or (2) its controller and an executive officer;
(d) as soon as available, but in any event not more than 30 days prior
to the end of each Fiscal Year, but prior to the end of such Fiscal Year, a
draft copy on a business unit basis of the plan and forecast of the Domestic
Borrower and its Subsidiaries of the next Fiscal Year on an annual basis and,
not more than 90 days after the end of the Fiscal Year, a final copy of the plan
and forecast (including a projected consolidated and consolidating balance
sheet, income statement and funds flow statement) of the Domestic Borrower and
its Subsidiaries for each month of the next Fiscal Year (the "Projections") in
form reasonably satisfactory to the Agent;
(e) together with each of the financial statements required under
Sections 6.1(a) and (b), a compliance certificate in substantially the form of
Exhibit E (a "Compliance Certificate") signed by the (1) chief financial officer
or (2) controller and executive officer of the Domestic Borrower showing the
calculations necessary to determine compliance with this Agreement (including,
without limitation, compliance with the Fixed Charge Coverage Ratio, if
applicable) and stating that no Default or Unmatured Default exists, or if any
Default or Unmatured Default exists, stating the nature and status thereof;
(f) At the Domestic Borrower's option, as soon as available, and in any
event no later than 3 Business Days after the end of each calendar week, a
Borrowing Base Report showing the computation of the Aggregate Borrowing Base in
reasonable detail as of the close of business on the last day of the immediately
preceding week, together with such other information as is
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therein required, in each case prepared by the Domestic Borrower and certified
to by the Domestic Borrower's chief financial officer or controller;
(g) as soon as available but in any event within 20 Business Days of
the end of each Fiscal Month, and at such other times as may be requested by the
Agent, as of the period then ended, an Aggregate Borrowing Base Certificate and
supporting information, including, without limitation, a Borrowing Base
Certificate from each Loan Party, in connection therewith;
(h) as soon as available but in any event within 20 days (30 days with
respect to subpart (iv) below) of the end of each Fiscal Month and at such other
times as may be requested by the Agent, as of the period then ended:
(i) a detailed accounts receivable aging for each Loan Party
(1) specifying the name and balance due for each Account Debtor and (2)
reconciled to the Aggregate Borrowing Base Certificate delivered as of
such date prepared in a manner reasonably acceptable to the Agent;
(ii) a schedule detailing each Loan Party's Inventory, in form
satisfactory to the Agent, (1) by location (including any Inventory
located with a third party under any consignment, bailee arrangement,
or warehouse agreement), product type, volume on hand, which Inventory
shall be valued at the lower of cost (determined on a first-in,
first-out basis) or market and adjusted for Reserves as the Agent has
previously indicated to such Loan Party are deemed by the Agent to be
appropriate, (2) including a report of any variances or other results
of Inventory counts performed by such Loan Party since the last
Inventory schedule (including information regarding sales or other
reductions, additions, returns, credits issued by such Loan Party and
complaints and claims made against such Loan Party), and (3) reconciled
to such Loan Party's Borrowing Base Certificate delivered as of such
date;
(iii) a worksheet of calculations prepared by the Domestic
Borrower to determine Eligible Accounts and Eligible Inventory, such
worksheets detailing the Accounts and Inventory excluded from Eligible
Accounts and Eligible Inventory and the reason for such exclusion; and
(iv) a reconciliation of the applicable Loan Parties' Accounts
and Inventory between the amounts shown in such Loan Parties' books and
financial statements and the reports delivered pursuant to clauses (i)
and (ii) above;
(i) as soon as available but in any event within 20 days of the end of
each Fiscal Month and at such other times as may be requested by the Agent, as
of the month then ended, a schedule and aging or listing of the Loan Parties'
accounts payable;
(j) promptly upon the Agent's request:
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(i) copies of invoices in connection with the invoices issued
by the Loan Parties in connection with any Accounts, credit memos,
shipping and delivery documents, and other information related thereto;
and
(ii) copies of purchase orders, invoices, and shipping and
delivery documents in connection with any Inventory or Equipment
purchased by any Loan Party.
(k) as soon as possible and in any event within two-hundred and seventy
days after the close of the Fiscal Year of the Domestic Borrower, a statement of
the Unfunded Liabilities of each Single Employer Plan, certified as correct by
an actuary enrolled under ERISA;
(l) as soon as possible and in any event within 10 days after any Loan
Party knows that any Reportable Event has occurred with respect to any Plan, a
statement, signed by the chief financial officer of such Loan Party, describing
said Reportable Event and the action which such Loan Party proposes to take with
respect thereto;
(m) as soon as possible and in any event within 10 days after receipt
by any Loan Party, a copy of (i) any notice or claim to the effect that any Loan
Party is or may be liable to any Person as a result of the release by any Loan
Party, or any other Person of any toxic or hazardous waste or substance into the
environment, and (ii) any notice alleging any violation of any federal, state or
local environmental, health or safety law or regulation by the any Loan Party;
(n) within 30 days after the first date on which the Availability is
less than $25,000,000 and, as the Agent may request, no more than once during
any twelve-month period thereafter, so long as the Availability remains less
than $25,000,000, an updated Customer List, certified as true and correct by an
Authorized Officer of each Loan Party;
(o) concurrently with the furnishing thereof to the shareholders of the
Parent, copies of all financial statements, reports and proxy statements so
furnished;
(p) promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular reports which any
Loan Party files with the Securities and Exchange Commission; and
(q) such other information (including non-financial information) as the
Agent or any Lender may from time to time reasonably request.
In addition, not later than 20 days after the end of each Fiscal Month, the
Domestic Borrower shall cause each Loan Party to submit a Borrowing Base
Certificate to the Domestic Borrower with respect to its borrowing base for the
immediately preceding month, and the Domestic Borrower shall retain such
Borrowing Base Certificate and deliver same to the Agent upon the Agent's
request therefor.
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6.2. Use of Proceeds.
(a) The Domestic Borrower will use the proceeds of the Credit
Extensions for general corporate purposes (not otherwise prohibited by this
Agreement).
(b) The Domestic Borrower will not, nor will it permit any Loan Party
to, use any of the proceeds of the Credit Extensions to (i) purchase or carry
any Margin Stock in violation of Regulation U, (ii) repay or refinance any
Indebtedness of any Person incurred to buy or carry any Margin Stock, or (iii)
acquire any security in any transaction that is subject to Section 13 or Section
14 of the Securities Exchange Act of 1934 (and the regulations promulgated
thereunder).
(c) The Domestic Borrower will not, nor will it permit any Loan Party
to, use any of the proceeds of Credit Extensions in any manner not permitted
under the Indenture or in any manner that would otherwise cause a default under
or a breach of the Indenture.
6.3 Notices. Each Loan Party, through the Domestic Borrower, will give
prompt notice in writing to the Agent of:
(a) the occurrence of any Default or Unmatured Default;
(b) any other development, financial or otherwise, which could
reasonably be expected to have a Material Adverse Effect;
(c) the assertion by the holder of any Indebtedness of any Loan Party
in excess of $5,000,000 that any default exists with respect thereto or that any
Loan Party is not in compliance therewith;
(d) receipt of any written notice that any Loan Party is subject to any
investigation by any governmental entity with respect to any potential or
alleged violation of any applicable Environmental Law that would reasonably be
expected to have a Material Adverse Effect or of imposition of any Lien against
any Property of any Loan Party for any material liability with respect to
damages arising from, or costs resulting from, any violation of any
Environmental Laws;
(e) receipt of any notice of litigation commenced or threatened against
any Loan Party that (i) seeks damages in excess of $5,000,000, (ii) seeks
injunctive relief, (iii) is asserted or instituted against any Multiemployer
Plan or ERISA Plan, its fiduciaries or its assets, (iv) alleges criminal
misconduct by any Loan Party, (v) alleges the violation of any law regarding, or
seeks remedies in connection with, any Environmental Laws; or (vi) involves any
product recall to the extent that such product recall would have a Material
Adverse Effect;
(f) any Lien (other than Permitted Liens) or claim made or asserted
against any material portion of the Collateral;
(g) unless otherwise permitted hereunder, its decision to change, (i)
such Loan Party's name or type of entity, (ii) such Loan Party's articles or
certificate of incorporation,
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partnership agreement, certificate of partnership, articles or certificate of
organization, by-laws, or operating or other management agreement, and (iii) the
location where any Collateral is held or maintained; provided that in no event
shall the Agent receive notice of such change less than thirty days prior
thereto;
(h) commencement of any proceedings contesting any tax, fee,
assessment, or other governmental charge in excess of $250,000;
(i) the opening of any new deposit account by any Loan Party with any
bank or other financial institution other than Agent;
(j) any loss, damage, or destruction to the Collateral in the amount of
$1,000,000 or more, whether or not covered by insurance;
(k) any and all payment or other material default notices received
under or with respect to any leased location or public warehouse where
Collateral with a value in excess of $1,000,000 is located (which shall be
delivered within two Business Days after receipt thereof);
(l) all material amendments to real estate leases where Collateral in
excess of $1,000,000 is located, together with a copy of such amendment;
(m) the fact that such Loan Party has entered into a Rate Management
Transaction or an amendment to a Rate Management Transaction, other than, each
case, any Rate Management Transaction with the Agent, together with copies of
all agreements evidencing such Rate Management Transactions or amendments
thereto (which shall be delivered within two Business Days);
(n) any notice provided to the trustee or the Senior Subordinated
Noteholders under the Indenture or the Senior Subordinated Notes, such notice to
be contemporaneously delivered by the Domestic Borrower to the Agent and the
Domestic Lenders; and
(o) any other matter as the Agent may reasonably request.
6.4. Conduct of Business. Each Loan Party will:
(a) carry on and conduct its business in substantially the same manner
and in substantially the same fields of enterprise as it is presently conducted;
(b) do all things necessary to remain duly incorporated or organized,
validly existing and (to the extent such concept applies to such entity) in good
standing as a domestic corporation, partnership or limited liability company in
its jurisdiction of incorporation or organization, as the case may be, and
maintain all requisite authority to conduct its business in each jurisdiction in
which its business is conducted;
(c) keep adequate books and records with respect to its business
activities in which proper entries, reflecting all financial transactions, are
made as necessary to permit preparation
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of the Domestic Borrower's consolidated financial statements in accordance in
all material respects with GAAP and on a basis consistent with the Financial
Statements delivered to the Agent pursuant to Section 4.1(l);
(d) at all times maintain, preserve and protect all of its assets and
properties used or useful in the conduct of its business, and keep the same in
good repair, working order and condition in all material respects (taking into
consideration ordinary wear and tear) and from time to time make, or cause to be
made, all necessary or appropriate repairs, replacements and improvements
thereto consistent with the Loan Parties' practices; and
(e) transact business only in such corporate and trade names as are set
forth in Schedule 5.12.
6.5. Taxes. Each Loan Party will timely file complete and correct U.S.
federal and applicable foreign, state and local tax returns required by law and
pay when due all taxes, assessments and governmental charges and levies upon it
or its income, profits, Property or Collateral, except those which are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves have been provided for in accordance with GAAP on the Domestic
Borrower's consolidated financial statements.
6.6. Payment of Indebtedness and Other Liabilities Each Loan Party will
pay or discharge when due all Indebtedness permitted by Section 6.16 owed by
such Loan Party and all other liabilities and obligations due to materialmen,
mechanics, carriers, warehousemen, and landlords, except that the Loan Parties
may in good faith contest, by appropriate proceedings diligently pursued, any
such obligations; provided that, (a) adequate reserves have been set aside for
such liabilities in accordance with GAAP, (b) such liabilities would not result
in aggregate liabilities in excess of $5,000,000, (c) no Lien shall be imposed
to secure payment of such liabilities that is superior to the Applicable Agent's
Liens securing the Secured Obligations, (d) no material portion of the
Collateral becomes subject to forfeiture or loss as a result of the contest and
(e) such Loan Party shall promptly pay or discharge such contested liabilities,
if any, and shall deliver to the Agent evidence reasonably acceptable to the
Agent of such compliance, payment or discharge, if such contest is terminated or
discontinued adversely to such Loan Party or the conditions set forth in this
proviso are no longer met.
6.7. Insurance
(a) Each Loan Party shall at all times maintain, with financially sound
and reputable carriers, insurance against: (i) loss or damage by fire and loss
in transit; (ii) theft, burglary, pilferage, larceny, embezzlement, and if
available and appropriate other criminal activities; (iii) business
interruption; (iv) general liability and (v) and such other hazards, as is
customary in the business of such Loan Party. All such insurance shall be in
amounts, cover such assets and be under policies customary with the Loan
Parties' business and acceptable to the Agent in its Permitted Discretion. In
the event any Collateral is located in any area that has been designated by the
Federal Emergency Management Agency as a "SPECIAL FLOOD HAZARD Area," the
applicable Loan Party shall purchase and maintain flood insurance on such
Collateral (including any personal Property which is located on any real
Property leased by such Loan Party within a "SPECIAL FLOOD HAZARD AREA"). The
amount of all insurance required by this Section shall at a
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minimum comply with applicable law, including the Flood Disaster Protection Act
of 1973, as amended. All premiums on such insurance shall be paid when due by
the applicable Loan Party. If any Loan Party fails to obtain any insurance as
required by this Section, the Agent at the direction of the Required Lenders may
obtain such insurance at the Domestic Borrower's expense. By doing so, the Agent
shall not be deemed to have waived any Default or Unmatured Default arising from
any Loan Party's failure to maintain such insurance or pay any premiums
therefor. No Loan Party will use or permit any Property to be used in material
violation of applicable law or in any manner which might render inapplicable any
insurance coverage.
(b) All insurance policies required under Section 6.7(a) shall name the
Agent (for the benefit of the Agent and the Lenders) as an additional insured or
as loss payee, as applicable, and shall provide that, or contain loss payable
clauses or mortgagee clauses, in form and substance satisfactory to the Agent,
which provide that:
(i) all proceeds thereunder with respect to any Collateral
shall be payable to the Agent;
(ii) no such insurance shall be affected by any act or neglect
of the insured or owner of the Property described in such policy; and
(iii) such policy and loss payable clauses may be canceled,
amended, or terminated only upon at least thirty days prior written
notice given to the Agent.
(c) Notwithstanding the foregoing, any property insurance or
condemnation proceeds received by the Loan Parties (other than any such proceeds
relating to assets located in Canada or the UK that do not cover Inventory or
Accounts) shall be immediately forwarded to the Agent and the Agent may, at its
option, apply any such proceeds to the reduction of the Obligations in
accordance with Section 2.15, provided that (i) in the case of such proceeds
pertaining to a Domestic Loan Party, such proceeds shall be applied to the
Obligations owing by the Domestic Borrower, (ii) in the case of such proceeds
pertaining to a Canadian Loan Party such proceeds shall be applied to the
Obligations of the Canadian Borrower, and (iii) in the case of such proceeds
pertaining to a UK Loan Party, such proceeds shall be applied to the Obligations
of the UK Borrowers. The Agent may permit or require any Loan Party to use such
proceeds, or any part thereof, to replace, repair, restore or rebuild the
Collateral in a diligent and expeditious manner with materials and workmanship
of substantially the same quality as existed before the loss, damage or
destruction. Notwithstanding the foregoing, if the casualty giving rise to such
insurance proceeds could not reasonably be expected to have a Material Adverse
Effect and such insurance proceeds do not exceed $3,000,000 for any single
event, the Agent shall permit such Loan Party to replace, restore, repair or
rebuild the property; provided that, if such Loan Party has not completed or
entered into binding agreements to complete such replacement, restoration,
repair or rebuilding within 180 days of such casualty, the Agent may apply such
insurance proceeds to the Obligations in accordance with Section 2.15. All
insurance proceeds made available to any Loan Party to replace, repair, restore
or rebuild the Collateral shall be deposited in a cash collateral account
maintained with the Agent. Thereafter, such funds shall be made available to the
applicable Loan Party to provide funds to replace, repair, restore or rebuild
the Collateral as follows:
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(i) the Domestic Borrower shall request a release from the
cash collateral account be made to the applicable Loan Party in the
amount requested to be released; and
(ii) so long as the conditions set forth in Section 4.2 have
been met, the Agent shall release funds from the cash collateral
account.
6.8. Compliance with Laws Except where the failure to comply would have
a Material Adverse Effect, each Loan Party will comply with all laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it may be subject including, without limitation, all Environmental Laws.
6.9. Inspection Each Loan Party will permit the Agent by its employees,
representatives and agents, from time to time upon two Business Days' prior
notice as frequently as the Agent reasonably determines to be appropriate, to
(a) inspect any of the Property, the Collateral, and the books and financial
records of such Loan Party, (b) examine, audit and make extracts or copies of
the books of accounts and other financial records of such Loan Party, (c) have
access to its properties, facilities, the Collateral and its advisors, officers,
directors and employees to discuss the affairs, finances and accounts of such
Loan Party and (d) review, evaluate and make test verifications and counts of
the Accounts, Inventory and other Collateral of such Loan Party. If a Default
has occurred and is continuing, each Loan Party shall provide such access to the
Agent and to each Lender at all times and without advance notice. Furthermore,
so long as any Default has occurred and is continuing, each Loan Party shall
provide the Agent and each Lender with access to its suppliers. Each Loan Party
shall promptly make available to the Agent and its counsel originals or copies
of all books and records that the Agent may reasonably request. The Loan Parties
acknowledge that from time to time the Agent may prepare and may distribute to
the Lenders certain audit reports pertaining to the Loan Parties' assets for
internal use by the Agent and the Lenders from information furnished to the
Agent by or on behalf of the Loan Parties, after the Agent has exercised its
rights of inspection pursuant to this Agreement.
6.10. Appraisals Once every Fiscal Year for Inventory and once every
three Fiscal Years for Equipment and real Property, and, at any time during the
existence of an Unmatured Default or a Default, at the request of the Agent, the
Loan Parties shall, at their sole expense, provide the Agent with appraisals or
updates thereof of their Inventory, Equipment and real Property from an
appraiser, and prepared on a basis, reasonably satisfactory to the Agent, such
appraisals and updates to include, without limitation, information required by
applicable law and regulations and by the internal policies of the Lenders.
6.11. Communications with Accountants Each Loan Party executing this
Agreement authorizes (a) the Agent, and (b) so long as a Default has occurred
and is continuing, each Lender, to communicate, upon advance notice to the
Domestic Borrower, directly with its independent certified public accountants
and authorizes and shall instruct those accountants and advisors to communicate
to the Agent and each Lender information relating to any Loan Party with respect
to the business, results of operations and financial condition of any Loan
Party.
6.12. Collateral Access Agreements and Real Estate Purchases Each Loan
Party shall use commercially reasonable efforts to obtain a Collateral Access
Agreement from the lessor of
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each leased property, mortgagee of owned property or bailee or consignee with
respect to any warehouse, processor or converter facility or other location
where Collateral is stored or located, which agreement or letter shall contain a
waiver or subordination of all Liens or claims that the landlord, mortgagee or
bailee or consignee may assert against the Collateral at that location, and
shall otherwise be reasonably satisfactory in form and substance to the Agent.
After the Closing Date, no real Property or warehouse space shall be leased by
any Loan Party and no Inventory shall be shipped to a processor or converter
under arrangements established after the Closing Date without the prior written
consent of the Agent (which consent, in the Agent's discretion, may be
conditioned upon the exclusion from the Domestic Borrowing Base of 3 months rent
at that location in accordance with subpart (h) of the definition of Eligible
Inventory) or, unless and until a satisfactory Collateral Access Agreement shall
first have been obtained with respect to such location. Each Loan Party shall
timely and fully pay and perform in all material respects its obligations under
all leases and other agreements with respect to each leased location or third
party warehouse where any Collateral is or may be located. To the extent
permitted hereunder, if any Loan Party proposes to acquire a fee ownership
interest in real Property after the Closing Date, it shall (a) if proceeds of
the Loans were not used to purchase such real Property, provide to the Agent in
escrow a mortgage or deed of trust granting the Agent a first priority Lien on
such real Property, or (b) if proceeds of the Loans were used to purchase such
real Property, provide to the Agent a mortgage or deed of trust granting the
Agent a first priority Lien on such real Property, together with an
environmental audit, mortgage title insurance commitment, real property survey,
local counsel opinion, and, if required by the Agent, supplemental casualty
insurance and flood insurance, and such other documents, instruments or
agreements reasonably requested by the Agent, in each case, in form and
substance reasonably satisfactory to the Agent.
6.13. Deposit Account Control Agreements The Loan Parties will provide
to the Agent a Deposit Account Control Agreement duly executed on behalf of each
financial institution holding a deposit account of a Loan Party as set forth in
the Security Agreement; provided that the Agent may, in its Permitted
Discretion, defer delivery of any such Deposit Account Control Agreement,
establish a Reserve with respect to any deposit account for which the Agent has
not received such Deposit Account Control Agreement, or require the Loan Party
to open and maintain a new deposit account with a financial institution subject
to a Deposit Account Control Agreement.
6.14. Additional Collateral; Further Assurances.
(a) Subject to applicable law, each Loan Party shall, unless the
Required Lenders otherwise consent, except as otherwise permitted hereunder (i)
cause each Subsidiary of the Domestic Borrower (excluding any Foreign
Subsidiary) to become or remain a Loan Party and a Guarantor and (ii) cause each
Subsidiary of the Domestic Borrower (excluding any Foreign Subsidiary) formed or
acquired after the Closing Date in accordance with the terms of this Agreement
to (1) become a party to this Agreement by executing the Joinder Agreement set
forth as Exhibit F hereto (the "Joinder Agreement"), and (2) guarantee payment
and performance of the Guaranteed Obligations pursuant to the Guaranty and enter
into a Security Agreement granting to the Agent, for the benefit of the Domestic
Lenders, a first priority security interest in all of its personal property.
Upon execution and delivery of such Loan Documents and other instruments,
certificates, and agreements, each such Person shall automatically become a
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Guarantor hereunder and thereupon shall have all of the rights, benefits,
duties, and obligations in such capacity under the Loan Documents.
(b) Upon the request of the Agent, (i) each Domestic Loan Party shall
grant Liens to the Agent in respect of the Obligations, each Canadian Loan Party
shall grant Liens to the Canadian Correspondent Lender in respect of the
Canadian Obligations and the UK Obligations, and each UK Loan Party shall grant
Liens to the UK Correspondent Lender in respect of the UK Obligations and
Canadian Obligations, in each case for the benefit of the Applicable Agent, and
the applicable Lenders, pursuant to such documents as the Applicable Agent may
reasonably deem necessary and deliver such property, documents, and instruments
as the Applicable Agent may request to perfect the Liens of the Agent in any
Property of such Loan Party which constitutes Collateral, and (ii) in connection
with the foregoing requirements, deliver to the Agent all items of the type
required by Section 4.1 (as applicable). Notwithstanding the foregoing, the Loan
Parties shall not be required to grant mortgages for the benefit of the
Applicable Agent and the Domestic Lenders on their real Property (other than
those granted on the Closing Date) so long as the Availability exceeds
$25,000,000. If, at any time, the Availability falls below $25,000,000, the
Agent, in the Agent's sole and absolute discretion, shall have the right to
require perfected, first priority mortgage liens on the Domestic Borrower's real
Property located in the United States at the Domestic Borrower's sole cost and
expense. Upon the occurrence of a Default, the Agent, in the Agent's sole and
absolute discretion, shall have the right to require perfected, first priority
liens on the real Property of the Canadian Borrower and the UK Borrower at such
Borrower's sole cost or expense.
(c) The Parent will cause 100% of the issued and outstanding Capital
Stock of the Domestic Borrower to be subject at all times to a first priority,
perfected Lien in favor of the Agent pursuant to the terms and conditions of the
Loan Documents or other security documents as the Agent shall reasonably
request. Upon the occurrence and at all times during the existence of a Default
under this Agreement, the Domestic Borrower shall, upon the request of Agent, in
its sole and absolute discretion, cause (i) 100% of the issued and outstanding
Capital Stock of each of its Domestic Subsidiaries and (ii) 65% (or such greater
percentage that, due to a change in an applicable law after the date hereof, (1)
could not reasonably be expected to cause the undistributed earnings of such
Foreign Subsidiary as determined for U.S. federal income tax purposes to be
treated as a deemed dividend to such Foreign Subsidiary's U.S. parent and (2)
could not reasonably be expected to cause any material adverse tax consequences)
of the issued and outstanding Capital Stock entitled to vote (within the meaning
of Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued and outstanding
Capital Stock not entitled to vote (within the meaning of Treas. Reg. Section
1.956-2(c)(2)) in each first-tier Foreign Subsidiary directly owned by the
Domestic Borrower or any Domestic Subsidiary to be subject at all times to a
first priority, perfected Lien in favor of the Agent pursuant to the terms and
conditions of the Loan Documents or other security documents.
(d) Without limiting the foregoing, each Loan Party shall, and shall
cause each of its Subsidiaries which is required to become a Loan Party pursuant
to the terms of this Agreement to, execute and deliver, or cause to be executed
and delivered, to the Agent such documents and agreements, and shall take or
cause to be taken such actions as the Agent and the Required
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Lenders may, from time to time, reasonably request to carry out the terms and
conditions of this Agreement and the other Loan Documents.
6.15. Dividends.
(a) No Loan Party will declare or pay any dividends or make any
distributions on its Capital Stock (other than dividends or distributions
permitted under the Indenture and those payable in its own common stock) or
redeem, repurchase or otherwise acquire or retire any of its Capital Stock at
any time outstanding, except that, if no Default or Unmatured Default has
occurred or is continuing or would result after giving effect to such payment,
(i) any Subsidiary may declare and pay dividends or make distributions to a Loan
Party or to a Wholly-Owned Subsidiary and (ii) the Domestic Borrower may declare
and pay or make distributions to the Parent in an aggregate amount not to exceed
$750,000 in any Fiscal Year.
(b) No Loan Party shall directly or indirectly enter into or become
bound by any agreement, instrument, indenture or other obligation (other than
this Agreement and the other Loan Documents) that could directly or indirectly
restrict, prohibit or require the consent of any Person with respect to the
payment of dividends or distributions or the making or repayment of intercompany
loans by a Subsidiary to a Borrower.
6.16. Indebtedness. The Domestic Borrower will not, nor will it permit
any Loan Party to, create, incur or suffer to exist any Indebtedness, except:
(a) the Obligations;
(b) Indebtedness existing on the date hereof and described in Schedule
6.16;
(c) purchase money Indebtedness or Capitalized Lease Obligations or
Indebtedness incurred in connection with the purchase of any Equipment; provided
that, the amount of such purchase money Indebtedness and Capitalized Lease
Obligations shall be limited to an amount not in excess of the purchase price of
such Equipment and the aggregate of all such purchase money Indebtedness and
Capitalized Lease Obligations incurred in any Fiscal Year shall not exceed
$5,000,000; provided however, that during any Fixed Charge Condition Period,
such Indebtedness shall constitute Permitted Indebtedness as defined under the
Indenture;
(d) Indebtedness which represents an extension, refinancing, or renewal
of any of the Indebtedness described in clauses (b) and (c) hereof; provided
that, (i) the principal amount or interest rate of such Indebtedness is not
increased, (ii) any Liens securing such Indebtedness are not extended to any
additional Property of any Loan Party, (iii) no Loan Party that is not
originally obligated with respect to repayment of such Indebtedness is required
to become obligated with respect thereto, (iv) such extension, refinancing or
renewal does not result in a shortening of the average weighted maturity of the
Indebtedness so extended, refinanced, renewed, (v) the terms of any such
extension, refinancing, or renewal are not materially less favorable to the
obligor thereunder than the original terms of such Indebtedness, and (iv) if the
Indebtedness that is refinanced, renewed, or extended was subordinated in right
of payment to the Obligations, then the terms and conditions of the refinancing,
renewal, or extension
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Indebtedness must include subordination terms and conditions that are at least
as favorable to the Agent and the Lenders as those that were applicable to the
refinanced, renewed, or extended Indebtedness;
(e) Indebtedness owing by any Loan Party to any other Loan Party with
respect to intercompany loans, provided further, that:
(i) the applicable Loan Parties shall have executed and
delivered to such Loan Party, on the Effective Date, a demand note
(collectively, the "Intercompany Notes") to evidence any such
intercompany Indebtedness owing at any time by any Loan Party to any
other Loan Party, which Intercompany Notes shall be in form and
substance reasonably satisfactory to the Agent and shall be pledged and
delivered to the Agent pursuant to the Security Agreement as additional
collateral security for the Secured Obligations;
(ii) the Loan Parties shall record all intercompany
transactions on their books and records in a manner reasonably
satisfactory to the Agent;
(iii) the obligations of the Loan Parties under any such
Intercompany Notes shall be subordinated to the Obligations of the Loan
Parties hereunder in a manner reasonably satisfactory to the Agent;
(iv) at the time any such intercompany loan or advance is made
by a Loan Party and after giving effect thereto, such Loan Party shall
be Solvent;
(v) no Default or Unmatured Default would occur and be
continuing after giving effect to any such proposed intercompany loan;
(vi) each intercompany loan from a Borrower shall be to a
Borrowing Loan Party that is wholly owned by a Borrower or any wholly
owned Subsidiary of a Borrower, and shall be in accordance with the
provisions of Section 17.4 hereof; and
(vii) all such Indebtedness under Intercompany Notes shall
otherwise constitute Permitted Indebtedness (as defined in the
Indenture).
(f) Contingent Obligations (i) by endorsement of instruments for
deposit or collection in the ordinary course of business, (ii) consisting of the
Reimbursement Obligations and (iii) consisting of the Guaranty and guarantees of
Indebtedness incurred for the benefit of any other Loan Party if the primary
obligation is expressly permitted elsewhere in this Section 6.16;
(g) Indebtedness arising under Rate Management Transactions related to
the Loans having a Net Xxxx-to-Market Exposure not exceeding $2,000,000;
(h) the Subordinated Indebtedness of the Domestic Borrower incurred
under the Senior Subordinated Notes in an aggregate original principal amount
not to exceed
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$199,930,000, provided that such Subordinated Indebtedness may not be renewed,
extended or increased;
(i) other unsecured Indebtedness in an amount, for the Domestic
Borrower and all of its Subsidiaries, not in excess of $1,000,000; and
(j) Indebtedness arising under the UK Overdraft Facility.
6.17. Capital Structure Except as otherwise permitted herein, no Loan
Party shall make any change in its capital structure. If all or any part of a
Loan Party's Capital Stock has been pledged to the Agent, that Loan Party shall
not issue additional Capital Stock.
6.18. Merger. No Loan Party will merge or consolidate with or into any
other Person, except that (a) any Subsidiary of the Domestic Borrower may merge
into a Wholly-Owned Subsidiary of the Domestic Borrower (or the Domestic
Borrower so long as the Indenture is no longer in effect) and (b) any Loan Party
(other than the Domestic Borrower) may merge with any other Loan Party.
6.19. Sale of Assets No Loan Party will lease, sell or otherwise
dispose of its Property (including any Capital Stock owned by it) to any other
Person (other than another Loan Party), except:
(a) sales of Inventory in the ordinary course of business;
(b) the sale or other disposition of Equipment that is obsolete or no
longer useful in such Loan Party's business; and
(c) for (1) the sale of assets classified on the Domestic Borrower's
consolidated balance sheet on the Closing Date as "Held for Sale," and (2) the
sale or disposition of other assets having a book value not exceeding
$25,000,000 in the aggregate during the term of this Agreement.
The proceeds of any sale or disposition permitted pursuant to this Section shall
be delivered to the Agent if required by Section 2.15 and applied to the
Obligations as set forth therein.
6.20. Investments and Acquisitions No Loan Party will (a) make or
suffer to exist any Investments (including without limitation, loans and
advances to, and other Investments in, Subsidiaries), or commitments therefor,
(b) create any Subsidiary except as permitted herein, (c) become or remain a
partner in any partnership or joint venture, or (d) make any Acquisition,
except:
(i) Cash Equivalent Investments, subject to control agreements
in favor of the Agent for the benefit of the Lenders or otherwise
subject to a perfected security interest in favor of the Agent for the
benefit of the Lenders;
(ii) existing Investments in Subsidiaries;
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(iii) other Investments in existence on the Closing Date and
described in Schedule 6.20;
(iv) Investments consisting of loans or advances made to
employees of such Loan Party on an arms-length basis in the ordinary
course of business consistent with past practices for travel and
entertainment expenses, relocation costs and similar purposes up to a
maximum of $10,000 to any employee and up to a maximum of $25,000 in
the aggregate at any one time outstanding;
(v) subject to Sections 4.2(a) and 4.4 of the Security
Agreement, Investments comprised of notes payable, or stock or other
securities issued by Account Debtors to such Loan Party pursuant to
negotiated agreements with respect to settlement of such Account
Debtor's Accounts in the ordinary course of business, consistent with
past practices;
(vi) additional Investments in Subsidiaries which are Loan
Parties;
(vii) other Investments in Subsidiaries of a Loan Party not to
exceed $7,000,000 in the aggregate during the term of this Agreement;
(viii) other Investments not to exceed $3,000,000 in the
aggregate during the term of this Agreement; and
(ix) subject to Section 2.24 hereof, Acquisitions not to
exceed $1,000,000 each and an aggregate amount not to exceed $5,000,000
during any four (4) consecutive Fiscal Quarters, unless the Domestic
Borrower receives prior written consent from the Agent.
6.21. Liens.
(a) No Loan Party will create, incur, or suffer to exist any Lien in,
of, or on the Property of such Loan Party, except the following (collectively,
"PERMITTED LIENS"):
(i) Liens for taxes, fees, assessments, or other governmental
charges or levies on the Property of such Loan Party if such Liens (a)
shall not at the time be delinquent or (b) do not secure obligations in
excess of $250,000, are being contested in good faith and by
appropriate proceedings diligently pursued, adequate reserves in
accordance with GAAP have been provided on the books of such Loan
Party, and a stay of enforcement of such Lien is in effect;
(ii) Liens imposed by law, such as carrier's, warehousemen's,
and mechanic's Liens and other similar Liens arising in the ordinary
course of business which secure payment of obligations not more than
ten days past due or which are being contested in good faith by
appropriate proceedings diligently pursued and for which adequate
reserves shall have been provided on such Loan Party's books;
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(iii) statutory Liens in favor of landlords of real Property
leased by such Loan Party; provided that such Loan Party is current
with respect to payment of all rent and other material amounts due to
such landlord under any lease of such real Property;
(iv) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or other
social security or retirement benefits, or similar legislation or to
secure the performance of bids, tenders, or contracts (other than for
the repayment of Indebtedness) or to secure indemnity, performance, or
other similar bonds for the performance of bids, tenders, or contracts
(other than for the repayment of Indebtedness) or to secure statutory
obligations (other than material liens arising under ERISA or
Environmental Laws) or surety or appeal bonds, or to secure indemnity,
performance, or other similar bonds;
(v) utility easements, building restrictions, and such other
encumbrances or charges against real Property as are of a nature
generally existing with respect to properties of a similar character
and which do not in any material way affect the marketability of such
real Property or materially and adversely interfere with the use
thereof in the business of such Loan Party;
(vi) the equivalent of the types of Liens discussed in clauses
(i) through (v) above, inclusive, in any foreign jurisdiction in which
any Loan Party conducts business;
(vii) Liens existing on the Closing Date and described in
Schedule 6.21;
(viii) Liens resulting from any extension, refinancing, or
renewal of the related Indebtedness as permitted pursuant to Section
6.16(d); provided that, the Liens evidenced thereby are not increased
to cover any additional Property not originally covered thereby;
(ix) Liens securing purchase money Indebtedness of such Loan
Party permitted pursuant to Section 6.16(c); provided that, such Liens
attach only to the Property which was purchased with the proceeds of
such purchase money Indebtedness;
(x) Liens granted pursuant to any Loan Document; and
(xi) Liens in favor of HSBC Bank plc or its affiliates until
released in accordance with Section 4.3.
(b) Notwithstanding the foregoing, none of the Liens permitted pursuant
to this Section 6.21, other than (x) of the type described in clause (i) above,
may at any time attach to any Accounts of any Loan Party and (y) of the type
described in clauses (i) through (iii) above, may at any time attach to any
Inventory of any Loan Party.
(c) Other than as provided in the Loan Documents or in connection with
the creation or incurrence of any Indebtedness under Section 6.16(c), no Loan
Party will enter into or become subject to any negative pledge or other
restriction on the right of such Loan Party to grant Liens to the Agent and the
Lenders on any of its Property; provided that, any such negative pledge or
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other restriction entered into in connection with the creation of Indebtedness
under Section 6.16(c) shall be limited to the Property securing such purchase
money Indebtedness.
6.22. Change of Name or Location; Change of Fiscal Year. Except as
permitted hereunder, no Loan Party shall (a) change its name as it appears in
official filings in the state of its incorporation or organization, (b) change
its chief executive office, principal place of business, mailing address,
corporate offices or warehouses or locations at which Collateral is held or
stored, or the location of its records concerning the Collateral as set forth in
the Security Agreement, (c) change the type of entity that it is, (d) change its
organization identification number, if any, issued by its state of incorporation
or other organization, or (e) change its state of incorporation or organization,
in each case, without at least thirty days prior written notice to the Agent and
the Agent shall have either (1) determined that such event or occurrence will
not adversely affect the validity, perfection or priority of the Agent's
security interest in the Collateral, or (2) after the Agent's written
acknowledgment that any reasonable action requested by the Agent in connection
therewith, including to continue the perfection of any Liens in favor of the
Agent, on behalf of Lenders, in any Collateral, has been completed or taken,
and, provided that any new location shall be in the continental U.S. No Loan
Party shall change its Fiscal Year.
6.23. Affiliate Transactions. Except as permitted hereunder, no Loan
Party will enter into any transaction (including, without limitation, the
purchase or sale of any Property or service) with, or make any payment or
transfer (including, without limitation, any payment or transfer with respect to
any fees or expenses for management services) to, any Affiliate except in the
ordinary course of business and pursuant to the reasonable requirements of such
Loan Party's business and upon fair and reasonable terms no less favorable to
such Loan Party than such Loan Party would obtain in a comparable arms-length
transaction.
6.24. Amendments to Agreements. Except as permitted hereunder, the
Borrower will not, and will not permit any of its Subsidiaries to, amend or
terminate their organizational documents or governing documents in a manner that
would be adverse to the Lenders.
6.25. Prepayment of Indebtedness; Subordinated Indebtedness.
(a) No Loan Party shall, directly or indirectly, voluntarily purchase,
redeem, defease or prepay any principal of, premium, if any, interest or other
amount payable in respect of any Indebtedness prior to its scheduled maturity,
other than (i) the Obligations; (ii) Indebtedness secured by a Permitted Lien if
the asset securing such Indebtedness has been sold or otherwise disposed of in
accordance with Section 6.19; (iii) Indebtedness permitted by Section 6.16(d)
upon any refinancing thereof in accordance therewith; and (iv) Indebtedness
permitted by Section 6.16(e).
(b) No Loan Party shall make any amendment or modification to the
Indenture, note or other agreement evidencing or governing any Subordinated
Indebtedness, or directly or indirectly voluntarily prepay, defease or in
substance defease, purchase, redeem, retire or otherwise acquire, any
Subordinated Indebtedness; provided that, the Domestic Borrower may make
scheduled payments of interest with respect to Subordinated Indebtedness as long
as no
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Default or Unmatured Default has occurred and is continuing or would result
after giving effect to such payment.
6.26 Letters of Credit. No Loan Party will apply for or become liable
upon or in respect of any Letter of Credit other than Facility LCs.
6.27. Financial Contracts. No Loan Party shall enter into or remain
liable upon any Financial Contract, except for Rate Management Transactions
permitted by Section 6.16.
6.28. Capital Expenditures. No Loan Party shall expend, or be committed
to expend, in the aggregate for the Loan Parties in excess of (a) $16,000,000
during Fiscal Year 2003, (b) $18,000,000 during Fiscal Year 2004, (c)
$20,000,000 during Fiscal Year 2005, and (d) $22,000,000 during Fiscal Years
2006 and 2007, for unfunded Capital Expenditures for the Loan Parties.
6.29. Debt Service Coverage Ratio. The Domestic Borrower will not
permit the Debt Service Coverage Ratio, determined as of the end of each Fiscal
Quarter for the then most-recently ended four Fiscal Quarters, to be less than
(a) 1.10 to 1.00 for any period of two consecutive Fiscal Quarters, or (b) 1.00
to 1.00.
6.30. Depository Banks (a) Each Domestic Loan Party shall maintain the
Agent as such Domestic Loan Party's principal depository bank, including for the
maintenance of operating, administrative, cash management, collection activity,
and other deposit accounts for the conduct of its business, (b) Each Canadian
Loan Party shall, within a reasonable amount of time, transfer its deposit
accounts (including for the maintenance of operating, administrative, cash
management, collection activity, and other deposit accounts for the conduct of
its business, but excluding xxxxx cash accounts maintained in the ordinary
course of business) to the Canadian Correspondent Lender and then maintain such
deposits accounts with such Lender.
6.31. Sale of Accounts. The Domestic Borrower will not, and will not it
permit any of its Subsidiaries to, sell or otherwise dispose of any notes
receivable or accounts receivable, with or without recourse.
6.32. Off-Balance Sheet Liabilities; Sale and Leaseback Transactions.
The Loan Parties shall not have any Off-Balance Sheet Liabilities or engage in
any Sale and Leaseback Transactions.
6.33. Subordination of Intercompany Notes.
(a) All Indebtedness evidenced by an Intercompany Note, together with
all accrued interest thereon, and any other indebtedness for borrowed money now
owing or which hereafter may become owing by or from a Loan Party to any other
Loan Party, howsoever such indebtedness may be hereafter created, extended,
renewed or evidenced, together with all accrued interest thereon and any and all
other obligations and liabilities of any kind owing by or from a Loan Party to
any other Loan Party shall at all times and in all respects be subordinate and
junior in right of payment to any and all obligations, liabilities and
indebtedness of any kind
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of the Loan Parties to the Lenders, and their respective successors and assigns,
including, without limitation, the Obligations, Guaranteed Obligations and any
extensions, renewals, modifications, and amendments thereof and all accrued
interest thereon and any Fees owing by the Loan Parties to the Lenders.
(b) Unless and until (i) all of the Guaranteed Obligations shall have
been fully and finally paid and satisfied and (ii) all financing arrangements,
including, but not limited to this Agreement, between the Domestic Borrower, the
other Loan Parties and the Lenders have been terminated, no Loan Party shall:
(A) enforce or exercise any right of demand or setoff or commence any legal or
other action against any other Loan Party to collect upon any Intercompany Note;
(B) take or accept any collateral or security with respect to the obligations
evidenced by any Intercompany Note without the prior written consent of the
Agent; (C) commence foreclosure or any other similar type of proceedings or
exercise any similar remedies in respect of any collateral for the obligations
evidenced by any Intercompany Note; (D) enforce any judgment that it might
obtain with respect to the obligations evidenced by the Intercompany Notes
without obtaining the prior written consent of the Agent; or (E) commence or
join with any other creditor or creditors of the Loan Parties in commencing any
bankruptcy, reorganization or insolvency proceedings against such Loan Party.
All rights, liens and security interests of each Loan Party in any assets of any
other Loan Party and/or any other person securing the obligations evidenced by
any Intercompany Note, whether now or hereafter arising and howsoever existing,
shall be and hereby are subordinated to the rights and interests of the Agent
under this Agreement and in those assets. The Loan Parties shall have no right
to possession of any such assets or to foreclose or execute upon any such
assets, whether by judicial action or otherwise. The Loan Parties represent and
warrant that all Intercompany Notes are and will remain unsecured.
6.34. Post-Closing Mortgages. Within one hundred fifty (150) days after
the Closing Date, the Domestic Borrower shall deliver, with respect to each
parcel of real Property located in the United States that is not required to be
subject to a Lien in favor of the Agent on the Closing Date, a Mortgage on such
real Property, in form and substance reasonably satisfactory to the Agent, to be
held by the Agent until such time as the Agent is permitted to file and perfect
such Mortgage in accordance with the provisions of Section 6.14.
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a "DEFAULT" hereunder:
(a) nonpayment, when due (whether upon demand or otherwise), of
any principal, interest, fee, Reimbursement Obligation or any other obligation
owing under any of the Loan Documents;
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(b) any representation or warranty made or deemed made by or on
behalf of any Loan Party to the Lenders or the Agent under or in connection with
this Agreement, any other Loan Document, any Credit Extension, or any
certificate or information delivered in connection with any of the foregoing
shall be materially false on the date as of which made;
(c) the breach by any Loan Party of any of the terms or provisions
of Sections 2.24, 6.2, 6.5, 6.7, 6.9, 6.10, 6.13 through 6.34, or 17.4;
(d) the breach by any Loan Party (other than a breach which
constitutes a Default under another Section of this Article VII) of any of the
terms or provisions of this Agreement which is not remedied (i) in the case of
Section 6.1, within 5 days of such breach, and (ii) in all other cases, within
30 days of such breach;
(e) (i) failure of any Loan Party or Parent to pay when due any
Indebtedness in an aggregate amount equal to $5,000,000, (ii) a default, breach
or other event occurs under any term, provision or condition contained in any
Material Indebtedness Agreement of any Loan Party or Parent, the effect of which
default, event or condition is to cause, or to permit the holder(s) of such
Material Indebtedness or the lender(s) under any Material Indebtedness Agreement
to cause, such Material Indebtedness to become due prior to its stated maturity;
any Indebtedness in an aggregate amount equal to $3,000,000 of any Loan Party or
Parent shall be declared to be due and payable or required to be prepaid or
repurchased (other than by a regularly scheduled payment) prior to the stated
maturity thereof; or any Loan Party or Parent shall not pay, or (iii) admit in
writing its inability to pay, its debts generally as they become due.
(f) (i) Loan Parties (other than the UK Borrower) and Parent: any
Loan Party or Parent shall (A) have an order for relief entered with respect to
it under the Bankruptcy Code as now or hereafter in effect, (B) make an
assignment for the benefit of creditors, (C) apply for, seek, consent to, or
acquiesce in, the appointment of a receiver, custodian, trustee, examiner,
liquidator or similar official for it or any Substantial Portion of Property,
(D) institute any proceeding seeking an order for relief under the Bankruptcy
Code as now or hereafter in effect or seeking to adjudicate it a bankrupt or
insolvent, or seeking dissolution, winding up, liquidation, reorganization,
arrangement, adjustment or composition of it or its debts under any law relating
to bankruptcy, insolvency or reorganization or relief of debtors or fail to file
an answer or other pleading denying the material allegations of any such
proceeding filed against it, (E) take any corporate, partnership or limited
liability company action to authorize or effect any of the foregoing actions set
forth in this subsection (f) or (F) fail to contest in good faith any
appointment or proceeding described in subsection (g) below;
(ii) UK Borrower: the UK Loan Parties shall (A) take any corporate
action for or other formal steps are taken or legal or other proceedings started
or a petition or application is presented for its winding up administration
dissolution or reorganization (other than for the purposes of a bona fide
solvent scheme of reconstruction previously approved in writing by the Agent and
the Required Lenders, or, in respect of a petition or other proceedings for its
winding up only, where such action is taken on grounds which the UK Loan Parties
shall reasonably demonstrate to the Agent and the Required Lenders to be
vexatious or unwarranted and such petition is withdrawn or dismissed or such
proceedings are withdrawn or stayed within 14 days
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and prior to their advertisement) or for the appointment of a provisional
liquidator, receiver, administrator, trustee or similar officer of all or any
material part of its assets, (B) be or become or admits in writing its inability
to pay its debts as they fall due as that expression is defined in Section 123
of the Insolvency Xxx 0000, (3) cease or threaten to cease to carry on all or
any substantial part of its business, (4) have a moratorium in respect of all or
any of the debts of the UK Loan Parties or a composition or arrangement
readjustment or rescheduling with all or any class of creditors of the UK Loan
Parties proposed, agreed, applied for, ordered or declared, (5) have a receiver
or administrative receiver appointed in respect of the any UK Loan Party or in
respect of all or any material part of their assets or if the security created
by any Lien created by any UK Loan Party over all or any material part of their
undertakings, assets, rights or remedies become enforceable or any step has been
taken to enforce such Lien, or (D) any distress execution attachment or other
process is carried out or otherwise affects any assets of any UK Loan Party and
is not discharged within 60 days.
(g) a receiver, trustee, examiner, liquidator or similar official
shall be appointed for any Loan Party or Parent or any Substantial Portion of
Property, or a proceeding described in subsection (f)(iv) of Article VII shall
be instituted against any Loan Party or Parent and such appointment continues
undischarged or such proceeding continues undismissed or unstayed for a period
of sixty consecutive days;
(h) any court, government or governmental agency shall condemn,
seize or otherwise appropriate, or take custody or control of, all or any
portion of the Property of any Loan Party which, when taken together with all
other Property of any Loan Party so condemned, seized, appropriated, or taken
custody or control of, during the twelve-month period ending with the month in
which any such action occurs, constitutes a Substantial Portion;
(i) any loss, theft, damage or destruction of any item or items of
Collateral or other property of any Loan Party occurs which could reasonably be
expected to cause a Material Adverse Effect and is not adequately covered by
insurance;
(j) any Loan Party shall fail within thirty days when due to pay,
bond or otherwise discharge one or more (i) judgments or orders for the payment
of money in excess of $1,000,000 (or the equivalent thereof in currencies other
than Dollars) in the aggregate, or (ii) nonmonetary judgments or orders which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect, which judgments or orders, in any such case, are not
stayed on appeal or otherwise being appropriately contested in good faith by
proper proceedings diligently pursued;
(k) any Change in Control shall occur;
(l) the Unfunded Liabilities of all Single Employer Plans shall
exceed in the aggregate $7,800,000 or any Reportable Event shall occur in
connection with any Plan;
(m) a Loan Party or any other member of a Controlled Group has
incurred or shall have been notified by the sponsor of a Multiemployer Plan that
it has incurred withdrawal liability to such Multiemployer Plan;
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(n) a Loan Party or any other member of a Controlled Group shall
have been notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being terminated, within the
meaning of Title IV of ERISA, if as a result of such reorganization or
termination the aggregate annual contributions of a Loan Party and the other
members of a Controlled Group (taken as a whole) to all Multiemployer Plans
which are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for the
respective plan years of each such Multiemployer Plan immediately preceding the
plan year in which the reorganization or termination occurs by an amount
exceeding $250,000;
(o) the occurrence of any "default," as defined in any Loan
Document (other than this Agreement) or the breach of any of the terms or
provisions of any Loan Document (other than this Agreement), which default or
breach continues beyond any period of grace therein provided;
(p) the Guaranty shall fail to remain in full force or effect or
any action shall be taken to discontinue or to assert the invalidity or
unenforceability of the Guaranty, or any Guarantor shall fail to comply with any
of the material terms or provisions of the Guaranty to which it is a party, or
any Guarantor shall deny that it has any further liability under the Guaranty to
which it is a party, or shall give notice to such effect;
(q) any Collateral Document shall for any reason fail to create a
valid and perfected first priority security interest in any material portion of
the Collateral purported to be covered thereby, except as permitted by the terms
of any Loan Document, or any Collateral Document shall fail to remain in full
force or effect or any action shall be taken to discontinue or to assert the
invalidity or unenforceability of any Loan Document;
(r) any material provision of any Loan Document for any reason
ceases to be valid, binding and enforceable in accordance with its terms (or any
Loan Party shall challenge the enforceability of any Loan Document or shall
assert in writing, or engage in any action or inaction based on any such
assertion, that any provision of any of the Loan Documents has ceased to be or
otherwise is not valid, binding and enforceable in accordance with its terms);
(s) (i) any Default (as defined in the Indenture) or Event of
Default (as defined in the Indenture) shall exist under the Indenture, the
Senior Subordinated Notes or any agreement executed by the Domestic Borrower in
connection therewith, (ii) without the prior written consent of the Agent and
the Required Lenders, the Indenture or the Senior Subordinated Notes shall be
amended or modified in any respect or replaced, or (iii) the Senior Subordinated
Notes shall be accelerated for any reason;
(t) nonpayment by the Domestic Borrower or any of its Subsidiaries
of any Rate Management Obligation when due or the breach by the Domestic
Borrower or any of its Subsidiaries of any term, provision or condition
contained in any Rate Management Transaction or any transaction of the type
described in the definition of "RATE MANAGEMENT TRANSACTIONS," whether or not
any Lender or Affiliate of a Lender is a party thereto or the occurrence or
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existence of any default, event of default or other similar condition or event
(however described) with respect to Rate Management Transactions;
(u) there is filed against any Loan Party any action, suit or
proceeding under any federal or state racketeering statute (including the
Racketeer Influenced and Corrupt Organization Act of 1970), which action, suit
or proceeding (i) is not dismissed within one hundred twenty days, and (ii)
could reasonably be expected to result in the confiscation or forfeiture of any
material portion of the Collateral;
(v) if any Loan Party shall incur or permit to exist any
Designated Senior Indebtedness (as defined in the Indenture) other than the
Secured Obligations; or
(w) the Parent shall guaranty the indebtedness of any Person other
than a Loan Party.
ARTICLE VIII
REMEDIES; WAIVERS AND AMENDMENTS
8.1. Remedies
(a) If any Default occurs, the Agent (i) may in its discretion (and at
the written request of the Required Lenders, shall) (A) reduce the Aggregate
Commitment, (B) terminate or suspend the obligations of the Lenders to make
Loans hereunder and the obligation and power of the LC Issuer to issue Facility
LCs, (C) upon notice to the Domestic Borrower, and in addition to the continuing
right to demand payment of all amounts payable under this Agreement, the Agent
may either (1) make demand on the Borrower to pay, and the Borrower shall,
forthwith upon such demand and without any further notice or act, pay to the
Agent an amount, in immediately available funds (which funds shall be held in
the Facility LC Collateral Account), equal to 105% of the Collateral Shortfall
Amount or (2) deliver a Supporting Letter of Credit as required by Section
2.1.2(l), whichever the Agent may specify in its sole discretion, (D) increase
the rate of interest applicable to the Loans and the LC Fees as set forth in
this Agreement and (E) exercise any rights and remedies provided to the Agent
under the Loan Documents or at law or equity, including all remedies provided
under the UCC, and (ii) shall, at the written request of the Required Lenders,
declare all or any portion of the Obligations to be due and payable, whereupon
the Obligations shall become immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which the Borrower hereby
expressly waives.
(b) If any Default described in subsections (f) or (g) of Article VII
occurs with respect to any Loan Party, the obligations of the Lenders to make
Loans hereunder and the obligation and power of the LC Issuer to issue Facility
LCs shall automatically terminate and all Obligations shall immediately become
due and payable without any election or action on the part of the Agent, the LC
Issuer or any Lender and the Loan Parties will be and become thereby
unconditionally obligated, without any further notice, act or demand, to pay to
the Agent an amount equal to 105% of the Collateral Shortfall Amount, which
funds shall be deposited in the Facility LC Collateral Account.
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(c) If, within thirty days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans and
the obligation and power of the LC Issuer to issue Facility LCs hereunder as a
result of any Default (other than any Default as described in subsections (f) or
(g) of Article VII with respect to the Domestic Borrower) and before any
judgment or decree for the payment of the Obligations due shall have been
obtained or entered, the Required Lenders (in their sole discretion) shall so
direct, the Agent shall, by notice to the Domestic Borrower, rescind and annul
such acceleration and/or termination.
(d) If at any time while any Default is continuing, the Agent
determines that the Collateral Shortfall Amount at such time is greater than
zero, the Agent may make demand on the Domestic Borrower to pay, and the
Domestic Borrower shall, forthwith upon such demand and without any further
notice or act, pay to the Agent an amount equal to 105% of the Collateral
Shortfall Amount, which funds shall be deposited in the Facility LC Collateral
Account. The Domestic Borrower hereby pledges, assigns, and grants to the Agent,
on behalf of and for the benefit of the Agent, the Lenders, and the LC Issuer, a
security interest in all of the Domestic Borrower's right, title, and interest
in and to all funds which may from time to time be on deposit in the Facility LC
Collateral Account to secure the prompt and complete payment and performance of
the Obligations.
(e) The Agent may at any time or from time to time after funds are
deposited in the Facility LC Collateral Account, apply such funds to the payment
of the Obligations and any other amounts as shall from time to time have become
due and payable by the Borrower to the Lenders or the LC Issuer under the Loan
Documents.
(f) At any time while any Default is continuing, neither the Borrower
nor any Person claiming on behalf of or through the Borrower shall have any
right to withdraw any of the funds held in a Facility LC Collateral Account.
After all of the Obligations have been indefeasibly paid in full and the
Aggregate Commitment has been terminated, any funds remaining in the Facility LC
Collateral Accounts shall be returned by the Applicable Agent to the Borrower or
paid to whomever may be legally entitled thereto at such time.
8.2. Waivers by Loan Parties. Except as otherwise provided for in this
Agreement or by applicable law, each Loan Party waives: (a) presentment, demand
and protest and notice of presentment, dishonor, notice of intent to accelerate,
notice of acceleration, protest, default, nonpayment, maturity, release,
compromise, settlement, extension or renewal of any or all commercial paper,
accounts, contract rights, documents, instruments, chattel paper and guaranties
at any time held by the Agent on which any Loan Party may in any way be liable,
and hereby ratifies and confirms whatever the Agent may do in this regard, (b)
all rights to notice and a hearing prior to the Agent's taking possession or
control of, or to the Agent's replevy, attachment or levy upon, the Collateral
or any bond or security that might be required by any court prior to allowing
the Agent to exercise any of its remedies, and (c) the benefit of all valuation,
appraisal, marshaling and exemption laws.
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8.3. Amendments.
(a) Subject to the provisions of this Section 8.3, no amendment, waiver
or modification of any provision of this Agreement or any other Loan Document,
and no consent with respect to any departure by any Loan Party therefrom, shall
be effective unless the same shall be in writing and signed by the Required
Lenders (or the Agent with the consent in writing of the Required Lenders) and
the Loan Parties and then any such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
(b) Notwithstanding subsection (a) above, no such amendment, waiver or
other modification with respect to this Agreement shall, without the consent of
all of the Lenders:
(i) extend the final maturity of any Loan to a date after the
Facility Termination Date;
(ii) postpone any regularly scheduled payment of principal of
any Loan or reduce or forgive all or any portion of the principal
amount of any Loan or any Reimbursement Obligation;
(iii) reduce the rate or extend the time of payment of
interest or fees payable to the Lenders pursuant to any Loan Document;
(iv) reduce the percentage or number of Lenders specified in
the definition of Required Lenders;
(v) extend the Facility Termination Date;
(vi) increase the amount of the Aggregate Commitment
hereunder;
(vii) increase the advance rates set forth in the definition
of Borrowing Base above the initial levels;
(viii) permit any Loan Party to assign its rights under this
Agreement;
(ix) amend this Section 8.3;
(x) release any guarantor of any Credit Extension, except as
otherwise permitted herein or in the other Loan Documents; or
(xi) except as provided in Section 10.16 or any Collateral
Document, release all or substantially all of the Collateral.
(c) No amendment of any provision of this Agreement relating to the
Agent or to the Non-Ratable Loans, the Overadvances or the Protective Advances
shall be effective without the written consent of the Agent. No amendment of any
provision relating to the LC Issuer shall be effective without the written
consent of the LC Issuer. The Agent may (i) amend the
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Commitment Schedule to reflect assignments entered into pursuant to Section
12.3, and (ii) waive payment of the fee required under Section 12.3(c).
8.4. Preservation of Rights No delay or omission of the Lenders, the LC
Issuer or the Agent to exercise any right under the Loan Documents shall impair
such right or be construed to be a waiver of any Default or an acquiescence
therein, and the making of a Credit Extension notwithstanding the existence of a
Default or the inability of the Borrower to satisfy the conditions precedent to
such Credit Extension shall not constitute any waiver or acquiescence. Any
single or partial exercise of any such right shall not preclude other or further
exercise thereof or the exercise of any other right, and no waiver, amendment or
other variation of the terms, conditions or provisions of the Loan Documents
whatsoever shall be valid unless in writing signed by the Lenders required
pursuant to Section 8.3, and then only to the extent in such writing
specifically set forth. All remedies contained in the Loan Documents or by law
afforded shall be cumulative and all shall be available to the Agent, the LC
Issuer and the Lenders until the Obligations have been paid in full.
ARTICLE IX
GENERAL PROVISIONS
9.1. Survival of Representations All representations and warranties of
the Loan Parties contained in this Agreement and the other Loan Documents shall
survive the execution and delivery of the Loan Documents and the making of the
Credit Extensions herein contemplated.
9.2. Governmental Regulation Anything contained in this Agreement to
the contrary notwithstanding, neither the LC Issuer nor any Lender shall be
obligated to extend credit to the Borrower in violation of any limitation or
prohibition provided by any applicable statute or regulation.
9.3. Headings Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
9.4. Entire Agreement The Loan Documents embody the entire agreement
and understanding among the Loan Parties, the Agent, the LC Issuer and the
Lenders and supersede all prior agreements and understandings among the Loan
Parties, the Agent and the Lenders relating to the subject matter thereof other
than those contained in the fee letter described in Section 10.13 which shall
survive and remain in full force and effect during the term of this Agreement.
9.5. Several Obligations; Benefits of this Agreement The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other lender (except to the extent to which
the Agent is authorized to act as administrative agent for the Lenders
hereunder). The failure of any Lender to perform any of its obligations
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hereunder shall not relieve any other Lender from any of its obligations
hereunder. This Agreement shall not be construed so as to confer any right or
benefit upon any Person other than the parties to this Agreement and their
respective successors and assigns, provided however, that the parties hereto
expressly agree that the Arranger shall enjoy the benefits of the provisions of
Sections 9.6, 9.10 and 10.11 to the extent specifically set forth therein and
shall have the right to enforce such provisions on its own behalf and in its own
name to the same extent as if it were a party to this Agreement.
9.6. Expenses; Indemnification
(a) The Domestic Borrower shall reimburse the Agent and the Arranger
(and each Lender up to a maximum amount of $2,500) for any costs, internal
charges and out-of-pocket expenses (including attorneys' fees and time charges
of attorneys for the Agent, which attorneys may be employees of the Agent) paid
or incurred by the Agent or the Arranger in connection with the preparation,
negotiation, execution, delivery, syndication, distribution (including, without
limitation, via the internet or through a service such as Intralinks), review,
amendment, modification, and administration of the Loan Documents. The Domestic
Borrower also agrees to reimburse the Agent, the Arranger, the LC Issuer and the
Lenders for any costs, internal charges and out-of-pocket expenses (including
attorneys' fees and time charges of attorneys for the Agent, the Arranger, the
LC Issuer and the Lenders, which attorneys may be employees of the Agent, the
Arranger, the LC Issuer or the Lenders) paid or incurred by the Agent, the
Arranger, the LC Issuer or any Lender in connection with the restructuring,
collection and enforcement of the Loan Documents. Expenses being reimbursed by
the Domestic Borrower under this Section 9.6 include, without limitation, costs
and expenses incurred in connection with:
(i) appraisals of all or any portion of the Collateral, each
parcel of real Property or interest in real Property described in any
Collateral Document, which appraisals shall be in conformity with the
applicable requirements of any law or any governmental rule,
regulation, policy, guideline or directive (whether or not having the
force of law), or any interpretation thereof, including, without
limitation, the provisions of Title XI of the Financial Institutions
Reform, Recovery and Enforcement Act of 1989, as amended, reformed or
otherwise modified from time to time, and any rules promulgated to
implement such provisions (including travel, lodging, meals and other
out of pocket expenses for inspections of the Collateral and the
Borrower's operations by the Agent) plus the Agent's then customary
charge for field examinations and audits and the preparation of certain
audit reports (the "REPORTS") which the Borrower acknowledges may be
prepared by Bank One from time to time and which the Borrower agrees
may be distributed to the Lenders by Bank One pertaining to the
Borrower's assets from information furnished to it by or on behalf of
the Borrower, after Bank One has exercised its rights of inspection
pursuant to this Agreement (such charge is currently $850 per day (or
portion thereof) for each Person retained or employed by the Agent with
respect to each field examination or audit);
(ii) any amendment, modification, supplement, consent, waiver
or other documents prepared with respect to any Loan Document and the
transactions contemplated thereby;
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(iii) lien and title searches and title insurance;
(iv) taxes, fees and other charges for recording the
Mortgages, filing financing statements and continuations, and other
actions to perfect, protect, and continue the Agent's Liens (including
costs and expenses paid or incurred by the Agent in connection with the
consummation of the Agreement);
(v) sums paid or incurred to take any action required of the
Borrower under the Loan Documents that the Borrower fails to pay or
take;
(vi) any litigation, contest, dispute, proceeding or action
(whether instituted by the Agent, the LC Issuer, any Lender, any Loan
Party or any other Person and whether as to party, witness or
otherwise) in any way relating to the Collateral, the Loan Documents or
the transactions contemplated thereby; and
(vii) costs and expenses of forwarding loan proceeds,
collecting checks and other items of payment, and establishing and
maintaining the Funding Account and lock boxes, and costs and expenses
of preserving and protecting the Collateral.
The foregoing shall not be construed to limit any other provisions of
the Loan Documents regarding costs and expenses to be paid by the Borrower. All
of the foregoing costs and expenses may be charged to the applicable Borrower's
Loan Account as Revolving Loans or to another deposit account, all as described
in Section 2.17(b).
(b) The Domestic Borrower hereby further agrees to indemnify the Agent,
the Arranger, the LC Issuer, each Lender, their respective Affiliates, and each
of their directors, officers and employees against all losses, claims, damages,
penalties, judgments, liabilities and expenses (including, without limitation,
all expenses of litigation or preparation therefor whether or not the Agent, the
Arranger, the LC Issuer any Lender or any Affiliate is a party thereto) which
any of them may pay or incur arising out of or relating to this Agreement, the
other Loan Documents, the transactions contemplated hereby or the direct or
indirect application or proposed application of the proceeds of any Credit
Extension hereunder except to the extent that they are determined in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of the party seeking
indemnification. The obligations of the Domestic Borrower under this Section 9.6
shall survive the termination of this Agreement.
9.7. Numbers of Documents. All statements, notices, closing documents,
and requests hereunder shall be furnished to the Agent with sufficient
counterparts so that the Agent may furnish one to each of the Lenders.
9.8. Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with GAAP in a manner
consistent with that used in preparing the financial statements referred to in
Section 5.5, except that any calculation or determination which is to be
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made on a consolidated basis shall be made for the Domestic Borrower and all of
its Subsidiaries, including those Subsidiaries, if any, which are unconsolidated
on the Domestic Borrower's audited financial statements. If at any time any
change in GAAP would affect the computation of any financial ratio or
requirement set forth in any Loan Document, and the Domestic Borrower, the Agent
or the Required Lenders shall so request the Agent, the Lenders and the Loan
Parties shall negotiate in good faith to amend such ratio or requirement to
preserve the original intent thereof in light of such change in GAAP (subject to
the approval of the Required Lenders), provided that, until so amended, such
ratio or requirement shall continue to be computed in accordance with GAAP prior
to such change therein and the Domestic Borrower shall provide to the Agent and
the Lenders reconciliation statements showing the difference in such
calculation, together with the delivery of monthly, quarterly and annual
financial statements required hereunder.
9.9. Severability of Provisions. Any provision in any Loan Document
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
9.10. Nonliability of Lenders. The relationship between any Loan Party
on the one hand and the Lenders, the LC Issuer and the Agent on the other hand
shall be solely that of debtor and creditor. Neither the Agent, the Arranger,
the LC Issuer nor any Lender shall have any fiduciary responsibilities to any
Loan Party. Neither the Agent, the Arranger, the LC Issuer nor any Lender
undertakes any responsibility to any Loan Party to review or inform such Loan
Party of any matter in connection with any phase of any Loan Party's business or
operations. The Loan Parties agree that neither the Agent, the Arranger, the LC
Issuer nor any Lender shall have liability to any Loan Party (whether sounding
in tort, contract or otherwise) for losses suffered by any Loan Party in
connection with, arising out of, or in any way related to, the transactions
contemplated and the relationship established by the Loan Documents, or any act,
omission or event occurring in connection therewith, unless it is determined in
a final non-appealable judgment by a court of competent jurisdiction that such
losses resulted from the gross negligence or willful misconduct of the party
from which recovery is sought. Neither the Agent, the Arranger, the LC Issuer
nor any Lender shall have any liability with respect to, and each Loan Party
hereby waives, releases and agrees not to xxx for, any special, indirect,
consequential or punitive damages suffered by any Loan Party in connection with,
arising out of, or in any way related to the Loan Documents or the transactions
contemplated thereby.
9.11. Confidentiality. Each Lender agrees to hold any confidential
information which it may receive from any Loan Party in connection with this
Agreement in confidence, except for disclosure (a) to its Affiliates and to
other Lenders and their respective Affiliates, (b) to legal counsel,
accountants, and other professional advisors to such Lender or to a Transferee,
(c) to regulatory officials, (d) to any Person as requested pursuant to or as
required by law, regulation, or legal process, (e) to any Person in connection
with any legal proceeding to which such Lender is a party, (f) to such Lender's
direct or indirect contractual counterparties in swap agreements or to legal
counsel, accountants and other professional advisors to such counterparties, (g)
permitted by Section 12.4 and (h) to rating agencies if requested or required by
such agencies in connection
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with a rating relating to the Credit Extensions hereunder. Notwithstanding
anything herein to the contrary, confidential information shall not include, and
each Lender (and each employee, representative or other agent of any Lender) may
disclose to any and all Persons, without limitation of any kind, the "tax
treatment" and "tax structure" (in each case, within the meaning of Treasury
Regulation Section 1.6011-4) of the transactions contemplated hereby and all
materials of any kind (including opinions or other tax analyses) that are or
have been provided to such Lender relating to such tax treatment or tax
structure; provided that, with respect to any document or similar item that in
either case contains information concerning such tax treatment or tax structure
of the transactions contemplated hereby as well as other information, this
sentence shall only apply to such portions of the document or similar item that
relate to such tax treatment or tax structure.
9.12. Nonreliance. Each Lender hereby represents that it is not relying
on or looking to any Margin Stock for the repayment of the Credit Extensions
provided for herein.
9.13 Disclosure. Each Loan Party and each Lender hereby acknowledges
and agrees that Bank One and/or its Affiliates from time to time may hold
investments in, make other loans to or have other relationships with any of the
Loan Parties and their respective Affiliates.
9.14 Judgment Currency. If the Agent, on behalf of any Lender, obtains
a judgment or a judgment against a Borrower in a currency other than Dollars,
the obligations of such Borrower in respect of any sum adjudged to be due to the
Agent or the Lenders hereunder or under the Revolving Notes (the "Judgment
Amount") shall be discharged only to the extent that, on the Business Day
following receipt by the Agent of the Judgment Amount in such currency the
Agent, in accordance with normal banking procedures, purchases Dollars with the
Judgment Amount in such currency. If the amount of Dollars so purchased is less
than the amount of Dollars that could have been purchased with the Judgment
Amount on the date or dates the Judgment Amount (excluding the portion of the
Judgment Amount which has accrued as a result of the failure of such Borrower to
pay the sum originally due hereunder or under the Revolving Notes when it was
originally due and owing to the Agent or any Lender hereunder or under the
Revolving Notes) was originally due and owing to the Agent or any Lender
hereunder or under the Notes (the "Original Due Date") (the "Loss"), such
Borrower agrees as a separate obligation and notwithstanding any such judgment,
to indemnify the Agent or such Lender, as the case may be, against the Loss, and
if the amount of Dollars so purchased exceeds the amount of Dollars that could
have been purchased with the Judgment Amount on the Original Due Date, the Agent
or such Lender agrees to remit such excess to such Borrower.
9.15 Currency Equivalent Generally. For the purposes of making
valuations or computations under this Agreement (but not for the purposes of the
preparation of any financial statements delivered pursuant hereto), unless
expressly provided otherwise, where a reference is made to a dollar amount the
amount is to be considered as the amount in Dollars and, therefor, each other
currency shall be converted into the Dollar Equivalent.
9.16 No Cross Collateralization. For the avoidance of doubt, the
parties hereto agree that (i) the Collateral securing the Secured Obligations of
the Canadian Loan Parties shall not constitute security for the Obligations of
the Domestic Loan Parties; and (ii) the Collateral
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securing the Secured Obligations of the UK Loan Parties shall not constitute
security for the Obligations of the Domestic Loan Parties.
9.17. Amendment and Restatement. This Agreement is an amendment and
restatement of that certain Credit Agreement dated as of July 30, 2003, among
the Domestic Borrower, the Loan Parties party thereto, the Lenders, Bank One, NA
as the Agent and LC Issuer, KeyBank National Association as the Syndication
Agent and Bank One Capital Markets, Inc. as the lead arranger and sole book
runner (the "Original Loan Agreement"). All "Obligations" under the Original
Loan Agreement and all Liens securing payment of the Obligations under the
Original Loan Agreement shall in all respects be continuing and this Agreement
shall not be deemed to evidence or result in a novation or repayment and
re-borrowing of such Obligations. This Agreement shall supersede the Original
Loan Agreement. From and after the Effective Date, this Agreement shall govern
the terms of the Obligations under the Original Loan Agreement. To the extent
not replaced by Loan Documents dated as of the Closing Date, any Loan Documents
(as defined in the Original Loan Agreement) executed in connection with the
Original Loan Agreement (other than any such Loan Document that is specifically
terminated by the parties thereto) shall continue to be effective, and all
references in those prior Loan Documents to the "Credit Agreement" or the
"Agreement" shall be deemed to refer to this Agreement without further amendment
thereof.
ARTICLE X
THE AGENT
10.1. Appointment; Nature of Relationship Bank One, NA (referred to in
this Agreement, except for this Article X, as the "Agent") is hereby appointed
by each of the Lenders as its contractual representative, the Canadian
Correspondent Lender is hereby appointed by each of the Canadian Lenders as its
contractual representative, and the UK Correspondent Lender is hereby appointed
by each of the UK Lenders as its contractual representative (each, collectively
referred to in this Article X only as the "AGENT") hereunder and under each
other Loan Document, and each of the Lenders irrevocably authorizes the Agent to
act as the contractual representative of such Lender with the rights and duties
expressly set forth herein and in the other Loan Documents. The Agent agrees to
act as such contractual representative upon the express conditions contained in
this Article X. Notwithstanding the use of the defined term "Agent," it is
expressly understood and agreed that the Agent shall not have any fiduciary
responsibilities to any Lender by reason of this Agreement or any other Loan
Document and that the Agent is merely acting as the contractual representative
of the Lenders with only those duties as are expressly set forth in this
Agreement and the other Loan Documents. In its capacity as the Lenders'
contractual representative, the Agent (a) does not hereby assume any fiduciary
duties to any of the Lenders, (b) is a "representative" of the Lenders within
the meaning of the term "secured party" as defined in the UCC and (c) is acting
as an independent contractor, the rights and duties of which are limited to
those expressly set forth in this Agreement and the other Loan Documents. Each
of the Lenders hereby agrees to assert no claim against the Agent on any agency
theory or any other theory of liability for breach of fiduciary duty, all of
which claims each Lender hereby waives.
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10.2. Powers The Agent shall have and may exercise such powers under
the Loan Documents as are specifically delegated to the Agent by the terms of
each thereof, together with such powers as are reasonably incidental thereto.
The Agent shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by
the Loan Documents to be taken by the Agent.
10.3. General Immunity Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to any Loan Party, the Lenders or
any Lender for any action taken or omitted to be taken by it or them hereunder
or under any other Loan Document or in connection herewith or therewith except
to the extent such action or inaction is determined in a final non-appealable
judgment by a court of competent jurisdiction to have arisen from the gross
negligence or willful misconduct of such Person.
10.4. No Responsibility for Credit Extensions, Recitals, etc. Neither
the Agent nor any of its directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into, or verify (a) any
statement, warranty or representation made in connection with any Loan Document
or any borrowing hereunder; (b) the performance or observance of any of the
covenants or agreements of any obligor under any Loan Document, including,
without limitation, any agreement by an obligor to furnish information directly
to each Lender; (c) the satisfaction of any condition specified in Article IV,
except receipt of items required to be delivered solely to the Agent; (d) the
existence or possible existence of any Default or Unmatured Default; (e) the
validity, enforceability, effectiveness, sufficiency or genuineness of any Loan
Document or any other instrument or writing furnished in connection therewith;
(f) the value, sufficiency, creation, perfection or priority of any Lien in any
Collateral; or (g) the financial condition of any Loan Party, any Guarantor or
any Affiliate of any Loan Party. The Agent shall have no duty to disclose to the
Lenders information that is not required to be furnished by the Loan Parties to
the Agent at such time, but is voluntarily furnished by any Loan Party to the
Agent (either in its capacity as the Agent or in its individual capacity). Each
Lender has received a copy of the Indenture and has reviewed the terms and
conditions thereof, including, but limited to, the conditions relating to the
status of the Obligations as Designated Senior Indebtedness (as defined in the
Indenture) and Senior Indebtedness (as defined in the Indenture) under the
Indenture. Furthermore, none of the Lenders shall be deemed to have a fiduciary
relationship with any other Lender.
10.5. Action on Instructions of the Lenders The Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder and
under any other Loan Document in accordance with written instructions signed by
the Required Lenders, and such instructions and any action taken or failure to
act pursuant thereto shall be binding on all of the Lenders. The Lenders hereby
acknowledge that the Agent shall be under no duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement
or any other Loan Document unless it shall be requested in writing to do so by
the Required Lenders. The Agent shall be fully justified in failing or refusing
to take any action hereunder and under any other Loan Document unless it shall
first be indemnified to its satisfaction by the Lenders pro rata against any and
all liability, cost and expense that it may incur by reason of taking or
continuing to take any such action.
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10.6. Employment of Agents and Counsel The Agent may execute any of its
duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by the Agent or its
authorized agents, for the default or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. The Agent shall be
entitled to advice of counsel concerning the contractual arrangement between the
Agent and the Lenders and all matters pertaining to the Agent's duties hereunder
and under any other Loan Document.
10.7. Reliance on Documents; Counsel The Agent shall be entitled to
rely upon any Revolving Note, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex, electronic mail message, statement, paper or
document believed by it to be genuine and correct and to have been signed or
sent by the proper person or persons, and, in respect to legal matters, upon the
opinion of counsel selected by the Agent, which counsel may be employees of the
Agent. For purposes of determining compliance with the conditions specified in
Sections 4.1 and 4.2, each Lender that has signed this Agreement shall be deemed
to have consented to, approved or accepted or to be satisfied with, each
document or other matter required thereunder to be consented to or approved by
or acceptable or satisfactory to a Lender unless the Agent shall have received
notice from such Lender prior to the applicable date specifying its objection
thereto.
10.8. Agent's Reimbursement and Indemnification The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (or, if the Commitments have been terminated, in proportion to their
Commitments immediately prior to such termination) (a) for any amounts not
reimbursed by the Borrower for which the Agent is entitled to reimbursement by
the Borrower under the Loan Documents, (b) for any other expenses incurred by
the Agent on behalf of the Lenders, in connection with the preparation,
execution, delivery, administration and enforcement of the Loan Documents
(including, without limitation, for any expenses incurred by the Agent in
connection with any dispute between the Agent and any Lender or between two or
more of the Lenders) and (c) for any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of the Loan Documents or
any other document delivered in connection therewith or the transactions
contemplated thereby (including, without limitation, for any such amounts
incurred by or asserted against the Agent in connection with any dispute between
the Agent and any Lender or between two or more of the Lenders), or the
enforcement of any of the terms of the Loan Documents or of any such other
documents, provided that, (i) no Lender shall be liable for any of the foregoing
to the extent any of the foregoing is found in a final non-appealable judgment
by a court of competent jurisdiction to have resulted from the gross negligence
or willful misconduct of the Agent and (ii) any indemnification required
pursuant to Section 3.5(g) shall, notwithstanding the provisions of this Section
10.8, be paid by the relevant Lender in accordance with the provisions thereof.
The obligations of the Lenders under this Section 10.8 shall survive payment of
the Obligations and termination of this Agreement.
10.9. Notice of Default The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Unmatured Default hereunder unless
the Agent has received
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written notice from a Lender or the Domestic Borrower, referring to this
Agreement describing such Default or Unmatured Default and stating that such
notice is a "notice of default." In the event that the Agent receives such a
notice, the Agent shall give prompt notice thereof to the Lenders; provided,
that, the Agent shall not be liable to any Lender for any failure to do so,
except to the extent that such failure is attributable to the Agent's gross
negligence or willful misconduct.
10.10. Rights as a Lender In the event the Agent is a Lender, the Agent
shall have the same rights and powers hereunder and under any other Loan
Document with respect to its Commitment and its Credit Extensions as any Lender
and may exercise the same as though it were not the Agent, and the term "LENDER"
or "LENDERS" shall, at any time when the Agent is a Lender, unless the context
otherwise indicates, include the Agent in its individual capacity. The Agent and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of trust, debt, equity or other transaction, in addition to those
contemplated by this Agreement or any other Loan Document, with any Loan Party
in which such Loan Party is not restricted hereby from engaging with any other
Person, all as if Bank One were not the Agent and without any duty to account
therefor to Lenders. Bank One and its Affiliates may accept fees and other
consideration from any Loan Party for services in connection with this Agreement
or otherwise without having to account for the same to Lenders. The Agent in its
individual capacity, is not obligated to remain a Lender.
10.11. Lender Credit Decision Each Lender acknowledges that it has,
independently and without reliance upon the Agent, the Arranger or any other
Lender and based on the financial statements prepared by the Loan Parties and
such other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and without
reliance upon the Agent, the Arranger 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 and the other Loan Documents.
10.12. Successor Agent The Agent may resign at any time by giving
written notice thereof to the Lenders and the Domestic Borrower, such
resignation to be effective upon the appointment of a successor Agent or, if no
successor Agent has been appointed, forty-five days after the retiring Agent
gives notice of its intention to resign. The Agent may be removed at any time
with or without cause by written notice received by the Agent from the Required
Lenders, such removal to be effective on the date specified by the Required
Lenders. Upon any such resignation or removal, the Required Lenders shall have
the right to appoint, on behalf of the Borrower and the Lenders, a successor
Agent. If no successor Agent shall have been so appointed by the Required
Lenders within thirty days after the resigning Agent's giving notice of its
intention to resign, then the resigning Agent may appoint, on behalf of the
Borrower and the Lenders, a successor Agent. Notwithstanding the previous
sentence, the Agent may at any time without the consent of the Borrower or any
Lender, appoint any of its Affiliates which is a commercial bank as a successor
Agent hereunder. If the Agent has resigned or been removed and no successor
Agent has been appointed, the Lenders may perform all the duties of the Agent
hereunder and the Borrower shall make all payments in respect of the Obligations
to the Lenders and for all other purposes shall deal directly with the Lenders.
No successor Agent shall be
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deemed to be appointed hereunder until such successor Agent has accepted the
appointment. Any such successor Agent shall be a commercial bank having capital
and retained earnings of at least $100,000,000. Upon the acceptance of any
appointment as the Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the resigning or removed the Agent. Upon the
effectiveness of the resignation or removal of the Agent, the resigning or
removed Agent shall be discharged from its duties and obligations hereunder and
under the Loan Documents. After the effectiveness of the resignation or removal
of an Agent, the provisions of this Article X shall continue in effect for the
benefit of such Agent in respect of any actions taken or omitted to be taken by
it while it was acting as the Agent hereunder and under the other Loan
Documents. In the event that there is a successor to the Agent by merger, or the
Agent assigns its duties and obligations to an Affiliate pursuant to this
Section 10.12, then the term "PRIME RATE" as used in this Agreement shall mean
the prime rate, base rate or other analogous rate of the new Agent.
10.13. Agent and Arranger Fees. The Domestic Borrower agrees to pay to
Bank One, NA and the Arranger, for their respective accounts, the fees agreed to
by the Domestic Borrower, such Agent and the Arranger pursuant to that certain
letter agreement dated June 24, 2003, or as otherwise agreed from time to time.
10.14. Delegation to Affiliates The Borrower and the Lenders agree that
the Agent may delegate any of its duties under this Agreement to any of its
Affiliates. Any such Affiliate (and such Affiliate's directors, officers, agents
and employees) which performs duties in connection with this Agreement shall be
entitled to the same benefits of the indemnification, waiver and other
protective provisions to which the Agent is entitled under Articles IX and X.
10.15. Execution of Loan Documents The Lenders hereby empower and
authorize the Agent, on behalf of the Agent and the Lenders, to execute and
deliver to the Loan Parties the Loan Documents and all related agreements,
certificates, documents, or instruments as shall be necessary or appropriate to
effect the purposes of the Loan Documents. Each Lender agrees that any action
taken by the Agent or the Required Lenders in accordance with the terms of this
Agreement or the other Loan Documents, and the exercise by the Agent or the
Required Lenders of their respective powers set forth therein or herein,
together with such other powers that are reasonably incidental thereto, shall be
binding upon all of the Lenders. The Lenders acknowledge that all of the
Obligations hereunder constitute one debt, secured pari passu by all of the
Collateral.
10.16. Collateral Matters
(a) The Lenders hereby irrevocably authorize the Agent, at its option
and in its sole discretion, to release any Liens granted to the Agent by the
Loan Parties on any Collateral (i) upon the termination of the Aggregate
Commitment, payment and satisfaction in full in cash of all Obligations (other
than Unliquidated Secured Obligations), and the cash collateralization of all
Unliquidated Secured Obligations in a manner satisfactory to each affected
Lender, (ii) constituting Property being sold or disposed of if the Loan Party
disposing of such Property certifies to the Agent that the sale or disposition
is made in compliance with the terms of this Agreement (and the Agent may rely
conclusively on any such certificate, without further inquiry), (iii)
constituting Property in which no Loan Party has at any time during the term of
this
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Agreement owned any interest, (iv) constituting property leased to a Loan
Party under a lease which has expired or been terminated in a transaction
permitted under this Agreement, (v) owned by or leased to an Loan Party which is
subject to a purchase money security interest or which is the subject of a
Capitalized Lease, in either case, entered into by such Loan Party pursuant to
Section 6.16(c), or (vi) as required to effect any sale or other disposition of
such Collateral in connection with any exercise of remedies of the Agent and the
Lenders pursuant to Section 8.1. Upon request by the Agent at any time, the
Lenders will confirm in writing the Agent's authority to release any Liens upon
particular types or items of Collateral pursuant to this Section 10.16. Except
as provided in the preceding sentence, the Agent will not release any Liens on
Collateral without the prior written authorization of the Required Lenders;
provided that, the Agent may in its discretion, release its Liens on Collateral
valued in the aggregate not in excess of $1,000,000 during any Fiscal Year
without the prior written authorization of the Lenders.
(b) Upon receipt by the Agent of any authorization required pursuant to
Section 10.16(a) from the Required Lenders of the Agent's authority to release
any Liens upon particular types or items of Collateral, and upon at least five
Business Days prior written request by the Loan Parties, the Agent shall (and is
hereby irrevocably authorized by the Lenders to) execute such documents as may
be necessary to evidence the release of its Liens upon such Collateral; provided
that, (i) the Agent shall not be required to execute any such document on terms
which, in the Agent's opinion, would expose the Agent to liability or create any
obligation or entail any consequence other than the release of such Liens
without recourse or warranty and (ii) such release shall not in any manner
discharge, affect, or impair the Obligations or any Liens (other than those
expressly being released) upon (or obligations of the Loan Parties in respect
of) all interests retained by the Loan Parties, including the proceeds of any
sale, all of which shall continue to constitute part of the Collateral.
(c) The Agent shall have no obligation whatsoever to any of the Lenders
to assure that the Collateral exists or is owned by the Loan Parties or is cared
for, protected, or insured or has been encumbered, or that the Liens granted to
the Agent therein have been properly or sufficiently or lawfully created,
perfected, protected, or enforced or are entitled to any particular priority, or
to exercise at all or in any particular manner or under any duty of care,
disclosure, or fidelity, or to continue exercising, any of the rights,
authorities, and powers granted or available to the Agent pursuant to any of the
Loan Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission, or event related thereto, the Agent may act in
any manner it may deem appropriate, in its sole discretion given the Agent's own
interest in the Collateral in its capacity as one of the Lenders and that the
Agent shall have no other duty or liability whatsoever to any Lender as to any
of the foregoing.
(d) Each Lender hereby appoints each other Lender as its agent for the
purpose of perfecting Liens, for the benefit of the Agent and the Lenders, in
assets which, in accordance with Article 9 of the UCC or any other applicable
law can be perfected only by possession. Should any Lender (other than the
Agent) obtain possession of any such Collateral, such Lender shall notify the
Agent thereof, and, promptly upon the Agent's request therefor shall deliver
such Collateral to the Agent or otherwise deal with such Collateral in
accordance with the Agent's instructions.
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(e) Each Lender hereby agrees as follows: (a) such Lender is deemed to
have requested that the Agent furnish such Lender, promptly after it becomes
available, a copy of each Report prepared by or on behalf of the Agent; (b) such
Lender expressly agrees and acknowledges that neither Bank One nor the Agent (i)
makes any representation or warranty, express or implied, as to the completeness
or accuracy of any Report or any of the information contained therein, or (ii)
shall be liable for any information contained in any Report; (c) such Lender
expressly agrees and acknowledges that the Reports are not comprehensive audits
or examinations, that the Agent, Bank One, or any other party performing any
audit or examination will inspect only specific information regarding the Loan
Parties and will rely significantly upon the Loan Parties' books and records, as
well as on representations of the Loan Parties' personnel and that Bank One
undertakes no obligation to update, correct or supplement the Reports; (d) such
Lender agrees to keep all Reports confidential and strictly for its internal
use, not share the Report with any Loan Party and not to distribute any Report
to any other Person except as otherwise permitted pursuant to this Agreement;
and (e) without limiting the generality of any other indemnification provision
contained in this Agreement, such Lender agrees (i) that neither Bank One nor
the Agent shall be liable to such Lender or any other Person receiving a copy of
the Report for any inaccuracy or omission contained in or relating to a Report,
(ii) to conduct its own due diligence investigation and make credit decisions
with respect to the Loan Parties based on such documents as such Lender deems
appropriate without any reliance on the Reports or on the Agent or Bank One,
(iii) to hold the Agent and any such other Person preparing a Report harmless
from any action the indemnifying Lender may take or conclusion the indemnifying
Lender may reach or draw from any Report in connection with any Credit
Extensions that the indemnifying Lender has made or may make to the Loan
Parties, or the indemnifying Lender's participation in, or the indemnifying
Lender's purchase of, any Obligations and (iv) to pay and protect, and
indemnify, defend, and hold the Agent and any such other Person preparing a
Report harmless from and against, the claims, actions, proceedings, damages,
costs, expenses, and other amounts (including reasonable attorney fees) incurred
by the Agent and any such other Person preparing a Report as the direct or
indirect result of any third parties who might obtain all or part of any Report
through the indemnifying Lender.
10.17. Syndication Agent. The Lender identified in this Agreement as
the "Syndication Agent" shall not have any right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to all
Lenders as such. Without limiting the foregoing, none of such Lenders shall have
or be deemed to have a fiduciary relationship with any Lender. Each Lender
hereby makes the same acknowledgments with respect to such Lenders as it makes
with respect to the Agent in Section 10.11.
10.18 Authority with Respect to Quebec. For greater certainty, and
without limiting the powers of the Canadian Correspondent Lender under the Loan
Documents, each of the Canadian Lenders, the UK Correspondent Lender, the UK
Lenders, the applicable LC Issuers and the Canadian Correspondent Lender (but
solely in its capacity as the holder and depositary of the Bonds (as defined
below)), acknowledges and agrees that the Canadian Correspondent Lender shall,
for the purposes of holding any security granted by RB&W Logistics Canada, Inc.
under the Loan Documents 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, UK Lenders, UK Correspondent Lender, applicable LC
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Issuers, indemnified parties (with respect to Canadian Revolving Loans), as well
as holders and depositaries of the Bonds. Each of the Lenders, the LC Issuer and
the Canadian Correspondent Lender (but solely in its capacity as the holder and
depositary of the Bonds) constitutes, to the extent necessary, the Canadian
Correspondent Lender as the holder of such irrevocable power of attorney (fonde
de pouvoir) in order to hold security granted by RB&W Logistics Canada, Inc.
under the Loan Documents in the Province of Quebec to secure payment of the
Bonds. Each assignee of the Canadian Lenders, successor UK Correspondent Lender,
assignee of the UK Lenders, successor or assignee of the applicable LC Issuers,
indemnified party (with respect to Canadian Revolving Loans and UK Fixed Rate
Loans) and successor Canadian Correspondent Lender (but solely in its capacity
as the holder and depositary of the Bonds) shall be deemed to have confirmed and
ratified the constitution of the Canadian Correspondent Lender as the holder of
such irrevocable power of attorney (fonde de pouvoir). Furthermore, the Canadian
Correspondent Lender hereby agrees to act in the capacity of the holder and
depositary of the Bonds on its own behalf as Canadian Correspondent Lender and
for and on behalf and for the benefit of all present and future Canadian
Lenders, applicable LC Issuer and indemnified parties (with respect to the
Canadian Revolving Loans). Notwithstanding the provisions of Section 32 of the
Special Powers of Legal Persons Act (Quebec), the Canadian Correspondent Lender
may acquire and be the holder of a Bond. RB&W Logistics Canada, Inc.
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 19.1 hereof, the provisions of this
Section 10.18 shall be governed by the laws of the Province of Quebec and the
federal laws of Canada applicable therein.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. Setoff In addition to, and without limitation of, any rights of
the Lenders under applicable law, if any Loan Party becomes insolvent, however
evidenced, or any Default occurs, any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender or
any Affiliate of any Lender to or for the credit or account of the Borrower, or
any Guarantor, may be offset and, if offset, shall be applied toward the payment
of the Secured Obligations, whether or not the Secured Obligations, or any part
thereof, shall then be due.
11.2. Ratable Payments If any Lender, whether by setoff or otherwise,
has payment made to it upon its Credit Exposure (other than payments received
pursuant to Section 3.1, 3.2, 3.4 or 3.5) in a greater proportion than that
received by any other Lender, such Lender agrees, promptly upon demand, to
purchase a portion of the Aggregate Credit Exposure held by the other Lenders so
that after such purchase each Lender will hold its Pro Rata Share of the
Aggregate Credit Exposure. If any Lender, whether in connection with setoff or
amounts which might be subject to setoff or otherwise, receives collateral or
other protection for its Secured Obligations or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to respective Pro Rata Share of the Aggregate Credit Exposure. In
case any such
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payment is disturbed by legal process, or otherwise, appropriate further
adjustments shall be made.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Loan Parties and
the Lenders and their respective successors and assigns permitted hereby, except
that (a) the Loan Parties shall not have the right to assign its rights or
obligations under the Loan Documents without the prior written consent of each
Lender, (b) any assignment by any Lender must be made in compliance with Section
12.3, and (c) any transfer by Participation must be made in compliance with
Section 12.2. Any attempted assignment or transfer by any party not made in
compliance with this Section 12.1 shall be null and void, unless such attempted
assignment or transfer is treated as a participation in accordance with Section
12.3. The parties to this Agreement acknowledge that clause (b) of this Section
12.1 relates only to absolute assignments and this Section 12.1 does not
prohibit assignments creating security interests, including, without limitation,
any pledge or assignment by any Lender of all or any portion of its rights under
this Agreement and any Revolving Note to a Federal Reserve Bank; provided
however, that no such pledge or assignment creating a security interest shall
release the transferor Lender from its obligations hereunder unless and until
the parties thereto have complied with the provisions of Section 12.3. The Agent
may treat the Person which made any Credit Extension or which holds any
Revolving Note as the owner thereof for all purposes hereof unless and until
such Person complies with Section 12.3; provided however, that the Agent may in
its discretion (but shall not be required to) follow instructions from the
Person which made any Credit Extension or which holds any Revolving Note to
direct payments relating to such Credit Extension or Revolving Note to another
Person. Any assignee of the rights to any Credit Extension or any Revolving Note
agrees by acceptance of such assignment to be bound by all the terms and
provisions of the Loan Documents. Any request, authority or consent of any
Person, who at the time of making such request or giving such authority or
consent is the owner of the rights to any Credit Extension (whether or not a
Revolving Note has been issued in evidence thereof), shall be conclusive and
binding on any subsequent holder or assignee of the rights to such Credit
Extension.
12.2. Participations.
(a) Permitted Participants; Effect. Any Lender may at any time sell to
one or more banks or other entities ("Participants") participating interests in
any Credit Exposure of such Lender, any Revolving Note held by such Lender, any
Commitment of such Lender or any other interest of such Lender under the Loan
Documents. In the event of any such sale by a Lender of participating interests
to a Participant, such Lender's obligations under the Loan Documents shall
remain unchanged, such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, such Lender shall remain
the owner of its Credit Exposure and the holder of any Revolving Note issued to
it in evidence thereof for all purposes under the Loan Documents, all amounts
payable by the Borrower under this Agreement shall be
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determined as if such Lender had not sold such participating interests, and the
Borrower and the Agent shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under the Loan
Documents.
(b) Voting Rights. Each Lender shall retain the sole right to approve,
without the consent of any Participant, any amendment, modification or waiver of
any provision of the Loan Documents other than any amendment, modification or
waiver with respect to any Credit Extension or Commitment in which such
Participant has an interest which would require consent of all of the Lenders
pursuant to the terms of Section 8.3 or of any other Loan Document.
(c) Benefit of Certain Provisions. Each Loan Party agrees that each
Participant shall be deemed to have the right of setoff provided in Section 11.1
in respect of its participating interest in amounts owing under the Loan
Documents to the same extent as if the amount of its participating interest were
owing directly to it as a Lender under the Loan Documents, provided that, each
Lender shall retain the right of setoff provided in Section 11.1 with respect to
the amount of participating interests sold to each Participant. The Lenders
agree to share with each Participant, and each Participant, by exercising the
right of setoff provided in Section 11.1, agrees to share with each Lender, any
amount received pursuant to the exercise of its right of setoff, such amounts to
be shared in accordance with Section 11.2 as if each Participant were a Lender.
The Borrower further agrees that each Participant shall be entitled to the
benefits of Sections 3.1, 3.2, 3.4 and 3.5 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to Section 12.3,
provided that, (i) a Participant shall not be entitled to receive any greater
payment under Section 3.1, 3.2 or 3.5 than the Lender who sold the participating
interest to such Participant would have received had it retained such interest
for its own account, unless the sale of such interest to such Participant is
made with the prior written consent of the Domestic Borrower, and (ii) any
Participant not incorporated under the laws of the U.S. or any state thereof
agrees to comply with the provisions of Section 3.5 to the same extent as if it
were a Lender.
12.3. Assignments.
(a) Permitted Assignments. Any Lender may at any time assign to one or
more banks or other entities ("Purchasers") all or any part of its rights and
obligations under the Loan Documents. Such assignment shall be substantially in
the form of Exhibit G (an "Assignment Agreement"); provided, however, that
neither such Lender nor any of its successors or assigns shall assign or
transfer any interest herein without obtaining a prior determination from the
Domestic Borrower that any such assignment or transfer would not result, at the
time of such transfer or assignment, in a non-exempt prohibited transaction
under Section 406 of ERISA or Section 4975 of the Code with respect to any
Employee Benefit Plan. Anything herein to the contrary notwithstanding, such
Lender and its successors or assigns may at any time assign or transfer any
interest herein if an Unmatured Default or Default has occurred, such assignment
or transfer is to another Lender or any Affiliate of a Lender, or such
assignment or transfer is to a Federal Reserve Bank. Each such assignment with
respect to a Purchaser which is not a Lender or an Affiliate of a Lender shall
either be in an amount equal to the entire applicable Commitment and Credit
Extensions of the assigning Lender or (unless the Domestic Borrower and the
Agent otherwise consents) be in an aggregate amount not less than $10,000,000.
The
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amount of the assignment shall be based on the Commitment or outstanding
Credit Extensions (if the Commitment has been terminated) subject to the
assignment, determined as of the date of such assignment or as of the "Trade
Date," if the "Trade Date" is specified in the assignment.
(b) Consents. The consent of the Domestic Borrower shall be required
prior to an assignment becoming effective unless the Purchaser is a Lender or an
Affiliate of a Lender, provided that, the consent of the Domestic Borrower shall
not be required if a Default has occurred and is continuing. The consent of the
Agent shall be required prior to an assignment becoming effective unless the
Purchaser is a Lender. Any consent required under this Section 12.3(b) shall not
be unreasonably withheld or delayed.
(c) Effect; Effective Date. Upon (i) delivery to the Agent of a duly
executed Assignment Agreement, together with any consents required by Sections
12.3(a) and 12.3(b), and (ii) payment of a $3,500 fee to the Agent for
processing such assignment (unless such fee is waived by the Agent), such
Assignment Agreement shall become effective on the effective date specified by
the Agent in such Assignment Agreement. The Assignment Agreement shall contain a
representation by the Purchaser to the effect that none of the consideration
used to make the purchase of the Commitment and Credit Exposure under the
applicable Assignment Agreement constitutes "plan assets" as defined under ERISA
and that the rights and interests of the Purchaser in and under the Loan
Documents will not be "plan assets" under ERISA. On and after the effective date
of such Assignment Agreement, such Purchaser shall for all purposes be a Lender
party to this Agreement and any other Loan Document executed by or on behalf of
the Lenders and shall have all the rights and obligations of a Lender under the
Loan Documents, to the same extent as if it were an original party thereto, and
the transferor Lender shall be released with respect to the Commitment and
Credit Exposure assigned to such Purchaser without any further consent or action
by the Borrower, the Lenders or the Agent. In the case of an Assignment
Agreement covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a Lender hereunder but shall
continue to be entitled to the benefits of, and subject to, those provisions of
this Agreement and the other Loan Documents which survive payment of the
Obligations and termination of the applicable agreement. Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not
comply with this Section 12.3 shall be treated for purposes of this Agreement as
a sale by such Lender of a participation in such rights and obligations in
accordance with Section 12.2. Upon the consummation of any assignment to a
Purchaser pursuant to this Section 12.3(c), the transferor Lender, the Agent and
the Domestic Borrower shall make appropriate arrangements so that new Revolving
Notes or, as appropriate, replacement Revolving Notes are issued to such
transferor Lender and new Revolving Notes or, as appropriate, replacement
Revolving Notes, are issued to such Purchaser, in each case in principal amounts
reflecting their respective Commitments, as adjusted pursuant to such
assignment; provided that simultaneously with the Borrower's delivery of new or
replacement Revolving Notes as provided in this Section 12.3 the Agent and the
transferor Lender shall deliver to the Domestic Borrower any Revolving Note
being replaced in whole or in part, conspicuously marked cancelled or replaced.
(d) Register. The Agent, acting solely for this purpose as an agent of
the Borrower, shall maintain at one of its offices in the U.S. a copy of each
Assignment Agreement delivered to it and a register for the recordation of the
names and addresses of the Lenders, and the
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Commitments of, and principal amounts of the Credit Extensions owing to, each
Lender pursuant to the terms hereof from time to time (the "Register"). The
entries in the Register shall be conclusive, and the Borrower, the Agent and the
Lenders may treat each Person whose name is recorded in the Register pursuant to
the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.
12.4. Dissemination of Information Each Loan Party authorizes each
Lender to disclose to any Participant or Purchaser or any other Person acquiring
an interest in the Loan Documents by operation of law (each a "TRANSFEREE") and
any prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and its Subsidiaries, including
without limitation any information contained in any Reports; provided that, each
Transferee and prospective Transferee agrees to be bound by Section 9.11 of this
Agreement.
12.5. Tax Treatment If any interest in any Loan Document is transferred
to any Transferee which is not incorporated under the laws of the U.S. or any
state thereof, the transferor Lender shall cause such Transferee, concurrently
with the effectiveness of such transfer, to comply with the provisions of
Section 3.5(d).
12.6. Assignment by LC Issuer. Notwithstanding anything contained
herein, if at any time Bank One assigns all of its Commitment and Revolving
Loans pursuant to Section 12.3, Bank One may, upon thirty days' notice to the
Domestic Borrower, and the Lenders, resign as LC Issuer. In the event of any
such resignation as LC Issuer, the Domestic Borrower shall be entitled to
appoint from among the Lenders a successor LC Issuer hereunder; provided
however, that no failure by the Domestic Borrower to appoint any such successor
shall affect the resignation of Bank One as LC Issuer. If Bank One resigns as LC
Issuer, it shall retain all the rights and obligations of the LC Issuer
hereunder with respect to the Facility LCs outstanding as of the effective date
of its resignation as LC Issuer and all LC Obligations with respect thereto
(including the right to require the Lenders to make Revolving Loans or fund risk
participations in outstanding Reimbursement Obligations pursuant to Section
2.1.2(d)).
ARTICLE XIII
NOTICES
13.1. Notices; Effectiveness; Electronic Communication.
(a) Notices Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in paragraph (b) below), all notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopier as
follows:
(i) if, to any Loan Party, such notice shall be delivered to
the Domestic
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Borrower, on behalf of such Loan Party, at the Domestic Borrower's
address or telecopier number set forth on the signature page hereof;
(ii) if to the Agent, at its address or telecopier number set
forth on the signature page hereof;
(iii) if to the LC Issuer, at its address or telecopier number
set forth on the signature page hereof; and
(iv) if to a Lender, to it at its address or telecopier number
set forth on the signature pages hereto.
Notices sent by hand or overnight courier service, or mailed by
certified or registered mail, shall be deemed to have been given when received;
notices sent by telecopier shall be deemed to have been given when sent (except
that, if not given during normal business hours for the recipient, shall be
deemed to have been given at the opening of business on the next Business Day
for the recipient). Notices delivered through electronic communications to the
extent provided in paragraph (b) below, shall be effective as provided in said
paragraph (b).
(b) Electronic Communications. Notices and other communications to the
Lenders and the LC Issuer hereunder may be delivered or furnished by electronic
communication (including e-mail and internet or intranet websites) pursuant to
procedures approved by the Agent or as otherwise determined by the Agent,
provided that, the foregoing shall not apply to notices to any Lender or the LC
Issuer pursuant to Article II if such Lender or the LC Issuer, as applicable,
has notified the Agent that it is incapable of receiving notices under such
Article by electronic communication. The Agent or any Loan Party may, in its
respective discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it or
as it otherwise determines, provided that such determination or approval may be
limited to particular notices or communications. Notwithstanding the foregoing,
in every instance, the Domestic Borrower shall be required to provide paper
copies of the Compliance Certificates required by Section 6.1(e) to the Agent.
Unless the Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender's receipt of an acknowledgement from the intended recipient (such as by
the "return receipt requested" function, as available, return e-mail or other
written acknowledgement), provided that, if such notice or other communication
is not given during the normal business hours of the recipient, such notice or
communication shall be deemed to have been given at the opening of business on
the next Business Day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.
13.2. Change of Address, Etc. Any party hereto may change its address
or telecopier number for notices and other communications hereunder by notice to
the other parties hereto.
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ARTICLE XIV
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Loan Parties, the
Agent, the LC Issuer and the Lenders and each party has notified the Agent by
facsimile transmission or telephone that it has taken such action.
ARTICLE XV
GUARANTY
15.1. Guaranty Each Loan Party (other than the Borrowers and the other
UK Loan Parties, each to be referred to in this Section as a "GUARANTOR" and
collectively as the "GUARANTORS"), subject to the last sentence of this Section
15.1, hereby agrees that it is jointly and severally liable for, and, as primary
obligor and not merely as surety, absolutely and unconditionally guarantees to
the Lenders the prompt payment when due, whether at stated maturity, upon
acceleration or otherwise, and at all times thereafter, of the Secured
Obligations and all costs and expenses including, without limitation, all
out-of-pocket court costs and attorneys' and paralegals' fees and expenses paid
or incurred by the Agent, the LC Issuer and the Lenders in endeavoring to
collect all or any part of the Obligations from, or in prosecuting any action
against, the Borrowers, any Guarantor or any other guarantor of all or any part
of the Obligations (such costs and expenses, together with the Secured
Obligations, collectively the "GUARANTEED OBLIGATIONS"). Each Guarantor further
agrees that the Guaranteed Obligations may be extended or renewed in whole or in
part without notice to or further assent from it, and that it remains bound upon
its guarantee notwithstanding any such extension or renewal. Anything in this
Agreement or any other Loan Document to the contrary notwithstanding, the Loan
Parties listed on Schedule 15.1 shall be liable with respect to the Guaranteed
Obligations only to the extent such Guaranteed Obligations exceed the Certified
Acquisition Amount. Notwithstanding anything contained this Article XV or
elsewhere to the contrary, the Guaranteed Obligations which are guaranteed by
any Canadian Subsidiary are limited solely to the Canadian Obligations and the
UK Obligations.
15.2. Guaranty of Payment This Guaranty is a guaranty of payment and
not of collection. Each Guarantor waives any right to require the Agent, the LC
Issuer or any Lender to xxx the Borrower, any Guarantor, any other guarantor, or
any other person obligated for all or any part of the Guaranteed Obligations, or
otherwise to enforce its payment against any collateral securing all or any part
of the Guaranteed Obligations.
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15.3. No Discharge or Diminishment of Guaranty
(a) Except as otherwise provided for herein and to the extent provided
for herein, the obligations of each Guarantor hereunder are unconditional and
absolute and not subject to any reduction, limitation, impairment or termination
for any reason (other than the indefeasible payment in full in cash of the
Guaranteed Obligations), including:
(i) any claim of waiver, release, extension, renewal,
settlement, surrender, alteration, or compromise of any of the
Guaranteed Obligations, by operation of law or otherwise;
(ii) any change in the corporate existence, structure or
ownership of the Borrower or any other guarantor of or other person
liable for any of the Guaranteed Obligations;
(iii) any insolvency, bankruptcy, reorganization or other
similar proceeding affecting the Borrower, any Guarantor, or any other
guarantor of or other person liable for any of the Guaranteed
Obligations, or their assets or any resulting release or discharge of
any obligation of the Borrower, any Guarantor, or any other guarantor
of or other person liable for any of the Guaranteed Obligations; or
(iv) the existence of any claim, setoff or other rights which
any Guarantor may have at any time against the Borrower, any Guarantor,
any other guarantor of the Guaranteed Obligations, the Agent, the LC
Issuer, any Lender, or any other person, whether in connection herewith
or in any unrelated transactions.
(b) The obligations of each Guarantor hereunder are not subject to any
defense or setoff, counterclaim, recoupment, or termination whatsoever by reason
of the invalidity, illegality, or unenforceability of any of the Guaranteed
Obligations or otherwise, or any provision of applicable law or regulation
purporting to prohibit payment by the Borrower, any Guarantor or any other
guarantor of or other person liable for any of the Guaranteed Obligations, of
the Guaranteed Obligations or any part thereof.
(c) Further, the obligations of any Guarantor hereunder are not
discharged or impaired or otherwise affected by:
(i) the failure of the Agent, the LC Issuer or any Lender to
assert any claim or demand or to enforce any remedy with respect to all
or any part of the Guaranteed Obligations;
(i) any waiver or modification of or supplement to any
provision of any agreement relating to the Guaranteed Obligations;
(ii) any release, non-perfection, or invalidity of any
indirect or direct security for the obligations of the Borrower for all
or any part of the Guaranteed Obligations or any obligations of any
other guarantor of or other person liable for any of the Guaranteed
Obligations;
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(iii) any action or failure to act by the Agent, the LC Issuer
or any Lender with respect to any collateral securing any part of the
Guaranteed Obligations;
(iv) any default, failure or delay, willful or otherwise, in
the payment or performance of any of the Guaranteed Obligations, or any
other circumstance, act, omission or delay that might in any manner or
to any extent vary the risk of such Guarantor or that would otherwise
operate as a discharge of any Guarantor as a matter of law or equity
(other than the indefeasible payment in full in cash of the Guaranteed
Obligations).
15.4. Defenses Waived To the fullest extent permitted by applicable
law, each Guarantor hereby waives any defense based on or arising out of any
defense of the Borrower or any Guarantor or the unenforceability of all or any
part of the Guaranteed Obligations from any cause, or the cessation from any
cause of the liability of the Borrower or any Guarantor, other than the
indefeasible payment in full in cash of the Guaranteed Obligations. Without
limiting the generality of the foregoing, each Guarantor irrevocably waives
acceptance hereof, presentment, demand, protest and, to the fullest extent
permitted by law, any notice not provided for herein, as well as any requirement
that at any time any action be taken by any person against the Borrower, any
Guarantor, any other guarantor of any of the Guaranteed Obligations, or any
other person. The Agent may, at its election, foreclose on any Collateral held
by it by one or more judicial or nonjudicial sales, accept an assignment of any
such Collateral in lieu of foreclosure or otherwise act or fail to act with
respect to any collateral securing all or a part of the Guaranteed Obligations,
compromise or adjust any part of the Guaranteed Obligations, make any other
accommodation with the Borrower, any Guarantor, any other guarantor or any other
person liable on any part of the Guaranteed Obligations or exercise any other
right or remedy available to it against the Borrower, any Guarantor, any other
guarantor or any other person liable on any of the Guaranteed Obligations,
without affecting or impairing in any way the liability of such Guarantor under
this Guaranty except to the extent the Guaranteed Obligations have been fully
and indefeasibly paid in cash. To the fullest extent permitted by applicable
law, each Guarantor waives any defense arising out of any such election even
though that election may operate, pursuant to applicable law, to impair or
extinguish any right of reimbursement or subrogation or other right or remedy of
any Guarantor against the Borrower, any other guarantor or any other person
liable on any of the Guaranteed Obligations, as the case may be, or any
security.
15.5. Rights of Subrogation No Guarantor will assert any right, claim
or cause of action, including, without limitation, a claim of subrogation,
contribution or indemnification that it has against the Borrower, any Guarantor,
any person liable on the Guaranteed Obligations, or any collateral, until the
Loan Parties and the Guarantors have fully performed all their obligations to
the Agent, the LC Issuer and the Lender.
15.6. Reinstatement; Stay of Acceleration If at any time any payment of
any portion of the Guaranteed Obligations is rescinded or must otherwise be
restored or returned upon the insolvency, bankruptcy, or reorganization of the
Borrower or otherwise, each Guarantor's obligations under this Guaranty with
respect to that payment shall be reinstated at such time as though the payment
had not been made and whether or not the Agent, the LC Issuer and the Lenders
are in possession of this Guaranty. If acceleration of the time for payment of
any of the Guaranteed Obligations is stayed upon the insolvency, bankruptcy or
reorganization of the
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Borrower, all such amounts otherwise subject to acceleration under the terms of
any agreement relating to the Guaranteed Obligations shall nonetheless be
payable by the Guarantors forthwith on demand by the Lender.
15.7. Information Each Guarantor assumes all responsibility for being
and keeping itself informed of the Borrower's financial condition and assets,
and of all other circumstances bearing upon the risk of nonpayment of the
Guaranteed Obligations and the nature, scope and extent of the risks that each
Guarantor assumes and incurs under this Guaranty, and agrees that neither the
Agent, the LC Issuer nor any Lender shall have any duty to advise any Guarantor
of information known to it regarding those circumstances or risks.
15.8. [Intentionally Deleted.]
15.9. Taxes All payments of the Guaranteed Obligations will be made by
each Guarantor free and clear of and without deduction for or on account of any
and all present or future taxes, levies, imposts, duties, charges, deductions or
withholdings of whatever nature imposed by any governmental authority with
respect to such payments, and any and all liabilities with respect to the
foregoing, but excluding franchise taxes and taxes imposed on overall net income
of the Lender by the U.S. or the jurisdiction in which the Lender's applicable
Lending Installation is located (collectively, "TAXES"). If any Guarantor is
required by law to deduct any Taxes from or in respect of any sum payable to the
Lenders under this Guaranty, (a) the sum payable must be increased as necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this provision) the Lenders receive an amount
equal to the sum it would have received had no such deductions been made, (b)
the Guarantors must then make such deductions, and must pay the full amount
deducted to the relevant authority in accordance with applicable law, (c) the
Guarantors must furnish to the Lender within forty-five days after their due
date certified copies of all official receipts evidencing payment thereof, and
(d) if any such Lender receives or is entitled to receive a credit against,
remission for, or repayment of any tax paid or payable by it in respect of or
calculated with reference to the taxes giving rise to such payment, such Lender
shall, within a reasonable time after it receives such credit, remission or
repayment, reimburse the Borrowers the amount of any such credit, remission or
repayment.
15.10. Contribution In the event any Guarantor (a "PAYING GUARANTOR")
shall make any payment or payments under this Guaranty or shall suffer any loss
as a result of any realization upon any collateral granted by it to secure its
obligations under this Guaranty, each other Guarantor (each a "NON-PAYING
GUARANTOR") shall contribute to such Paying Guarantor an amount equal to such
Non-Paying Guarantor's "Pro Rata Share" of such payment or payments made, or
losses suffered, by such Paying Guarantor. For purposes of this Article XV, each
Non-Paying Guarantor's "PRO RATA SHARE" with respect to any such payment or loss
by a Paying Guarantor shall be determined as of the date on which such payment
or loss was made by reference to the ratio of (i) such Non-Paying Guarantor's
Maximum Liability as of such date (without giving effect to any right to
receive, or obligation to make, any contribution hereunder) or, if such
Non-Paying Guarantor's Maximum Liability has not been determined, the aggregate
amount of all monies received by such Non-Paying Guarantor from the Borrower
after the date hereof (whether by loan, capital infusion or by other means) to
(ii) the aggregate Maximum Liability of all Guarantors hereunder (including such
Paying Guarantor) as of such date (without
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giving effect to any right to receive, or obligation to make, any contribution
hereunder), or to the extent that a Maximum Liability has not been determined
for any Guarantor, the aggregate amount of all monies received by such
Guarantors from the Borrower after the date hereof (whether by loan, capital
infusion or by other means). Nothing in this provision shall affect any
Guarantor's several liability for the entire amount of the Guaranteed
Obligations (up to such Guarantor's Maximum Liability). Each of the Guarantors
covenants and agrees that its right to receive any contribution under this
Guaranty from a Non-Paying Guarantor shall be subordinate and junior in right of
payment to the payment in full in cash of the Guaranteed Obligations. This
provision is for the benefit of both the Agent, the LC Issuer, the Lenders and
the Guarantors and may be enforced by any one, or more, or all of them in
accordance with the terms hereof.
15.11. Lending Installations The Guaranteed Obligations may be booked
at any Lending Installation. All terms of this Guaranty apply to and may be
enforced by or on behalf of any Lending Installation.
15.12 Liability Cumulative. The liability of each Loan Party as a
Guarantor under this Article XV is in addition to and shall be cumulative with
all liabilities of each Loan Party to the Agent, the LC Issuer and the Lenders
under this Agreement and the other Loan Documents to which such Loan Party is a
party or in respect of any obligations of liabilities of the other Loan Parties,
without any limitation as to amount, unless the instrument or agreement
evidencing or creating such other liability specifically provides to the
contrary.
15.13 Fraudulent Conveyance Matters. Notwithstanding anything to the
contrary contained herein or in any Loan Document, in any proceeding involving
the bankruptcy, reorganization, arrangement, adjustment of debts, relief of
debtors, dissolution or insolvency or any similar proceeding with respect to the
Borrower or any Guarantor or their assets, it is the intention of the Loan
Parties and the Lenders that the amount of the Guarantors' Guaranteed
Obligations of the Borrower or any Guarantor shall be in, but not in excess of,
the maximum amount thereof (the "MAXIMUM LIABILITY") not subject to avoidance or
recovery by operation of applicable law governing bankruptcy, reorganization,
arrangement, adjustment of debts, relief of debtors, dissolution, insolvency,
fraudulent transfers or conveyances or other similar laws (including, without
limitation, 11 U.S.C. ss.547, ss.548, ss.550 and other "avoidance" provisions of
Title 11 of the United States Code) applicable in any such proceeding to such
Guarantor and this Agreement or the Loan Documents (collectively, "APPLICABLE
INSOLVENCY LAWS"). To that end, but only in the event and to the extent that a
Guarantor's individual obligations with respect to the Guaranteed Obligations of
the Borrower or any other Guarantor or any payment made pursuant to such
Guaranteed Obligations would, but for the operation of the foregoing proviso, be
subject to avoidance or recovery in any such proceeding under Applicable
Insolvency Laws, the amount of such Guarantor's individual obligations with
respect to such Guaranteed Obligations shall be limited to the largest amount
which, after giving effect thereto, would not, under Applicable Insolvency Laws,
render such Guarantor's individual obligations with respect to such Guaranteed
Obligations unenforceable or avoidable or otherwise subject to recovery under
Applicable Insolvency Laws, which (a) the fair consideration actually (directly
or indirectly) received by such Guarantor under the terms and as a result of
this Agreement and the value of the benefits described herein, including (and to
the extent not inconsistent with applicable federal and state laws affecting the
enforceability of guaranties) distributions,
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commitments, and advances made to or for the benefit of said Guarantor with the
proceeds of any credit extended hereunder, or (b) the excess of (i) the amount
of the fair value of the assets of such Guarantor as of the date of this
Agreement as determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors as in effect on the date
hereof, over (ii) the amount of all liabilities of such Guarantor as of the date
of this Agreement, also as determined on the basis of applicable federal and
state laws governing the insolvency of debtors as in effect on the date hereof.
To the extent any payment actually made by a Guarantor pursuant to the
Guaranteed Obligations of the Borrower or any other Guarantor exceeds the
limitation of the foregoing proviso and is otherwise subject to avoidance and
recovery in any such proceeding under Applicable Insolvency Laws, the amount
subject to avoidance shall in any event be limited to the amount by which such
actual payments exceed such limitation and the Guaranteed Obligations as limited
by the foregoing proviso shall in all events remain in full force and effect and
be fully enforceable against such Guarantor. The foregoing proviso is intended
solely to preserve the rights of the Lenders hereunder against the Guarantors in
such proceeding to the maximum extent permitted by Applicable Insolvency Laws
and neither the Guarantors nor any other Person shall have any right or claim
under such proviso that would not otherwise be available under Applicable
Insolvency Laws in such proceeding.
ARTICLE XVI
CASH MANAGEMENT
16.1. Lockbox and Cash Management Account. Each Loan Party has obtained
and shall continue to maintain during the term of this Agreement the post office
box at the Post Office bearing the address set forth on Schedule 16.1, or such
other address or deposit account as the Agent may notify the Domestic Borrower
from time to time (the "Locked Boxes"). The Canadian Loan Parties shall maintain
their Locked Boxes in Canada and the UK Loan Parties shall maintain their Locked
Boxes in the United Kingdom. Each Loan Party shall notify all of its customers
and Account Debtors to forward all remittances of every kind due to such Loan
Party ("Remittances") to its Locked Box (such notices to be in such form and
substance as the Agent may require from time to time). Promptly upon receipt
thereof, the Loan Parties shall deposit all other proceeds of Accounts or other
Collateral into the Locked Boxes (or into a Cash Management Account). The Agent,
Canadian Correspondent Lender, and UK Correspondent Lender, as the case may be,
shall have sole access to the Locked Boxes at all times, and each Loan Party
shall take all action necessary to grant such Lenders such sole access. At no
time shall any Loan Party remove any item from the Locked Boxes without the
prior written consent of the Agent, Canadian Correspondent Lender, or UK
Correspondent Lender, as the case may be, and each Loan Party shall notify each
customer or Account Debtor not to pay any Remittance to any other place or
address without the prior written consent of the Agent, Canadian Correspondent
Lender, or UK Correspondent Lender, as the case may be. If a Loan Party should
neglect or refuse to notify any customer or Account Debtor to pay any Remittance
to its Locked Box after notice from the Agent, Canadian Correspondent Lender, or
UK Correspondent Lender, as the case may be, such Lender shall be entitled to
make such notification. Each Loan Party hereby grants to each of such Lenders an
irrevocable power of attorney, coupled with an interest, to take in such Loan
Party's name all action necessary (a) to grant the such Lenders sole access
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to its Locked Box, (b) during the continuance of a Default, to contact Account
Debtors to pay any Remittance to such Locked Box in the event that any such
Account Debtor is not paying any such Remittance to such Locked Box, (c) during
the continuance of a Default, to contact Account Debtors for any reason and (d)
to endorse each Remittance delivered to its Locked Box for deposit to such
Borrower's Cash Management Account. Each Borrower shall establish and, unless
otherwise directed by the Agent, Canadian Correspondent Lender, or UK
Correspondent Lender, as the case may be, maintain a cash management account
with such Lender (each, a "Cash Management Account"). Each Borrower shall enter
into an agreement with the Agent, the Canadian Correspondent Lender, or the UK
Correspondent Lender, as the case may be, relating to such Loan Party's Cash
Management Account, in form and substance reasonably satisfactory to the such
Lender.
16.2 Application of Payments. So long as no Default shall be
continuing, deposits to the Cash Management Accounts shall be credited to the
applicable Borrower as follows: (i) first, to the payment of any fees, expenses
or other Obligations (other than Obligations to pay principal and interest
relating to the Loans) then due and payable by such Borrower to the Applicable
Agent or the Lenders hereunder or under any of the other Loan Documents; (ii)
second, to the ratable payment of interest due on the Loans made to such
Borrower; (iii) third, to late charges until paid in full; (iv) fourth, to the
extent requested by such Borrower, to pay the amounts disbursed from the master
concentration accounts of such Borrower and Integrated Logistics Solutions LLC,
(v) fifth, to the outstanding principal balance of such Borrower's Loans and
(vi) sixth, to the extent of any excess not so credited, such deposits shall be
made available to the applicable Borrower by deposit in such Borrower's
operating Account with the Agent, the Canadian Correspondent Lender, or the UK
Correspondent Lender, as applicable. Notwithstanding the foregoing sentence, so
long as the Availability is greater than or equal to $20,000,000, deposits to
the Cash Management Account shall be credited first to applicable Borrower as
follows: (i) first, to the payment of any fees, expenses or other Obligations
(other than Obligations to pay principal and interest relating to the Loans)
then due and payable by such Borrower to the Applicable Agent or the Lenders
hereunder or under any of the other loan Documents; (ii) second, to the ratable
payment of interest due on the Loans made to such Borrower; (iii) third, to late
charges until paid in full, (iv) fourth, to the extent requested by the Domestic
Borrower, to pay the amounts disbursed from the master concentration accounts of
such Borrower and Integrated Logistics Solutions LLC, and (v) fifth, to the
extent of any excess not so credited, such deposits shall be made available to
the applicable Borrower by deposit in such Borrower's operating Account with the
Agent, the Canadian Correspondent Lender, or the UK Correspondent Lender, as
applicable. Upon the occurrence and during the continuance of a Default which
has not been waived in writing, all such deposits to the Cash Management Account
shall be credited to applicable Borrower: first, to pay any fees, indemnities,
or expense reimbursements including amounts then due to the Agent, the Canadian
Correspondent Lender, or the UK Correspondent Lender, as applicable, from such
Borrower (other than in connection with Banking Services or Rate Management
Obligations), second, to pay any fees, expense reimbursements, or Taxes then due
to the Lenders from such Borrower (other than in connection with Banking
Services or Rate Management Obligations), third, to pay interest due in respect
of the Loans, including Non-Ratable Loans, Overadvances and Protective Advances,
fourth, to pay or prepay principal of the Non-Ratable Loans, Overadvances and
Protective Advances, fifth, to pay or prepay principal of the Revolving Loans
(other than Non-Ratable Loans, Overadvances
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and Protective Advances) and unpaid reimbursement obligations in respect of
Facility LCs, sixth, to pay an amount to the Agent, the Canadian Correspondent
Lender, or the UK Correspondent Lender, as the case may be, equal to one hundred
five percent (105%) of the aggregate undrawn face amount of all outstanding
Facility LCs and the aggregate amount of any unpaid reimbursement obligations in
respect of Facility LCs, to be held as cash collateral for such Obligations,
seventh, to payment of any amounts owing with respect to Banking Services and
Rate Management Obligations, eighth, to the payment of any other Obligation due
to the Applicable Agent or any Lender by such Borrower, and ninth, to the extent
of any excess not so credited, such excess shall be made available to the
applicable Borrower by deposit in such Borrower's operating Account with the
Agent. For the purpose of calculating the applicable Borrower's interest and
determining the aggregate Loans outstanding, all collections and remittances
shall be credited to such Borrower: (i) in the case of collections and
remittances received by wire transfer prior to 11:00 a.m. (local time), on the
same Business Day as received, (ii) in the case of collections and remittances
received by wire transfer after 11:00 a.m. (local time), on the next succeeding
Business Day after such receipt and (iii) in the case of all other collections
and remittances received, conditional on final payment, one (1) Business Day
after the Agent receives notice of the deposit of the proceeds of such
collections and remittances into the Cash Management Account prior to noon
(local time), provided however in the case of clause (iii) above, that in the
event that the Applicable Agent receives notice of such deposit later than noon
(local time) on any Business Day, such collection or remittance deposited shall
be credited to such Borrower (conditional upon final collection) two (2)
Business Days after such deposit. From time to time, upon advance written notice
to the Domestic Borrower, the Agent, the Canadian Correspondent Lender and the
UK Correspondent Lender may adopt such additional or modified regulations and
procedures as it may deem reasonable and appropriate with respect to the
operation of the Cash Management Account and the services to be provided by such
agent under this Agreement. Notwithstanding any provision of the foregoing
Section 16.2, in the event that the application of any proceeds to the principal
balance of the Revolving Loans shall reduce such principal balance below the
then Certified Acquisition Amount, then the Agent shall apply such deposit
proceeds to a cash collateral account maintained with the Agent and as to which
the Agent shall have sole access. Notwithstanding any provision of any Loan
Document to the contrary, unless Availability is less than $20,000,000 or a
Default has occurred and is continuing, promptly upon the Domestic Borrower's
request, the UK Correspondent Lender will transfer all funds from the UK
lockboxes to the UK Borrowers' accounts at Midland Bank on a bi-weekly basis.
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ARTICLE XVII
RELATIONSHIP OF THE DOMESTIC BORROWER AND THE OTHER LOAN PARTIES
17.1. Notices. Each Loan Party shall immediately notify the Domestic
Borrower of the occurrence of any Default or Unmatured Default hereunder
referring to this Agreement describing such Default or Unmatured Default and
stating that such notice is a "notice of default." Any notice provided to the
Domestic Borrower hereunder shall constitute notice to each Loan Party on the
date received by the Domestic Borrower.
17.2. Execution of Loan Documents; Borrowing Base Certificate. The Loan
Parties hereby empower and authorize the Domestic Borrower, on behalf of the
Loan Parties, to execute and deliver to the Agent and the Lenders the Loan
Documents and all related agreements, certificates, documents, or instruments as
shall be necessary or appropriate to effect the purposes of the Loan Documents,
including without limitation, the Aggregate Borrowing Base Certificates and the
Compliance Certificates. Each Loan Party agrees that any action taken by the
Domestic Borrower in accordance with the terms of this Agreement or the other
Loan Documents, and the exercise by the Domestic Borrower of its powers set
forth therein or herein, together with such other powers that are reasonably
incidental thereto, shall be binding upon all of the Loan Parties.
17.3. Reporting. Each Borrowing Loan Party hereby agrees that it shall
furnish promptly after each Fiscal Month to the Domestic Borrower, and in no
event later than 20 days after the end of each Fiscal Month, a copy of its
Borrowing Base Certificate and the calculation of its Consolidated Fixed Charge
Coverage Ratio (as defined in the Indenture), on which the Domestic Borrower
shall rely to prepare the Aggregate Borrowing Base Certificates and Compliance
Certificates and the Indenture Certificate required pursuant to the provisions
of this Agreement. The Domestic Borrower shall retain all such Borrowing Base
Certificates until the Facility Termination Date and shall deliver same to the
Agent upon the Agent's request therefor.
17.4. Disbursement of Loan Proceeds. Upon the receipt by a Borrower of
the proceeds of any Advance, such Borrower shall immediately disburse such
proceeds to itself and to the other Borrowing Loan Parties via intercompany
loans, in each case based upon each such Borrowing Loan Party's Borrowing Base
Certificate. After such initial disbursement, the Loan Parties may make
additional intercompany loans to the extent permitted pursuant to the terms
hereof.
17.5 Domestic Borrower as Representative. For purposes of this
Agreement, each Loan Party hereby: (i) authorizes the Domestic Borrower to make
such requests, give such notices or furnish such certificates to the Agent, the
Canadian Correspondent Lender, the UK Correspondent Lender or the LC Issuer as
may be required or permitted by this Agreement for the benefit of such Loan
Party and to give any consents on behalf of such Loan Party required by Section
12.2(b) of this Agreement in connection with assignments by the Lenders pursuant
thereto and (ii) authorizes the Agent, the Canadian Correspondent Lender, the UK
Correspondent Lender and the LC Issuer to treat such requests, notices,
certificates or consents made, given or furnished by the Domestic Borrower as
having been made, given or furnished by such Loan
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Party. Each Loan Party agrees to be bound by all such requests, notices,
certificates and consents and other such actions by the Domestic Borrower and
agrees that all notices to and demands upon the Domestic Borrower in respect of
any Loan Party shall constitute effective notice to and demand upon such Loan
Party for all purposes hereunder. The Agent, the Canadian Correspondent Lender,
the UK Correspondent Lender and the LC Issuer shall be entitled to rely upon all
such requests, notices, certificates and consents made, given or furnished by
the Domestic Borrower pursuant to this Agreement or any other Loan Documents as
being made or furnished on behalf of, and with the effect of irrevocably
binding, any Loan Party.
ARTICLE XVIII
USA PATRIOT ACT NOTIFICATION
18.1 USA Patriot Act Notification. The following notification is
provided to the Loan Parties pursuant to Section 326 of the USA Patriot Act of
2001, 31 U.S.C. Section 5318:
IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW
ACCOUNT. To help the government fight the funding of terrorism and
money laundering activities, Federal law requires all financial
institutions to obtain, verify, and record information that identifies
each person or entity that opens an account, including any deposit
account, treasury management account, loan, other extension of credit,
or other financial services product. What this means for each Loan
Party: When a Loan Party opens an account, if such Loan Party is an
individual, the Agent will ask for such Loan Party's name, residential
address, tax identification number, date of birth, and other
information that will allow the Agent and the Lender to identify such
Loan Party, and, if a Loan Party is not an individual, the Agent will
ask for such Loan Party's name, tax identification number, business
address, and other information that will allow the Agent and the
Lenders to identify such Loan Party. The Agent may also ask, if such
Loan Party is an individual, to see such Loan Party's driver's license
or other identifying documents, and, if such Loan Party is not an
individual, to see such Loan Party's legal organizational documents or
other identifying documents.
ARTICLE XIX
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL;
CONFESSION OF JUDGMENT
19.1 CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (WITHOUT REGARD TO THE CONFLICT OF LAWS
PROVISIONS) OF THE STATE OF OHIO, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE
TO NATIONAL BANKS.
129
19.2 CONSENT TO JURISDICTION. EACH LOAN PARTY HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY U.S. FEDERAL OR OHIO STATE
COURT SITTING IN CLEVELAND, OHIO IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENTS AND EACH LOAN PARTY HEREBY IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL
LIMIT THE RIGHT OF THE AGENT, THE LC ISSUER OR ANY LENDER TO BRING PROCEEDINGS
AGAINST LOAN PARTY IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL
PROCEEDING BY ANY LOAN PARTY AGAINST THE AGENT, THE LC ISSUER OR ANY LENDER
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED
TO, OR CONNECTION WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN
CLEVELAND, OHIO.
19.3 WAIVER OF JURY TRIAL. EACH LOAN PARTY, THE AGENT, THE LC ISSUER
AND EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
19.4 CONFESSION OF JUDGMENT. THE LOAN PARTIES HEREBY AUTHORIZE ANY
ATTORNEY-AT-LAW TO APPEAR IN ANY COURT OF RECORD IN ANY COUNTY IN THE STATE OF
OHIO OR ELSEWHERE WHERE A LOAN PARTY HAS A PLACE OF BUSINESS, SIGNED A REVOLVING
NOTE OR CAN BE FOUND, AFTER THE AGENT OR REQUIRED LENDERS DECLARE A DEFAULT AND
ACCELERATE THE BALANCES DUE UNDER THIS AGREEMENT, TO WAIVE THE ISSUANCE OF
SERVICE OF PROCESS AND CONFESS JUDGMENT AGAINST THE LOAN PARTIES IN FAVOR OF THE
AGENT AND LENDERS FOR THE AMOUNTS THEN APPEARING DUE, TOGETHER WITH THE COSTS OF
SUIT, AND THEREUPON TO RELEASE ALL ERRORS AND WAIVE ALL RIGHT OF APPEAL AND STAY
OF EXECUTION. THE LOAN PARTIES AGREE AND CONSENT THAT THE ATTORNEY CONFESSING
JUDGMENT ON BEHALF OF THE LOAN PARTIES HEREUNDER MAY ALSO BE COUNSEL TO THE
AGENT, LENDERS OR ANY OF THEIR AFFILIATES, WAIVES ANY CONFLICT OF INTEREST WHICH
MIGHT OTHERWISE ARISE, AND CONSENTS TO THE AGENT OR LENDERS PAYING SUCH
CONFESSING ATTORNEY A LEGAL FEE OR ALLOWING SUCH ATTORNEY'S FEES TO BE PAID FROM
ANY PROCEEDS OF COLLECTION OF AGREEMENT OR COLLATERAL SECURITY THEREFOR.
[Signature Pages Follow]
130
IN WITNESS WHEREOF, the Loan Parties, the Lenders, the LC Issuer and
the Agent have executed this Agreement as of the date first above written.
WARNING -- BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH AGREEMENT, OR
ANY OTHER CAUSE.
DOMESTIC BORROWER:
PARK-OHIO INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxx
---------------------------------------
Title: Secretary
--------------------------------------
NOTICE ADDRESS FOR ALL LOAN PARTIES:
c/o Park-Ohio Industries, Inc.
Address: 00000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Amended and Restated Credit Agreement - Signature Pages
WARNING -- BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH AGREEMENT, OR
ANY OTHER CAUSE.
CANADIAN BORROWER:
RB&W CORPORATION OF CANADA
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------------------
Name: Xxxxx X. Xxxxxxxx
-----------------------------------------------
Title: President
----------------------------------------------
UK BORROWERS:
AJAX TOCCO INTERNATIONAL
LIMITED
By: /s/ Xxxxx Xxxxx
-------------------------------------------------
Name: Xxxxx Xxxxx
-----------------------------------------------
Title: Director
----------------------------------------------
By: /s/ Xxxxxxxxx Xxxxx
----------------------------------------
Name: Xxxxxxxxx Xxxxx
-----------------------------------------------
Title: Secretary
----------------------------------------------
INTEGRATED LOGISTICS SOLUTIONS LIMITED
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxxx
-----------------------------------------------
Title: Secretary
----------------------------------------------
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
-----------------------------------------------
Title: Director
----------------------------------------------
Amended and Restated Credit Agreement - Signature Pages
LENDERS:
BANK ONE, NA
Individually, as the Agent, a Lender and LC Issuer
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
Address: Mail Code OH2-5167
Akron Centre
00 Xxxxx Xxxx Xxxxxx, 0xx Xxxxx
Xxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
KEYBANK NATIONAL ASSOCIATION
as Syndication Agent
By: /s/ Xxxxxxx X. XxXxxxxxxx
----------------------------------------
Name: Xxxxxxx X. XxXxxxxxxx
Title: Senior Vice President
Address: 000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Amended and Restated Credit Agreement - Signature Pages
CITIZENS BANK OF PENNSYLVANIA
as a Lender
By: /s/ Xxx Xxxx
----------------------------------------
Name: Xxx Xxxx
Title: Vice President
Address: Citizens Building Credit
Xxx XXX Xxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
U.S. BANK NATIONAL ASSOCIATION
as a Lender
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
Address: U.S. Bank National Association
000 Xxxxxx Xxxxxx, 14th Floor
Mailcode: CN-OH-W14S
Xxxxxxxxxx, Xxx0 00000
Attention: Xxxxxxx X. XxXxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
PNC BUSINESS CREDIT
as a Lender
By:
--------------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Address: PNC Bank
000 Xxxxx Xxxxxx, 0xx Xxxxx
0 XXX Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Amended and Restated Credit Agreement - Signature Pages
XXXXXX TRUST & SAVINGS BANK
as a Lender
By: /s/ Xxxxxx Xxxxx
----------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
Address: Xxxxxx Trust & Savings Bank
000 Xxxx Xxxxxx, Xxxxx 00 Xxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
For notices regarding the UK Commitment:
Address: Bank of Montreal
Bucklersbury House
00 Xxxxxxxx - 0xx Xxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
Attention: Xxxxxxx Xxxxx
Telephone: 000 00 (000) 000-0000
Facsimile: 000 00 (000) 000-0000, or
000 00 (000) 000-0000
For notices regarding the Canadian Commitment:
Address: Xxxxxx Trust & Savings Bank
000 Xxxx Xxxxxx, Xxxxx 00 Xxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Amended and Restated Credit Agreement - Signature Pages
FIFTH THIRD BANK
as a Lender
By: /s/ Xxx X. Xxxxxxx
----------------------------------------
Name: Xxx X. Xxxxxxx
Title: Vice President
Address: Fifth Third Bank
0000 X. Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
THE PROVIDENT BANK
as a Lender
By: /s/ Xxxx Xxxxxxxx
-------------------------------------------------
Name: Xxxx Xxxxxxxx
Title: Vice President
Address: The Provident Bank
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Amended and Restated Credit Agreement - Signature Pages
CANADIAN LENDER:
Xxxx Xxx, XX, Xxxxxx Branch,
Individually, as the Canadian Correspondent
Lender, a Lender, and LC Issuer
By: /s/ Xxxxxxx X. Xxx
----------------------------------------
Name: Xxxxxxx X. Xxx
Title: Director
Address: BCE Place
000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxxxx Xxxxxxx
Telephone (000) 000-0000
Facsimile: (000) 000-0000
UK LENDER:
Bank One, NA, London Branch,
Individually, as the UK Correspondent Lender, a
UK Lender, and LC Issuer
By: /s/ Xxxx Xxxxxxxx
-------------------------------------------------
Name: Xxxx Xxxxxxxx
Title: Associate Director
Address: Bank One, NA, London Branch
0 Xxxxxx Xxxxxx
Xxxxxx XX0 0XX
Xxxxxxx
Attention: Xxxxxx Xxxxx
Telephone: 00 00 0000 0000
Facsimile: 44 20 7903 4148
44 20 7903 4607
Amended and Restated Credit Agreement - Signature Pages
WARNING -- BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH AGREEMENT, OR
ANY OTHER CAUSE.
DOMESTIC SUBSIDIARIES:
THE AJAX MANUFACTURING COMPANY PARK AVENUE TRAVEL LTD.
AJAX TOCCO MAGNETHERMIC CORPORATION PARK-OHIO FORGED & MACHINED PRODUCTS LLC
ATBD, INC. PARK-OHIO PRODUCTS, INC.
BLUE FALCON FORGE, INC. PHARMACEUTICAL LOGISTICS INC.
BLUE FALCON TRAVEL, INC. PHARMACY WHOLESALE LOGISTICS, INC.
THE XXXXXX XXXX COMPANY PMC INDUSTRIES CORP.
CONTROL TRANSFORMER, INC. PMC-COLINET, INC.
DONEGAL BAY LTD. P-O REALTY LLC
FECO, INC. POVI L.L.C.
FORGING PARTS & MACHINING COMPANY PRECISION MACHINING
GATEWAY INDUSTRIAL SUPPLY LLC RB&W LTD.
GENERAL ALUMINUM MFG. COMPANY LLC RB&W MANUFACTURING LLC
ILS TECHNOLOGY LLC RED BIRD, INC.
INTEGRATED LOGISTICS HOLDING COMPANY SOUTHWEST STEEL PROCESSING LLC
INTEGRATED LOGISTICS SOLUTIONS LLC SUMMERSPACE, INC.
LALLEGRO, INC. TOCCO, INC.
XXXXX & PARK SCREW & BOLT COMPANY TRICKERATION, INC.
WB&R ACQUISITION COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
Amended and Restated Credit Agreement - Signature Pages
WARNING -- BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH AGREEMENT, OR
ANY OTHER CAUSE.
CANADIAN SUBSIDIARIES:
AJAX TOCCO MAGNETHERMIC CANADA LIMITED
By: /s/ Xxxxx Xxxx
-------------------------------------------------
Name: Xxxxx Xxxx
------------------------------------------------
Title: Secretary
----------------------------------------------
INTEGRATED LOGISTICS COMPANY OF CANADA
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxxx
---------------------------------------
Title: Secretary
-----------------------------------------------
RB&W LOGISTICS CANADA, INC. / LOGISTIQUE RB&W
CANADA, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxxx
---------------------------------------
Title: Secretary
-----------------------------------------------
Amended and Restated Credit Agreement - Signature Pages
COMMITMENT SCHEDULE
--------------------------------- -------------------- ------------------- ---------------------- --------------------
LENDER DOMESTIC COMMITMENT COMMITMENT UK SUB-COMMITMENT CANADIAN
PERCENTAGE OF UK LENDERS* SUB-COMMITMENT OF
CANADIAN LENDERS*
--------------------------------- -------------------- ------------------- ---------------------- --------------------
Bank One, NA $31,250,000 18.93939% 10,000,000 12,000,000
--------------------------------- -------------------- ------------------- ---------------------- --------------------
KeyBank National Association $31,250,000 18.93939%
--------------------------------- -------------------- ------------------- ---------------------- --------------------
U.S. Bank National Association $25,000,000 15.15152%
--------------------------------- -------------------- ------------------- ---------------------- --------------------
Citizens Bank of Pennsylvania $20,000,000 12.12121%
--------------------------------- -------------------- ------------------- ---------------------- --------------------
PNC Business Credit $20,000,000 12.12121%
--------------------------------- -------------------- ------------------- ---------------------- --------------------
Xxxxxx Trust & Savings Bank $15,000,000 9.09090%
--------------------------------- -------------------- ------------------- ---------------------- --------------------
Fifth Third Bank $15,000,000 9.09090%
--------------------------------- -------------------- ------------------- ---------------------- --------------------
The Provident Bank $ 7,500,000 4.54545%
--------------------------------- -------------------- ------------------- ---------------------- --------------------
AGGREGATE COMMITMENT $165,000,000 100% $10,000,000 $12,000,000
--------------------------------- -------------------- ------------------- ---------------------- --------------------
*The UK Sub-Commitment and Canadian Sub-Commitment are Sub-Commitments of the
Domestic Commitment and not separate Commitments.
Commitment Schedule
PRICING SCHEDULE
--------------------------------- ----------------------------------------------------------------------- --------------------------
APPLICABLE MARGIN APPLICABLE FEE RATE
--------------------------------- ----------------------------------------------------------------------- --------------------------
LEVEL DEBT SERVICE EURODOLLAR MARGIN ABR EURODOLLAR UNUSED COMMITMENT FEE
COVERAGE RATIO RELATING TO MARGIN MARGIN APPLICABLE TO
(TRAILING 4 DOMESTIC APPLICABLE TO FLOATING FIXED ASSET AND
QUARTERS) REVOLVING RATE LOANS CAPEX ADVANCES
LOANS OTHER
THAN FOR
FIXED ASSET
AND CAPEX
ADVANCES
--------------- ----------------- ----------------------- ------------------------ ---------------------- --------------------------
4 < 1.20 to 1.00 2.50% 0% 3.00% 0.25%
--------------- ----------------- ----------------------- ------------------------ ---------------------- --------------------------
3 => 1.20 to 1.00 2.25% 0% 2.75% 0.25%
but
< 1.40 to 1.00
--------------- ----------------- ----------------------- ------------------------ ---------------------- --------------------------
2 => 1.40 to 1.00 2.00% 0% 2.50% 0.25%
but
< 1.60 to 1.00
--------------- ----------------- ----------------------- ------------------------ ---------------------- --------------------------
1 => 1.60 to 1.00 1.75% 0% 2.25% 0.25%
--------------- ----------------- ----------------------- ------------------------ ---------------------- --------------------------
"Financials" means the annual or quarterly financial statements of the
Domestic Borrower delivered pursuant to Section 6.1 of the Credit Agreement.
The applicable margins and fees shall initially be set at Level 3 and
thereafter shall be determined in accordance with the foregoing table based on
the Domestic Borrower's most recent Financials commencing with the Financials
dated December 31, 2003. Adjustments, if any, to the applicable margins fees
shall be effective five Business Days after the Agent has received the
applicable Financials. If the Domestic Borrower fails to deliver the Financials
to the Agent at the time required pursuant to the Credit Agreement, then the
applicable margins and fees shall be the highest applicable margins and fees set
forth in the foregoing table until five days after such Financials are so
delivered.
Pricing Schedule
EXHIBIT A
BORROWING NOTICE
Date: ______________________, 20__
To: Bank One, NA, as the Agent for the Lenders
This Borrowing Notice is furnished pursuant to Section 2.1.1(d)(i) of
that certain Amended and Restated Credit Agreement dated as of November 5, 2003
(as amended, modified, renewed or extended from time to time, the "Agreement")
among the Domestic Borrower, the other Loan Parties, the Lenders party thereto,
and Bank One, NA, as the Agent, the Canadian Correspondent Lender, the UK
Correspondent Lender and as LC Issuer. Unless otherwise defined herein,
capitalized terms used in this Borrowing Notice have the meanings ascribed
thereto in the Agreement.
The Domestic Borrower hereby notifies the Agent of its request of the
following Advance:
(1) Borrower: ___________________________________
(2) Borrowing Date (must be a Business Day): ___________________
(3) Aggregate Amount of the Advance: $__________________________
(4) Type of Advance:
Canadian Floating Rate Advance ___________
Canadian Fixed Rate Advance ___________
UK Fixed Rate Advance ___________
Domestic Floating Rate Advance ___________
Eurodollar Advance ___________
(5) Duration of Interest Period:
One Month __________
Two Months __________
Three Months __________
Six Months __________
The Domestic Borrower hereby represents, on behalf of itself and the
other Loan Parties, that, as of the date of this Borrowing Notice:
A-1
(a) There exists no Default or Unmatured Default and no Default or
Unmatured Default shall result from this Credit Extension.
(b) The representations and warranties contained in Article V of
the Agreement are true and correct, except to the extent any
such representation or warranty is stated to relate solely to
an earlier date.
PARK-OHIO INDUSTRIES, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
A-2
EXHIBIT B
CONVERSION/CONTINUATION NOTICE
Date: ______________________, 20__
To: Bank One, NA, as the Agent for the Lenders
This Conversion/Continuation Notice is furnished pursuant to Section
2.7 of that certain Amended and Restated Credit Agreement dated as of November
5, 2003 (as amended, modified, renewed or extended from time to time, the
"Agreement") among the Domestic Borrower, the other Loan Parties, the Lenders
party thereto and Bank One, NA, as the Agent, Canadian Correspondent Lender, the
UK Correspondent Lender and as LC Issuer. Unless otherwise defined herein,
capitalized terms used in this Borrowing Notice have the meanings ascribed
thereto in the Agreement.
The Domestic Borrower hereby notifies the Agent of its request to
[SELECT ONE]:
(1) convert the [Canadian/Domestic] Floating Rate Advance in the
amount of $_________ into a [Canadian/Eurodollar] Fixed Rate
Advance with an Interest Period duration of:
________ month(s)
(2) continue the [Canadian/Eurodollar/UK] Fixed Rate Advance
described below:
(a) Date of Continuation (must be a Business Day): ___________
(b) Aggregate Amount of Advance: $___________________________
(c) The duration of the Interest Period applicable thereto:
________ month(s)
(3) This relates to a Capex Advance: Yes / No
The Domestic Borrower hereby represents, on behalf of itself and the
Loan Parties, that, as of the date of this Conversion/Continuation Notice:
(a) There exists no Default or Unmatured Default and no Default or
Unmatured Default shall result from this Credit Extension.
B-1
(b) The representations and warranties contained in Article V of
the Agreement are true and correct, except to the extent any
such representation or warranty is stated to relate solely to
an earlier date.
PARK-OHIO INDUSTRIES, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
B-2
EXHIBIT C
DOMESTIC REVOLVING NOTE
November 5, 2003
Park-Ohio Industries, Inc. (the "BORROWER"), promises to pay to the
order of ____________________________________ (the "LENDER") the aggregate
unpaid principal amount of all Revolving Loans made by the Lender to the
Borrower pursuant to Article II of the Agreement (as hereinafter defined), in
immediately available funds at the main office of Bank One, NA, as the Agent,
together with interest on the unpaid principal amount hereof at the rates and on
the dates set forth in the Agreement. The Borrower shall pay the principal of
and accrued and unpaid interest on the Revolving Loans and Reimbursement
Obligations in full on the Facility Termination Date
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Loan and the date and amount of each principal
payment hereunder.
This Note is one of the Revolving Notes issued pursuant to, and is
entitled to the benefits of, the Amended and Restated Credit Agreement dated as
of November 5, 2003 (which, as it may be amended or modified and in effect from
time to time, is herein called the "AGREEMENT"), among the Borrower, the other
Loan Parties, the lenders party thereto, including the Lender, the LC Issuer and
Bank One, NA, as the Agent, to which Agreement reference is hereby made for a
statement of the terms and conditions governing this Note, including the terms
and conditions under which this Note may be prepaid or its maturity date
accelerated. This Note is secured pursuant to the Collateral Documents and
guaranteed pursuant to the Guaranty, as more specifically described in the
Agreement, and reference is made thereto for a statement of the terms and
provisions thereof. Capitalized terms used herein and not otherwise defined
herein are used with the meanings attributed to them in the Agreement.
The Borrower and the Lender hereby designate all Indebtedness and other
obligations now or hereafter incurred or otherwise outstanding under this Note
to be "Designated Senior Indebtedness" as set forth and defined in the
Indenture.
THE BORROWER HEREBY AUTHORIZES ANY ATTORNEY-AT-LAW TO APPEAR IN ANY COURT OF
RECORD IN ANY COUNTY IN THE STATE OF OHIO OR ELSEWHERE WHERE THE BORROWER HAS A
PLACE OF BUSINESS, SIGNED THIS NOTE OR CAN BE FOUND, AFTER THE AGENT OR REQUIRED
LENDERS DECLARE A DEFAULT AND ACCELERATE THE BALANCES DUE UNDER THIS AGREEMENT,
TO WAIVE THE ISSUANCE OF SERVICE OF PROCESS AND CONFESS JUDGMENT AGAINST THE
BORROWER IN FAVOR OF THE AGENT AND LENDERS FOR THE AMOUNTS THEN APPEARING DUE,
TOGETHER WITH THE COSTS OF SUIT, AND THEREUPON TO RELEASE ALL ERRORS AND WAIVE
ALL RIGHT OF APPEAL AND STAY OF EXECUTION. THE BORROWER AGREES AND CONSENTS THAT
THE ATTORNEY CONFESSING JUDGMENT ON BEHALF
C-1
OF THE BORROWER HEREUNDER MAY ALSO BE COUNSEL TO THE AGENT, LENDERS OR ANY OF
THEIR AFFILIATES, WAIVES ANY CONFLICT OF INTEREST WHICH MIGHT OTHERWISE ARISE,
AND CONSENTS TO THE AGENT OR LENDERS PAYING SUCH CONFESSING ATTORNEY A LEGAL FEE
OR ALLOWING SUCH ATTORNEY'S FEES TO BE PAID FROM ANY PROCEEDS OF COLLECTION OF
AGREEMENT OR COLLATERAL SECURITY THEREFOR.
WARNING -- BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND
COURT TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGEMENT MAY BE TAKEN
AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN
BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE
AGAINST THE CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE
ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY OTHER CAUSE.
PARK-OHIO INDUSTRIES, INC.
By:
---------------------------------------
Print Name:
-------------------------------
Title:
------------------------------------
C-2
EXHIBIT D
RESERVED
EXHIBIT E
COMPLIANCE CERTIFICATE
To: The Lenders parties to the
Credit Agreement Described Below
This Compliance Certificate is furnished pursuant to that certain
Amended and Restated Credit Agreement dated as of November 5, 2003 (as amended,
modified, renewed or extended from time to time, the "AGREEMENT") among
Park-Ohio Industries, Inc. (the "DOMESTIC BORROWER"), the other Loan Parties,
the Lenders party thereto and Bank One, NA, as the Agent, the Canadian
Correspondent Lender, the UK Correspondent Lender and as LC Issuer. Unless
otherwise defined herein, capitalized terms used in this Compliance Certificate
have the meanings ascribed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected of the Borrower;
---------------------
2. I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a review of the financial transactions
and conditions of the Borrower and its Subsidiaries during the accounting period
covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which constitutes
a Default or Unmatured Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate, except as set forth below;
4. I hereby certify that no Loan Party has changed (i) its name, (ii)
its principal place of business, (iii) the type of entity it is or (iv) its
state of incorporation or organization without having given the Agent the notice
required by Section 6.22;
5. Schedule I attached hereto sets forth financial data and
computations evidencing the Domestic Borrower's compliance with the covenant
contained in Section 6.29 of the Agreement, all of which data and computations
are true, complete and correct;
6. Schedule II attached hereto sets forth the various reports and
deliveries which are required at this time under the Credit Agreement and the
other Loan Documents and the status of compliance; and
7. If the Domestic Borrower is in compliance with the Fixed Charge
Coverage Ratio, Schedule III attached hereto sets forth a calculation of the
Fixed Charge Coverage Ratio (as defined in the Indenture) for the Domestic
Borrower and each other Loan Party evidencing
E-1
such compliance with the terms thereof, all of which data and computations are
true, complete and correct, if applicable.
Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the nature of the condition or event, the period during which it has
existed and the action which the Domestic Borrower has taken, is taking, or
proposes to take with respect to each such condition or event:
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
The foregoing certifications, together with the computations and
information set forth in Schedules I, II and III hereto and the financial
statements delivered with this Certificate in support hereof, are made and
delivered this day of , .
PARK-OHIO INDUSTRIES, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
E-2
SCHEDULE I TO COMPLIANCE CERTIFICATE
Compliance as of _________, ____ with respect to
Section 6.29 of the Agreement
E-3
SCHEDULE II TO COMPLIANCE CERTIFICATE
Reports and Deliveries Currently Due
E-4
SCHEDULE III TO COMPLIANCE CERTIFICATE
Fixed Charge Coverage Ratio
E-5
EXHIBIT F
JOINDER AGREEMENT
THIS JOINDER AGREEMENT (this "Agreement"), dated as of __________,
____, 200_, is entered into between ________________________________, a
_________________ (the "New Subsidiary") and BANK ONE, NA, in its capacity as
administrative agent (the "Agent") under that certain Amended and Restated
Credit Agreement, dated as of November 5, 2003 among Park-Ohio Industries, Inc.,
the Loan Parties party thereto, the Lenders party thereto, the Agent, the
Canadian Correspondent Agent, the UK Correspondent Agent, the LC Issuer, KeyBank
National Association, as Syndication Agent, and Banc One Capital Markets, Inc.,
as Lead Arranger and Sole Book Runner (as the same may be amended, modified,
extended or restated from time to time, the "Credit Agreement"). All capitalized
terms used herein and not otherwise defined shall have the meanings set forth in
the Credit Agreement.
The New Subsidiary and the Agent, for the benefit of the Lenders,
hereby agree as follows:
1. The New Subsidiary hereby acknowledges, agrees and confirms that, by
its execution of this Agreement, the New Subsidiary will be deemed to be a
[Domestic/Canadian/UK] Loan Party under the Credit Agreement and a "Guarantor"
for all applicable purposes of the Credit Agreement and shall have all of the
obligations of a [Domestic/Canadian/UK] Loan Party and a Guarantor thereunder as
if it had executed the Credit Agreement. The New Subsidiary hereby ratifies, as
of the date hereof, and agrees to be bound by, all of the terms, provisions and
conditions contained in the Credit Agreement, including without limitation (a)
all of the representations and warranties of the Loan Parties set forth in
Article V of the Credit Agreement, (b) all of the covenants set forth in Article
VI of the Credit Agreement, and (c) all of the guaranty obligations set forth in
Article XV of the Credit Agreement. Without limiting the generality of the
foregoing terms of this paragraph 1, the New Subsidiary, subject to the
limitations set forth in Sections 15.1 and 15.13 of the Credit Agreement, hereby
guarantees, jointly and severally with the other Guarantors, to the Agent and
the Lenders, as provided in Article XV of the Credit Agreement, the prompt
payment and performance of the Guaranteed Obligations in full when due (whether
at stated maturity, as a mandatory prepayment, by acceleration or otherwise)
strictly in accordance with the terms thereof and agrees that if any of the
Guaranteed Obligations are not paid or performed in full when due (whether at
stated maturity, as a mandatory prepayment, by acceleration or otherwise), the
New Subsidiary will, jointly and severally together with the other Guarantors,
promptly pay and perform the same, without any demand or notice whatsoever
except as may be required under the Credit Agreement, and that in the case of
any extension of time of payment or renewal of any of the Guaranteed
Obligations, the same will be promptly paid in full when due (whether at
extended maturity, as a mandatory prepayment, by acceleration or otherwise) in
accordance with the terms of such extension or renewal.
2. If required under the Credit Agreement, the New Subsidiary is,
simultaneously with the execution of this Agreement, executing and delivering
such Collateral Documents (and
F-1
such other documents and instruments) as requested by the Agent in accordance
with the Credit Agreement.
3. The address of the New Subsidiary for purposes of Article XIII of
the Credit Agreement is set forth on the signature page to the Credit Agreement
unless otherwise specified below:
---------------------------------
---------------------------------
---------------------------------
---------------------------------
---------------------------------
4. The New Subsidiary hereby waives acceptance by the Agent and the
Lenders of the guaranty by the New Subsidiary upon the execution of this
Agreement by the New Subsidiary.
5. This Agreement may be executed in any number of counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument.
6. The Agent and the New Subsidiary hereby designate all Indebtedness
now or hereafter incurred or otherwise outstanding under the Agreement to be
"Designated Senior Indebtedness" as set forth as defined in the Indenture.
7. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF OHIO.
THE BORROWER HEREBY AUTHORIZES ANY ATTORNEY-AT-LAW TO APPEAR IN ANY COURT OF
RECORD IN ANY COUNTY IN THE STATE OF OHIO OR ELSEWHERE WHERE THE BORROWER HAS A
PLACE OF BUSINESS, SIGNED THIS NOTE OR CAN BE FOUND, AFTER THE AGENT OR REQUIRED
LENDERS DECLARE A DEFAULT AND ACCELERATE THE BALANCES DUE UNDER THIS AGREEMENT,
TO WAIVE THE ISSUANCE OF SERVICE OF PROCESS AND CONFESS JUDGMENT AGAINST THE
BORROWER IN FAVOR OF THE AGENT AND LENDERS FOR THE AMOUNTS THEN APPEARING DUE,
TOGETHER WITH THE COSTS OF SUIT, AND THEREUPON TO RELEASE ALL ERRORS AND WAIVE
ALL RIGHT OF APPEAL AND STAY OF EXECUTION. THE BORROWER AGREES AND CONSENTS THAT
THE ATTORNEY CONFESSING JUDGMENT ON BEHALF OF THE BORROWER HEREUNDER MAY ALSO BE
COUNSEL TO THE AGENT, LENDERS OR ANY OF THEIR AFFILIATES, WAIVES ANY CONFLICT OF
INTEREST WHICH MIGHT OTHERWISE ARISE, AND CONSENTS TO THE AGENT OR LENDERS
PAYING SUCH CONFESSING ATTORNEY A LEGAL FEE OR ALLOWING SUCH ATTORNEY'S FEES TO
BE PAID FROM ANY PROCEEDS OF COLLECTION OF AGREEMENT OR COLLATERAL SECURITY
THEREFOR.
F-2
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the New Subsidiary has caused this Agreement to be
duly executed by its authorized officer, and the Agent, for the benefit of the
Lenders, has caused the same to be accepted by its authorized officer, as of the
day and year first above written.
WARNING -- BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND
COURT TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGEMENT MAY BE TAKEN
AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN
BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE
AGAINST THE CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE
ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY OTHER CAUSE.
[NEW SUBSIDIARY]
By:
--------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
Acknowledged and accepted:
BANK ONE, NA, as Agent
By:
--------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
F-4
EXHIBIT G
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption (the "ASSIGNMENT AND ASSUMPTION") is
dated as of the Effective Date set forth below and is entered into by and
between *[Insert name of Assignor]* (the "ASSIGNOR") and *[Insert name of
Assignee]* (the "ASSIGNEE"). Capitalized terms used but not defined herein shall
have the meanings given to them in the Credit Agreement identified below (as
amended, the "CREDIT AGREEMENT"), receipt of a copy of which is hereby
acknowledged by the Assignee. The Terms and Conditions set forth in ANNEX 1
attached hereto are hereby agreed to and incorporated herein by reference and
made a part of this Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Effective Date inserted by
the Agent as contemplated below, the interest in and to all of the Assignor's
rights and obligations in its capacity as a Lender under the Credit Agreement
and any other documents or instruments delivered pursuant thereto that
represents the amount and percentage interest identified below of all of the
Assignor's outstanding rights and obligations under the respective facilities
identified below (including without limitation any letters of credit, guaranties
and swingline loans included in such facilities and, to the extent permitted to
be assigned under applicable law, all claims (including without limitation
contract claims, tort claims, malpractice claims, statutory claims and all other
claims at law or in equity), suits, causes of action and any other right of the
Assignor against any Person whether known or unknown arising under or in
connection with the Credit Agreement, any other documents or instruments
delivered pursuant thereto or the loan transactions governed thereby) (the
"ASSIGNED INTEREST"). Such sale and assignment is without recourse to the
Assignor and, except as expressly provided in this Assignment and Assumption,
without representation or warranty by the Assignor.
The Assignee represents and warrants to, and covenants with the
Borrowers, the Lenders and the Agent and acknowledges that the Borrowers, the
Lenders and the Agent are relying thereon that select one of (i), (ii) or (iii)
below and delete the other two provisions:
(i) the Assignee is not a non-resident of Canada within the meaning,
for all purposes, of the Income Tax Act (Canada).
OR
(ii) the Assignee is a Schedule III Bank that will receive amounts
under the Credit Documents in connection with its Canadian banking business
within the meaning of the Income Tax Act (Canada).
OR
G-1
(iii) the Assignee is a resident of and taxable in ___________________
[country] and that it is the beneficial owner of any and all amounts paid to it
under the Credit Agreement and the Assignee covenants that if its country of
residence changes while it is a Lender under the Credit Agreement, the Assignee
hereby undertakes to advise the Borrower, the Lender and the Agent within three
(3) Business Days of such change.
1. Assignor:
-----------------------------------------------------
2. Assignee:
-----------------------------------------------------
*[and is an Affiliate of identify Lender]1*
3. Borrower: Park-Ohio Industries, Inc.
4. Agent: Bank One, NA, as the agent under the Credit Agreement.
5. Credit Agreement: The Amended and Restated Credit Agreement dated as of
November 5, 2003 among Park-Ohio Industries, Inc., (the "BORROWER"), the other
Loan Parties, the Lenders party thereto, Bank One, NA, as the Agent, and the
other agents party thereto.
1 Select as applicable.
G-2
6. Assigned Interest:
---------------------------------- ----------------------------------------- ---------------------------------
Aggregate Amount of Amount of Commitment/Credit Exposure Percentage Assigned of
Commitment/Aggregate Credit Assigned2 Commitment/Aggregate Credit
Exposure for all Lenders1 Exposure3
---------------------------------- ----------------------------------------- ---------------------------------
$ $ -------%
---------------------------------- ----------------------------------------- ---------------------------------
7. Trade Date: 4
---------------------------------------------
Effective Date: ____________________, 20__ [TO BE INSERTED BY AGENT AND WHICH
SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER BY THE AGENT.]
The terms set forth in this Assignment and Assumption are hereby agreed
to:
ASSIGNOR
[NAME OF ASSIGNOR]
By:
--------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
ASSIGNEE
[NAME OF ASSIGNEE]
By:
--------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
Consented to and Accepted:
Bank One, NA, as the Agent and LC Issuer
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
---------------------
2 AMOUNT TO BE ADJUSTED BY THE COUNTERPARTIES TO TAKE INTO ACCOUNT ANY
PAYMENTS OR PREPAYMENTS MADE BETWEEN THE TRADE DATE AND THE EFFECTIVE DATE.
3 SET FORTH, TO AT LEAST 9 DECIMALS, AS A PERCENTAGE OF THE COMMITMENT/LOANS
OF ALL LENDERS THEREUNDER.
4 INSERT IF SATISFACTION OF MINIMUM AMOUNTS IS TO BE DETERMINED AS OF THE
TRADE DATE.
G-3
Consented to:
PARK-OHIO INDUSTRIES, INC.
By:
--------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
G-4
ANNEX 1
TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1. Assignor. The Assignor represents and warrants that (i)
it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and
(iii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby. Neither the Assignor nor any of its officers,
directors, employees, agents or attorneys shall be responsible for (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency, perfection, priority,
collectibility, or value of the Loan Documents or any collateral thereunder,
(iii) the financial condition of the Borrower, any of its Subsidiaries or
Affiliates or any other Person obligated in respect of any Loan Document, (iv)
the performance or observance by the Borrower, any of its Subsidiaries or
Affiliates or any other Person of any of their respective obligations under any
Loan Document, (v) inspecting any of the property, books or records of the
Borrower, or any guarantor, or (vi) any mistake, error of judgment, or action
taken or omitted to be taken in connection with the Loans or the Loan Documents.
1.2. Assignee. The Assignee (a) represents and warrants that
(i) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby and to become a Lender under the Credit
Agreement, (ii) from and after the Effective Date, it shall be bound by the
provisions of the Credit Agreement as a Lender thereunder and, to the extent of
the Assigned Interest, shall have the obligations of a Lender thereunder, (iii)
agrees that its payment instructions and notice instructions are as set forth in
Schedule 1 to this Assignment and Assumption, (iv) confirms that none of the
funds, monies, assets or other consideration being used to make the purchase and
assumption hereunder are "plan assets" as defined under ERISA and that its
rights, benefits and interests in and under the Loan Documents will not be "plan
assets" under ERISA, (v) agrees to indemnify and hold the Assignor harmless
against all losses, costs and expenses (including, without limitation,
reasonable attorneys' fees) and liabilities incurred by the Assignor in
connection with or arising in any manner from the Assignee's non-performance of
the obligations assumed under this Assignment and Assumption, (vi) it has
received a copy of the Credit Agreement, together with copies of financial
statements and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Assignment and
Assumption and to purchase the Assigned Interest on the basis of which it has
made such analysis and decision independently and without reliance on the Agent
or any other Lender, and (vii) attached as Schedule 1 to this Assignment and
Assumption is any documentation required to be delivered by the Assignee with
respect to its tax status pursuant to the terms of the Credit Agreement, duly
completed and executed by the Assignee and (b) agrees that (i) it will,
independently and without reliance on the Agent, the
G-5
Assignor 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 the Loan Documents, and (ii) it will perform
in accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.
2. Payments. The Assignee shall pay the Assignor, on the Effective
Date, the amount agreed to by the Assignor and the Assignee. From and after the
Effective Date, the Agent shall make all payments in respect of the Assigned
Interest (including payments of principal, interest, fees and other amounts) to
the Assignor for amounts which have accrued to but excluding the Effective Date
and to the Assignee for amounts which have accrued from and after the Effective
Date.
3. General Provisions. This Assignment and Assumption shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns. This Assignment and Assumption may be executed in any
number of counterparts, which together shall constitute one instrument. Delivery
of an executed counterpart of a signature page of this Assignment and Assumption
by telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of Ohio.
G-6
EXHIBIT H
BORROWING BASE CERTIFICATE
See attached.
H-1
EXHIBIT I
INDENTURE CERTIFICATE
[Date] __________________, 20____
Bank One, NA
______________________________
______________________________
Attention: __________________
Ladies and Gentlemen:
The undersigned, a duly elected Authorized Officer of the Domestic
Borrower, refers to the Amended and Restated Credit Agreement, dated as of
November 5, 2003 (as it may from time to time be amended, restated or otherwise
modified, the "CREDIT AGREEMENT," the terms defined therein being used herein as
therein defined), among the Borrower, the other Loan Parties, the Lenders party
thereto, and Bank One, NA, as the Agent for the Lenders and as LC Issuer.
Concurrently herewith, the Borrower has requested a Loan under the
Credit Agreement.
Pursuant to Section 2.24 of the Credit Agreement, the undersigned
hereby certifies that on the proposed date of the Loan both prior to and after
giving effect thereto:
(a) the Aggregate Credit Exposure on such date (minus the Certified
Acquisition Amount) is less than an amount equal to the greater of (i)
$50,000,000, or (ii) the sum of (A) forty-five percent (45%) of the book value
of accounts receivable of the Borrower and its Subsidiaries and (B) twenty-five
percent (25%) of the book value of the inventory of the Borrower and its
Subsidiaries, all as defined or described in the Indenture;
(b) set forth on Schedule 1 hereto are calculations confirming the
amounts and values set forth in subparts (a) and (b) above;
(c) the use of the proceeds of the Loan are for (Check One):
_____ working capital purposes only; or
_____ are for the purchase of capital assets and
the requirements of Section 2.24(b)(ii) of
the Credit Agreement have been met (and set
forth on Schedule 1 hereto are calculations
confirming the amounts and values required
to be confirmed pursuant to such Section
2.24(b)(ii));
I-1
(d) under the undersigned's supervision, a review of the terms and
conditions of the Indenture has been made and, based on such review, as of the
date hereof, there is no Default (as defined in the Indenture) or Event of
Default (as defined in the Indenture) that exists;
(e) the representations and warranties contained in each Loan Document
are correct as of the date hereof;
(f) no event has occurred and is continuing that constitutes a Default
or Event of Default; and
(g) the conditions set forth in Section 2.1.1(b), Section 2.24 and
Article IV of the Credit Agreement have been satisfied.
Very truly yours,
PARK-OHIO INDUSTRIES, INC.
By: __________________________
Name: ________________________
Title: _________________________
I-2
SCHEDULE I TO INDENTURE CERTIFICATE
I. FOR ALL LOANS
A. Certified Acquisition Amount $
---------------------
B. Revolver amount $
---------------------
(the greater of (a) $50,000,000.00
or (b) below*)
C. Total availability (A plus B) $
---------------------
D. Amount of requested funds $
---------------------
E. Loans outstanding $
---------------------
F. Aggregate Credit Exposure (D plus E) $
---------------------
G. C less A $
---------------------
* 45% of book value of accounts receivable $
---------------------
25% of book value of inventory $
---------------------
Total $
---------------------
II. FOR ALL LOANS FOR CAPITAL EXPENDITURES
A. Aggregate amount of Capital $
Expenditures for fiscal year ---------------------
B. Aggregate amount of loans and capital $
---------------------
leases the proceeds of which have been
used for Capital Expenditures
C. Amount of requested CapEx Loan $
---------------------
D. Total of B + C $
---------------------
I-3
EXHIBIT J
ORDERLY LIQUIDATION PERCENTAGE
See attached.
J-1
EXHIBIT L
CANADIAN REVOLVING NOTE
September __, 2003
[______________] (the "Canadian Borrower"), promises to pay to the
order of ____________________________________ (the "Lender") the aggregate
unpaid principal amount of all Canadian Revolving Loans made by the Lender to
the Canadian Borrower pursuant to Article II of the Agreement (as hereinafter
defined), in immediately available funds at [name and branch of Canadian Bank]
together with interest on the unpaid principal amount hereof at the rates and on
the dates set forth in the Agreement. The Canadian Borrower shall pay the
principal of and accrued and unpaid interest on the Canadian Revolving Loans and
Reimbursement Obligations in full on the Facility Termination Date
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Loan and the date and amount of each principal
payment hereunder.
This Note is one of the Revolving Notes issued pursuant to, and is
entitled to the benefits of, the Amended and Restated Credit Agreement dated as
of November 5, 2003 (which, as amended, and as it may be further amended or
modified and in effect from time to time, is herein called the "Agreement"),
among the Domestic Borrower, Canadian Borrower, the UK Borrower, the other Loan
Parties, the lenders party thereto, including the Canadian Lender, the LC Issuer
and Bank One, NA, as the Agent, to which Agreement reference is hereby made for
a statement of the terms and conditions governing this Note, including the terms
and conditions under which this Note may be prepaid or its maturity date
accelerated. This Note is secured pursuant to the Collateral Documents, as more
specifically described in the Agreement, and reference is made thereto for a
statement of the terms and provisions thereof. Capitalized terms used herein and
not otherwise defined herein are used with the meanings attributed to them in
the Agreement.
The Canadian Borrower and the Lender hereby designate all Indebtedness
and other obligations now or hereafter incurred or otherwise outstanding under
this Note to be "Designated Senior Indebtedness" as set forth and defined in the
Indenture.
[CANADIAN BORROWER]
By:
----------------------------------------
Print Name:
--------------------------------
Title:
-------------------------------------
L-1
EXHIBIT M
UK REVOLVING NOTE
November 5, 2003
[______________] (the "UK Borrower"), promises to pay to the order of
____________________________________ (the "Lender") the aggregate unpaid
principal amount of all UK Fixed Rate Loans made by the Lender to the UK
Borrower pursuant to Article II of the Agreement (as hereinafter defined), in
immediately available funds at [name and branch of UK Bank] together with
interest on the unpaid principal amount hereof at the rates and on the dates set
forth in the Agreement. The UK Borrower shall pay the principal of and accrued
and unpaid interest on the UK Fixed Loans and Reimbursement Obligations in full
on the Facility Termination Date
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Loan and the date and amount of each principal
payment hereunder.
This Note is one of the Revolving Notes issued pursuant to, and is
entitled to the benefits of, the Amended and Restated Credit Agreement dated as
of November 5, 2003 (which, as amended, and as it may be further amended or
modified and in effect from time to time, is herein called the "Agreement"),
among the Domestic Borrower, Canadian Borrower, the UK Borrower, the other Loan
Parties, the lenders party thereto, including the UK Lender, the LC Issuer and
Bank One, NA, as the Agent, to which Agreement reference is hereby made for a
statement of the terms and conditions governing this Note, including the terms
and conditions under which this Note may be prepaid or its maturity date
accelerated. This Note is secured pursuant to the Collateral Documents, as more
specifically described in the Agreement, and reference is made thereto for a
statement of the terms and provisions thereof. Capitalized terms used herein and
not otherwise defined herein are used with the meanings attributed to them in
the Agreement.
The UK Borrower and the Lender hereby designate all Indebtedness and
other obligations now or hereafter incurred or otherwise outstanding under this
Note to be "Designated Senior Indebtedness" as set forth and defined in the
Indenture.
[UK BORROWER]
By:
----------------------------------------
Print Name:
--------------------------------
Title:
-------------------------------------
M-1
EXHIBIT N
ASSOCIATED COSTS RATES
1. For the purpose of this Agreement, the cost of compliance with
existing requirements of the Bank of England and/or the Financial Services
Authority (or any other authority which replaces all or any of their functions)
in respect of the UK Fixed Rate Advances denominated in Pounds Sterling will be
calculated by the UK Correspondent Lender in relation to each UK Fixed Rate
Advance on the basis of rates supplied by the UK Correspondent Lender by
reference to the circumstances existing on the first day of each Interest Period
in respect of such UK Fixed Rate Advance and, if any such Interest Period
exceeds three months, at three calendar monthly intervals from the first day of
such Interest Period during its duration in accordance with the following
formula:
AB + C(B - D) + E x 0.01 percent per annum
------------------------------------------------
100 - (A + C)
Where:
A is the percentage of Eligible Liabilities (assuming these to
be in excess of any stated minimum) which the UK Correspondent
Lender is from time to time required to maintain as an
interest free cash ratio deposit with the Bank of England to
comply with cash ratio requirements.
B is the percentage rate per annum at which Pounds Sterling
deposits are offered by the UK Correspondent Lender in
accordance with its normal practice, for a period equal to (a)
the relevant Interest Period (or, as the case may be,
remainder of such Interest Period) in respect of the relevant
UK Fixed Rate Advance or (b) three months, whichever is
shorter, to a leading bank in the London Interbank Market at
or about 11:00 a.m. (London time) in a sum approximately equal
to the amount of such UK Fixed Rate Advance.
C is the percentage of Eligible Liabilities which the UK
Correspondent Lender is required from time to time maintain as
interest bearing Special Deposits with the Bank of England.
D is the percentage rate per annum payable by the Bank of
England on interest bearing Special Deposits.
E is the rate payable by the UK Correspondent Lender to the
Financial Services Authority pursuant to the Fees Regulations
(but, for this purpose, ignoring any minimum fee required
pursuant to the Fees Regulations) and expressed in pounds per
(pound)1,000,000 of the Fee Base of the Bank.
2. For the purposes of this EXHIBIT N
N-1
(a) "Eligible Liabilities" and "Special Deposits" shall
bear the meanings ascribed to them from time to time
under or pursuant to the Bank of England Act 1998 or
(as appropriate) by the Bank of England.
(b) "Fee Regulations" means the Banking Supervision
(Fees) Regulations 2001 or such other law or
regulation as may be in force from time to time in
respect of the payment of fees for banking
supervision.
(c) "Fee Base" shall bear the meaning ascribed to it, and
shall be calculated in accordance with, the Fees
Regulations.
3. The percentages used in A and C above shall be those required to be
maintained on the first day of the relevant period as determined in accordance
with B above.
4. In application of the above formula, A, B, C and D will be included
in the formula as figures and not as percentages e.g. if A is 0.5 per cent. and
B is 12 per cent, AB will be calculated as 0.5 x 12 and not as 0.5 per cent x 12
per cent.
5. Calculations will be made on the basis of a 365 day year (or, if
market practice differs, in accordance with market practices).
6. A negative result obtained by subtracting D from B shall be taken as
zero.
7. The resulting figures shall be rounded upwards, if not already such
a multiple, to the nearest whole multiple to 1/32%.
8. Additional amounts calculated in accordance with this Schedule are
payable on the last day of the Interest Period to which they relate.
9. The determination of the Associated Costs Rate by the UK
Correspondent Lender in relation to any period shall, in the absence of manifest
error, be conclusive and binding on all of the parties hereto.
10. The UK Correspondent Lender may from time to time, after
consultation with the UK Borrower, determine and notify to all parties any
amendments or variations which are required to be made to the formula set out
above in order to comply with any requirements from time to time imposed by the
Bank of England or the Financial Service Authority (or any other authority which
replaces all or an of their functions) in relation to UK Fixed Rate Advances
denominated in Pounds Sterling (including any requirements relating to Pounds
Sterling primary liquidity) and, any such determination shall, in the absence of
manifest error, be conclusive and binding on all the parties hereto.
N-2
