SENIOR REVOLVING CREDIT AGREEMENT by and among 3231021 NOVA SCOTIA COMPANY as Canadian Borrower, BUMBLE BEE FOODS, LLC, as U.S. Borrower, THE LENDERS THAT ARE SIGNATORIES HERETO as the Lenders, WELLS FARGO FOOTHILL, LLC as the Arranger and U.S....
Exhibit 10.35
SENIOR REVOLVING CREDIT AGREEMENT
by and among
3231021 NOVA SCOTIA COMPANY
as Canadian Borrower,
BUMBLE BEE FOODS, LLC,
as U.S. Borrower,
THE LENDERS THAT ARE SIGNATORIES HERETO
as the Lenders,
XXXXX FARGO FOOTHILL, LLC
as the Arranger and U.S. Administrative Agent
and
XXXXX FARGO FOOTHILL CANADA ULC
as the Canadian Administrative Agent
Dated as of November 18, 2008
TABLE OF CONTENTS
Page | ||||||
1. |
DEFINITIONS AND CONSTRUCTION | 1 | ||||
1.1. | Definitions | 1 | ||||
1.2. | Accounting Terms | 1 | ||||
1.3. | Code | 1 | ||||
1.4. | Construction | 1 | ||||
1.5. | Schedules and Exhibits | 2 | ||||
1.6. | Exchange Rates | 2 | ||||
2. |
LOAN AND TERMS OF PAYMENT | 2 | ||||
2.1. | U.S. Revolver Advances | 2 | ||||
2.2. | Canadian Revolver Advances | 3 | ||||
2.3. | Borrowing Procedures and Settlements | 4 | ||||
2.4. | Payments; Reductions of Commitments; Prepayments | 11 | ||||
2.5. | Overadvances | 17 | ||||
2.6. | Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations | 17 | ||||
2.7. | Crediting Payments | 19 | ||||
2.8. | Designated Account | 20 | ||||
2.9. | Maintenance of Loan Account; Statements of Obligations | 20 | ||||
2.10. | Fees | 20 | ||||
2.11. | Letters of Credit | 21 | ||||
2.12. | LIBOR/CDOR Option | 27 | ||||
2.13. | Capital Requirements | 29 | ||||
3. |
CONDITIONS; TERM OF AGREEMENT | 30 | ||||
3.1. | Conditions Precedent to the Initial Extension of Credit | 30 | ||||
3.2. | Conditions Precedent to all Extensions of Credit after the Closing Date | 31 | ||||
3.3. | Term | 31 | ||||
3.4. | Effect of Termination | 31 | ||||
3.5. | Early Termination by Borrower | 31 | ||||
4. |
REPRESENTATIONS AND WARRANTIES | 32 | ||||
4.1. | Due Organization and Qualification; Subsidiaries | 32 | ||||
4.2. | Due Authorization; No Conflict | 32 | ||||
4.3. | Governmental Consents | 33 | ||||
4.4. | Binding Obligations; Perfected Liens | 33 | ||||
4.5. | Title to Assets; No Encumbrances | 33 |
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TABLE OF CONTENTS
(continued)
Page | ||||||
4.6. | Jurisdiction of Organization; Location of Chief Executive Office; Organizational Identification Number; Commercial Tort Claims | 33 | ||||
4.7. | Litigation | 34 | ||||
4.8. | Compliance with Laws | 34 | ||||
4.9. | No Material Adverse Change | 34 | ||||
4.10. | Fraudulent Transfer | 34 | ||||
4.11. | Employee Benefits | 35 | ||||
4.12. | Environmental Condition | 37 | ||||
4.13. | Intellectual Property | 38 | ||||
4.14. | Leases | 38 | ||||
4.15. | Deposit Accounts and Securities Accounts | 38 | ||||
4.16. | Complete Disclosure | 38 | ||||
4.17. | Material Contracts | 39 | ||||
4.18. | Patriot Act | 39 | ||||
4.19. | Indebtedness | 39 | ||||
4.20. | Payment of Taxes | 39 | ||||
4.21. | Margin Stock | 39 | ||||
4.22. | Governmental Regulation | 40 | ||||
4.23. | OFAC | 40 | ||||
4.24. | Holding Companies | 40 | ||||
4.25. | Required Equity Documents | 41 | ||||
4.26. | Other Documents | 41 | ||||
4.27. | Eligible Accounts | 42 | ||||
4.28. | Eligible Inventory | 42 | ||||
4.29. | Location of Inventory and Equipment | 42 | ||||
4.30. | Inventory Records | 42 | ||||
4.31. | Withholdings and Remittances | 42 | ||||
4.32. | Packers and Stockyards Act | 42 | ||||
4.33. | Senior Debt, Etc | 42 | ||||
4.34. | Equipment | 43 | ||||
5. | AFFIRMATIVE COVENANTS | 43 | ||||
5.1. | Financial Statements, Reports, Certificates | 43 | ||||
5.2. | Collateral Reporting | 43 | ||||
5.3. | Existence | 43 |
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TABLE OF CONTENTS
(continued)
Page | ||||||
5.4. | Maintenance of Properties | 43 | ||||
5.5. | Taxes | 43 | ||||
5.6. | Insurance | 44 | ||||
5.7. | Inspection | 44 | ||||
5.8. | Compliance with Laws | 45 | ||||
5.9. | Environmental | 45 | ||||
5.10. | Disclosure Updates | 45 | ||||
5.11. | Formation of Subsidiaries | 45 | ||||
5.12. | Further Assurances | 46 | ||||
5.13. | Lender Meetings | 46 | ||||
5.14. | Material Contracts | 46 | ||||
5.15. | Location of Inventory and Equipment | 47 | ||||
5.16. | Compliance with ERISA and the IRC | 47 | ||||
5.17. | Canadian Pension and Benefit Plans | 47 | ||||
5.18. | Post-Closing Covenants | 48 | ||||
6. | NEGATIVE COVENANTS | 48 | ||||
6.1. | Indebtedness | 48 | ||||
6.2. | Liens | 49 | ||||
6.3. | Restrictions on Fundamental Changes | 49 | ||||
6.4. | Disposal of Assets | 49 | ||||
6.5. | Change Name | 49 | ||||
6.6. | Nature of Business | 49 | ||||
6.7. | Prepayments and Amendments | 50 | ||||
6.8. | Change of Control | 50 | ||||
6.9. | Distributions | 50 | ||||
6.10. | Accounting Methods | 52 | ||||
6.11. | Investments | 52 | ||||
6.12. | Transactions with Affiliates | 52 | ||||
6.13. | Use of Proceeds | 53 | ||||
6.14. | Holding Companies | 53 | ||||
6.15. | Consignments | 54 | ||||
6.16. | Inventory and Equipment with Bailees | 54 | ||||
6.17. | PSA | 54 |
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TABLE OF CONTENTS
(continued)
Page | ||||||
7. | FINANCIAL COVENANT | 55 | ||||
8. | EVENTS OF DEFAULT | 56 | ||||
9. | RIGHTS AND REMEDIES | 59 | ||||
9.1. | Rights and Remedies | 59 | ||||
9.2. | Remedies Cumulative | 59 | ||||
10. | WAIVERS; INDEMNIFICATION | 59 | ||||
10.1. | Demand; Protest; etc | 59 | ||||
10.2. | The Lender Group’s Liability for Collateral | 60 | ||||
10.3. | Indemnification | 60 | ||||
10.4. | Waiver of Consequential Damages, Etc | 61 | ||||
11. | NOTICES | 61 | ||||
12. | CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER | 62 | ||||
13. | ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS | 63 | ||||
13.1. | Assignments and Participations | 63 | ||||
13.2. | Successors | 66 | ||||
14. | AMENDMENTS; WAIVERS | 67 | ||||
14.1. | Amendments and Waivers | 67 | ||||
14.2. | Replacement of Holdout Lender | 68 | ||||
14.3. | No Waivers; Cumulative Remedies | 69 | ||||
15. | AGENT; THE LENDER GROUP | 69 | ||||
15.1. | Appointment and Authorization of Agent | 69 | ||||
15.2. | Delegation of Duties | 70 | ||||
15.3. | Liability of Agent | 70 | ||||
15.4. | Reliance by Agent | 70 | ||||
15.5. | Notice of Default or Event of Default | 71 | ||||
15.6. | Credit Decision | 71 | ||||
15.7. | Costs and Expenses; Indemnification | 71 | ||||
15.8. | Agent in Individual Capacity | 72 | ||||
15.9. | Successor Agent | 72 | ||||
15.10. | Lender in Individual Capacity | 73 | ||||
15.11. | Collateral Matters | 73 | ||||
15.12. | Restrictions on Actions by Lenders; Sharing of Payments | 74 | ||||
15.13. | Agency for Perfection | 74 |
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TABLE OF CONTENTS
(continued)
Page | ||||||
15.14. | Payments by Agents to the Lenders | 74 | ||||
15.15. | Concerning the Collateral and Related Loan Documents | 74 | ||||
15.16. | Audits and Examination Reports; Confidentiality; Disclaimers by Lenders; Other Reports and Information | 75 | ||||
15.17. | Several Obligations; No Liability | 76 | ||||
16. | WITHHOLDING TAXES | 77 | ||||
17. | GENERAL PROVISIONS | 79 | ||||
17.1. | Effectiveness | 79 | ||||
17.2. | Section Headings | 79 | ||||
17.3. | Interpretation | 79 | ||||
17.4. | Severability of Provisions | 80 | ||||
17.5. | Bank Product Providers | 80 | ||||
17.6. | Debtor-Creditor Relationship | 80 | ||||
17.7. | Counterparts; Electronic Execution | 80 | ||||
17.8. | Revival and Reinstatement of Obligations | 80 | ||||
17.9. | Confidentiality | 80 | ||||
17.10. | Lender Group Expenses | 81 | ||||
17.11. | USA PATRIOT Act | 81 | ||||
17.12. | Applicable Currency | 81 | ||||
17.13. | Integration | 82 | ||||
17.14. | Canadian Fishing Licenses | 82 | ||||
17.15. | Clam Quotas | 82 | ||||
17.16. | Mexican Subsidiaries | 82 |
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EXHIBITS AND SCHEDULES
Exhibit A-1 |
Form of Assignment and Acceptance | |
Exhibit C-1 |
Form of Canadian Borrowing Base Certificate | |
Exhibit C-2 |
Form of Compliance Certificate | |
Exhibit I-1 |
Form of Intercreditor Agreement | |
Exhibit L-1 |
Form of LIBOR Notice | |
Exhibit L-2 |
Form of CDOR Notice | |
Exhibit S-1 |
Form of Subordination Agreement | |
Exhibit U-1 |
Form of U.S. Borrowing Base Certificate | |
Schedule A-1 |
Authorized Persons of Canadian Borrower | |
Schedule A-2 |
Authorized Persons of U.S. Borrower | |
Schedule C-1 |
Canadian Agent’s Account | |
Schedule C-2 |
Commitments | |
Schedule D-1 |
Designated U.S. Account | |
Schedule D-2 |
Designated Canadian Account | |
Schedule E-1 |
Eligible Inventory Locations | |
Schedule J-1 |
Permitted Joint Ventures | |
Schedule P-1 |
Permitted Holders | |
Schedule P-2 |
Permitted Investments | |
Schedule P-3 |
Permitted Liens | |
Schedule P-4 |
Permitted Dispositions | |
Schedule R-1 |
Real Property Collateral | |
Schedule U-1 |
U.S. Agent’s Account | |
Schedule 1.1 |
Definitions | |
Schedule 3.1 |
Conditions Precedent | |
Schedule 4.1(b) |
Capitalization of Borrowers | |
Schedule 4.1(c) |
Capitalization of Loan Parties’ Subsidiaries | |
Schedule 4.1(d) |
Subscriptions, Options, Warrants, and Calls | |
Schedule 4.6(a) |
Jurisdictions of Organization | |
Schedule 4.6(b) |
Chief Executive Offices | |
Schedule 4.6(c) |
Organizational Identification Numbers | |
Schedule 4.6(d) |
Commercial Tort Claims | |
Schedule 4.7 |
Litigation | |
Schedule 4.11(a) |
U.S. Employee Benefits | |
Schedule 4.11(b) |
Canadian Employee Benefits | |
Schedule 4.12 |
Environmental Matters | |
Schedule 4.13 |
Intellectual Property | |
Schedule 4.15 |
Deposit Accounts and Securities Accounts | |
Schedule 4.17 |
Material Contracts | |
Schedule 4.19 |
Permitted Indebtedness | |
Schedule 4.20 |
Existing Tax Liabilities | |
Schedule 4.24 |
BB Holdings | |
Schedule 4.29 |
Locations of Inventory and Equipment | |
Schedule 5.1 |
Financial Statements, Reports, Certificates | |
Schedule 5.2 |
Collateral Reporting | |
Schedule 5.5 |
Taxes | |
Schedule 5.15 |
Immaterial Locations of Inventory and Equipment | |
Schedule 6.6 |
Nature of Business | |
Schedule 6.12 |
Affiliated Party Transactions |
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SENIOR REVOLVING CREDIT AGREEMENT
THIS SENIOR REVOLVING CREDIT AGREEMENT (this “Agreement”), is entered into as of November 18, 2008, by and among the lenders identified on the signature pages hereof (such lenders, together with their respective successors and permitted assigns, are referred to hereinafter each individually as a “Lender” and collectively as the “Lenders”), XXXXX FARGO FOOTHILL, LLC, a Delaware limited liability company, as the arranger and United States administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, “U.S. Agent”), XXXXX FARGO FOOTHILL CANADA ULC, an Alberta unlimited corporation, as the arranger and Canadian administrative agent for the Canadian Lenders (in such capacity, together with its successors and assigns in such capacity, “Canadian Agent”), 3231021 NOVA SCOTIA COMPANY, a Nova Scotia unlimited company (“3231021”), and BUMBLE BEE FOODS, LLC, a Delaware limited liability company (“U.S. Borrower”).
The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1. Definitions. Capitalized terms used in this Agreement shall have the meanings specified therefor on Schedule 1.1.
1.2. Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with GAAP. When used herein, the term “financial statements” shall include the notes and schedules thereto. Whenever the term “Company” is used in respect of a financial covenant or a related definition, it shall be understood to mean Xxxxxxx and its Subsidiaries (on a consolidated basis) and Canadian Holdco and its Subsidiaries (on a consolidated basis), on a combined basis, unless the context clearly requires otherwise.
1.3. Code. Any terms used in this Agreement that are defined in the Code shall be construed and defined as set forth in the Code unless otherwise defined herein; provided, however, that to the extent that the Code is used to define any term herein and such term is defined differently in different Articles of the Code, the definition of such term contained in Article 9 of the Code shall govern. Notwithstanding the foregoing, and where the context so requires, (i) any term defined in this Agreement by reference to the “Code”, the “UCC” or the “Uniform Commercial Code” shall also have any extended, alternative or analogous meaning given to such term in applicable Canadian personal property security and other laws (including, without limitation, the Personal Property Security Act of each applicable province of Canada, the Civil Code of Quebec, the Bills of Exchange Act (Canada) and the Depository Bills and Notes Act (Canada)), in all cases for the extension, preservation or betterment of the security and rights of the Agents, (ii) all references in this Agreement to “Article 8” shall be deemed to refer also to applicable Canadian securities transfer laws (including, without limitation, the Securities Xxxxxxxx Xxx, 0000 (Xxxxxxx)), (xxx) all references in this Agreement to a financing statement, continuation statement, amendment or termination statement shall be deemed to refer also to the analogous documents used under applicable Canadian personal property security laws, (v) all references to the United States of America, or to any subdivision, department, agency or instrumentality thereof shall be deemed to refer also to Canada, or to any subdivision, department, agency or instrumentality thereof, and (vi) all references to federal or state securities law of the United States shall be deemed to refer also to analogous federal and provincial securities laws in Canada.
1.4. Construction. Unless the context of this Agreement or any other Loan Document clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the terms “includes” and “including” are not limiting, and the term “or” has, except where otherwise indicated,
the inclusive Meaning represented by the phrase “and/or.” The words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document, as the case may be, as a whole and not to any particular provision of this Agreement or such other Loan Document, as the case may be. Section, subsection, clause, schedule, and exhibit references herein are to this Agreement unless otherwise specified. Any reference in this Agreement or in any other Loan Document to any agreement, instrument, or document shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements, thereto and thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements set forth herein). The words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts, and contract rights. Any reference herein or in any other Loan Document to the satisfaction or repayment in full of the Obligations shall mean the repayment in full in cash (or, in the case of Letters of Credit or Bank Products, providing Letter of Credit Collateralization or Bank Product Collateralization) of all Obligations other than unasserted contingent indemnification Obligations and other than any Bank Product Obligations that, at such time, are allowed by the applicable Bank Product Provider to remain outstanding and that are not required by the provisions of this Agreement to be repaid or cash collateralized. Any reference herein to any Person shall be construed to include such Person’s successors and assigns. Any requirement of a writing contained herein or in any other Loan Document shall be satisfied by the transmission of a Record. With respect to real or tangible personal property located in the Province of Quebec, (a) the terms “real property”, “personal property” and “real and personal property” and words of similar import shall be deemed to also refer to “immovable property”, “movable property” and “immovable and movable property”, and (b) the terms “tangible” and “intangible” and words of similar import shall be deemed to also refer to “corporeal” and “incorporeal”.
1.5. Schedules and Exhibits. All of the schedules and exhibits attached to this Agreement shall be deemed incorporated herein by reference.
1.6. Exchange Rates. For purposes of determining compliance at any time under Sections 6.4, 6.9, 6.11 (other than, in each case, with respect to determining the amount of any Indebtedness) and 7 with respect to any amount in a Foreign Currency, such amount shall be deemed to equal the Dollar Equivalent thereof based on the Exchange Rate for such Foreign Currency at such time. For purposes of determining compliance with Sections 6.1, 6.2 and 6.11 (but only, in each case, with respect to any amount of Indebtedness in a Foreign Currency), compliance will be determined at the time of incurrence or advancing thereof using the Dollar Equivalent thereof at the Exchange Rate in effect at the time of such incurrence or advancement.
2. LOAN AND TERMS OF PAYMENT.
2.1. U.S. Revolver Advances.
(a) Subject to the terms and conditions of this Agreement, and during the term of this Agreement, each Lender with a U.S. Revolver Commitment agrees (severally, not jointly or jointly and severally) to make advances (“U.S. Advances”) to U.S. Borrower in an amount at any one time outstanding not to exceed such Lender’s Pro Rata Share of an amount equal to the lesser of (i) the Maximum U.S. Revolver Amount less the U.S. Letter of Credit Usage at such time, and (ii) the U.S. Borrowing Base at such time less the U.S. Letter of Credit Usage at such time.
(b) Amounts borrowed pursuant to this Section 2.1 may be repaid and, subject to the terms and conditions of this Agreement, reborrowed at any time during the term of this Agreement. The outstanding principal amount of the U.S. Advances, together with interest accrued thereon, shall be due and payable on the Maturity Date or, if earlier, on the date on which they are declared due and payable pursuant to the terms of this Agreement.
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(c) Anything to the contrary in this Section 2.1 notwithstanding, U.S. Agent shall have the right to establish reserves against the U.S. Borrowing Base in such amounts, and with respect to such matters, as U.S. Agent in its Permitted Discretion shall deem necessary or appropriate but without duplication of any reserve otherwise provided for herein, including reserves with respect to (i) sums due and owing and that any U.S. Loan Party or its Subsidiaries are required to pay under any Section of this Agreement or any other Loan Document (such as taxes, assessments, insurance premiums, or, in the case of leased assets, rents or other amounts payable under such leases) and has failed to pay, (ii) amounts owing by a U.S. Loan Party to any Person to the extent secured by a Lien on, or trust over, any of the Collateral (other than a Permitted Lien), which Lien or trust, in the Permitted Discretion of U.S. Agent likely would have a priority superior to the U.S. Agent’s Liens (such as Liens or trusts in favor of carriers, mechanics, materialmen, laborers, or suppliers, or Liens or trusts for ad valorem, excise, sales, or other taxes where given priority under applicable law) in and to such item of the Collateral, (iii) reserves (determined from time to time by U.S. Agent in its Permitted Discretion) for (a) the estimated costs relating to unpaid freight charges, warehousing or storage charges, taxes, duties, and other similar unpaid costs associated with the acquisition of Eligible In-Transit Inventory by any U.S. Loan Party, plus (b) the estimated reclamation claims of unpaid sellers of Inventory sold to any U.S. Loan Party to the extent that the applicable U.S. Loan Party is not Solvent at such time, and (iv) the U.S. Bank Product Obligations.
2.2. Canadian Revolver Advances.
(a) Subject to the terms and conditions of this Agreement, and during the term of this Agreement, each Lender with a Canadian Revolver Commitment agrees (severally, not jointly or jointly and severally) to make advances (“Canadian Advances”) to Canadian Borrower in an amount at any one time outstanding not to exceed such Lender’s Pro Rata Share of an amount equal to the lesser of (i) the Maximum Canadian Revolver Amount less the Canadian Letter of Credit Usage at such time, and (ii) the Canadian Borrowing Base at such time less the Canadian Letter of Credit Usage at such time less the aggregate amount of Canadian Priority Payables Reserves at such time.
(b) Amounts borrowed pursuant to this Section 2.1 may be repaid and, subject to the terms and conditions of this Agreement, reborrowed at any time during the term of this Agreement. The outstanding principal amount of the Canadian Advances, together with interest accrued thereon, shall be due and payable on the Maturity Date or, if earlier, on the date on which they are declared due and payable pursuant to the terms of this Agreement.
(c) Anything to the contrary in this Section 2.2 notwithstanding, Canadian Agent shall have the right to establish reserves against the Canadian Borrowing Base (including Canadian Priority Payables Reserves) in such amounts, and with respect to such matters, as Canadian Agent in its Permitted Discretion shall deem necessary or appropriate but without duplication of any reserve otherwise provided for herein, including reserves with respect to (i) sums that any Canadian Loan Party or its Subsidiaries are required to pay under any Section of this Agreement or any other Loan Document (such as taxes, assessments, employee wages (including accrued vacation pay and severance obligations), unpaid pension plan contributions, insurance premiums, or, in the case of leased assets, rents or other amounts payable under such leases) and has failed to pay, (ii) amounts owing by a Canadian Loan Party to any Person to the extent secured by a Lien on, or trust over, any of the Collateral (other than a Permitted Lien), which Lien or trust, in the Permitted. Discretion of Canadian Agent likely would have a priority superior to the Canadian Agent’s Liens (such as Liens or trusts in favor of carriers, mechanics, materialmen, laborers, or suppliers, or Liens or trusts for ad valorem, excise, sales, or other taxes where given priority under applicable law) in and to such item of
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the Collateral, (iii) reserves (determined from time to time by Canadian Agent in its Permitted Discretion) necessary or appropriate to maintain compliance with the respective sublimits denominated in Dollars set forth in subsection (b)(i) and in subsection (b)(ii)(B)(l) of the definition of Canadian Borrowing Base, (iv) reserves (determined from time to time by Canadian Agent in its Permitted Discretion) for (A) the estimated costs relating to unpaid freight charges, warehousing or storage charges, taxes, duties, and other similar unpaid costs associated with the acquisition of Eligible In-Transit Inventory by any Canadian Loan Party, plus (B) the estimated reclamation claims of unpaid suppliers of Inventory sold to any Canadian Loan Party (including, without limitation, claims arising under the Bankruptcy and Insolvency Act (Canada)), and (v) the Canadian Bank Product Obligations.
2.3. Borrowing Procedures and Settlements.
(a) Procedure for Borrowing. Each Borrowing shall be made by a written request by an Authorized Person delivered to (i) in the case of U.S. Advances, U.S. Agent, or (ii) in the case of Canadian Advances, Canadian Agent. Unless Swing Lender is not obligated to make a Swing Loan pursuant to Section 2.3(b) below, such notice must be received by the applicable Agent no later than 10:00 a.m. (California time) on the Business Day that is the requested Funding Date specifying (i) the amount of such Borrowing, (ii) whether such Borrowing is a U.S. Advance or a Canadian Advance, and (iii) the requested Funding Date, which shall be a Business Day; provided, however, that if Swing Lender is not obligated to make a Swing Loan as to a requested Borrowing, such notice must be received by the applicable Agent no later than 10:00 a.m. (California time) on the Business Day prior to the date that is the requested Funding Date. At the applicable Agent’s election, in lieu of delivering the above-described written request, any Authorized Person may give such Agent telephonic notice of such request by the required time. In such circumstances, each Borrower agrees that any such telephonic notice will be confirmed in writing within 24 hours of the giving of such telephonic notice, but the failure to provide such written confirmation shall not affect the validity of the request. Each U.S. Advance shall be made in Dollars and each Canadian Advance shall be made in Canadian Dollars.
(b) Making of Swing Loans. In the case of a request for an Advance and so long as either (i) the aggregate amount of Swing Loans made since the last Settlement Date, minus the amount of Collections or payments applied to Swing Loans since the last Settlement Date, plus the amount of the requested Advance does not exceed $15,000,000 or (ii) (A) in the case of a request for a U.S. Advance, U.S. Swing Lender, in its sole discretion, shall agree to make a U.S. Swing Loan notwithstanding the foregoing limitation, U.S. Swing Lender shall make a U.S. Advance in the amount of such Borrowing (any such U.S. Advance made solely by U.S. Swing Lender pursuant to this Section 2.3(b) being referred to as a “U.S. Swing Loan” and such U.S. Advances being referred to collectively as “U.S. Swing Loans”) available to U.S. Borrower on the Funding Date applicable thereto by transferring immediately available funds to U.S. Borrower’s Designated U.S. Account, or (B) in the case of a request for a Canadian Advance, Canadian Swing Lender, in its sole discretion, shall agree to make a Canadian Swing Loan notwithstanding the foregoing limitation, Canadian Swing Lender shall make a Canadian Advance in the amount of such Borrowing (any such Canadian Advance made solely by Canadian Swing Lender pursuant to this Section 2.3(b) being referred to as a “Canadian Swing Loan” and such Canadian Advances being referred to collectively as “Canadian Swing Loans”; and together with the U.S. Swing Loans, each a “Swing Loan” and collectively the “Swing Loans”) available to Canadian Borrower on the Funding Date applicable thereto by transferring immediately available funds to Canadian Borrower’s Designated Canadian Account. Each U.S. Swing Loan shall be deemed to be a U.S. Advance hereunder and shall be subject to all the terms and conditions applicable to other U.S. Advances, except that all payments on any U.S. Swing Loan shall be payable to U.S. Swing Lender solely for its own account. Each Canadian Swing Loan shall be deemed to be a Canadian Advance hereunder and shall be subject to all the terms and conditions applicable to other Canadian Advances, except that all payments on any Canadian Swing Loan shall be payable to Canadian Swing Lender solely for its own account.
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Subject to the provisions of Section 2.3(d)(ii), no Swing Lender shall make or be obligated to make any Swing Loan if such Swing Lender has actual knowledge that (i) one or more of the applicable conditions precedent set forth in Section 3 will not be satisfied on the requested Funding Date for the applicable Borrowing, (ii) in the case of a request for a U.S. Advance, the requested U.S. Advance would exceed the U.S. Availability on such Funding Date, or (iii) in the case of a request for a Canadian Advance, the requested Canadian Advance would exceed the Canadian Availability on such Funding Date. No Swing Lender shall otherwise be required to determine whether the applicable conditions precedent set forth in Section 3 have been satisfied on the Funding Date applicable thereto prior to making any Swing Loan. The U.S. Swing Loans shall be secured by the Agent’s Liens, constitute Obligations hereunder, and bear interest at the rate applicable from time to time to U.S. Advances that are Base Rate Loans. The Canadian Swing Loans shall be secured by the Agent’s Liens, constitute Obligations hereunder, and bear interest at the rate applicable from time to time to Canadian Advances that are Canadian Prime Rate Loans.
(c) Making of Loans.
(i) In the event that the applicable Swing Lender is not obligated to make a Swing Loan, then promptly after receipt of a request for a Borrowing pursuant to Section 2.3(a), (A) in the case of a request for a U.S. Advance, U.S. Agent shall notify the U.S. Lenders, or (B) in the case of a request for a Canadian Advance, Canadian Agent shall notify the Canadian Lenders, in each case not later than 1:00 p.m. (California time) on the Business Day immediately preceding the Funding Date applicable thereto, by telecopy, telephone, or other similar form of transmission, of the requested Borrowing. In the case of a request for a U.S. Advance, each U.S. Lender shall make the amount of such U.S. Lender’s Pro Rata Share of the requested U.S. Advance available to U.S. Agent in immediately available funds, to U.S. Agent’s Account, not later than 10;00 a.m. (California time) on the Funding Date applicable thereto. In the case of a request for a Canadian Advance, each. Canadian Lender shall make the amount of such Canadian Lender’s Pro Rata Share of the requested Canadian Advance available to Canadian Agent in immediately available funds, to Canadian Agent’s Account, not later than 10:00 am. (California time) on the Funding Date applicable thereto. After (X) in the case of the request for a U.S. Advance, U.S. Agent’s receipt of the proceeds of such U.S. Advances, U.S. Agent shall make the proceeds thereof available to U.S. Borrower on the applicable Funding Date by transferring immediately available funds equal to such proceeds received by U.S. Agent to the Designated U.S. Account, or (Y) in the case of the request for a Canadian Advance, Canadian Agent’s receipt of the proceeds of such Canadian Advances, Canadian Agent shall make the proceeds thereof available to Canadian Borrower on the applicable Funding Date by transferring immediately available funds equal to such proceeds received by Canadian Agent to the Designated Canadian Account; provided, however, that, subject to the provisions of Section 2.3(d)(ii), neither Agent shall request any Lender to make, and no Lender shall have the obligation to make, any Advance if (1) one or more of the applicable conditions precedent set forth in Section 3 will not be satisfied on the requested Funding Date for the applicable Borrowing unless such condition has been waived, (2) in the case of a request for a U.S. Advance, the requested U.S. Advance would exceed the U.S. Availability on such Funding Date, or (3) in the case of a request for a Canadian Advance, the requested Canadian Advance would exceed the Canadian Availability on such Funding Date.
(ii) Unless the applicable Agent receives notice from a Lender prior to 9:00 a.m. (California time) on the date of a Borrowing, that such Lender will not make available as and when required hereunder to such Agent for the account of Borrower the amount of that Lender’s Pro Rata Share of the Borrowing, such Agent may assume that each Lender has made or will make such amount available to such Agent in immediately available funds on the Funding Date and such Agent may (but shall not be so required), in reliance upon such assumption, make available to the applicable Borrower on such date a corresponding amount. If any Lender shall not have made its full amount available to the applicable Agent in immediately available funds and if such Agent in such circumstances has made available to the applicable Borrower such amount, that Lender shall on the Business Day following such Funding Date make such amount available to
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such Agent, together with interest at the Defaulting Lender Rate for each day during such period. A notice submitted by the applicable Agent to any Lender with respect to amounts owing under this subsection shall be conclusive, absent manifest error. If such amount is so made available, such payment to the applicable Agent shall constitute such Lender’s Advance on the date of Borrowing for all purposes of this Agreement. If such amount is not made available to the applicable Agent on the Business Day following the Funding Date, such Agent will notify the applicable Borrower of such failure to fund and, upon demand by such Agent, such Borrower shall pay such amount to such Agent for such Agent’s account, together with interest thereon for each day elapsed since the date of such Borrowing, at a rate per annum equal to the interest rate applicable at the time to the Advances composing such Borrowing. The failure of any Lender to make any Advance on any Funding Date shall not relieve any other Lender of any obligation hereunder to make such Advance on such Funding Date, but no Lender shall be responsible for the failure of any other Lender to make the Advance to be made by such other Lender on any Funding Date.
(iii) Neither Agent shall be obligated to transfer to a Defaulting Lender any payments made by the applicable Borrower to such Agent for the Defaulting Lender’s benefit, and, in the absence of such transfer to the Defaulting Lender, such Agent shall transfer any such payments to each other non-Defaulting Lender member of the Lender Group ratably in accordance with their Commitments (but only to the extent that such Defaulting Lender’s Advance was funded by the other members of the Lender Group) or, if so directed by the applicable Borrower and if no Default or Event of Default has occurred and is continuing (and to the extent such Defaulting Lender’s Advance was not funded by the Lender Group), retain same to be re-advanced to such Borrower as if such Defaulting Lender had made the applicable Advances to such Borrower. Subject to the foregoing, the applicable Agent may hold and, in its Permitted Discretion, re-lend to the applicable Borrower for the account of such Defaulting Lender the amount of all such payments received and retained by such Agent for the account of such Defaulting Lender. Solely for the purposes of voting or consenting to matters with respect to the Loan Documents, such Defaulting Lender shall, be deemed not to be a “Lender” and such Lender’s Commitment shall be deemed to be zero. This Section shall remain effective with respect to such Lender until (x) the Obligations under this Agreement shall have been declared or shall have become immediately due and payable, (y) the non-Defaulting Lenders, the applicable Agent, and the applicable Borrower shall have waived such Defaulting Lender’s default in writing, or (z) the Defaulting Lender makes its Pro Rata Share of the applicable Advance and pays to the applicable Agent all amounts owing by Defaulting Lender in respect thereof. The operation of this Section shall not be construed to increase or otherwise affect the Commitment of any Lender, to relieve or excuse the performance by such Defaulting Lender or any other Lender of its duties and obligations hereunder, or to relieve or excuse the performance by any Borrower of its duties and obligations hereunder to either Agent or to the Lenders other than such Defaulting Lender. Any such failure to fund by any Defaulting Lender shall constitute a material breach by such Defaulting Lender of this Agreement and shall entitle the applicable Borrower at its option, upon written notice to Agent, to arrange for a substitute Lender to assume the Commitment of such Defaulting Lender, such substitute Lender to be reasonably acceptable to the applicable Agent. In connection with the arrangement of such a substitute Lender, the Defaulting Lender shall have no right to refuse to be replaced hereunder, and agrees to execute and deliver a completed form of Assignment and Acceptance in favor of the substitute Lender (and agrees that it shall be deemed to have executed and delivered such document if it fails to do so) subject only to being repaid its share of the outstanding Obligations (other than Bank Product Obligations, but including an assumption of its Pro Rata Share of the Risk Participation Liability) without any premium or penalty of any kind whatsoever; provided, however, that any such assumption of the Commitment of such Defaulting Lender shall not be deemed to constitute a waiver of any of the Lender Groups’ or the applicable Borrower’s rights or remedies against any such Defaulting Lender arising out of or in relation to such failure to fund.
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(d) Protective Advances and Optional Overadvances.
(i) Each Agent hereby is authorized by Borrowers and the Lenders, from time to time in such Agent’s sole discretion, (A) after the occurrence and during the continuance of a Default or an Event of Default, or (B) at any time that any of the other applicable conditions precedent set forth in Section 3 are not satisfied, to (x) make U.S. Advances to U.S. Borrower on behalf of the U.S. Lenders, and (y) make Canadian Advances to Canadian Borrower on behalf of the Canadian Lenders, in each case that such Agent, in its Permitted Discretion deems necessary or desirable (1) to preserve or protect the Collateral, or any portion thereof, or (2) to enhance the likelihood of repayment of the Obligations (other than the Bank Product Obligations) (any of the Advances described in this Section 2.3(0)11) shall be referred to as “Protective Advances”); provided, that, without the consent of the Required Lenders, the principal amount of Protective Advances made by Agents shall not exceed $10,000,000 at any time outstanding.
(ii) Any contrary provision of this Agreement notwithstanding, (A) the U.S. Lenders hereby authorize U.S. Agent or U.S. Swing Lender, as applicable, and either U.S. Agent or U.S. Swing Lender, as applicable, may, but is not obligated to, knowingly and intentionally, continue to make U.S. Advances (including U.S. Swing Loans) to U.S. Borrower notwithstanding that an Overadvance exists or thereby would be created, so long as (1) after giving effect to such U.S. Advances, the outstanding U.S. Revolver Usage does not exceed the U.S. Borrowing Base by more than $7,500,000, (2) after giving effect to such U.S. Advances, the outstanding U.S. Revolver Usage (except for and excluding amounts charged to the Loan Account for interest, fees, or Lender Group Expenses) does not exceed the Maximum U.S. Revolver Amount, and (3) at the time of the making of any such U.S. Advances, U.S. Agent or U.S. Swing Lender, as applicable, does not believe, in good faith, that the Overadvance created by such U.S. Advance will be outstanding for more than 90 days, and (B) the Canadian Lenders hereby authorize Canadian Agent or Canadian Swing Lender, as applicable, and either Canadian Agent or Canadian Swing Lender, as applicable, may, but is not obligated to, knowingly and intentionally, continue to make Canadian Advances (including Canadian Swing Loans) to Canadian Borrower notwithstanding that an Overadvance exists or thereby would be created, so long as (1) after giving effect to such Canadian Advances, the outstanding Canadian Revolver Usage does not exceed the Canadian Borrowing Base by more than C$3,000,000, (2) after giving effect to such Canadian Advances, the outstanding Canadian Revolver Usage (except for and excluding amounts charged to the Loan Account for interest, fees, or Lender Group Expenses) does not exceed the Maximum Canadian Revolver Amount, and (3) at the time of the making of any such Canadian Advances, Canadian Agent or Canadian Swing Lender, as applicable, does not believe, in good faith, that the Overadvance created by such Canadian Advance will be outstanding for more than 90 days. In the event (x) U.S. Agent obtains actual knowledge that the U.S. Revolver Usage exceeds the amounts permitted by the immediately foregoing provisions, or (y) Canadian Agent obtains actual knowledge that the Canadian Revolver Usage exceeds the amounts permitted by the immediately foregoing provisions, in each case regardless of the amount of, or reason for, such excess, such Agent shall notify the Lenders as soon as practicable (and prior to making any (or any additional) intentional Overadvances (except for and excluding amounts charged to the Loan Account for interest, fees, or Lender Group Expenses) unless such Agent determines that prior notice would result in imminent harm to the Collateral or its value), and the Lenders with Revolver Commitments thereupon shall, together with the Agents jointly determine the terms of arrangements that shall be implemented with the applicable Borrower intended to reduce, within a reasonable time, the outstanding principal amount of the Advances to such Borrower to an amount permitted by the preceding sentence. In such circumstances, if any Lender with a Revolver Commitment objects to the proposed terms of reduction or repayment of any Overadvance, the terms of reduction or repayment thereof shall be implemented according to the determination of the Required. Lenders. Each U.S. Lender with a U.S. Revolver Commitment shall be obligated to settle with U.S. Agent as provided in Section 2.3(e) for the amount of such U.S. Lender’s Pro Rata Share of any unintentional Overadvances by U.S. Agent reported to such U.S. Lender, any intentional Overadvances made by U.S. Agent as permitted under this Section 2.3(d)(ii), and any Overadvances consisting of U.S. Advances
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resulting from the charging to the U.S. Borrower’s Loan Account of interest, fees, or Lender Group Expenses. Each Canadian Lender with a Canadian Revolver Commitment shall be obligated to settle with Canadian Agent as provided in Section 2.3(e) for the amount of such Canadian Lender’s Pro Rata Share of any unintentional Overadvances by Canadian Agent reported to such Canadian Lender, any intentional Overadvances made by Canadian Agent as permitted under this Section 2.3(d)(ii), and any Overadvances consisting of Canadian Advances resulting from the charging to the Canadian Borrower’s Loan Account of interest, fees, or Lender Group Expenses.
(iii) Each Protective Advance and each Overadvance by U.S. Agent shall be deemed to be a U.S. Advance hereunder, and each Protective Advance and each Overadvance by Canadian Agent shall be deemed to be a Canadian Advance hereunder, except that no Protective Advance or Overadvance shall be eligible to be a LIBOR Rate Loan and, prior to Settlement therefor (x) all payments on the Protective Advances by U.S. Agent shall be payable to U.S. Agent solely for its own account, and (y) all payments on the Protective Advances by Canadian Agent shall be payable to Canadian Agent solely for its own account. The Protective Advances and Overadvances shall be repayable on demand, secured by the Agent’s Liens, constitute Obligations hereunder, and (1) in the case of Protective Advances and Overadvances by U.S. Agent, bear interest at the rate applicable from time to time to U.S. Advances that are Base Rate Loans, or (2) in the case of Protective Advances and Overadvances by Canadian Agent, bear interest at the rate applicable from time to time to Canadian Advances that are Canadian Prime Rate Loans. The provisions of this Section 2.3(d) are for the exclusive benefit of Agents, Swing Lenders, and the Lenders and are not intended to benefit any Borrower in any way.
(e) Settlement Regarding U.S. Advances. It is agreed that each U.S. Lender’s funded portion of the U.S. Advances is intended by the U.S. Lenders to equal, at all times, such U.S. Lender’s Pro Rata Share of the outstanding U.S. Advances. Such agreement notwithstanding, U.S. Agent, U.S. Swing Lender, and the other U.S. Lenders agree (which agreement shall not be for the benefit of U.S. Borrower) that in order to facilitate the administration of this Agreement and the other Loan Documents, settlement among the U.S. Lenders as to the U.S. Advances, the U.S. Swing Loans, and the Protective Advances by U.S. Agent shall take place on a periodic basis in accordance with the following provisions:
(i) U.S. Agent shall request settlement (“U.S. Settlement”) with the U.S. Lenders on a weekly basis, or on a more frequent basis if so determined by U.S. Agent (1) on behalf of U.S. Swing Lender, with respect to the outstanding U.S. Swing Loans, (2) for itself, with respect to the outstanding Protective Advances by U.S. Agent, and (3) with respect to the Loan Parties’ or their respective Subsidiaries’ Collections or payments received, as to each by notifying the U.S. Lenders by telecopy, telephone, or other similar form of transmission, of such requested U.S. Settlement, no later than 2:00 p.m. (California time) on the Business Day immediately prior to the date of such requested U.S. Settlement (the date of such requested U.S. Settlement being the “U.S. Settlement Date”). Such notice of a U.S. Settlement Date shall include a summary statement of the amount of outstanding U.S. Advances, U.S. Swing Loans, and Protective Advances by U.S. Agent for the period since the prior U.S. Settlement Date. Subject to the terms and conditions contained herein (including Section 2.3(c)(iii)): (y) if a U.S. Lender’s balance of the U.S. Advances (including U.S. Swing Loans and Protective Advances by U.S. Agent) exceeds such U.S. Lender’s Pro Rata Share of the U.S. Advances (including U.S. Swing Loans and Protective Advances by U.S. Agent) as of a U.S. Settlement Date, then U.S. Agent shall, by no later than 12:00 p.m. (California time) on the U.S. Settlement Date, transfer in immediately available funds to a Deposit Account of such U.S. Lender (as such U.S. Lender may designate), an amount such that each such U.S. Lender shall, upon receipt of such amount, have as of the U.S. Settlement Date, its Pro Rata Share of the U.S. Advances (including U.S. Swing Loans and Protective Advances by U.S. Agent), and (z) if a U.S. Lender’s balance of the U.S. Advances (including U.S. Swing Loans and Protective Advances by U.S. Agent) is less than such U.S. Lender’s Pro Rata Share of the U.S. Advances (including U.S. Swing Loans and Protective Advances by U.S. Agent) as of a U.S. Settlement Date, such U.S. Lender shall no
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later than 12:00 p.m. (California time) on the U.S. Settlement Date transfer in immediately available funds to the U.S. Agent’s Account, an amount such that each such U.S. Lender shall, upon transfer of such amount, have as of the U.S. Settlement Date, its Pro Rata Share of the U.S. Advances (including U.S. Swing Loans and Protective Advances by U.S. Agent). Such amounts made available to U.S. Agent under clause (z) of the immediately preceding sentence shall be applied against the amounts of the applicable U.S. Swing Loans or Protective Advances by U.S. Agent and, together with the portion of such U.S. Swing Loans or Protective Advances by U.S. Agent representing U.S. Swing Lender’s Pro Rata Share thereof, shall constitute U.S. Advances of such U.S. Lenders. If any such amount is not made available to U.S. Agent by any U.S. Lender on the U.S. Settlement Date applicable thereto to the extent required by the terms hereof, U.S. Agent shall be entitled to recover for its account such amount on demand from such U.S. Lender together with interest thereon at the Defaulting Lender Rate.
(ii) In determining whether a U.S. Lender’s balance of the U.S. Advances, U.S. Swing Loans, and Protective Advances by U.S. Agent is less than, equal to, or greater than such U.S. Lender’s Pro Rata Share of the U.S. Advances, U.S. Swing Loans, and Protective Advances by U.S. Agent as of a U.S. Settlement Date, U.S. Agent shall, as part of the relevant U.S. Settlement, apply to such balance the portion of payments actually received in good funds by U.S. Agent with respect to principal, interest, fees payable by U.S. Borrower and allocable to the U.S. Lenders hereunder, and proceeds of Collateral.
(iii) Between U.S. Settlement Dates, U.S. Agent, to the extent Protective Advances by U.S. Agent or U.S. Swing Loans are outstanding, may pay over to U.S. Agent or U.S. Swing Lender, as applicable, any Collections or payments received by U.S. Agent, that in accordance with the terms of this Agreement would be applied to the reduction of the U.S. Advances, for application to the Protective Advances by U.S. Agent or U.S. Swing Loans. Between U.S. Settlement Dates, U.S. Agent, to the extent no Protective Advances by U.S. Agent or U.S. Swing Loans are outstanding, may pay over to U.S. Swing Lender any Collections or payments received by U.S. Agent, that in accordance with the terms of this Agreement would be applied to the reduction of the U.S. Advances, for application to U.S. Swing Lender’s Pro Rata Share of the U.S. Advances. If, as of any U.S. Settlement Date, Collections or payments of the Loan Parties or their respective Subsidiaries received since the then immediately preceding U.S. Settlement Date have been applied to U.S. Swing Lender’s Pro Rata Share of the U.S. Advances other than to U.S. Swing Loans, as provided for in the previous sentence, U.S. Swing Lender shall pay to U.S. Agent for the accounts of the U.S. Lenders, and U.S. Agent shall pay to the U.S. Lenders, to be applied to the outstanding U.S. Advances of such U.S. Lenders, an amount such that each U.S. Lender shall, upon receipt of such amount, have, as of such U.S. Settlement Date, its Pro Rata Share of the U.S. Advances. During the period between U.S. Settlement Dates, U.S. Swing Lender with respect to U.S. Swing Loans, U.S. Agent with respect to Protective Advances by U.S. Agent, and each U.S. Lender (subject to the effect of agreements between U.S. Agent and individual U.S. Lenders) with respect to the U.S. Advances other than U.S. Swing Loans and Protective Advances by U.S. Agent, shall be entitled to interest at the applicable rate or rates payable under this Agreement on the daily amount of funds employed by U.S. Swing Lender, U.S. Agent, or the U.S. Lenders, as applicable.
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(f) Settlement Regarding Canadian Advances. It is agreed that each Canadian Lender’s funded portion of the Canadian Advances is intended by the Canadian Lenders to equal, at all times, such Canadian Lender’s Pro Rata Share of the outstanding Canadian Advances. Such agreement notwithstanding, Canadian Agent, Canadian Swing Lender, and the other Canadian Lenders agree (which agreement shall not be for the benefit of Canadian Borrower) that in order to facilitate the administration of this Agreement and the other Loan Documents, settlement among the Canadian Lenders as to the Canadian Advances, the Canadian Swing Loans, and the Protective Advances by Canadian Agent shall take place on a periodic basis in accordance with the following provisions:
(i) Canadian Agent shall request settlement (“Canadian Settlement”) with the Canadian Lenders on a weekly basis, or on a more frequent basis if so determined by Canadian Agent (1) on behalf of Canadian Swing Lender, with respect to the outstanding Canadian Swing Loans, (2) for itself, with respect to the outstanding Protective Advances by Canadian Agent, and (3) with respect to the Loan Parties’ or their respective Subsidiaries’ Collections or payments received, as to each by notifying the Canadian Lenders by telecopy, telephone, or other similar form of transmission, of such requested Canadian Settlement, no later than 2:00 p.m. (California time) on the Business. Day immediately prior to the date of such requested Canadian Settlement (the date of such requested Canadian Settlement being the “Canadian Settlement Date”), Such notice of a Canadian Settlement Date shall include a summary statement of the amount of outstanding Canadian Advances, Canadian Swing Loans, and Protective Advances by Canadian Agent for the period since the prior Canadian Settlement Date. Subject to the terms and conditions contained herein (including Section 2.3(c)(iii)): (y) if a Canadian Lender’s balance of the Canadian Advances (including Canadian Swing Loans and Protective Advances by Canadian Agent) exceeds such. Canadian Lender’s Pro Rata Share of the Canadian Advances (including Canadian Swing Loans and Protective Advances by Canadian Agent) as of a Canadian Settlement Date, then Canadian Agent shall, by no later than 12:00 p.m. (California time) on the Canadian Settlement Date, transfer in immediately available funds to a Deposit Account of such Canadian Lender (as such Canadian Lender may designate), an amount such that each such Canadian Lender shall, upon receipt of such amount, have as of the Canadian Settlement Date, its Pro Rata Share of the Canadian Advances (including Canadian Swing Loans and Protective Advances by Canadian Agent), and (z) if a Canadian Lender’s balance of the Canadian Advances (including Canadian Swing Loans and Protective Advances by Canadian Agent) is less than such Canadian Lender’s Pro Rata Share of the Canadian Advances (including Canadian Swing Loans and Protective Advances by Canadian Agent) as of a Canadian Settlement Date, such Canadian Lender shall no later than 12:00 p.m. (California time) on the Canadian Settlement Date transfer in immediately available funds to the Canadian Agent’s Account, an amount such that each such Canadian Lender shall, upon transfer of such amount, have as of the Canadian Settlement Date, its Pro Rata Share of the Canadian Advances (including Canadian Swing Loans and Protective Advances by Canadian Agent). Such amounts made available to Canadian Agent under clause (z) of the immediately preceding sentence shall be applied against the amounts of the applicable Canadian Swing Loans or Protective Advances by Canadian Agent and, together with the portion of such Canadian Swing Loans or Protective Advances by Canadian Agent representing Canadian Swing Lender’s Pro Rata Share thereof, shall constitute Canadian Advances of such Canadian Lenders. If any such amount is not made available to Canadian Agent by any Canadian Lender on the Canadian Settlement Date applicable thereto to the extent required by the terms hereof, Canadian Agent shall be entitled to recover for its account such amount on demand from such Canadian Lender together with interest thereon at the Defaulting Lender Rate.
(ii) In determining whether a Canadian Lender’s balance of the Canadian Advances, Canadian Swing Loans, and Protective Advances by Canadian Agent is less than, equal to, or greater than such Canadian Lender’s Pro Rata Share of the Canadian Advances, Canadian Swing Loans, and Protective Advances by Canadian Agent as of a Canadian Settlement Date, Canadian Agent shall, as part of the relevant Canadian Settlement, apply to such balance the portion of payments actually received in good funds by Canadian Agent with respect to principal, interest, fees payable by Canadian Borrower and allocable to the Canadian Lenders hereunder, and proceeds of Collateral.
(iii) Between Canadian Settlement Dates, Canadian Agent, to the extent Protective Advances by Canadian Agent or Canadian Swing Loans are outstanding, may pay over to Canadian Agent or Canadian Swing Lender, as applicable, any Collections or payments received by Canadian Agent, that in accordance with the terms of this Agreement would be applied to the reduction of the Canadian Advances, for application to the Protective Advances by Canadian Agent or Canadian Swing Loans. Between Canadian Settlement Dates, Canadian Agent, to the extent no Protective Advances by Canadian Agent or Canadian Swing Loans are outstanding, may pay over to Canadian Swing Lender any Collections or payments
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received by Canadian Agent, that in accordance with the terms of this Agreement would be applied to the reduction of the Canadian Advances, for application to Canadian Swing Lender’s Pro Rata Share of the Canadian Advances. If, as of any Canadian Settlement Date, Collections or payments of the Loan Parties or their respective Subsidiaries received since the then immediately preceding Canadian Settlement Date have been applied to Canadian Swing Lender’s Pro Rata Share of the Canadian Advances other than to Canadian Swing Loans, as provided for in the previous sentence, Canadian Swing Lender shall pay to Canadian Agent for the accounts of the Canadian Lenders, and Canadian Agent shall pay to the Canadian Lenders, to be applied to the outstanding Canadian Advances of such Canadian Lenders, an amount such that each Canadian Lender shall, upon receipt of such amount, have, as of such Canadian Settlement Date, its Pro Rata Share of the Canadian Advances. During the period between Canadian Settlement Dates, Canadian Swing Lender with respect to Canadian Swing Loans, Canadian Agent with respect to Protective Advances by Canadian Agent, and each Canadian Lender (subject to the effect of agreements between Canadian Agent and individual Canadian Lenders) with respect to the Canadian Advances other than Canadian Swing Loans and Protective Advances by Canadian Agent, shall be entitled to interest at the applicable rate or rates payable under this Agreement on the daily amount of funds employed by Canadian Swing Lender, Canadian Agent, or the Canadian Lenders, as applicable.
(g) [Intentionally Omitted].
(h) Lenders’ Failure to Perform. All Advances (other than Swing Loans and Protective Advances) shall be made by the Lenders contemporaneously and in accordance with their Pro Rata Shares. It is understood that (0 no Lender shall be responsible for any failure by any other Lender to perform its obligation to make any Advance (or other extension of credit) hereunder, nor shall any Commitment of any Lender be increased or decreased as a result of any failure by any other Lender to perform its obligations hereunder, and (ii) no failure by any Lender to perform its obligations hereunder shall excuse any other Lender from its obligations hereunder.
2.4. Payments; Reductions of Commitments; Prepayments.
(a) Payments by Borrower.
(i) Except as otherwise expressly provided herein, (A) all payments by Canadian Borrower shall be made to Canadian Agent’s Account for the account of the Lender Group and shall be made in immediately available funds, no later than 11:00 a.m. (California time) on the date specified herein, and (B) all payments by U.S. Borrower shall be made to U.S. Agent’s Account for the account of the Lender Group and shall be made in immediately available funds, no later than 11:00 a.m. (California time) on the date specified herein. Any payment received by an Agent later than 11:00 a.m. (California time) shall be deemed to have been received on the following Business Day and any applicable interest or fee shall continue to accrue until such following Business Day.
(ii) Unless the applicable Agent receives notice from the applicable Borrower prior to the date on which any payment is due to the Lenders that such Borrower will not make such payment in full as and when required, the applicable Agent may assume that such Borrower has made (or will make) such payment in full to such Agent on such date in immediately available funds and such Agent may (but shall not be so required), in reliance upon such assumption, distribute to each Lender on such due date an amount equal to the amount then due such Lender. If and to the extent the applicable Borrower does not make such payment in full to the applicable Agent on the date when due, each Lender severally shall repay to such Agent on demand such amount distributed to such Lender, together with interest thereon at the Defaulting Lender Rate for each day from the date such amount is distributed to such Lender until the date repaid.
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(iii) For greater certainty, any payments made by Canadian Borrower that are applied to the U.S. Loan Account, and any payments made by U.S. Borrower that are applied against the Canadian Loan Account, are made by Canadian Borrower or U.S. Borrower, as the case may be, pursuant to its obligations under the Guaranty or the Canadian Guaranty, as applicable.
(b) Apportionment and Application.
(i) So long as no Application Event has occurred and is continuing and except as otherwise provided with respect to Defaulting Lenders, all principal and interest payments shall be apportioned ratably among the Lenders (according to the unpaid principal balance of the Obligations to which such payments relate held by each Lender) and all payments of fees and expenses (other than fees or expenses that are for Agent’s separate account) shall be apportioned ratably among the Lenders having a Pro Rata Share of the type of Commitment or Obligation to which a particular fee or expense relates. All payments to be made hereunder by a Borrower shall be remitted to the applicable Agent and all such payments, and all proceeds of Collateral received by such Agent, shall be applied, so long as no Application Event has occurred and is continuing, to reduce the balance of the applicable Advances outstanding and, thereafter, to the applicable Borrower (to be wired to the applicable Designated Account) or such other Person entitled thereto under applicable law.
(ii) At any time that an Application Event has occurred and is continuing and except as otherwise provided (A) with respect to Defaulting Lenders or (B) in any agreements between the applicable Agent and any Lender, all payments remitted to Canadian Agent and all proceeds of Collateral received by Canadian Agent shall be applied as follows (and in each case without duplication with this clause (ii) and with clause (iii)):
(A) first, ratably to pay any Lender Group Expenses (including cost or expense reimbursements) or indemnities then due to the Agents under the Loan Documents, until paid in full,
(B) second, ratably to pay any fees or premiums then due to the Agents under the Loan Documents until paid in full,
(C) third, to pay interest due in respect of all Protective Advances made by Canadian Agent until paid in full,
(D) fourth, to pay the principal of all Protective Advances made by Canadian Agent until paid in full,
(E) fifth, ratably to pay any Lender Group Expenses (including cost or expense reimbursements) or indemnities then due to any of the Lenders under the Loan Documents, in each case to the extent fairly attributable to the revolving credit facility made to the Canadian Borrower, until paid in full,
(F) sixth, ratably to pay any fees or premiums then due to any of the Lenders under the Loan Documents, in each case to the extent fairly attributable to the revolving credit facility made to the Canadian Borrower, until paid in full,
(G) seventh, ratably to pay interest due in respect of the Canadian. Advances (other than Protective Advances made by Canadian Agent) and Canadian Swing Loans until paid in full,
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(H) eighth, ratably (i) to pay the principal of all Canadian Swing Loans until paid in full, (ii) to pay the principal of ail Canadian Advances, until paid in full, and (iii) to Canadian Agent, to be held by Canadian Agent, for the benefit of Canadian Issuing Lender and those Lenders having a share of the Risk Participation Liability in respect of the Canadian Letters of Credit, as cash collateral in an amount up to 105% of the Canadian Letter of Credit Usage,
(I) ninth, to pay interest due in respect of all Protective Advances made by U.S. Agent until paid in full,
(J) tenth, to pay the principal of all Protective Advances made by U.S. Agent until paid in full,
(K) eleventh, ratably to pay interest due in respect of the U.S. Advances (other than Protective Advances made by U.S. Agent) and U.S. Swing Loans until paid in full,
(L) twelfth, ratably (i) to pay the principal of all U.S. Swing Loans until paid in full, (ii) to pay the principal of all U.S. Advances until paid in full, and (iii) to U.S. Agent, to be held by U.S. Agent, for the benefit of U.S. Issuing Lender and those Lenders having a share of the Risk Participation Liability in respect of the U.S. Letters of Credit, as cash collateral in an amount up to 105% of the U.S. Letter of Credit Usage,
(M) thirteenth, to pay any other Obligations, and
(N) fourteenth, to Canadian Borrower (to be wired to the Designated Canadian Account) or such other Person entitled thereto under applicable law.
(iii) At any time that an Application Event has occurred and is continuing and except as otherwise provided (A) with respect to Defaulting Lenders or (B) in any agreements between the applicable Agent and any Lender, all payments remitted to U.S. Agent and all proceeds of Collateral received by U.S. Agent shall be applied as follows (and, in each case, without duplication under this clause (iii) or clause (ii)):
(A) first, to pay any Lender Group Expenses (including cost or expense reimbursements) or indemnities then due to the Agents under the Loan Documents, until paid in full,
(B) second, to pay any fees or premiums then due to the Agents under the Loan Documents until paid in full,
(C) third, to pay interest due in respect of all Protective Advances made by U.S. Agent until paid in full,
(D) fourth, to pay the principal of all Protective Advances made by U.S.
(E) fifth, ratably to pay any Lender Group Expenses (including cost or expense reimbursements) or indemnities then due to any of the Lenders under the Loan Documents, in each case to the extent fairly attributable to the revolving credit facility made to the U.S. Borrower, until paid in full,
(F) sixth, ratably to pay any fees or premiums then due to any of the Lenders under the Loan Documents, in each case to the extent fairly attributable to the revolving credit facility made to the U.S. Borrower, until paid in full,
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(G) seventh, ratably to pay interest due in respect of the U.S. Advances (other than Protective Advances made by U.S. Agent) and the U.S. Swing Loans until paid in full,
(H) eighth, ratably (i) to pay the principal of all U.S. Swing Loans until paid in full, (ii) to pay the principal of all U.S. Advances until paid in full, and (iii) to U.S. Agent, to be held by U.S. Agent, for the benefit of U.S. Issuing Lender and those Lenders having a share of the Risk Participation Liability in respect of the U.S. Letters of Credit, as cash collateral in an amount up to 105% of the U.S. Letter of Credit Usage,
(I) ninth, to pay interest due in respect of all Protective Advances made by Canadian Agent until paid in full,
(J) tenth, to pay the principal of all Protective Advances made by Canadian Agent until paid in full,
(K) twelfth, ratably to pay interest due in respect of the Canadian Advances (other than Protective Advances made by Canadian Agent) and the Canadian Swing Loans until paid in full,
(L) thirteenth, ratably (i) to pay the principal of all Canadian Swing Loans until paid in full, (ii) to pay the principal of all Canadian Advances, until paid in full, and (iii) to Canadian Agent, to be held by Canadian Agent, for the benefit of Canadian Issuing Lender and those Lenders having a share of the Risk Participation Liability in respect of Canadian Letters of Credit, as cash collateral in an amount up to 105% of the Canadian Letter of Credit Usage,
(M) fourteenth, to pay any other Obligations, and
(N) fifteenth, to U.S. Borrower (to be wired to the Designated U.S. Account) or such other Person entitled thereto under applicable law.
(iv) Agent promptly shall distribute to each Lender, pursuant to the applicable wire instructions received from each Lender in writing, such funds as it may be entitled to receive, subject to a Settlement delay as provided in Section 2.3(e).
(v) In each instance, so long as no Application Event has occurred and is continuing, Section 2.4(b)(i), (ii), or (iii) shall not apply to any payment made by a Borrower to an Agent and specified by such Borrower to be for the payment of specific Obligations then due and payable (or prepayable) under any provision of this Agreement or any other Loan Document.
(vi) For purposes of Section 2.4(b)(ii), “paid in full” means payment in cash of all Obligations owing under the Loan Documents according to the terms thereof (other than unasserted contingent indemnification obligations and other than any Bank Product Obligations that, at such time, are allowed by the applicable Bank Product Provider to remain outstanding and that are not required by the provisions of this Agreement to be repaid or cash collateralized), including loan fees, service fees, reasonable and documented, out-of-pocket professional fees (excluding allocation costs of internal counsel), interest (and specifically including interest accrued after the commencement of any Insolvency Proceeding), default interest, interest on interest, and expense reimbursements, whether or not any of the foregoing would be or is allowed or disallowed in whole or in part in any Insolvency Proceeding.
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(vii) In the event of a direct conflict between the priority provisions of this Section 2.4 and any other provision contained in any other Loan Document, it is the intention of the parties hereto that such provisions be read together and construed, to the fullest extent possible, to be in concert with each other. In the event of any actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms and provisions of this Section 2.4 shall control and govern.
(c) Reduction of Commitments.
(i) Revolver Commitments. The Revolver Commitments shall terminate on the Maturity Date. With the prior written consent of the U.S. Agent, the Canadian Borrower may reduce the Canadian Revolver Commitments to an amount {which may be zero) not less than the sum of (A) the Canadian Revolver Usage as of such date, plus (B) the principal amount of all Canadian Advances not yet made as to which a request has been given by Canadian Borrower under Section 2.3(a). With the prior written consent of the U.S. Agent, the U.S. Borrower may reduce the U.S. Revolver Commitments to an amount (which may be zero) not less than the sum of (A) the U.S. Revolver Usage as of such date, plus (B) the principal amount of all U.S. Advances not yet made as to which a request has been given by U.S. Borrower under Section 2.3(a), plus (C) the amount of all Letters of Credit not yet issued as to which a request has been given by Borrower pursuant to Section 2.11(a). Each request for such reduction shall be in an amount which is an integral multiple of (x) in the case of U.S. Revolver Commitments, $1,000,000 (unless the U.S. Revolver Commitments in effect immediately prior to such reduction are less than $25,000,000), or (y) in the case of Canadian Revolver Commitments, C$500,000 (unless the Canadian Revolver Commitments in effect immediately prior to such reduction are less than C$10,000,000), shall be made by providing not less than 10 Business Days prior written notice of such request to the applicable Agent and shall be irrevocable. Once reduced, the applicable Revolver Commitments may not be increased. Each such reduction of Revolver Commitments shall reduce the applicable Revolver Commitments of each. Lender proportionately in accordance with its Pro Rata Share thereof.
(ii) [intentionally omitted].
(d) Optional Prepayments.
(i) Canadian Advances. The Canadian Borrower may prepay the principal of any Canadian Advance at any time in whole or in part. Any amounts prepaid may be reborrowed.
(ii) U.S. Advances. The U.S. Borrower may prepay the principal of any U.S. Advance at any time in whole or in part. Any amounts prepaid may be reborrowed.
(e) Mandatory Prepayments. Within 3 Business Days of the date of receipt by any Loan Party or any of its Subsidiaries of the Net Cash Proceeds of any:
(i) voluntary or involuntary sale or disposition by any Loan Party or any of its Subsidiaries of Revolver Priority Collateral (including casualty losses {including proceeds of insurance in respect thereof) or condemnations with respect thereto but excluding sales or dispositions which qualify as Permitted Dispositions under clauses (a), (b), (c), (d), (e), (f), (i), (j), (k) or (n) of the definition of Permitted Dispositions), (A) U.S. Borrower shall prepay the outstanding principal amount of the Obligations in accordance with Section 2.4(f)(i) in an amount equal to 100% of such Net Cash Proceeds (including condemnation awards and payments in lieu thereof) received by any U.S. Loan Party or any of its Subsidiaries in connection with such sales or dispositions and (B) Canadian Borrower shall prepay the outstanding principal amount of the Obligations in accordance with Section 2.4(f)(ii) in an amount equal to 100% of such Net Cash Proceeds (including condemnation awards and payments in lieu thereof) received by any Canadian Loan Party
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or any of its Subsidiaries in connection with such sales or dispositions provided, however, that, so long as (w) no Default or Event of Default shall have occurred and is continuing, (x) U.S. Borrower or Canadian Borrower, as applicable, shall have given Agent prior written notice of Borrower’s intention to apply such monies to the costs of replacement of the properties or assets that are the subject of such sale or disposition or the cost of purchase or construction of other assets useful in the business of such Borrower or its Subsidiaries, (y) the monies are held in a Deposit Account in which Agent has a perfected first-priority security interest (subject to Permitted Liens), and (z) such Loan Party or any its Subsidiaries, as applicable, commits to such replacement, purchase or construction within 6 months after the date of initial receipt of such monies and completes such replacement, purchase, or construction within 1 year after the initial receipt of such monies, such Loan Party or any of its Subsidiaries shall have the option to apply such monies, in an aggregate amount not to exceed (1) with respect to sales or dispositions (other than casualty losses or condemnations), (aa) $1,000,000 for all such sales or dispositions in any fiscal year, and (bb) $5,000,000 for all such sales or dispositions since the Closing Date, or (2) with respect to casualty losses and condemnations, $10,000,000 for all such casualty losses (including proceeds of insurance in respect thereof) and condemnations in any fiscal year, to the costs of replacement of the assets that are the subject of such sale or disposition or for the purchase or construction of assets useful to the business of any of the Loan Parties unless and to the extent that (aa) such applicable period shall have expired without such replacement, purchase or construction being made or completed or (bb) an Event of Default shall have occurred and be continuing, in which ease, any amounts remaining in the cash collateral account shall be paid to Agent and applied in accordance with Section 2.4(f)(i) or Section 2.4(f)(ii), as applicable; and
(ii) business interruption insurance, (A) U.S. Borrower shall prepay the outstanding principal amount of the Obligations in accordance with Section 2.4(f)(i) in an amount equal to 50% of such Net Cash Proceeds of any business interruption insurance received by any U.S. Loan Party or any of its Subsidiaries and (B) Canadian Borrower shall prepay the outstanding principal amount of the Obligations in accordance with Section 2.4(f)(ii) in an amount equal to 50% of such Net Cash Proceeds of any business interruption insurance received by any Canadian Loan Party or any of its Subsidiaries;
Nothing contained in this Section 2.4(e) shall permit any Loan Party or any of its Subsidiaries to sell or otherwise dispose of any assets other than in accordance with Section 6.4.
(f) Application of Payments.
(i) Each prepayment pursuant to Section 2.4(e)(i)(A) and Section 2.4(e)(ii)(A) above shall (A) if an Application Event shall have occurred and be continuing, be applied in the manner set forth in Section 2.4(b)(iii) and (B) so long as no Application Event shall have occurred and be continuing, be applied, as follows:
(A) subject to clause (B) below, if the proceeds are from any disposition of any Revolver Priority Collateral or any insurance policy or condemnation awards with respect to any Revolver Priority Collateral, such proceeds shall be applied, first, to the outstanding principal amount of the U.S. Advances, until paid in full, second, to cash collateralize the U.S. Letters of Credit in an amount up to 105% of then extant U.S. Letter of Credit Usage, until paid in full, third, to the outstanding principal amount of the Canadian Advances, until paid in full, and fourth, to cash collateralize the Canadian Letters of Credit in an amount up to 105% of then extant Canadian Letter of Credit Usage, until paid in full; and
(B) if the proceeds are from any disposition of all or substantially all of the assets or Stock of any Person or any business interruption insurance, which disposition or proceeds of insurance include both Revolver Priority Collateral and other assets, such proceeds shall be applied as follows: (1) an amount equal to the net book value of such Revolver Priority Collateral (determined at the time of such
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disposition or event resulting in such insurance proceeds) shall be applied first, to the outstanding principal amount of the U.S. Advances, until paid in full, second, to cash collateralize the U.S. Letters of Credit in an amount up to 105% of then extant U.S. Letter of Credit Usage, third, to the outstanding principal amount of the Canadian Advances, until paid in full, fourth, to cash collateralize the Canadian Letters of Credit in an amount up to 105% of then extant Canadian Letter of Credit Usage and (2) the remaining proceeds shall be applied to prepay the Senior Term Loan Indebtedness pursuant to the Senior Term Loan Credit Agreement.
(ii) Each prepayment pursuant to Section 2.4(e)(i)(B) and Section 2.4(e)(ii)(8) above shall (A) if an Application Event shall have occurred and be continuing, be applied in the manner set forth in Section 2.4(b)(ii) and (B) so long as no Application Event shall have occurred and be continuing, be applied, as follows:
(A) subject to clause (B) below, if the proceeds are from any disposition of any. Revolver Priority Collateral or any insurance policy or condemnation awards with respect to any Revolver Priority Collateral, such proceeds shall be applied, first, to the outstanding principal amount of the Canadian Advances, until paid in full, second, to cash collateralize the Canadian Letters of Credit in an amount up to 105% of then extant U.S. Letter of Credit Usage, until paid in full, third, to the outstanding principal amount of the U.S. Advances, until paid in full, fourth, to cash collateralize the U.S. Letters of Credit in an amount up to 105% of then extant Canadian Letter of Credit Usage, until paid in full; and
(B) if the proceeds are from any disposition of all or substantially all of the assets or Stock of any Person or any business interruption insurance, which disposition or proceeds of insurance include both Revolver Priority Collateral and other assets, such proceeds shall be applied as follows: (1) an amount equal to the net book value of such Revolver Priority Collateral (determined at the time of such disposition or event resulting in such insurance proceeds) shall be applied first, to the outstanding principal amount of the Canadian Advances, until paid in full, second, to cash collateralize the Canadian Letters of Credit in an amount up to 105% of then extant Canadian Letter of Credit Usage, until paid in full, third, to the outstanding principal amount of the U.S. Advances, until paid in full, fourth, to cash collateralize the U.S. Letters of Credit in an amount up to 105% of then extant U.S. Letter of Credit Usage, until paid in full and (2) the remaining proceeds shall be applied to prepay the Senior Term Loan Indebtedness pursuant to the Senior Term Loan Credit Agreement.
2.5. Overadvances. Subject to Section 2.3, if, at any time or for any reason, the amount of Obligations owed by a Borrower pursuant to Section 2.1 or Section 2.2 or Section 2.11 is greater than any of the limitations set forth in Section 2.1 or Section 2.2 or Section 2.11, as applicable (an “Overadvance”), the applicable Borrower shall immediately pay to the applicable Agent, in cash, the amount of such excess, which amount shall be used by such Agent to reduce the Obligations in accordance with the priorities set forth in Section 2.4(b) or (c), as applicable. Each Borrower promises to pay the Obligations (including principal, interest, fees, costs, and expenses) in Dollars or Canadian Dollars (as the case may be) in full on the Maturity Date or, if earlier, on the date on which the Obligations are declared due and payable pursuant to the terms of this Agreement.
2.6. Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations.
(a) Interest Rates. Except as provided in Section 2.6(e), all Obligations (except for undrawn Letters of Credit and except for Bank Product Obligations) that have been charged to the Loan Account pursuant to the terms hereof shall bear interest on the Daily Balance thereof as follows:
(i) if the relevant Obligation is a CDOR Rate Loan, at a per annum rate equal to the CDOR Rate plus the CDOR Rate Margin,
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(ii) if the relevant Obligation is a Canadian Prime Rate Loan, at a per annum rate equal to the Canadian Prime Rate plus the Canadian Prime Rate Margin,
(iii) if the relevant Obligation is a LIBOR Rate Loan, at a per annum rate equal to the LIBOR Rate plus the LIBOR Rate Margin, and Margin.
(b) Letter of Credit Fee.
(i) U.S. Borrower shall pay to the U.S. Agent (for the ratable benefit of the Lenders with a U.S. Revolver Commitment, subject to any agreements between U.S. Agent and individual Lenders), a Letter of Credit fee (in addition to the charges, commissions, fees, and costs set forth in Section 2.11(e)) in respect of the U.S. Letters of Credit which shall accrue at a per annum rate equal to (i) the LIBOR Rate Margin times the Daily Balance of the undrawn amount of all outstanding U.S. Letters of Credit minus (ii) 0.325 percentage points.
(ii) Canadian Borrower shall pay to the Canadian Agent (for the ratable benefit of the Lenders with a Canadian Revolver Commitment, subject to any agreements between Canadian Agent and individual Lenders), a Letter of Credit fee (in addition to the charges, commissions, fees, and costs set forth in Section 2.11(e)) in respect of the Canadian Letters of Credit which shall accrue at a per annum rate equal to (i) the CDOR Rate Margin times the Daily Balance of the undrawn amount of all outstanding Canadian Letters of Credit minus (ii) 0.325 percentage points.
(c) Default Rate. Upon the occurrence and during the continuation of an Event of Default and at the election of the Required Lenders,
(i) all Obligations (except for undrawn Letters of Credit and except for Bank Product Obligations) that have been charged to the Loan Account pursuant to the terms hereof shall bear interest on the Daily Balance thereof (and at the election of the Required Lenders, as of the date of such Event of Default) at a per annum rate equal to 2 percentage points above the per annum rate otherwise applicable hereunder, and
(ii) the Letter of Credit fees provided for in Section 2.6(b)(i) and Section 2.6(b)(ii) shall be increased to 2 percentage points above the per annum rate otherwise applicable hereunder.
(d) Payment. Except as provided to the contrary in Section 2.10 or Section 2.12(a) or the Fee Letter, interest, Letter of Credit fees, and all other fees payable hereunder shall be due and payable, in arrears, on the first day of each month at any time that Obligations or Commitments are outstanding. Each Borrower hereby authorizes the applicable Agent, from time to time without prior notice to such Borrower, to charge all interest and fees (when due and payable), all Lender Group Expenses (as and when incurred), all charges, commissions, fees, and costs provided for in Section 2.11(e) (as and when accrued or incurred), all fees and costs provided for in Section 2.10 (as and when accrued or incurred), and all other payments as and when due and payable under any Loan Document or any Senior Term Loan Document (1) in the case of amounts owing by U.S. Borrower, to the U.S. Loan Account, which amounts thereafter shall constitute U.S. Advances hereunder and shall accrue interest at the rate then applicable to U.S. Advances that are Base Rate Loans, or (2) in the case of amounts owing by Canadian Borrower, to the Canadian Loan Account, which amounts thereafter shall constitute Canadian Advances hereunder and shall accrue interest at the rate then applicable to Canadian Advances that are Canadian Prime Rate Loans. Any interest not paid when due shall be compounded by being charged to the applicable Loan Account and shall thereafter constitute (I) in the case of amounts owing by U.S. Borrower, U.S. Advances hereunder and shall accrue interest at the rate then applicable to U.S. Advances that are Base Rate Loans, or (II) in the case of amounts owing by Canadian Borrower, Canadian Advances hereunder and shall accrue interest at the rate then applicable to Canadian Advances that are Canadian Prime Rate Loans.
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(e) Computation. All interest and fees chargeable under the Loan Documents shall be computed on the basis of a 360 day year, in each case, for the actual number of days elapsed in the period during which the interest or fees accrue. In the event the Base Rate or Canadian Prime Rate is changed from time to time hereafter, the rates of interest hereunder based upon the Base Rate or Canadian Prime Rate automatically and immediately shall be increased or decreased by an amount equal to such change in the Base Rate or Canadian Prime Rate. For the purposes of the Interest Act (Canada) and disclosure thereunder, whenever any interest or any fee to be paid hereunder or in connection herewith is to be calculated on the basis of a 360-day year, the yearly rate of interest to which the rate used in such calculation is equivalent is the rate so used multiplied by the actual number of days in the calendar year in which the same is to be ascertained and divided by 360. The rates of interest under this Agreement are nominal rates, and not effective rates or yields. The principle of deemed reinvestment of interest does not apply to any interest calculation under this Agreement.
(f) Intent to Limit Charges to Maximum Lawful Rate. In no event shall the interest rate or rates payable under this Agreement, plus any other amounts paid in connection herewith, exceed the highest rate permissible under any law that a court of competent jurisdiction shall, in a final determination, deem applicable. Each Borrower and the Lender Group, in executing and delivering this Agreement, intend legally to agree upon the rate or rates of interest and manner of payment stated within it; provided, however, that, anything contained herein to the contrary notwithstanding, if said rate or rates of interest or manner of payment exceeds the maximum allowable under applicable law, then, ipso facto, as of the date of this Agreement, each Borrower is and shall be liable only for the payment of such maximum as allowed by law, and payment received from a Borrower in excess of such legal maximum, whenever received, shall be applied to reduce the principal balance of the Obligations to the extent of such excess. Without limiting the generality of the foregoing, if any provision of this Agreement would oblige any Borrower to make any payment of interest or other amount payable to any Lender in an amount or calculated at a rate which would be prohibited by law or would result in a receipt by that Lender of “interest” at a “criminal rate” (as such terms are construed under the Criminal Code (Canada)), then, notwithstanding such provision, such amount or rate shall be deemed to have been adjusted with retroactive effect to the maximum amount or rate of interest, as the case may be, as would not be so prohibited by applicable law or so result in a receipt by that Lender of “interest” at a “criminal rate”, such adjustment to be effected, to the extent necessary (but only to the extent necessary), as follows: first, by reducing the amount or rate of interest, and, thereafter, by reducing any fees, commissions, costs, expenses, premiums and other amounts required to be paid to the affected Lender which would constitute interest for purposes of section 347 of the Criminal Code (Canada).
2.7. Crediting Payments.
(a) The receipt of any payment item by an Agent shall not be considered a payment on account unless such payment item is a wire transfer of immediately available funds made to the applicable Agent’s Account or unless and until such payment item is honored when presented for payment. Should any payment item not be honored when presented for payment, then the applicable Borrower shall be deemed not to have made such payment and interest shall be calculated accordingly. Anything to the contrary contained herein notwithstanding, any payment item shall be deemed received by an Agent only if it is received into the applicable Agent’s Account on a Business Day on or before 11.:00 am. (California time). If any payment item is received into an Agent’s Account on a non-Business Day or after 11:00 a.m. (California time) on a Business Day, it shall be deemed to have been received by such Agent as of the opening of business on the immediately following Business Day.
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(b) [intentionally omitted].
2.8. Designated Account. Each Agent is authorized to make the Advances, and each Issuing Lender is authorized to issue the Letters of Credit, under this Agreement based upon telephonic or other instructions received from anyone purporting to be an Authorized Person or, without instructions, if pursuant to Section 2.6(d). Each Borrower agrees to establish and maintain its applicable Designated Account with the applicable Designated Account Bank for the purpose of receiving the proceeds of the Advances requested by such Borrower and made by the applicable Agent or the Lenders hereunder. Unless otherwise agreed by an Agent and the applicable Borrower, any Advances, or Swing Loan requested by such Borrower and made by an Agent or the Lenders hereunder shall be made to the applicable Designated Account.
2.9. Maintenance of Loan Account; Statements of Obligations.
(a) Canadian Agent shall maintain an account on its books in the name of Canadian Borrower (the “Canadian Loan Account”) on which Canadian Borrower will be charged with all Canadian Advances (including Protective Advances made by Canadian Agent) made by Canadian Agent or the Lenders to Canadian Borrower or for Canadian Borrower’s account, and with all other payment Obligations of Canadian Borrower hereunder or under the other Loan Documents (except for Bank Product Obligations), including, accrued interest, fees and expenses, and Lender Group Expenses. In accordance with Section 2.7, the Canadian Loan Account will be credited with all payments received by Canadian Agent from Canadian Borrower or for Canadian Borrower’s account. Canadian Agent shall render statements regarding the Canadian Loan Account to Canadian Borrower, including principal, interest, fees, and including an itemization of all charges and expenses constituting Lender Group Expenses owing, and such statements, absent manifest error, shall be conclusively presumed to be correct and accurate and constitute an account stated between Canadian Borrower and the Lender Group unless, within 30 days after receipt thereof by Canadian Borrower, Canadian Borrower shall deliver to the Agents written objection thereto describing the error or errors contained in any such statements.
(b) U.S. Agent shall maintain an account on its books in the name of U.S. Borrower (the “U.S. Loan Account”) on which U.S. Borrower will be charged with all U.S. Advances (including Protective Advances made by U.S. Agent) made by U.S. Agent or the Lenders to U.S. Borrower or for U.S. Borrower’s account, the Letters of Credit issued by Issuing Lender for U.S. Borrower’s account, and with all other payment Obligations of U.S. Borrower hereunder or under the other Loan Documents (except for Bank Product Obligations), including, accrued interest, fees and expenses, and Lender Group Expenses. In accordance with Section 2.7, the U.S. Loan Account will be credited with all payments received by U.S. Agent from U.S. Borrower or for U.S. Borrower’s account. U.S. Agent shall render statements regarding the U.S. Loan Account to U.S. Borrower, including principal, interest, fees, and including an itemization of all charges and expenses constituting Lender Group Expenses owing, and such statements, absent manifest error, shall be conclusively presumed to be correct and accurate and constitute an account stated between U.S. Borrower and the Lender Group unless, within 30 days after receipt thereof by U.S. Borrower, U.S. Borrower shall deliver to the Agents written objection thereto describing the error or errors contained in any such statements.
2.10. Fees.
(a) Each Borrower agrees to pay to the applicable Agent, as and when due and payable under the terms of the Fee Letter, the fees set forth in the Fee Letter.
(b) Canadian Borrower shall pay to Canadian Agent, for the ratable account of those Lenders with Canadian Revolver Commitments, on the first day of each month from and after the Closing Date up to the first day of the month prior to the Payoff Date and on the Payoff Date, an unused line fee in Canadian
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Dollars in an amount equal to 0.50% per annum times the result of (i) the Maximum Canadian Revolver Amount, less (ii) the average Daily Balance of the Canadian Revolver Usage during the immediately preceding month (or portion thereof).
(c) U.S. Borrower shall pay to U.S. Agent, for the ratable account of those Lenders with U.S. Revolver Commitments, on the first day of each month from and after the Closing Date up to the first day of the month prior to the Payoff Date and on the Payoff Date, an unused line fee in an amount equal to 0.50% per annum times the result of (i) the Maximum U.S. Revolver Amount, less (ii) the average Daily Balance of the U.S. Revolver Usage during the immediately preceding month (or portion thereof).
2.11. Letters of Credit.
(a) U.S. Letters of Credit
(i) Subject to the terms and conditions of this Agreement, the U.S. Issuing Lender agrees to issue letters of credit for the account of U.S. Borrower (each, a “U.S. L/C”) or to purchase participations or execute indemnities, guarantees, or reimbursement obligations (each such undertaking, a “U.S. L/C Undertaking”) with respect to letters of credit issued by the U.S. Underlying Issuer (as of the Closing Date, the U.S. Underlying Issuer is to be Xxxxx Fargo) for the account of U.S. Borrower. Each request for the issuance of a U.S. Letter of Credit, or the amendment, renewal, or extension of any outstanding U.S. Letter of Credit, shall be made in writing by an Authorized Person and delivered to the U.S. Issuing Lender and U.S. Agent via hand delivery, telefacsimile, or other electronic method of transmission reasonably in advance of the requested date of issuance, amendment, renewal, or extension. Each such request shall be in form and substance reasonably satisfactory to the U.S. Issuing Lender in its Permitted. Discretion and shall specify (A) the amount of such. U.S. Letter of Credit, (B) the date of issuance, amendment, renewal, or extension of such U.S. Letter of Credit, (C) the expiration date of such U.S. Letter of Credit, (D) the name and address of the beneficiary thereof (or the beneficiary of the U.S. Underlying Letter of Credit, as applicable), and (E) such other information (including, in the case of an amendment, renewal, or extension, identification of the outstanding U.S. Letter of Credit to be so amended, renewed, or extended) as shall be reasonably necessary to prepare, amend, renew, or extend such U.S. Letter of Credit. Each U.S. Letter of Credit shall be denominated in Dollars. Anything contained herein to the contrary notwithstanding, the U.S. Issuing Lender may, but shall not be obligated to issue a U.S. Letter of Credit that supports the obligations of a Loan Party or its Subsidiaries in respect of (1) a lease of real property, or (2) an employment contract. If requested by the U.S. Issuing Lender, U.S. Borrower also shall be an applicant under the application with respect to any U.S. Underlying Letter of Credit that is to be the subject of a U.S. L/C Undertaking. The U.S. Issuing Lender shall have no obligation to issue a U.S. Letter of Credit if any of the following would result after giving effect to the issuance of such requested U.S. Letter of Credit:
(A) the U.S. Letter of Credit Usage would exceed the U.S. Borrowing Base less the outstanding amount of U.S. Advances, or
(B) the U.S. Letter of Credit Usage would exceed $8,000,000, or
(C) the U.S. Letter of Credit Usage would exceed the Maximum U.S. Revolver Amount less the outstanding amount of U.S. Advances.
U.S. Borrower and the Lender Group acknowledge and agree that certain U.S. Underlying Letters of Credit may be issued to support letters of credit that already are outstanding as of the Closing Date. Each U.S. Letter of Credit (and corresponding U.S. Underlying Letter of Credit) shall be in form and substance acceptable to the U.S. Issuing Lender (in the exercise of its Permitted Discretion), including the requirement
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that the amounts payable thereunder must be payable in Dollars. If U.S. Issuing Lender is obligated to advance funds under a U.S. Letter of Credit, U.S. Borrower shall reimburse such L/C Disbursement to U.S. Issuing Lender by paying to U.S. Agent an amount equal to such L/C Disbursement not later than 11:00 a.m., California time, on the date that such L/C Disbursement is made, if U.S. Borrower shall have received written or telephonic notice of such L/C Disbursement prior to 10:00 a.m., California time, on such date, or, if such notice has not been received by U.S. Borrower prior to such time on such date, then not later than 11:00 a.m., California time, on the Business Day that U.S. Borrower receives such notice, if such notice is received prior to 10:00 a.m., California time, on the date of receipt, and, in the absence of such reimbursement, the L/C Disbursement immediately and automatically shall be deemed to be a U.S. Advance hereunder and, initially, shall bear interest at the rate then applicable to U.S. Advances that are Base Rate Loans. To the extent an L/C Disbursement is deemed to be a U.S. Advance hereunder, U.S. Borrower’s obligation to reimburse such L/C Disbursement shall be discharged and replaced by the resulting U.S. Advance. Promptly following receipt by U.S. Agent of any payment from U.S. Borrower pursuant to this paragraph, U.S. Agent shall distribute such payment to the U.S. Issuing Lender or, to the extent that U.S. Lenders have made payments pursuant to Section 2.11(a)(ii) to reimburse the U.S. Issuing Lender, then to such U.S. Lenders and the U.S. Issuing Lender as their interests may appear.
(ii) Promptly following receipt of a notice of L/C Disbursement pursuant to Section 2.11(a)(i), each U.S. Lender with a U.S. Revolver Commitment agrees to fund its Pro Rata Share of any U.S. Advance deemed made pursuant to the foregoing subsection on the same terms and conditions as if U.S. Borrower had requested such U.S. Advance and U.S. Agent shall promptly pay to U.S. Issuing Lender the amounts so received by it from the U.S. Lenders. By the issuance of a U.S. Letter of Credit (or an amendment to a U.S. Letter of Credit increasing the amount thereof) and without any further action on the part of the U.S. Issuing Lender or the U.S. Lenders with U.S. Revolver Commitments, the U.S. Issuing Lender shall be deemed to have granted to each U.S. Lender with a U.S. Revolver Commitment, and each U.S. Lender with a U.S. Revolver Commitment shall be deemed to have purchased, a participation in each U.S. Letter of Credit, in an amount equal to its Pro Rata Share of the Risk Participation Liability of such U.S. Letter of Credit, and each such U.S. Lender agrees to pay to U.S. Agent, for the account of the U.S. Issuing Lender, such U.S. Lender’s Pro Rata Share of any payments made by the U.S. Issuing Lender under such U.S. Letter of Credit. In consideration and in furtherance of the foregoing, each U.S. Lender with a U.S. Revolver Commitment hereby absolutely and unconditionally agrees to pay to U.S. Agent, for the account of the U.S. Issuing Lender, such U.S. Lender’s Pro Rata Share of each L/C Disbursement made by the U.S. Issuing Lender and not reimbursed by U.S. Borrower on the date due as provided in Section 2.11(a)(i), or of any reimbursement payment required to be refunded to U.S. Borrower for any reason. Each U.S. Lender with a U.S. Revolver Commitment acknowledges and agrees that its obligation to deliver to U.S. Agent, for the account of the U.S. Issuing Lender, an amount equal to its respective Pro Rata Share of each L/C Disbursement made by the U.S. Issuing Lender pursuant to this Section 2.11(a)(ii) shall be absolute and unconditional and such remittance shall be made notwithstanding the occurrence or continuation of an Event of Default or Default or the failure to satisfy any condition set forth in Section 3. If any such U.S. Lender fails to make available to U.S. Agent the amount of such Lender’s Pro Rata Share of each L/C Disbursement made by the U.S. Issuing Lender in respect of such U.S. Letter of Credit as provided in this Section, such U.S. Lender shall be deemed to be a Defaulting Lender and U.S. Agent (for the account of the U.S. Issuing Lender) shall be entitled to recover such amount on demand from such U.S. Lender together with interest thereon at the Defaulting Lender Rate until paid in full.
(iii) U.S. Borrower hereby agrees to indemnify, save, defend, and hold the Lender Group harmless from any loss, out-of-pocket cost, expense, or liability, and reasonable attorneys fees (but excluding the allocated costs of internal counsel) incurred by the Lender Group arising out of or in connection with any U.S. Letter of Credit; provided, however, that U.S. Borrower shall not be obligated hereunder to indemnify for any loss, cost, expense, liability or fees to the extent that it is caused by the gross negligence or willful misconduct of the U.S. Issuing Lender or any other member of the Lender Group or a
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breach of any Loan Document. U.S. Borrower agrees to be bound by the U.S. Underlying Issuer’s regulations and interpretations of any U.S. Underlying Letter of Credit or by U.S. Issuing Lender’s interpretations of any U.S. L/C issued by U.S. Issuing Lender to or for U.S. Borrower’s account, even though this interpretation may be different from U.S. Borrower’s own, and U.S. Borrower understands and agrees that the Lender Group shall not be liable for any error, negligence, or mistake, whether of omission or commission, in following U.S. Borrower’s instructions or those contained in the U.S. Letter of Credit or any modifications, amendments, or supplements thereto. U.S. Borrower understands that the U.S. L/C Undertakings may require U.S. Issuing Lender to indemnify the U.S. Underlying Issuer for certain costs or liabilities arising out of claims by U.S. Borrower against such U.S. Underlying Issuer. U.S. Borrower hereby agrees to indemnify, save, defend, and hold the Lender Group harmless with respect to any loss, out-of-pocket cost, expense (including reasonable attorneys fees but excluding the allocated costs of internal counsel), or liability incurred by the Lender Group under any U.S. L/C Undertaking as a result of the Lender Group’s indemnification of any U.S. Underlying Issuer; provided, however, that U.S. Borrower shall not be obligated hereunder to indemnify for any loss, cost, expense, liability or fee to the extent that it is caused by the gross negligence or willful misconduct of the U.S. Issuing Lender or any other member of the Lender Group or a breach of any Loan Document. U.S. Borrower hereby acknowledges and agrees that neither the Lender Group nor the U.S. Issuing Lender shall be responsible for delays, errors, or omissions resulting from the malfunction of equipment in connection with any U.S. Letter of Credit.
(iv) U.S. Borrower hereby authorizes and directs any U.S. Underlying Issuer to deliver to the U.S. Issuing Lender all instruments, documents, and other writings and property received by such U.S. Underlying Issuer pursuant to such U.S. Underlying Letter of Credit and to accept and rely upon the U.S. Issuing Lender’s instructions with respect to all matters arising in connection with such U.S. Underlying Letter of Credit and the related application.
(v) Any and all issuance charges, commissions, fees, and costs incurred by the U.S. Issuing Lender relating to U.S. Underlying Letters of Credit shall be Lender Group Expenses for purposes of this Agreement and shall be reimbursable immediately by U.S. Borrower to U.S. Agent for the account of the U.S. Issuing Lender; it being acknowledged and agreed by U.S. Borrower that, as of the Closing Date, the issuance charge imposed by the prospective U.S. Underlying Issuer is .825% per annum times the undrawn amount of each U.S. Underlying Letter of Credit, that such issuance charge may be changed from time to time, and that the U.S. Underlying Issuer also imposes a schedule of charges for amendments, extensions, drawings, and renewals.
(vi) If by reason of (A) any change after the Closing Date in any applicable law, treaty, rule, or regulation or any change in the interpretation or application thereof by any Governmental Authority, or (B) compliance by the U.S. Underlying Issuer or the Lender Group with any direction, request, or requirement (irrespective of whether having the force of law) of any Governmental Authority or monetary authority including, Regulation D of the Federal Reserve Board as from time to time in effect (and any successor thereto):
(X) any reserve, deposit, or similar requirement (other than reserves, deposits, or similar requirements of a de minimis nature) is or shall be imposed or modified in respect of any U.S. Letter of Credit issued hereunder, or
(Y) there shall be imposed on the U.S. Underlying Issuer or the Lender Group any other condition regarding any U.S. Underlying Letter of Credit or any U.S. Letter of Credit issued pursuant hereto,
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and the result of the foregoing is to increase, directly or indirectly, the cost to the Lender Group of issuing, making, guaranteeing, or maintaining any U.S. Letter of Credit or to reduce the amount receivable in respect thereof by the Lender Group (other than increases or reductions of a de minimis nature), then, and in any such case, U.S. Agent may, at any time within a reasonable period after the additional cost is incurred or the amount received is reduced, notify U.S. Borrower, and U.S. Borrower shall pay within 30 days after demand therefor, such amounts as U.S. Agent may specify to be necessary to compensate the Lender Group for such additional cost or reduced receipt, together with interest on such amount from the date of such demand until payment in full thereof at the rate then applicable to Base Rate Loans hereunder; provided that U.S. Borrower shall not be required to compensate a Lender pursuant to this Section for any such amounts incurred more than 180 days prior to the date that such Lender first demands payment from U.S. Borrower of such amounts; provided further that if an event or circumstance giving rise to such amounts is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof. The determination by U.S. Agent of any amount due pursuant to this Section., as set forth in a certificate setting forth the calculation thereof in reasonable detail, shall, in the absence of manifest or demonstrable error, be final and conclusive and binding on all of the parties hereto.
(b) Canadian Letters of Credit
(i) Subject to the terms and conditions of this Agreement, the Canadian Issuing Lender agrees to issue letters of credit for the account of Canadian. Borrower (each, a “Canadian L/C”) or to purchase participations or execute indemnities, guarantees, or reimbursement obligations (each such undertaking, a “Canadian L/C Undertaking”) with respect to letters of credit issued by the Canadian Underlying Issuer (as of the Closing Date, the Canadian Underlying Issuer is to be Toronto Dominion Bank) for the account of Canadian Borrower. Each request for the issuance of a Canadian Letter of Credit, or the amendment, renewal, or extension of any outstanding Canadian Letter of Credit, shall be made in writing by an Authorized Person and delivered to the Canadian Issuing Lender and Canadian Agent via hand delivery, telefacsimile, or other electronic method of transmission reasonably in advance of the requested date of issuance, amendment, renewal, or extension. Each such request shall be in form and substance reasonably satisfactory to the Canadian Issuing Lender in its Permitted Discretion and shall specify (A) the amount of such Canadian Letter of Credit, (B) the date of issuance, amendment, renewal, or extension of such Canadian Letter of Credit, (C) the expiration date of such Canadian Letter of Credit, (D) the name and address of the beneficiary thereof (or the beneficiary of the Canadian Underlying Letter of Credit, as applicable), and (E) such other information (including, in the case of an amendment, renewal, or extension, identification of the outstanding Canadian Letter of Credit to be so amended, renewed, or extended) as shall be reasonably necessary to prepare, amend, renew, or extend such Canadian Letter of Credit. Each Canadian Letter of Credit shall be denominated in Canadian Dollars. Anything contained herein to the contrary notwithstanding, the Canadian Issuing Lender may, but shall not be obligated to issue a Canadian Letter of Credit that supports the obligations of a Loan Party or its Subsidiaries in respect of (1) a lease of real property, or (2) an employment contract. If requested by the Canadian Issuing Lender, Canadian Borrower also shall be an applicant under the application with respect to any Canadian Underlying Letter of Credit that is to be the subject of a Canadian L/C Undertaking. The Canadian Issuing Lender shall have no obligation to issue a Canadian Letter of Credit if any of the following would result after giving effect to the issuance of such requested Canadian Letter of Credit:
(A) the Canadian Letter of Credit Usage would exceed the Canadian Borrowing Base less the sum of (I) the outstanding amount of Canadian Advances plus (2) the aggregate amount of Canadian Priority Payables Reserves at such time, or
(B) the Canadian Letter of Credit Usage would exceed C$2,250,000, or
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(C) the Canadian Letter of Credit Usage would exceed the Maximum Canadian Revolver Amount less the outstanding amount of Canadian Advances.
Canadian Borrower and the Lender Group acknowledge and agree that certain Canadian Underlying Letters of Credit may be issued to support letters of credit that already are outstanding as of the Closing Date. Each Canadian Letter of Credit (and corresponding Canadian Underlying Letter of Credit) shall be in form and substance acceptable to the Canadian Issuing Lender (in the exercise of its Permitted Discretion), including the requirement that the amounts payable thereunder must be payable in Canadian Dollars. If Canadian Issuing Lender is obligated to advance funds under a Canadian Letter of Credit, Canadian Borrower shall reimburse such L/C Disbursement to Canadian Issuing Lender by paying to Canadian Agent an amount equal to such L/C Disbursement not later than 11:00 a.m., California time, on the date that such L/C Disbursement is made, if Canadian Borrower shall have received written or telephonic notice of such L/C Disbursement prior to 10:00 a.m., California time, on such date, or, if such notice has not been received by Canadian Borrower prior to such time on such date, then not later than 11:00 a.m., California time, on the Business Day that Canadian Borrower receives such notice, if such notice is received prior to 10:00 a.m., California time, on the date of receipt, and, in the absence of such reimbursement, the L/C Disbursement immediately and automatically shall be deemed to be a Canadian Advance hereunder and, initially, shall bear interest at the rate then applicable to Canadian Advances that are Base Rate Loans. To the extent an L/C Disbursement is deemed to be a Canadian Advance hereunder, Canadian Borrower’s obligation to reimburse such L/C Disbursement shall be discharged and replaced by the resulting Canadian Advance. Promptly following receipt by Canadian Agent of any payment from Canadian Borrower pursuant to this paragraph, Canadian Agent shall distribute such payment to the Canadian Issuing Lender or, to the extent that Canadian Lenders have made payments pursuant to Section 2.11(b)(ii) to reimburse the Canadian Issuing Lender, then to such Canadian Lenders and the Canadian Issuing Lender as their interests may appear.
(ii) Promptly following receipt of a notice of L/C Disbursement pursuant to Section 2.11(b)(i), each Canadian Lender with a Canadian Revolver Commitment agrees to fund its Pro Rata Share of any Canadian Advance deemed made pursuant to the foregoing subsection on the same terms and conditions as if Canadian Borrower had requested such Canadian Advance and. Canadian Agent shall promptly pay to Canadian Issuing Lender the amounts so received by it from the Canadian Lenders. By the issuance of a Canadian Letter of Credit (or an amendment to a Canadian Letter of Credit increasing the amount thereof) and without any further action on the part of the Canadian Issuing Lender or the Canadian Lenders with Canadian Revolver Commitments, the Canadian Issuing Lender shall be deemed to have granted to each Canadian Lender with a Canadian Revolver Commitment, and each Canadian Lender with a Canadian Revolver Commitment shall be deemed to have purchased, a participation in each Canadian Letter of Credit, in an amount equal to its Pro Rata Share of the Risk Participation Liability of such Canadian Letter of Credit, and each such Canadian Lender agrees to pay to Canadian Agent, for the account of the Canadian Issuing Lender, such Canadian Lender’s Pro Rata Share of any payments made by the Canadian Issuing Lender under such Canadian Letter of Credit. In consideration and in furtherance of the foregoing, each Canadian Lender with a Canadian Revolver Commitment hereby absolutely and unconditionally agrees to pay to Canadian Agent, for the account of the Canadian Issuing Lender, such Canadian Lender’s Pro Rata Share of each L/C Disbursement made by the Canadian Issuing Lender and not reimbursed by Canadian Borrower on the date due as provided in Section 2.11(b)(i), or of any reimbursement payment required to be refunded to Canadian Borrower for any reason. Each Canadian Lender with a Canadian Revolver Commitment acknowledges and agrees that its obligation to deliver to Canadian Agent, for the account of the Canadian Issuing Lender, an amount equal to its respective Pro Rata Share of each L/C Disbursement made by the Canadian Issuing Lender pursuant to this Section 2.11(b)(ii) shall be absolute and unconditional and such remittance shall be made notwithstanding the occurrence or continuation of an Event of Default or Default or the failure to satisfy any condition set forth in Section 3. If any such Canadian Lender fails to make available to Canadian Agent the amount of such Lender’s Pro Rata Share of each L/C Disbursement made by the Canadian Issuing Lender in respect of such
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Canadian Letter of Credit as provided in this Section, such Canadian Lender shall be deemed to be a Defaulting Lender and Canadian Agent (for the account of the Canadian Issuing Lender) shall be entitled to recover such amount on demand from such Canadian Lender together with interest thereon at the Defaulting Lender Rate until paid in full.
(iii) Canadian Borrower hereby agrees to indemnify, save, defend, and hold the Lender Group harmless from any loss, out-of-pocket cost, expense, or liability, and reasonable attorneys fees (but excluding the allocated costs of internal counsel) incurred by the Lender Group arising out of or in connection with any Canadian Letter of Credit; provided, however, that Canadian Borrower shall not be obligated hereunder to indemnify for any loss, cost, expense, liability or fees to the extent that it is caused by the gross negligence or willful misconduct of the Canadian Issuing Lender or any other member of the Lender Group or a breach of any Loan Document. Canadian Borrower agrees to be bound by the Canadian Underlying Issuer’s regulations and interpretations of any Canadian Underlying Letter of Credit or by Issuing Lender’s interpretations of any Canadian L/C issued by Canadian Issuing Lender to or for Canadian Borrower’s account, even though this interpretation may be different from Canadian Borrower’s own, and Canadian Borrower understands and agrees that the Lender Group shall not be liable for any error, negligence, or mistake, whether of omission or commission, in following Canadian Borrower’s instructions or those contained in the Canadian Letter of Credit or any modifications, amendments, or supplements thereto. Canadian Borrower understands that the Canadian L/C Undertakings may require Canadian Issuing Lender to indemnify the Canadian Underlying Issuer for certain costs or liabilities arising out of claims by Canadian Borrower against such Canadian Underlying Issuer. Canadian Borrower hereby agrees to indemnify, save, defend, and hold the Lender Group harmless with respect to any loss, out-of-pocket cost, expense (including reasonable attorneys fees but excluding the allocated costs of internal counsel), or liability incurred by the Lender Group under any Canadian L/C Undertaking as a result of the Lender Group’s indemnification of any Canadian Underlying Issuer; provided, however, that Canadian Borrower shall not be obligated hereunder to indemnify for any loss, cost, expense, liability or fee to the extent that it is caused by the gross negligence or willful misconduct of the Canadian Issuing Lender or any other member of the Lender Group or a breach of any Loan Document. Canadian Borrower hereby acknowledges and agrees that neither the Lender Group nor the Canadian Issuing Lender shall be responsible for delays, errors, or omissions resulting from the malfunction of equipment in connection with any Canadian Letter of Credit.
(iv) Canadian Borrower hereby authorizes and directs any Canadian Underlying Issuer to deliver to the Canadian Issuing Lender all instruments, documents, and other writings and property received by such Canadian Underlying Issuer pursuant to such Canadian Underlying Letter of Credit and to accept and rely upon the Canadian Issuing Lender’s instructions with respect to all matters arising in connection with such Canadian Underlying Letter of Credit and the related application.
(v) Any and all issuance charges, commissions, fees, and costs incurred by the Canadian Issuing Lender relating to Canadian Underlying Letters of Credit shall be Lender Group Expenses for purposes of this Agreement and shall be reimbursable immediately by Canadian Borrower to Canadian Agent for the account of the Canadian Issuing Lender; it being acknowledged and agreed by Canadian Borrower that, as of the Closing Date, the issuance charge imposed by the prospective Canadian Underlying Issuer is .825% per annum times the undrawn amount of each Canadian Underlying Letter of Credit, that such issuance charge may be changed from time to time, and that the Canadian Underlying Issuer also imposes a schedule of charges for amendments, extensions, drawings, and renewals.
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(vi) If by reason of (A) any change after the Closing Date in any applicable law, treaty, rule, or regulation or any change in the interpretation or application thereof by any Governmental Authority, or (B) compliance by the Canadian Underlying Issuer or the Lender Group with any direction, request, or requirement (irrespective of whether having the force of law) of any Governmental Authority or monetary authority:
(X) any reserve, deposit, or similar requirement (other than reserves, deposits, or similar requirements of a de minimis nature) is or shall be imposed or modified in respect of any Canadian Letter of Credit issued hereunder, or
(Y) there shall be imposed on the Canadian Underlying Issuer or the Lender Group any other condition regarding any Canadian Underlying Letter of Credit or any v Letter of Credit issued pursuant hereto,
and the result of the foregoing is to increase, directly or indirectly, the cost to the Lender Group of issuing, making, guaranteeing, or maintaining any Canadian Letter of Credit or to reduce the amount receivable in respect thereof by the Lender Group (other than increases or reductions of a de minimis nature), then, and in any such case, Canadian Agent may, at any time within a reasonable period after the additional cost is incurred or the amount received is reduced, notify Canadian Borrower, and Canadian Borrower shall pay within 30 days after demand therefor, such amounts as Canadian Agent may specify to be necessary to compensate the Lender Group for such additional cost or reduced receipt, together with interest on such amount from the date of such demand until payment in full thereof at the rate then applicable to Canadian Prime Rate Loans hereunder; provided that Canadian Borrower shall not be required to compensate a Lender pursuant to this Section for any such amounts incurred more than 180 days prior to the date that such Lender first demands payment from Canadian Borrower of such amounts; provided further that if an event or circumstance giving rise to such amounts is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof. The determination by Canadian Agent of any amount due pursuant to this Section, as set forth in a certificate setting forth the calculation thereof in reasonable detail, shall, in the absence of manifest or demonstrable error, be final and conclusive and binding on all of the parties hereto.
2.12. LIBOR/CDOR Option.
(a) Interest and Interest Payment Dates. (1) U.S. Borrower, in lieu of having interest charged at the rate based upon the Base Rate, shall have the option (the “LIBOR Option”) to have interest on all or a portion of its U.S. Advances be charged (whether at the time when made (unless otherwise provided herein), upon conversion from a Base Rate Loan to a LIBOR Rate Loan, or upon continuation of a LIBOR Rate Loan as a LIBOR Rate Loan) at a rate of interest based upon the LIBOR Rate, or (2) Canadian Borrower, in lieu of having interest charged at the rate based upon the Canadian Prime Rate, shall have the option (the “CDOR Option”) to have interest on all or a portion of its Canadian Advances be charged (whether at the time when made (unless otherwise provided herein), upon conversion from a Canadian Prime Rate Loan to a CDOR Rate Loan, or upon continuation of a CDOR Rate Loan as a CDOR Rate Loan) at a rate of interest based upon the CDOR Rate. Interest on LIBOR Rate Loans and CDOR Rate Loans shall be payable on the earliest of (i) the last day of the Interest Period applicable thereto; provided, however, that, subject to the following clauses (ii) and (iii), in the case of any Interest Period greater than 3 months in duration, interest shall be payable at 3 month intervals after the commencement of the applicable Interest Period and on the last day of such Interest Period), (ii) the date on which all or any portion of the Obligations are accelerated pursuant to the terms hereof, or (iii) the date on which this Agreement is terminated pursuant to the terms hereof. On the last day of each applicable Interest Period, (x) in the case of a LIBOR Rate Loan, unless the U.S. Borrower properly has exercised the LIBOR Option with respect thereto, the interest rate applicable to such LIBOR Rate Loan, automatically shall convert to the rate of interest then applicable to Base Rate Loans, of the same type hereunder, and (y) in the case of a CDOR Rate Loan, unless the Canadian Borrower properly has exercised the CDOR Option with respect thereto, the interest rate applicable to such CDOR Rate Loan, automatically shall convert to the rate of interest then applicable to Canadian Prime Rate Loans, of the same type hereunder. At
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any time that an Event of Default has occurred and is continuing, no Borrower shall any longer have the option to request that Advances bear interest at a rate based upon the LIBOR Rate or the CDOR Rate and the applicable Agent shall have the right to convert the interest rate on all outstanding LIBOR Rate Loans or CDOR Rate Loans to the rate applicable to Base Rate Loans or Canadian Prime Rate Loans hereunder.
(b) LIBOR Election; CDOR Election.
(i)(a) U.S. Borrower may, at any time and from time to time, so long as no Event of Default has occurred and is continuing, elect to exercise the LIBOR Option by notifying the U.S. Agent prior to 11:00 a.m. (California time) at least 3 Business Days prior to the commencement of the proposed Interest Period (the “LIBOR Deadline”) and (b) Canadian Borrower may, at any time and from time to time, so long as no Event of Default has occurred and is continuing, elect to exercise the CDOR Option by notifying the Canadian Agent prior to 11:00 a.m. (California time) at least 3 Business Days prior to the commencement of the proposed Interest Period (the “CDOR Deadline”). Notice of a Borrower’s election of the LIBOR Option or CDOR Option, as applicable, for a permitted portion of its Advances and an Interest Period pursuant to this Section shall be made by delivery to the applicable Agent of a LIBOR Notice or CDOR Notice received by such Agent before the LIBOR Deadline of CDOR Deadline, as applicable, or by telephonic notice received by such Agent before the LIBOR Deadline or CDOR Deadline (to be confirmed by delivery to such Agent of a LIBOR Notice or CDOR Notice, as applicable, received by such Agent prior to 5:00 p.m. (California time) on the same day). Promptly upon its receipt of each such LIBOR Notice or CDOR Notice, the applicable Agent shall provide a copy thereof to each of the affected Lenders.
(ii) Each LIBOR Notice and each CDOR Notice shall be irrevocable and binding on the applicable Borrower. In connection with each LIBOR Rate Loan and each CDOR Rate Loan, the applicable Borrower shall indemnify, defend, and hold the applicable Agent and the Lenders harmless against any loss, cost, or expense actually incurred by such Agent or any Lender as a result of (A) the payment of any principal of any LIBOR Rate Loan or CDOR Rate Loan, as applicable, other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (B) the conversion of any LIBOR Rate Loan or CDOR Rate Loan other than on the last day of the Interest Period applicable thereto, or (C) the failure to borrow, convert, continue or prepay any LIBOR Rate Loan or CDOR Rate Loan on the date specified in any LIBOR Notice or CDOR Notice, as applicable, delivered pursuant hereto (such losses, costs, or expenses, “Funding Losses”). A certificate of the applicable Agent or a Lender delivered to the applicable Borrower setting forth in reasonable detail any amount or amounts that such Agent or such Lender is entitled to receive pursuant to this Section 2.12 shall be conclusive absent manifest error. Each Borrower shall pay such amount to the applicable Agent or the Lender, as applicable, within 30 days of the date of its receipt of such certificate.
(iii) U.S. Borrower shall have no more than 5 LIBOR Rate Loans in effect at any given time in the aggregate and Canadian Borrower shall have no more than 5 CDOR Rate Loans in effect at any given time in the aggregate. U.S. Borrower only may exercise the LIBOR Option for LIBOR Rate Loans of at least $1,000,000. Canadian Borrower only may exercise the CDOR Option for CDOR Rate Loans of at least C$1,000,000.
(c) Conversion. (i) U.S. Borrower may convert LIBOR Rate Loans to Base Rate Loans at any time and (ii) Canadian Borrower may convert CDOR Rate Loans to Canadian Prime Rate Loans at any time; provided, however, that, in each case, in the event that any LIBOR Rate Loans or CDOR Rate Loans are converted or prepaid on any date that is not the last day of the Interest Period applicable thereto, including as a result of any automatic prepayment through the required application by any Agent of proceeds of the Collections of the Loan Parties and their respective Subsidiaries in accordance with Section 2.4(b) or for any other reason, including early termination of the term of this Agreement or acceleration of all or any portion of
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the Obligations pursuant to the terms hereof, the Borrowers shall indemnify, defend, and hold the applicable Agent and the Lenders and their Participants harmless against any and all Funding Losses in accordance with Section 2.12 (b)(ii) above.
(d) Special Provisions Applicable to the LIBOR, Rate and the CDOR Rate.
(i) The LIBOR Rate and the CDOR Rate may be adjusted by the applicable Agent with respect to any Lender on a prospective basis to take into account any additional or increased costs to such Lender (other than additional or increased costs of a de minimis amount) of maintaining or obtaining any eurodollar deposits or increased costs (other than eurodollar deposits or increased costs of a de minimis amount), in each case, due to changes in applicable law occurring subsequent to the commencement of the then applicable Interest Period, other than changes in tax laws which are governed, solely as provided in Section 16 and changes in the reserve requirements imposed by the Board of Governors of the Federal Reserve System (or any successor), excluding the Reserve Percentage, which additional or increased costs would increase the cost of funding or maintaining loans bearing interest at the LIBOR Rate or CDOR Rate, as applicable, in any such event, the affected Lender shall promptly give the applicable Borrower and the applicable Agent notice of such a determination and adjustment and the applicable Agent promptly shall transmit the notice to each other Lender and, upon its receipt of the notice from the affected Lender, the applicable Borrower may, by notice to such affected Lender (y) require such Lender to furnish to the applicable Borrower a statement setting forth the basis for adjusting such LIBOR Rate or such CDOR Rate, as applicable, and the method for determining the amount of such adjustment, or (z) repay the LIBOR Rate Loans or CDOR Rate Loans with respect to which such adjustment is made (together with any amounts due under Section 2.12(b)(ii)).
(ii) In the event that any change after the Closing Date in market conditions or any law, regulation, treaty, or directive, or any change therein or in the interpretation or application thereof by any Governmental Authority, shall at any time after the date hereof, in the reasonable opinion of any Lender, make it unlawful or impractical for such Lender to fund or maintain LIBOR Rate Loans or CDOR Rate Loans, as applicable, or to continue such funding or maintaining, or to determine or charge interest rates at the LIBOR Rate or the CDOR Rate, as applicable, such Lender shall give notice of such changed circumstances to the Agents and Borrowers and the Agents promptly shall transmit the notice to each other Lender and (y) in the case of any LIBOR Rate Loans or CDOR Rate Loans of such Lender that are outstanding, the date specified in such Lender’s notice shall be deemed to be the last day of the Interest Period of such LIBOR Rate Loans or CDOR Rate Loans, as applicable, and interest upon the LIBOR Rate Loans or CDOR Rate Loans of such Lender thereafter shall accrue interest at the rate then applicable to (1) in the case of LIBOR Rate Loans, Base Rate Loans or (2) in the case of CDOR Rate Loans, Canadian Prime Rate Loans, and (z) the Borrowers shall not be entitled to elect the LIBOR Option or CDOR Option until such Lender determines that it would no longer be unlawful or impractical to do so.
(e) No Requirement of Matched Funding. Anything to the contrary contained herein notwithstanding, no Agent, nor any Lender, nor any of their Participants, is required actually to acquire eurodollar deposits to fund or otherwise match fund any Obligation as to which interest accrues at the LIBOR Rate.
2.13. Capital Requirements.
(a) If, after the date hereof, any Lender determines that (i) the adoption of or change in any law, rule, regulation or guideline regarding capital requirements for banks or bank holding companies, or any change in the interpretation or application thereof by any Governmental Authority charged with the administration thereof, or (ii) compliance by such Lender or its parent bank holding company with any guideline, request or directive of any such entity regarding capital adequacy (whether or not having the force
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of law), has the effect of reducing the return on such Lender’s or such holding company’s capital as a consequence of such Lender’s Commitments hereunder to a level below that which such Lender or such holding company could have achieved but for such adoption, change, or compliance (taking into consideration such Lender’s or such holding company’s then existing policies with respect to capital adequacy and assuming the full utilization of such entity’s capital) by any amount deemed by such Lender to be material, then such Lender may notify the Borrowers and Agents thereof. Following receipt of such notice, the applicable Borrower agrees to pay such Lender on demand the amount of such reduction of return on capital as and when such reduction is determined, payable within 30 days after presentation by such Lender of a statement setting forth in reasonable detail the amount and such Lender’s calculation thereof and the assumptions upon which such calculation was based (which statement shall be deemed true and correct absent manifest error). In determining such amount, such Lender may use any reasonable averaging and attribution methods. Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided that no Borrower shall be required to compensate a Lender pursuant to this Section for any reductions in return incurred more than 180 days prior to the date that such Lender notifies such Borrower of such law, rule, regulation or guideline giving rise to such reductions and of such Lender’s intention to claim compensation therefor; provided further that if such claim arises by reason of the adoption of or change in any law, rule, regulation or guideline that is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.
(b) If any Lender requests additional or increased costs referred to in Sections 2.11(f), 2.12(d)(i) or 16 or amounts under Section 2.13(a) (any such Lender, a “Affected Lender”), then such Affected Lender shall use reasonable efforts to promptly designate a different one of its lending offices or to assign its rights and obligations hereunder to another of its offices or branches, if (i) in the reasonable judgment of such Affected Lender, such designation or assignment would eliminate or reduce amounts payable pursuant to Sections 2.11(f), 2.12(d)(i), 2.13(a) or 16, as applicable, and (ii) in the reasonable judgment of such Affected Lender, such designation or assignment would not subject it to any material unreimbursed cost or expense and would not otherwise be materially disadvantageous to it. The applicable Borrower agrees to pay all reasonable and documented out-of-pocket costs and expenses incurred by such Affected Lender in connection with any such designation or assignment. If, after such reasonable efforts, such Affected Lender does not so designate a different one of its lending offices or assign its rights to another of its offices or branches so as to eliminate the applicable Borrower’s obligation to pay any future amounts to such Affected Lender pursuant to Sections 2.11(f), 2.12(d)(i), 2.13(a) or 16, as applicable, then such Borrower (without prejudice to any amounts then due to such Affected Lender under Sections 2.11(f), 2.12(d)(i), 2.13(a) or 16, as applicable) may, unless prior to the effective date of any such assignment the Affected Lender withdraws its request for such additional amounts under Sections 2.11(f), 2.12(d)(i), 2.1.3(a) or 16, as applicable, designate another lender reasonably acceptable to U.S. Agent to purchase the Obligations owed to such Affected Lender and such Affected Lender’s Commitments hereunder (a “Replacement Lender”), such Affected Lender shall assign to the Replacement Lender its Obligations and Commitments, pursuant to an Assignment and Acceptance Agreement, and upon such purchase by the Replacement Lender, such Replacement Lender shall be deemed to be a “Lender” for purposes of this Agreement and such Affected Lender shall cease to be a “Lender” for purposes of this Agreement.
3. CONDITIONS; TERM OF AGREEMENT.
3.1. Conditions Precedent to the Initial Extension of Credit. The obligation of each Lender to make its initial extension of credit provided for hereunder, is subject to the fulfillment, to the reasonable satisfaction of each Agent of each of the conditions precedent set forth on Schedule 3.1 (the making of such initial extension of credit by a Lender being conclusively deemed to be its reasonable satisfaction or waiver of the conditions precedent).
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3.2. Conditions Precedent to all Extensions of Credit after the Closing Date. The obligation of the Lender Group (or any member thereof) to make any Advances hereunder (or to extend any other credit hereunder) at any time after the Closing Date shall be subject to the following conditions precedent:
(a) the representations and warranties of the Borrowers contained in this Agreement or in the other Loan Documents shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date of such extension of credit, as though made on and as of such date (except to the extent that such representations and warranties relate solely to an earlier date); and
(b) no Default or Event of Default shall have occurred and be continuing on the date of such extension of credit, nor shall either result from the making thereof.
3.3. Term. This Agreement shall continue in full force and effect for a term ending on November 18, 2013 (the “Maturity Date”). The foregoing notwithstanding, the Lender Group, upon the election of the Required Lenders, shall have the right to terminate its obligations under this Agreement immediately and without notice upon the occurrence and during the continuation of an Event of Default.
3.4. Effect of Termination. On the date of termination of this Agreement, all Obligations (including reimbursement obligations of the Borrowers with respect to outstanding Letters of Credit and including all Bank Product Obligations, except to the extent otherwise agreed by the applicable Bank Product Provider) immediately shall become due and payable without notice or demand (including the requirement that (a) Borrowers provide Letter of Credit Collateralization, and (b) Borrowers provide Bank Product Collateralization). No termination of this Agreement, however, shall relieve or discharge any Loan Party of its duties, Obligations, or covenants hereunder or under any other Loan Document and the Agent’s Liens in the Collateral shall remain in effect until all Obligations have been paid in full and the Lender Group’s obligations to provide additional credit hereunder have been terminated. When this Agreement has been terminated and all of the Obligations have been paid in full and the Lender Group’s obligations to provide additional credit under the Loan Documents have been terminated irrevocably, U.S. Agent will, at the applicable Borrower’s sole expense, execute and deliver any termination statements, lien releases, mortgage releases, re-assignments of trademarks, discharges of security interests, and other similar discharge or release documents (and, if applicable, in recordable form) as are reasonably necessary to release, as of record, the Agent’s Liens and all notices of security interests and liens previously filed by U.S. Agent with respect to the Obligations.
3.5. Early Termination by Borrower. The Borrowers have the option, at any time upon 10 Business Days prior written notice to the Agents, to terminate this Agreement and terminate the Commitments hereunder by paying to the Agents (as applicable) the Obligations (including (a) providing Letter of Credit Collateralization with respect to the then existing Letter of Credit Usage, and (b) providing Bank Product Collateralization with respect to the then existing Bank Products), in full.
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4. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lender Group to enter into this Agreement, each Borrower makes the following representations and warranties to the Lender Group which shall be true, correct, and complete, in all material respects, as of the date hereof, and shall be true, correct, and complete, in all material respects, as of the Closing Date and at and as of the date of the making of each Advance (or other extension of credit) made thereafter, as though made on and as of the date of such Advance (or other extension of credit) (except to the extent that such representations and warranties relate solely to an earlier date) and such representations and warranties shall survive the execution and delivery of this Agreement:
4.1. Due Organization and Qualification; Subsidiaries.
(a) Each Loan Party (i) is duly organized or formed and existing and in good standing under the laws of the jurisdiction of its organization, (ii) qualified or licensed to do business in any jurisdiction where notice of its activities makes such qualification or license necessary or the failure to be so qualified or licensed reasonably could be expected to result in a Material Adverse Change, and (iii) has all requisite power and authority to own and operate its properties, to carry on its business as now conducted and as proposed to be conducted, to enter into the Loan Documents to which it is a party and to carry out the transactions contemplated thereby.
(b) Set forth on Schedule 4.1(b) is a complete and accurate description of the authorized capital Stock of each Borrower, by class, and, as of the Closing Date, a description of the number of shares of each such class that are issued and outstanding. Other than as described on Schedule 4.1(b), there are no subscriptions, options, warrants, or calls relating to any shares of a Borrower’s capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. No Borrower is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital Stock or any security convertible into or exchangeable for any of its capital Stock.
(c) Set forth on Schedule 4.1(c) (as such Schedule may be updated from time to time to reflect changes permitted to be made under Section 5.11), is a complete and accurate list of the Loan Parties’ direct and indirect Subsidiaries, showing: (i) the number of shares of each class of common and preferred Stock authorized for each of such Subsidiaries, and (ii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by the applicable Loan Party. All of the outstanding capital Stock of each such Subsidiary (other than Subsidiaries that are (i) limited liability companies or limited partnerships organized or formed under the laws of a jurisdiction within the United States) has been validly issued and is fully paid and non-assessable, subject only to the general assessability of shares of a Nova Scotia unlimited company.
(d) Except as set forth on Schedule 4.1(d) (as such Schedule may be updated from time to time to reflect changes permitted to be made under Section 5.11), there are no subscriptions, options, warrants, or calls relating to any shares of any Loan Party’s or any of its Subsidiaries’ capital Stock, including any right of conversion or exchange under any outstanding security or other instrument. No Guarantor is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or redeem any shares of its Subsidiaries’ capital Stock or any security convertible into or exchangeable for any such capital Stock, except as provided in Schedule 4.1(d).
4.2. Due Authorization; No Conflict.
(a) As to each Loan Party; the execution, delivery, and performance by such Loan Party of the Loan Documents to which it is a party have been duly authorized by all necessary action on the part of such Loan Party.
(b) As to each Loan Party, the execution, delivery, and performance by such Loan Party of the Loan Documents to which it is a party do not and will not (i) violate any material provision of any law or regulation applicable to any Loan Party or its Subsidiaries, the Governing Documents of any Loan Party or its Subsidiaries, or any order, judgment, or decree of any court or other Governmental Authority binding on any Loan Party or its Subsidiaries, (ii) conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any Material Contract of any Loan Party or its Subsidiaries except to the extent that any such conflict, breach or default could not individually or in the aggregate reasonably be expected to have a Material Adverse Change, (iii) result in or require the creation or imposition of any Lien of
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any nature whatsoever upon any assets of any Loan Party, other than Permitted Liens, or (iv) require any approval of any Loan Party’s interestholders or any approval or consent of any Person under any Material Contract of any Loan Party, other than consents or approvals that have been obtained and that are still in force and effect and, in the case of Material Contracts, for consents or approvals, the failure to obtain could not individually or in the aggregate reasonably be expected to cause a Material Adverse Change.
4.3. Governmental Consents. The execution, delivery, and performance by each Loan Party of the Loan Documents to which such Loan Party is a party and the consummation of the transactions contemplated by the Loan Documents do not and will not require any registration with, consent, or approval of, or notice to, or other action with or by, any Governmental Authority, other than (i) consents or approvals that have been obtained and that are still in force and effect, (ii) filings and recordings with respect to the Collateral to be made, or otherwise delivered to the U.S. Agent for filing or recordation, and (iii) consents, approvals, notices or other action, the failure to obtain or make could not reasonably be expected to be material to the business of the Loan Parties taken as a whole.
4.4. Binding Obligations; Perfected Liens.
(a) Each Loan Document has been duly executed and delivered by each Loan Party that is a party thereto and is the legally valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its respective terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally.
(b) The Agent’s Liens are validly created, perfected (other than (i) in respect of motor vehicles, (ii) in respect of vessels to the extent otherwise provided with respect to such vessels pursuant to Section 6(n)of the Security Agreement, and (iii) any Deposit Accounts and Securities Accounts not subject to a Control Agreement as permitted by Section 6.11, and subject only to the filing of financing statements and the recordation of the Mortgages), and first priority Liens, subject only to Permitted Liens.
4.5. Title to Assets; No Encumbrances. Each of the Loan Parties and its Subsidiaries has (i) good, sufficient and legal title to (in the case of fee interests in Real Property), (ii) valid leasehold interests in (in the case of leasehold interests in real or personal property), and (iii) good and marketable title to (in the case of all other personal property), all of their respective material assets reflected in their most recent financial statements delivered pursuant to Section 5.1, in each case except for assets disposed of since the date of such financial statements to the extent permitted hereby. All of such assets are free and clear of Liens except for Permitted Liens.
4.6. Jurisdiction of Organization; Location of Chief Executive Office; Organizational Identification Number; Commercial Tort Claims.
(a) The full legal name of (within the meaning of Section 9-503 of the Code, and including any French or combined form of name), and jurisdiction of organization of, each Loan Party and each of its Subsidiaries is set forth on Schedule 4.6(a) (as such Schedule may be updated from time to time to reflect changes permitted to be made under Section 6.5 or changes resulting from the transactions contemplated by Section 5.11).
(b) The chief executive office of each Loan Party and each of its Subsidiaries is located at the address indicated on Schedule 4.6(b) (as such Schedule may be updated from time to time to reflect changes permitted to be made under Section 5.15 or changes resulting from the transactions contemplated by Section 5.11).
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(c) Each Loan Party’s and each of its Subsidiaries’ tax identification numbers and organizational identification numbers, if any, are identified on Schedule 4.6(c) (as such Schedule may be updated from time to time to reflect changes permitted to be made under Section 6.5 or changes resulting from the transactions contemplated by Section 5.11).
(d) As of the Closing Date, no Loan Party and no Subsidiary of a Loan Party holds any commercial tort claims that exceed $500,000 in amount, except as set forth on Schedule 4.6(d).
4.7. Litigation.
(a) There are no actions, suits, or proceedings pending or, to the best knowledge of each Borrower, threatened in writing against a Loan Party or any of its Subsidiaries that either individually or in the aggregate could reasonably be expected, if determined adversely, to result in a Material Adverse Change.
(b) Schedule 4.7(b) sets forth a complete and accurate description, with respect to each of the actions, suits, or proceedings with asserted liabilities in excess of, or that could reasonably be expected to result in liabilities in excess of, $1,000,000 that, as of the Closing Date, is pending or, to the best knowledge of each Borrower, threatened in writing against a Loan Party or any of its Subsidiaries, of (i) the parties to such actions, suits, or proceedings, (ii) the nature of the dispute that is the subject of such actions, suits, or proceedings, (iii) the status, as of the Closing Date, with respect to such actions, suits, or proceedings, (iv) whether any liability of the Loan Parties’ and their Subsidiaries in connection with such actions, suits, or proceedings, as of the Closing Date, is covered by insurance, and (v) such other information that is set forth on Schedule 4.7(b).
4.8. Compliance with Laws. No Loan Party nor any of its Subsidiaries (a) is in violation of any applicable laws, rules, regulations, executive orders, or codes (including Environmental Laws) that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Change, or (b) is subject to or in default with respect to any final judgments, writs, injunctions, decrees, rules or regulations of any court or any federal, state, provincial, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Change.
4.9. No Material Adverse Change. All financial statements relating to the Loan Parties and their Subsidiaries that have been delivered by Borrower to Agent after the Closing Date have been prepared in accordance with. GAAP (except, in the case of unaudited financial statements, for the lack of footnotes and being subject to year-end audit adjustments) and present fairly in all material respects, the Loan Parties’ and their Subsidiaries’ consolidated financial condition as of the date thereof and results of operations for the period then ended. The audited financial statements of the Fund for the fiscal year ended December 31, 2007 have been prepared in accordance with Canadian GAAP and present fairly in all material respects, the Fund’s and its Subsidiaries’ consolidated financial condition as of the date thereof and results of operations for the period then ended. Since December 31, 2007, no event, circumstance, or change has occurred that has or could reasonably be expected to result in a Material Adverse Change with respect to the Loan Parties and their Subsidiaries, taken as a whole.
4.10. Fraudulent Transfer.
(a) Each Borrower is Solvent and the Loan Parties taken as a whole are Solvent.
(b) No transfer of property is being made by any Loan Party and no obligation is being incurred by any Loan Party in connection with the transactions contemplated by this Agreement or the other Loan Documents with the intent to hinder, delay, or defraud either present or future creditors of such Loan Party.
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4.11. Employee Benefits.
(a) U.S. Employee Benefits
(i) No U.S. Loan Party nor any of their ERISA Affiliates maintains or contributes to, or has any obligation under, any Employee Benefit Plan other than those identified on Schedule 4.11(a) (as updated from time to time upon written notice to each Agent).
(ii) Each U.S. Loan Party and each ERISA Affiliate is in material compliance with all applicable provisions of ERISA, the IRC and the regulations and published interpretations thereunder with respect to all Employee Benefit Plans except for any required amendments for which the remedial amendment period as defined in Section 401(b) of the IRC has not yet expired and except where a failure to so comply could not reasonably be expected to result in a Material Adverse Change. Each Employee Benefit Plan that is intended to be qualified under Section 401(a) of the IRC has been determined by the Internal Revenue Service to be so qualified, and each trust related to such plan has been determined to be exempt under Section 501(a) of the IRC. No liability has been incurred by any U.S. Loan Party or any ERISA Affiliate which remains unsatisfied for any taxes or penalties with respect to any Employee Benefit Plan or any Multiemployer Plan except to the extent that such liability (x) could not reasonably be expected to result in liability in excess of $2,000,000, either individually or in the aggregate, and (y) could not reasonably be expected to result in the imposition of a Lien on any assets of any Loan Party or any of their respective Subsidiaries.
(iii) No Employee Benefit Plan provides for post-employment welfare benefits, except as required by the Consolidated Omnibus Reconciliation Act and no Pension Plan has been terminated for which the liabilities have not been satisfied in full, nor has any Pension Plan failed to meet the minimum funding standards of Section 412 or 430 of the 1RC (without regard to any waiver granted under Section 412 of the IRC) other than as set forth on Schedule 4.11(a) (which schedule sets forth the fair market value of the plan’s assets and the present value of the plan’s liabilities using the assumptions required by the Pension Protection Act), nor has any funding waiver from the Internal Revenue Service been received or requested with respect to any Pension Plan, nor has any U.S. Loan Party or any ERISA Affiliate failed to make any contributions or to pay any amounts due and owing as required by Section 412 or 430 of the IRC, Section 302 of ERISA or the terms of any Pension Plan prior to the due dates of such contributions under Section 412 or 430 of the IRC or Section 302 of ERISA, except to the extent that the failure to make such contributions or payment could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change, nor has there been any event requiring any disclosure under Section 4041(c)(3)(C) or 4063(a) of ERISA with respect to any Pension Plan.
(iv) No U.S. Loan Party nor any ERISA Affiliate has: (A) engaged in a nonexempt prohibited transaction described in Section 406 of ERISA or Section 4975 of the IRC, except for any transaction that could not reasonably be expected to result in more than de minimis liability, (B) incurred any liability to the PBGC which remains outstanding other than the payment of premiums and there are no premium payments which are due and unpaid, (C) failed to make a required contribution or payment to a Multiemployer Plan, or (D) failed to make a required installment or other required payment under Section 412 or Section 430 of the IRC.
(v) No Termination Event has occurred or is reasonably expected to occur with respect to any Employee Benefit Plan of any U.S. Loan Party or any of its ERISA Affiliates.
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(vi) No proceeding, claim (other than a benefits claim in the ordinary course of business), lawsuit or investigation is existing or, to the best knowledge of any U.S. Loan Party after due inquiry, threatened concerning or involving any (A) employee welfare benefit plan (as defined in Section 3(1) of ERISA) currently maintained or contributed to by any U.S. Loan Party or any ERISA Affiliate, (B) Pension Plan or (C) Multiemployer Plan, except, in any such case, individually or in the aggregate, to the extent that such actions (x) could not reasonably be expected to result in liability in excess of $2,000,000, either individually or in the aggregate, and (y) could not reasonably be expected to result in the imposition of a Lien on any assets of any Loan Party or any of their respective Subsidiaries.
(vii) Except as set forth on Schedule 4.11(a), there is (a) no unfair labor practice complaint pending or, to U.S. Borrower’s knowledge, threatened against any U.S. Loan Party or any Subsidiary before any Governmental Authority and no grievance or arbitration proceeding pending or-threatened against any U.S. Loan Party or any Subsidiary which arises out of or under any collective bargaining agreement except to the extent such complaint, grievance, or arbitration (x) could not reasonably be expected to result in a liability of at least $2,000,000 or (y) could not reasonably be expected to result in a disruption of a material portion of any Loan Party’s business, (b) no strike, labor dispute, slowdown, stoppage or similar action or grievance pending or, to the best knowledge of U.S. Borrower’s, threatened against any U.S. Loan Party or any Subsidiary except to the extent such strike, labor dispute, slowdown, stoppage or similar action or grievance pending (x) could not reasonably be expected to result in a liability of at least $2,000,000 or (y) could not reasonably be expected to result in a disruption of a material portion of any Loan Party’s business and (c) no union representation question existing with respect to the employees of any U.S. Loan Party or any Subsidiary and no union organizing activity taking place with respect to any of the employees of any of them. Neither the Loan Parties, nor any Subsidiary, has incurred any liability or obligation under the Worker Adjustment and Retraining Notification Act (“WARN”) or similar state or provincial law, which remains unpaid or unsatisfied. The hours worked and payments made to employees of the Loan Parties and each Subsidiary are in material compliance with the Fair Labor Standards .Act or any other applicable legal requirements.
(b) Canadian Employee Benefits.
(i) Except as set forth in Schedule 4.11(b), any overtime pay, vacation pay, premiums for unemployment insurance, health and welfare insurance premiums, accrued wages, salaries and commissions, severance pay and employee benefit plan payments have been fully paid by each Canadian Loan Party or, in the case of accrued unpaid overtime pay or accrued unpaid vacation pay for Canadian Employees, has been accurately accounted for in the books and records of each Canadian Loan Party or has been reported pursuant to the collateral reporting obligation pursuant to Section 5.2.
(ii) Schedule 4.11(b) (as updated from time to time upon written notice to each Agent) lists all the Canadian. Pension Plans and Canadian Employee Plans applicable to the Canadian Employees of each Canadian Loan. Party in respect of employment in Canada and which are currently maintained or sponsored by each Canadian Loan Party or to which each Canadian. Loan Party contributes or has an obligation to contribute, except, for greater certainty, any statutory plans to which each Canadian Loan Party is obligated to contribute to or comply with under applicable law.
(iii) No improvements to any Canadian Pension Plan or any Canadian Employee Plan have been promised, except such improvements as are described in the collective bargaining agreements listed in Schedule 4.11(b), and no amendments or improvements to a Canadian Employee Plan will be made or promised by any Canadian Loan Party.
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(iv) Except as disclosed in Schedule 4.11(b), no Canadian Loan Party provides benefits to retired Canadian Employees or to beneficiaries or dependents of retired Canadian Employees.
(v) All obligations regarding the Canadian Pension Plans and the Canadian Employee Plans (including current service contributions and special payments, as applicable) have been satisfied, there are no outstanding defaults or violations by any party to any Canadian Pension Plan and any Canadian Employee Plan and no taxes, penalties or fees are owing or exigible under any of the Canadian Employee Plans, except which could not reasonably be expected to result in a Material Adverse Change. Except as disclosed in Schedule 4.11(b), each Canadian Pension Plan and each Canadian Employee Plan is fully funded or fully insured pursuant to the actuarial assumptions and methodology set out in Schedule 4.11(b) and, in the case of a Canadian Pension Plan, as required under the most recent actuarial valuation filed with the applicable Governmental Authority pursuant to generally accepted actuarial practices and principles. To the best knowledge of each Canadian Loan Party, no fact or circumstance exists that could adversely affect the tax-exempt status of a Canadian Pension Plan or, where applicable, a Canadian Employee Plan.
(vi) Except as disclosed in Schedule 4.11(b),
(A) No Canadian Loan Party is a party to any collective bargaining agreement, contract or legally binding commitment to any trade union or employee organization or group in respect of or affecting Canadian Employees;
(B) No Canadian Loan Party is a party to any application, complaint, grievance, arbitration, or other proceeding under any statute or under any collective agreement related to any Canadian Employee or the termination of any Canadian Employee and there is no complaint, inquiry or other investigation by any regulatory or other administrative authority or agency with regard to or in relation to any Canadian Employee or the termination of any Canadian Employee;
(C) To the best knowledge of each Canadian Loan Party, no Canadian Loan Party has engaged in any unfair labor practice, nor is any Canadian Loan Party aware of any pending or threatened complaint regarding any alleged unfair labor practices; and
(D) To the best knowledge of each Canadian Loan Party, there is no strike, labor dispute, work slow down or stoppage pending or threatened against any Canadian Loan Party and no Canadian Loan Party is currently the subject of any union organization effort or any labor negotiation.
(vii) All contributions, assessments, premiums, fees, taxes, penalties or fines in relation to the Canadian Employees have been duly paid and there is no outstanding liability of any kind in relation to the employment of the Canadian Employees or the termination of employment of any Canadian Employee.
(viii) Each Canadian Loan Party is in compliance with all requirements of Canadian Employee Benefits Legislation and health and safety, workers compensation, employment standards, labor relations, health insurance, employment insurance, protection of personal information, human rights laws and any Canadian federal, provincial or local counterparts or equivalents in each case, as applicable to the Canadian Employees and as amended from time to time.
4.12. Environmental Condition. Except as set forth on Schedule 4.12, (a) to each Borrower’s knowledge, no Loan Party’s or its Subsidiaries’ properties or assets has ever been used by a Loan Party, its Subsidiaries, or by previous owners or operators in the disposal of; or to produce, store, handle, treat, release, or transport, any Hazardous Materials, where such disposal, production, storage, handling, treatment, release or
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transport was in violation, in any material respect, of any applicable Environmental Law, (b) to each Borrower’s knowledge, no Loan Party’s or its Subsidiaries’ properties or assets has ever been designated or identified in any manner pursuant to any environmental protection statute as a Hazardous Materials disposal site, (c) no Loan Party nor any of its Subsidiaries has received notice that a Lien arising under any Environmental Law has attached to any revenues or to any Real Property owned or operated by a Loan Party or its Subsidiaries, and (d) no Loan Party nor any of its Subsidiaries nor any of their respective facilities or operations is subject to any outstanding written order, consent decree, or settlement agreement with any Person relating to any Environmental Law or Environmental Liability that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Change.
4.13. Intellectual Property. Each Loan Party and its Subsidiaries own, or hold licenses in, all trademarks, trade names, copyrights, patents, industrial designs or any other form of intellectual property and registrations or applications therefor, and licenses that are necessary and material to the conduct of its business as currently conducted, provided that, with respect to third party patents, the foregoing representation and warranty is made to the knowledge of such Loan Party and its Subsidiaries. Attached hereto as Schedule 4.13 (as updated from time to time) is a true, correct, and complete listing of all registrations of and applications to register material trademarks, trade names, copyrights, and patents that are owned by them, and material licenses as to which a Loan Party or one of its Subsidiaries is the owner of the licensed intellectual property or is an exclusive licensee of intellectual property (but excluding non-exclusive licenses granted in the ordinary course of business); provided, however, that Borrowers may amend Schedule 4.13 to add additional intellectual property so long as such amendment occurs by written notice to U.S. Agent not more than 30 days after the date on, which the applicable Loan Party or its Subsidiary acquires any such property after the Closing Date at the time that Borrowers provide their quarterly financial statements pursuant to Section 5.1.
4.14. Leases. Each Loan Party and its Subsidiaries enjoy peaceful and undisturbed possession under all leases material to their business and to which they are parties or under which they are operating, and, subject to Permitted Protests, all of such material leases are valid and subsisting and no material default by the applicable Loan Party or its Subsidiaries exists under any of them.
4.15. Deposit Accounts and Securities Accounts. Set forth on Schedule 4.15 (as updated pursuant to the provisions of the Security Agreement from time to time) is a listing of all of the Loan Parties’ and their Subsidiaries’ Deposit Accounts and Securities Accounts, including, with respect to each bank or securities intermediary (a) the name and address of such Person, and (b) the account numbers of the Deposit Accounts or Securities Accounts maintained with such Person.
4.16. Complete Disclosure. The factual information regarding the Loan Parties (other than forward-looking information and projections and information of a general economic nature and general information about the Borrowers’ industry) (taken as a whole) furnished by or on behalf of a Loan Party or its Subsidiaries in writing to either of the Agents or any Lender (including all information contained in the Schedules hereto or in the other Loan Documents) for purposes of or in connection with this Agreement, the other Loan Documents, or any transaction contemplated herein or therein does not contain any untrue statement of material fact or omit to state any fact necessary to make the factual statements therein taken as a whole not misleading in any material respect as of the time made or furnished in light of the circumstances under which such information was made or furnished after taking into account any modification or supplement to such information. On the Closing Date, the Closing Date Projections represent, and as of the date on which any other Projections are delivered to either Agent, as of the date of such Projections, such additional Projections represent (as of the date of such Projections) the Borrowers’ good faith estimate of the Loan Parties’ and their Subsidiaries future performance for the periods covered thereby based upon assumptions believed by Borrowers to be reasonable as of the date of such Projections (it being understood that such projections and forecasts are subject to uncertainties and contingencies, many of which are beyond the control of the Loan Parties and their Subsidiaries and no assurances can be given that such projections or forecasts will be realized).
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4.17. Material Contracts. Set forth on Schedule 4.17 is a list of the Material Contracts, as of the Closing Date, of each Loan Party and its Subsidiaries.
4.18. Patriot Act. To the extent applicable, each Loan Party is in compliance, in all material respects, with the (a) Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, and (b) Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act of 2001) (the “Patriot Act”). No part of the proceeds of the loans made hereunder will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.
4.19. Indebtedness. Set forth on Schedule 4.19 is a true and complete list of all Indebtedness described in clauses (a), (b), (c), (d), (e) or (g) of the definition thereof of each Loan Party and each of its Subsidiaries outstanding immediately prior to the Closing Date that is to remain outstanding after the Closing Date and such Schedule accurately sets forth the aggregate principal amount of such Indebtedness as of the Closing Date.
4.20. Payment of Taxes. Except as otherwise permitted under Section 5.5 and except as set forth on Schedule 4.20, all federal, state, provincial and local tax returns and reports of each Loan Party and its Subsidiaries required to be filed by any of them have been timely filed, and all taxes shown on such tax returns to be due and payable and all other federal, state, provincial and local taxes, assessments, fees and other governmental charges upon a Loan Party and its Subsidiaries and upon their respective assets, income, businesses and franchises that are due and payable have been paid when due and payable. Each Loan Party and each of its Subsidiaries have made adequate provision in accordance with GAAP for all taxes not yet due and payable. No Borrower knows of any proposed tax assessment against a Loan Party or any of its Subsidiaries that is not being actively contested by such Loan Party or such Subsidiary diligently, in good faith, and by appropriate proceedings; provided such reserves or other appropriate provisions, if any, as shall be required in conformity with GAAP shall have been made or provided therefor. No Loan Party nor any of its Subsidiaries has ever been a party to any understanding or arrangement constituting a “tax shelter” within the meaning of Section 6662(d)(2)(C)(iii) of the IRC or within the meaning of Section 6111(c) or Section 6111(d) of the IRC as in effect immediately prior to the enactment of the American Jobs Creation Act of 2004, or has ever “participated” in a “reportable transaction” within the meaning of Treasury Regulation Section 1.6011-4, except as would not be reasonably expected to, individually or in the aggregate, result in a Material Adverse Change. Except as otherwise permitted under Section 5.5 and except as set forth on Schedule 4.20, each Loan Party has withheld and remitted all required amounts within the prescribed periods to the appropriate governmental authorities, and in particular has deducted, remitted and paid all Canada Pension Plan contributions, workers compensation assessments, employment insurance premiums, employee health taxes, and real estate taxes within the prescribed periods to the appropriate governmental authorities.
4.21. Margin Stock. No Loan Party nor any of its Subsidiaries is engaged in the business of extending credit for the purpose of purchasing or carrying any Margin Stock. No part of the proceeds of the loans made to any Borrower will be used to purchase or carry any such Margin Stock or to extend credit to others for the purpose of purchasing or carrying any such margin stock or for any purpose that violates the provisions of Regulation T, U or X of said Board of Governors.
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4.22. Governmental Regulation. No Loan Party nor any of its Subsidiaries is a “registered investment company” or a company “controlled” by a “registered investment company” or a “principal underwriter” of a “registered investment company” as such terms are defined in the Investment Company Act of 1940.
4.23. OFAC. No Loan Party nor any of its Subsidiaries is in violation of any of the country or list based economic and trade sanctions administered and enforced by OFAC or Canadian Anti-Terrorism Laws. No Loan Party nor any of its Subsidiaries (a) is a Sanctioned Person or a Sanctioned Entity, (b) has a more than 10% of its assets located in Sanctioned Entities, (c) derives more than 10% of its revenues from investments in, or transactions with Sanctioned Persons or Sanctioned Entities, or (d) engages in any dealings or transactions prohibited by Canadian Anti-Terrorism Laws. The proceeds of any Advance will not be used to fund any operations in, finance any investments or activities in, or make any payments to, a Sanctioned Person or a Sanctioned Entity.
4.24. Holding Companies.
(a) Canadian Holdco is a holding company and does not have any material liabilities (other than liabilities arising under the Loan Documents, the Senior Term Loan Documents, the Subordinated Loan Documents or the Subordinated Canadian Holdco Note), own any material assets (other than the Stock of the Canadian Borrower and, prior to the Amalgamation, 3231021, the Subordinated CBCL Note and any payments in connection with the Subordinated CBCL Note) or engage in any operations or business (other than the ownership of the Canadian Borrower and its Subsidiaries, ownership of the Subordinated CBCL Note and activities reasonably related thereto, including, but not limited to, administrative activities).
(b) Xxxxxxx is a holding company and does not have any material liabilities (other than liabilities arising under the Loan Documents, the Senior Term Loan Documents, or the Subordinated Loan Documents), own any material assets (other than the Stock of BB Holdings and the BBF Note and any payments in connection therewith) or engage in any operations or business (other than the ownership of BB Holdings and its Subsidiaries, the ownership of the BBF Note and activities reasonably related thereto, including but not limited to administrative activities).
(c) Except as set forth on Schedule 4.24, BB Holdings is a holding company and does not have any material liabilities (other than liabilities arising under the Loan Documents, the Senior Term Loan Documents, or the Subordinated Loan Documents), own any material assets (other than the Stock of U.S. Borrower) or engage in any operations or business (other than the ownership of U.S. Borrower and its Subsidiaries and activities reasonably related thereto, including but not limited to administrative activities).
(d) Bumble Bee International (PR), Inc. is a holding company and does not have any material liabilities (other than liabilities arising under the Loan Documents, the Senior Term Loan Documents, the Subordinated Loan Documents, or as a result of its general partnership interest in BB Acquisition (PR), L.P.), own any material assets (other than ownership of a general partnership interest in BB Acquisition (PR), L.P.) or engage in any operations or business (other than ownership of a general partnership interest in BB Acquisition (PR), L.P. and activities reasonably related thereto, including but not limited to administrative activities).
(e) Mexican Subsidiaries do not have any material liabilities, own any material assets (other than potential tax refunds which may, or may not be, material) or engage in any operations or business (other than administrative activities).
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4.25. Required Equity Documents. As of the Closing Date, the Borrowers have delivered to Agents true and correct copies of any Required Equity Documents. As of the Closing Date, no party thereto is in default in the performance or compliance with any provisions thereof and the Required Equity Documents comply in all material respects with all applicable laws. The Required Equity Documents are in full force and effect as of the Closing Date and have not been terminated, rescinded or withdrawn as of such date. The execution, delivery and performance of the Required Equity Documents do not and will not require any registration with, consent, or approval of, or notice to, or other action with or by, any Governmental Authority, other than consents or approvals that have been obtained and that are still in full force and effect.
4.26. Other Documents.
(a) Borrowers have delivered to U.S. Agent a complete and correct copy of the Acquisition Documents, including all schedules and exhibits thereto. The execution, delivery and performance of each of the Acquisition Documents has been duly authorized by all necessary action on the part of the Loan Parties that are parties thereto. Each Acquisition Document is the legal, valid and binding obligation of the Loan Parties that are parties thereto, enforceable against such Loan Party in accordance with its terms, in each case, except (i) as may be limited by general principles of equity and applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other similar laws relating to or affecting generally the enforcement of creditors’ rights generally and (ii) the availability of the remedy of specific performance or injunctive or other equitable relief is subject to the discretion of the court before which any proceeding therefore may be brought. As of the Closing Date, to the best of Borrowers’ knowledge, no Loan Party is in default in the performance or compliance with any provisions thereof. As of the Closing Date, to the best of Borrowers’ knowledge, all representations and warranties made by a Loan Party in the Acquisition Agreement and in the certificates delivered in connection therewith are true and correct in all material respects (except to the extent that such representations and warranties relate solely to an earlier date).
(b) Borrowers have delivered to U.S. Agent a complete and correct copy of the Subordinated Loan Documents and the Subordinated Canadian Holdco Note, including all schedules and exhibits thereto. The execution, delivery and performance of each of the Subordinated Loan Documents and the Subordinated Canadian Holdco Note have been duly authorized by all necessary action on the part of the Loan Parties that are parties thereto. Each Subordinated Loan Document and the Subordinated Canadian Holdco Note are the legal, valid and binding obligation of the Loan Parties that are parties thereto, enforceable against such Loan Party in accordance with its terms, in each case, except (i) as may be limited by general principles of equity and applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other similar laws relating to or affecting generally the enforcement of creditors’ rights generally and (ii) the availability of the remedy of specific performance or injunctive or other equitable relief is subject to the discretion of the court before which any proceeding therefor may be brought. As of the Closing Date, no Loan Party is in default in the performance or compliance with any provisions thereof. As of the Closing Date, all representations and warranties made by a Loan Party in the Subordinated Loan Documents and the Subordinated Canadian Holdco Note and in the certificates delivered in connection therewith are true and correct in all material respects (except to the extent that such representations and warranties relate solely to an earlier date).
(c) As of the Closing Date, the Closing Date Acquisition has been consummated in all material respects, in accordance with the Acquisition Agreement and all applicable laws. As of the Closing Date, all material requisite approvals relating to the Closing Date Acquisition by Governmental Authorities having jurisdiction over Borrower and, to each Borrower’s knowledge, the Seller, with respect to the Closing Date Acquisition, have been obtained (including filings or approvals required under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act), except for any approval the failure to obtain could not reasonably be expected to be adverse in any material respect to the interests of the Lenders.
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4.27. Eligible Accounts. As to each Account that is identified by a Borrower as an Eligible Account in a Borrowing Base Certificate submitted to an Agent, such Account is (a) a bona fide existing payment obligation of the applicable Account Debtor created by the sale and delivery of Inventory to such Account Debtor in the ordinary course of such Borrower’s business, (b) owed to such Borrower without any known defenses, disputes, offsets, counterclaims, or rights of return or cancellation, other than (i) as is consistent with the Loan Parties’ historic return, refund, credit, cancellation or exchange policies that in each case have been previously disclosed in writing to the applicable Agent or (ii) for amounts not in excess of $10,000, and (c) not excluded as ineligible by virtue of one or more of the excluding criteria set forth in the definition of Eligible Accounts.
4.28. Eligible Inventory. As to each item of Inventory that is identified by a Borrower as Eligible Inventory in a Borrowing Base Certificate submitted to an Agent, such Inventory is (a) of good and merchantable quality, free from known defects, and (b) not excluded as ineligible by virtue of one or more of the excluding criteria set forth in the definition of Eligible Inventory.
4.29. Location of Inventory and Equipment. The Inventory and Equipment (other than (a) vehicles or Equipment out for repair, and (b) Inventory and Equipment for which the aggregate fair market value is less than $250,000 in the aggregate) of the Loan Parties and their Subsidiaries are not stored with a bailee, warehouseman, or similar party, except as provided on Schedule 4.29 (as such Schedule may be updated pursuant to Section 5.15), and are located only at, or in-transit between or in route to, the locations identified on Schedule 4.29 (as such Schedule may be updated pursuant to Section 5.15).
4.30. Inventory Records. Each Loan Party keeps correct and accurate records itemizing and describing the type, quality, and quantity of its and its Subsidiaries’ Inventory and the book value thereof.
4.31. Withholdings and Remittances. Each Loan Party has remitted all Canada Pension Plan contributions, provincial pension plan contributions, workers’ compensation assessments, employment insurance premiums, employer health taxes, municipal real estate taxes and other taxes payable under applicable law by them, and, furthermore, have withheld from each payment made to any of its present or former employees, officers and directors, and to all persons who are non-residents of Canada for the purposes of the Income Tax Act (Canada) all amounts required by law to be withheld, including without limitation all payroll deductions required to be withheld and has remitted such amounts to the proper Governmental Authority within the time required under applicable law.
4.32. Packers and Stockyards Act. From and after December 31, 2007, neither the Loan Parties nor their respective Subsidiaries are (a) “packers” who purchase “livestock” (as each such term is defined in the Packers and Stockyards Act of 1921 (the “PSA”)) in excess of $500,000 during any calendar year or (b) “live poultry dealers” who purchase “poultry” (as each such term is defined in the PSA) in excess of $100,000 during any calendar year.
4.33. Senior Debt, Etc. The subordination provisions of the Subordination Agreement are and will be enforceable against the holders of the Subordinated Indebtedness to which the Subordination Agreement relates by Agents and Lenders. Subject to the terms of the Subordination Agreement, all Obligations, including, without limitation, those to pay principal of and interest (including post-petition interest) on the Advances and fees and expenses in connection therewith, constitute Senior Obligations (as defined in the Subordination Agreement), and all such Obligations are entitled to the benefits of the subordination created by the subordination provisions contained therein. Borrowers acknowledge that Agents and Lenders are entering into this Agreement, and extending their Commitments, in reliance upon the subordination provisions of the Subordination Agreement and this Section 4.33.
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4.34. Equipment. All of the material Equipment (other than (a) obsolete or worn out Equipment and (b) Equipment sold or disposed of pursuant to Section 6.4 or Equipment held for sale or disposition permitted by Section 6.4) is used or held for use in Loan Parties’ business and is fit for such purposes.
5. AFFIRMATIVE COVENANTS.
Each Borrower covenants and agrees that, until termination of all of the Commitments and payment in full of the Obligations, the Loan Parties shall and shall cause each of their Subsidiaries to comply with each of the following:
5.1. Financial Statements, Reports, Certificates. Deliver to each Agent each of the financial statements, reports, and other items set forth on Schedule 5.1 at the times specified therein. In addition, each Borrower agrees that no Subsidiary of a Loan Party will have a fiscal year different from that of the Borrowers. In addition, each Borrower agrees to maintain a system of accounting that enables the Borrowers to produce financial statements in accordance with GAAP. Each Loan Party shall also (a) keep a reporting system that shows all material additions, sales, claims, returns, and allowances with respect to its and its Subsidiaries’ sales, and (b) maintain in all material respects its billing systems/practices as approved by the Agents prior to the Closing Date and shall only make material modifications thereto with notice to, and with the consent of, the Agents, if such material modification is materially adverse to the interests of the Lenders.
5.2. Collateral Reporting. Provide each Agent with each of the reports set forth on Schedule 5.2 at the times specified therein. In addition, each Borrower agrees to use commercially reasonable efforts in cooperation with Agents to facilitate and implement a system of electronic collateral reporting in order to provide electronic reporting of each of the items set forth above.
5.3. Existence. Except as otherwise permitted (x) under Section 6.3, (y) in connection with the Amalgamation, or (z) in connection with the dissolution of Mexican Subsidiaries:
(a) cause each Loan Party to, and cause each of its Subsidiaries to, at all times preserve and keep in full force and effect its existence in good standing in its jurisdiction of organization, and
(b) cause each Loan Party to, and cause each of its Subsidiaries to, at all times preserve and keep in full force and effect all existence (other than in respect of good standing in its jurisdiction of organization) and all rights and franchises, licenses and permits material to its business;
provided, however, that no Loan Party or any of its Subsidiaries shall be required to preserve any such right or franchise, licenses or permits if such Person’s board of directors (or similar governing body) shall determine that the preservation thereof is no longer desirable or necessary in the conduct of the business of such Person, and if loss thereof is not disadvantageous in any material respect to such Person or to the Lenders.
5.4. Maintenance of Properties. Maintain and preserve all of its material assets that are necessary or useful in the proper conduct of its business in good working order and condition, ordinary wear, tear, and casualty excepted and Permitted Dispositions excepted, and comply with the material provisions of all material leases to which it is a party as lessee, so as to prevent the loss or forfeiture thereof, unless such provisions are the subject of a Permitted Protest.
5.5. Taxes. Except as set forth on Schedule 5.5, cause all assessments and taxes imposed, levied, or assessed against any Loan Party or its Subsidiaries, or any of their respective assets or in respect of any of its income, businesses, or franchises to be paid in full, before delinquency or before the expiration of any extension period, except to the extent that the validity of such assessment or tax shall be the subject of a
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Permitted Protest and so long as, in the case of an assessment or tax that has or may become a Lien against any of the Collateral, such contest proceedings conclusively operate to stay the sale of any portion of the Collateral to satisfy such assessment or tax. Each Borrower will and will cause each Loan Party and each of their respective Subsidiaries to make timely payment or deposit of all tax payments and withholding taxes and other withholding required of it and them by applicable laws, including those laws concerning F.I.C.A., F.U.T.A., state disability, Canada Pension Plan and provincial pension plans, employer health tax, Canadian employment insurance, and local, state, provincial, and federal income taxes and excise taxes, and will, upon request, furnish Agents with proof reasonably satisfactory to Agents indicating that each Loan Party and its Subsidiaries have made such payments or deposits. Each Borrower will and will cause each Loan Party and its Subsidiaries to timely file all material federal, state, provincial and local tax returns and reports required to be filed by it.
5.6. Insurance. At Borrowers’ expense, maintain insurance respecting each of the Loan Parties’ and their Subsidiaries’ assets wherever located, covering loss or damage by fire, theft, explosion, and all other hazards and risks as ordinarily are insured against by other Persons engaged in the same or similar businesses and which are similarly situated and located. Borrowers also shall maintain (with respect to each of the Loan Parties and their Subsidiaries) business interruption, public liability, and product liability insurance, as well as insurance against larceny. All such policies of insurance shall be with reputable insurance companies, in such amounts as is carried generally in accordance with sound business practice by companies in similar businesses similarly situated and located, and in any event in amount, adequacy and scope that is no less favorable to the Loan Parties than the insurance maintained by the Loan Parties on the Closing Date or such policies of insurance shall be reasonably acceptable to Agent. All property insurance policies covering the Collateral are to be made payable to U.S. Agent for the benefit of Agents and the Lenders, as their interests may appear, in ease of loss, pursuant to a standard loss payable endorsement with a standard non contributory “lender” or “secured party” clause and are to contain such other provisions as U.S. Agent may reasonably require to fully protect the Lenders’ interest in the Collateral and to any payments to be made under such policies. All certificates of insurance are to be delivered to U.S. Agent, with the loss payable and additional insured endorsement in favor of U.S. Agent and shall provide for not less than 30 days (10 days in the case of non-payment) prior written notice to U.S. Agent of the exercise of any right of cancellation. If Borrower fails to maintain such insurance, U.S. Agent may arrange for such insurance, but at Borrowers’ expense and without any responsibility on U.S. Agent’s part for obtaining the insurance, the solvency of the insurance companies, the adequacy of the coverage, or the collection of claims. Borrowers shall give U.S. Agent reasonably prompt notice of any loss exceeding $1,000,000 covered by its casualty or business interruption insurance. Upon the occurrence and during the continuance of an Event of Default, U.S. Agent shall have the sole right to file claims under any insurance policies, to receive, receipt and give acquittance for any payments that may be payable thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect the collection, compromise or settlement of any claims under any such insurance policies.
5.7. Inspection. Permit each Agent and each of its duly authorized representatives or agents to visit any of its properties and inspect any of its assets or books and records, to examine and make copies of its books and records, and to discuss its affairs, finances, and accounts with, and to be advised as to the same by, its officers and employees at such reasonable times and intervals as such Agent may designate during normal business hours and, so long as no Event of Default is continuing, with reasonable prior notice to the applicable Borrower; provided, however, that, so long as no Event of Default shall have occurred and be continuing, the Loan Parties collectively shall not be obligated to reimburse the Agents or any Senior Term Loan Agent for (a) from the Closing Date to the date that is the first anniversary of the Closing Date, more than 3 audits and 1 appraisal in an aggregate amount (with respect to such audits and appraisal) not to exceed $125,000 (minus the sum of the amounts reimbursed pursuant to (i) the Fee Letter, (ii) Section 5.7 of the Senior Term Loan Credit Agreement and (iii) any fee letter entered into in connection with the Senior Term Loan Credit Agreement),
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and (b) from and after the date that is the first anniversary of the Closing Date, more than 2 audits and 1 appraisal in an aggregate amount (with respect to such audits and appraisal) not to exceed $100,000 (minus the sum of the amounts reimbursed pursuant to (i) the Fee Letter, (ii) Section 5.7 of the Senior Term Loan Credit Agreement, and (iii) any fee letter entered into in connection with the Senior Term Loan Credit Agreement) during any fiscal year.
5.8. Compliance with Laws. Comply with the requirements of all applicable laws, rules, regulations, and orders of any Governmental Authority, other than laws, rules, regulations, and orders the noncompliance with which, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Change.
5.9. Environmental.
(a) Keep any property either owned or operated by any Loan Party or any of its Subsidiaries free of any Environmental Liens or post bonds or other financial assurances sufficient to satisfy the obligations or liability evidenced by such Environmental Liens,
(b) comply, in all material respects, with Environmental Laws and provide to any Agent documentation of such compliance which such Agent reasonably requests,
(c) promptly notify each Agent of any release of a Hazardous Material in any reportable quantity from or onto property owned or operated by any Loan Party or any of its Subsidiaries and take any Remedial Actions required to xxxxx said release or otherwise to come into compliance with applicable Environmental Law, and
(d) promptly, but in any event within 5 Business Days of its receipt thereof, provide each Agent with written notice of any of the following: (i) written notice that an Environmental Lien has been filed against any of the real or personal property of any Loan Party or any of its Subsidiaries, (ii) commencement of any Environmental Action or written notice that an Environmental Action will be filed against any Loan Party or any of its Subsidiaries, and (iii) notice of a violation, citation, or other administrative order which could reasonably be expected to result in a Material Adverse Change.
5.10. Disclosure Updates. Promptly and in no event later than 5 Business Days after obtaining knowledge thereof, notify each Agent if any written information, exhibit, or report (other than forward-looking information and projections and information of a general economic nature and general information about the Borrowers’ industry) (taken as a whole) furnished to the Lender Group contained, at the time it was furnished, any untrue statement of a material fact or omitted to state any material fact necessary to make the statements contained therein not misleading in light of the circumstances in which made after taking into account any modification or supplement to such information. The foregoing to the contrary notwithstanding, any notification pursuant to the foregoing provision will not cure or remedy the effect of the prior untrue statement of a material fact or omission of any material fact nor shall any such notification have the effect of amending or modifying this Agreement or any of the Schedules hereto.
5.11. Formation of Subsidiaries. At the time that any Loan Party forms any direct or indirect Subsidiary (other than a Permitted Joint Venture) or acquires any direct or indirect Subsidiary (other than a Permitted Joint Venture) after the Closing Date, such Loan Party shall (a) within 10 days of such formation or acquisition cause any such new Subsidiary to provide to U.S. Agent (1) a joinder to the Guaranty, the Security Agreement and the Intercompany Subordination Agreement, or (2), a joinder to the Canadian Security Documents (if such new Subsidiary is a non-U.S. entity), together with such other security documents (including mortgages with respect to any Real Property owned in fee of such new Subsidiary with a fair market
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value of at least $250,000), as well as appropriate financing statements (and with respect to all property subject to a mortgage, fixture filings), all in form and substance reasonably satisfactory to the U.S. Agent) (including being sufficient to grant U.S. Agent a first priority Lien (subject to Permitted Liens) in and to the assets of such newly formed or acquired Subsidiary), (b) within 10 days of such formation or acquisition (or such later date as permitted by U.S. Agent in its sole discretion) provide to U.S. Agent, to the extent not covered by the Security Agreement, a pledge agreement and appropriate certificates and powers or financing statements, hypothecating all of the direct or beneficial ownership interest in such new Subsidiary reasonably satisfactory to U.S. Agent, and (c) within 10 days of such formation or acquisition (or such later date as permitted by U.S. Agent in its sole discretion) provide to U.S. Agent all other documentation, including one or more opinions of counsel reasonably satisfactory to U.S. Agent, which in its reasonable opinion is appropriate with respect to the execution and delivery of the applicable documentation referred to above (including policies of title insurance or other documentation with respect to all Real Property owned in fee and subject to a mortgage). Any document, agreement, or instrument executed or issued pursuant to this Section 5.11 shall be a Loan Document.
5.12. Further Assurances. At any time upon the reasonable request of U.S. Agent, execute or deliver to U.S. Agent any and all financing statements, fixture filings, security agreements, pledges, assignments, endorsements of certificates of title, mortgages, deeds of trust, opinions of counsel, and all other documents (collectively, the “Additional Documents”) that U.S. Agent may reasonably request in form and substance reasonably satisfactory to U.S. Agent, to create, perfect, and continue perfected or to better perfect the Agent’s Liens in all of the assets of the Loan Parties and their Subsidiaries (whether now owned or hereafter arising or acquired, tangible or intangible, real or personal) (other than Permitted Joint Ventures), to create and perfect Liens in favor of U.S. Agent in any Real Property acquired by any Loan Party or any of its Subsidiaries after the Closing Date with a fair market value in excess of $250,000, and in order to fully consummate all of the transactions contemplated hereby and under the other Loan Documents). To the maximum extent permitted by applicable law, each Loan Party authorizes U.S. Agent to execute any such Additional Documents in the applicable Loan Party’s or its Subsidiary’s name, as applicable, and authorizes U.S. Agent to file such executed Additional Documents in any appropriate filing office. In furtherance and not in limitation of the foregoing, each Loan Party shall take such actions as U.S. Agent may reasonably request from time to time to ensure that the Obligations are guarantied by the Guarantors and are secured by substantially all of the assets of each Loan Party and its Subsidiaries (other than Permitted Joint Ventures) and all of the outstanding Capital Stock of the Subsidiaries (other than. Permitted Joint Ventures) of each Loan Party.
5.13. Lender Meetings. Within 90 days after the close of the second and fourth fiscal quarters of each fiscal year of the Borrowers, at the request of either Agent or of the Required Lenders and upon reasonable notice, hold a meeting (at a mutually agreeable location and time or, at the option of such Agent, by conference call) with all the Lenders who choose to attend such meeting at which meeting shall be reviewed the financial results of the previous fiscal year and the financial condition of the Loan Parties and their respective Subsidiaries and the projections presented for the current fiscal year of the Borrowers; provided, that each such meeting required to be held within 90 days after the close of the second fiscal quarter of each fiscal year shall be by conference call.
5.14. Material Contracts.
(a) Contemporaneously with the delivery of each quarterly Compliance Certificate pursuant hereto, provide Agents with (i) a list of each Material Contract entered into since the delivery of the previous quarterly Compliance Certificate, and (ii) upon request of any Agent, copies of any such Material Contract.
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(b) Promptly, within 10 Business Days, (i) notify each Agent of any material amendment or modification of any Material Contract and (ii) upon request of any Agent, deliver copies of any such material amendment or modification of a Material Contract.
5.15. Location of Inventory and Equipment. Keep each Loan Parties’ and their respective Subsidiaries’ Inventory and Equipment (other than (a) vehicles or Equipment out for repair in the ordinary course of business and (b) Inventory and Equipment for which the aggregate fair market value is less than $250,000 in the aggregate) only at the locations identified on Schedule 4.29 (or in transit between or in route to such locations) and their chief executive offices only at the locations identified on Schedule 4.6(b); provided, however, that Borrower may amend Schedule 4.29 or Schedule 4.6(b) so long as such amendment occurs by written notice to Agents not more than 5 days after the date on which such Inventory or Equipment is moved to such new location or such chief executive office is relocated and so long as such new location is within (i) the United States, (ii) Puerto Rico, (iii) Canada, (iv) Trinidad, Fiji, or Mauritius or (v) any other jurisdiction (provided that the aggregate value of the Equipment and Inventory in all such other jurisdictions set forth in this clause (v) is not in excess of $2,000,000), and so long as, at the time of such written notification (except with respect to locations set forth on Schedule 5.15), a Borrower uses its commercially reasonable efforts to provide U.S. Agent a Collateral Access Agreement with respect thereto.
5.16. Compliance with ERISA and the IRC. In addition to and without limiting the generality of Section 5.8, (a) comply with all material applicable provisions of ERISA, the IRC and the regulations and published interpretations thereunder with respect to all Employee Benefit Plans, (b) without the prior written consent of U.S. Agent, not take any action or fail to take action the result of which could be a material liability to the PBGC or to a Multiemployer Plan, (c) not participate in any prohibited transaction that could result in any civil penalty under ERISA or tax under the IRC, other than any prohibited transaction that could not reasonably be expected to result in liability other than de minimis liability and (d) operate each Employee Benefit Plan in such a manner that will not incur any material tax liability under Section 4980B of the IRC or any material liability to any qualified beneficiary as defined in Section 4980B of the IRC and (e) furnish to the U.S. Agent upon the U.S. Agent’s request such additional information about any Employee Benefit Plan as may be reasonably requested by the U.S. Agent.
5.17. Canadian Pension and Benefit Plans.
(a) The Canadian Borrower will cause to be delivered to the Canadian Agent, promptly upon the Canadian Agent’s written request, a copy of each Canadian Pension Plan and Canadian Employee Plan and, if applicable, related trust agreements or other funding instruments and all amendments thereto.
(b) The Canadian Borrower shall obtain and provide the Agents, upon their request, with written confirmation from the applicable Governmental Authorities for each Canadian Pension Plan or Canadian Employee Plan that is required to be registered with any Governmental Authority under Canadian Employee Benefits Legislation. The Canadian Borrower shall ensure that each Canadian Pension Plan or Canadian Employee Plan retains its registered status under and is administered in all material respects in accordance with the terms of the applicable Canadian Pension Plan text, funding agreement and Canadian Employee Benefits Legislation.
(c) The Canadian Borrower will cause all reports and disclosures required by any Canadian Pension Plan or applicable Canadian Employee Benefits Legislation to be filed and distributed as required.
(d) Each applicable Canadian Loan Party shall perform in all material respects all obligations (including (if applicable), funding, investment and administration obligations) required to be
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performed by such Canadian Loan Party in connection with each applicable Canadian Pension Plan and Canadian Employee Plan and the funding therefor; make and pay all current service and, as applicable, special payments relating to solvency deficiencies under each applicable Canadian Pension Plan and pay all premiums required to be made or paid by it in accordance with the terms of each applicable Canadian Employee Plan and Canadian Employee Benefits Legislation and withhold by way of authorized payroll deductions or otherwise collect and pay into the applicable Canadian Pension Plan or Canadian Employee Plan all employee contributions required to be withheld or collected by it in accordance with the terms of each applicable Canadian Pension Plan or Canadian Employee Plan, and Canadian Employee Benefits Legislation; and ensure that, to the extent that such Canadian Loan Party has a Canadian Pension Plan which is a defined benefit pension plan, that such plan is fully funded, both on an ongoing basis and on a solvency basis (using actuarial methods and assumptions which are consistent with the actuarial valuations last filed with the applicable Governmental Authorities and which are consistent with Canadian actuarial standards for pension plan funding valuations.
5.18. Post-Closing Covenants.
(a) Within one year after the Closing Date, Agents shall have received evidence reasonably satisfactory to each Agent that the Mexican Subsidiaries have been dissolved and the proceeds thereof shall have been distributed to the Loan Parties;
(b) Within 15 days after the Closing Date, Agents shall have received evidence satisfactory to each Agent that Xxxxxxx received at least $7,000,000 of additional cash equity contributions from certain management employees of the Loan Parties;
(c) Within 30 days after the Closing Date, Agents shall have received in respect of Bumble Bee International (PR), Inc. (i) Cayman Security Documents, and (ii) such legal opinions with respect to such Cayman Security Documents, the guaranty, stock pledge agreement, and security agreement as U.S. Agent shall reasonably require; and
(d) Within 15 days after the Closing Date, Agent shall have received Control Agreements with respect to U.S. Loan Parties’ Deposit Accounts at Bank of America, N.A., which are in form and substance satisfactory to Agent;
(e) Within 60 days after the Closing Date, Agent shall have received Control Agreements with Canadian Loan Parties’ Deposit Accounts which are in form and substance satisfactory to Agent; and
(f) Within 60 days after the Closing Date, Agent shall have received insurance endorsements;
(g) Within 30 days after the Closing Date, Agent shall have received a consent from the Puerto Rico Industrial Development Company with respect to the Puerto Rico Production Facility—Tuna Canning Plant located at 3075 Xxxx, 00 Xxxx Xxxxxxxxxx Xx Xxxxxxx Xxxxxxxx, Xxxxxx Xxxx, 00000.
6. NEGATIVE COVENANTS.
Each Borrower covenants and agrees that, until termination of all of the Commitments and payment in full of the Obligations, the Loan Parties will not and will not permit any of their Subsidiaries to do any of the following:
6.1. Indebtedness. Create, incur, assume, suffer to exist, guarantee, or otherwise become or remain, directly or indirectly, liable with respect to any Indebtedness, except for Permitted Indebtedness.
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6.2. Liens. Create, incur, assume, or suffer to exist, directly or indirectly, any Lien on or with respect to any of its assets, of any kind, whether now owned or hereafter acquired, or any income or profits therefrom, except for Permitted Liens.
6.3. Restrictions on Fundamental Changes. Except as otherwise permitted in connection with the Amalgamation, or in connection with the dissolution of the Mexican Subsidiaries:
(a) Enter into any merger, amalgamation, consolidation, reorganization, or recapitalization, or reclassify its Stock, except for (i) any merger, amalgamation, consolidation, reorganization or recapitalization among any Loan Parties, provided that a Borrower must be the surviving entity of any such merger or amalgamation to which it is a party and no merger may occur among any of Canadian Holdco, Xxxxxxx, XX Holdings and any Borrower, (ii) any merger between Loan Parties and Subsidiaries of any Loan Party that are not Loan Parties so long as such Loan Party is the surviving entity of any such merger, and (iii) any merger between Subsidiaries of any Loan Party that are not Loan Parties,
(b) Liquidate, wind up, or dissolve itself (or suffer any liquidation or dissolution), except for (i) the liquidation or dissolution of non-operating Subsidiaries of any Loan. Party with nominal assets and nominal liabilities, (ii) the liquidation or dissolution, of a Loan Party (other than Canadian Holdco, Xxxxxxx, XX Holdings, or any Borrower) or any of its wholly-owned Subsidiaries so long as all of the assets (including any interest in any Stock) of such liquidating or dissolving Loan Party or Subsidiary are transferred to a Loan Party that is not liquidating or dissolving (unless otherwise disposed of or transferred in a transaction permitted pursuant to Section 6.4), or (iii) the liquidation or dissolution of a Subsidiary of a Loan Party that is not a Loan Party (other than any such Subsidiary the Stock of which (or any portion thereof) is subject to a Lien in favor of U.S. Agent) so long as all of the assets of such liquidating or dissolving Subsidiary are transferred to a Loan Party or a Subsidiary of a Loan Party that is not liquidating or dissolving (unless otherwise disposed of or transferred in a transaction permitted pursuant to Section 6.4); or
(c) Suspend or go out of a substantial portion of its or their business, except as permitted pursuant to clauses (a) or (b) above or in connection with the transactions permitted pursuant to Section 6.4.
6.4. Disposal of Assets. Other than Permitted Dispositions, Permitted Investments, or transactions expressly permitted by Sections 6.3 and 6.11, convey, sell, lease, license, assign (other than in connection with the granting of Permitted Liens), transfer, or otherwise dispose of (or enter into an agreement to convey, sell, lease, license, assign, transfer, or otherwise dispose of) any of any Loan Party’s or its Subsidiaries’ assets.
6.5. Change Name. Change any Loan Party’s or any of its Subsidiaries’ name, organizational identification number, jurisdiction of organization or organizational identity; provided, however, that any Loan Party or any of its Subsidiaries may change its name upon at least 10 days prior written notice to U.S. Agent of such change.
6.6. Nature of Business. Make any change (other than changes of a de minimis nature) in the nature of its or their business, taken as a whole, as described in Schedule 6.6 or acquire any material properties or assets that are not reasonably related to the conduct of such business activities; provided that the Loan Parties and their respective Subsidiaries may engage in any business that is reasonably related or ancillary or incidental to its or their business.
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6.7. Prepayments and Amendments.
(a) Except in connection with Refinancing Indebtedness permitted by Section 6.1,
(i) optionally prepay, redeem, defease, purchase, or otherwise optionally acquire any Indebtedness of any Loan Party or its Subsidiaries, other than (A) the Obligations in accordance with this Agreement, (B) the Senior Term Loan Indebtedness, so long as (x) no Event of Default has occurred and is continuing or would result therefrom, and (y) Borrowers have Excess Availability of at least $25,000,000 immediately after giving effect to such prepayment, (C) Capital Leases, (D) Permitted Intercompany Advances, (E) prepayments of Indebtedness (other than Subordinated Indebtedness) in an aggregate amount not to exceed $250,000 during the term of this Agreement, and (F) payments of principal of the Subordinated Canadian Holdco Note and the Subordinated CBCL Note solely in amounts necessary to permit the payment of all Canadian withholding taxes due and payable with respect to such notes,
(ii) make any payment on account of Indebtedness that has been contractually subordinated in right of payment if such payment is not permitted at such time under the subordination terms and conditions; provided, that any payment on account of the Subordinated Indebtedness may be made if such payment is permitted at such time under the Subordination Agreement, or
(b) Except in connection with Refinancing Indebtedness permitted by Section 6.1, directly or indirectly, amend, modify, or change any of the terms or provisions of
(i) any agreement, instrument, document, indenture, or other writing evidencing or concerning Indebtedness permitted under Section 6.1 other than (A) the Obligations in accordance with this Agreement, (B) Permitted Intercompany Advances, (C) Indebtedness permitted under clauses (c), (h), (j) and (k) of the definition of Permitted Indebtedness, (D) the Senior Term Loan Documents, except as otherwise prohibited by the terms of the Intercreditor Agreement, and (E) Subordinated Loan Documents, except as otherwise prohibited by the terms of the Subordination Agreement,
(ii) the Governing Documents of any Loan Party or any of its Subsidiaries if the effect thereof, either individually or in the aggregate, could reasonably be expected to be materially adverse to the interests of the Lenders, or
(iii) the Acquisition Agreement, without prior written consent of Agent and the Required Lenders, if the effect thereof, either individually or in the aggregate, could reasonably be expected to be materially adverse to the interests of the Lenders.
6.8. Change of Control. Cause, permit, or suffer, directly or indirectly, any Change of Control.
6.9. Distributions. Make any distribution or declare or pay any dividends (in each case, in cash or other property, other than Stock) on, or purchase, acquire, redeem, or retire any of any Borrower’s Stock, of any class, whether now or hereafter outstanding; provided, however, that, so long as it is permitted by applicable law,
(a) the Loan Parties may make distributions to Clover Leaf Seafood 2 B.V. for the purpose of permitting Clover Leaf Seafood 2 B.V. to discharge its tax liability in respect of its 2008 taxable year, provided, however that the aggregate amount of such distributions does not exceed $10,000 in the aggregate;
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(b) so long as no Event of Default shall have occurred and be continuing or would result therefrom, the Loan Parties may make distributions (through any direct or indirect, wholly-owned Subsidiary of Xxxxxxx) to Xxxxxxx for the sole purpose of allowing Xxxxxxx to make distributions to former employees, officers, managers or directors (or any spouses, ex-spouses, or estates of any of the foregoing) on account of redemptions of Stock of Xxxxxxx held by such Persons (or the estates of such Persons) or (y) BB Employee Invest, L.P., BB Co-Invest L.P. and BB Management Invest L.P. to permit BB Employee Invest, L.P., BB Co-Invest L.P. and BB Management Invest L.P. to make distributions to former employees, officers, or directors (or any spouses, ex-spouses, or estates of any of the foregoing) on account of redemptions of Stock of BB Employee Invest, L.P., BB Co-Invest L.P. or BB Management Invest L.P. held by such Persons (or the estates of such Persons), provided, however, that the aggregate amount of all distributions described in clauses (x) and (y) above and made by the Loan Parties during the term of this Agreement does not exceed $1,000,000 in the aggregate;
(c) Loan Parties may make distributions (through any direct or indirect, wholly-owned Subsidiary of Xxxxxxx) to each of Xxxxxxx, Canadian Holdco, Xxxxxxx and BB Holdings in an amount equal to the product of (A) the taxable income of Xxxxxxx attributable to its ownership in Canco prior to the Amalgamation and Canadian Borrower at all times thereafter, as determined for U.S. federal income tax purposes, for a particular taxable period after taking into account all available credits and deductions of the relevant Loan Party and (B) the greater of (x) the maximum combined United States federal, New York State and New York City tax rate applicable during such period to such item of income if included in income by an individual resident of New York City, and (y) the maximum combined United States federal, New York State and New York City tax rate applicable during such period to such item of income if included as New York source income by a corporation doing business in New York City; provided, that Loan Parties may make any such distribution no more frequently than four times per fiscal year, and (ii) so long as no Event of Default shall have occurred and be continuing or would result therefrom, pay other reasonable administrative, corporate overhead and maintenance expenses arising solely out of the consolidated operations (including maintenance of existence and legal, accounting or similar expenses provided by third parties) of the Loan Parties and their respective Subsidiaries, in an aggregate amount not to exceed $250,000 in any fiscal year;
(d) Loan Parties may make distributions to Xxxxxxx as and to the extent necessary to permit Xxxxxxx (or the relevant taxpaying Affiliate of Xxxxxxx) to discharge consolidated or combined (or comparable) tax liabilities for which Xxxxxxx or its Subsidiaries could otherwise be held liable; provided, that Loan Parties may make any such distribution no more frequently than four times per fiscal year;
(e) Loan Parties may make dividends or distributions to each other and (through any direct or indirect, wholly-owned Subsidiary of Xxxxxxx) to Xxxxxxx for the purpose of permitting each other and Xxxxxxx to make the payments expressly permitted by Section 6.12(e);
(f) Without duplication of any other payments permitted under this Section 6.9, Loan Parties may make payments to BB Holdings to pay their consolidated federal tax liability; provided, that Loan Parties may make any such distribution no more frequently than four times per fiscal year;
(g) Without duplication of any other payments permitted under this Section 6.9, (A) Loan Parties may make distributions to Canadian Holdco to the extent necessary to permit Canadian Holdco (or the relevant tax-paying Affiliate of Canadian Holdco) to discharge Canadian withholding tax liabilities attributable to the Subordinated Canadian Holdco Note and/or the Subordinated CBCL Note and (B) Canadian Holdco may make prepayments of principal under the Subordinated Canadian Holdco Note to the extent necessary to permit Clover Leaf Seafood 2 B.V. (or the relevant tax-paying Affiliate of Clover Leaf Seafood 2 B.V.) to discharge Canadian withholding tax liabilities attributable to the Subordinated CBCL Note; provided, that Loan Parties may make any such distribution no more frequently than four times per fiscal year;
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(h) Loan Parties and each of their respective Subsidiaries may make distributions to a Borrower; and
(i) Loan Parties may make distributions (through any direct or indirect, wholly-owned Subsidiary of Xxxxxxx) to each of Xxxxxxx, Canadian Holdco, Xxxxxxx, XX Holdings, CP V CB GP, LLC BB Employee Invest, L.P., B.B. Co-Invest L.P. and BB Management Invest L.P. to pay: (1) indemnities of officers and directors of each such Person (including payments in respect of directors’ and officers’ liability insurance); and (2) (A) fees, costs and expenses of officers, managers and directors of Xxxxxxx, Canadian Holdco, Xxxxxxx, XX Holdings, CP V CB GP, LLC, BB Employee Invest, L.P., B.B. Co-Invest L.P. and BB Management Invest L.P. and (B) the fees, costs and expenses of Xxxxxxx, Canadian Holdco, Xxxxxxx, XX Holdings, CP V CB GP, LLC, BB Employee Invest, L.P., B.B. Co-Invest L.P. and BB Management Invest L.P.; provided, however, that in no event shall distributions on account of the fees, costs and expenses referred to clauses (2)(A) and (2)(B) exceed $500,000 in any fiscal year.
6.10. Accounting Methods. Modify or change its fiscal year or its method of accounting (other than as may be required to conform to GAAP).
6.11. Investments. Except for Permitted Investments, directly or indirectly, make or acquire any Investment or incur any liabilities (including contingent obligations) for or in connection with any Investment; provided, however, that (other than (a) an aggregate amount of not more than $500,000 at any one time, in the case of the Loan Parties, (b) amounts deposited into Deposit Accounts specially and exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the employees of the Loan Parties, and (c) an aggregate amount of not more than $750,000 (calculated at current exchange rates) at any one time, in the case of Subsidiaries that are not Loan Parties), the Loan Parties and their respective Subsidiaries shall not have Permitted Investments consisting of cash, Cash Equivalents, or amounts credited to Deposit Accounts or Securities Accounts unless the applicable Loan Party or its Subsidiary, as applicable, and the applicable securities intermediary or bank have entered into Control Agreements with U.S. Agent governing such Permitted Investments in order to perfect (and further establish) the Agent’s Liens in such Permitted Investments. Subject to the foregoing proviso, the Loan Parties shall not and shall not permit their respective Subsidiaries to establish or maintain any Deposit Account or Securities Account unless U.S. Agent shall have received a Control Agreement in respect of such Deposit Account or Securities Account.
6.12. Transactions with Affiliates. Directly or indirectly enter into or permit to exist any transaction with any Affiliate of any Loan Party or any of its Subsidiaries except for:
(a) transactions (other than the payment of management, consulting, monitoring, or advisory fees) between any Loan Party or its Subsidiaries, on the one hand, and any Affiliate of a Loan Party, on the other hand, so long as such transactions (i) are upon fair and reasonable terms, (ii) other than with respect to ordinary course transactions with Sea Value Company Limited, are fully disclosed to Agents prior to the consummation thereof, if they involve one or more payments by a Loan Party or its Subsidiaries in excess of $1,000,000 for any single transaction or series of related transactions, and (iii) are no less favorable, taken as a whole, to the Loan Parties or their respective Subsidiaries, as applicable, than would be obtained in a comparable arm’s length transaction with a non-Affiliate,
(b) so long as it has been approved by the Board of Directors of Xxxxxxx or the applicable Subsidiary of Xxxxxxx in accordance with applicable law, any indemnity provided for the benefit of members of the Board of Directors of Xxxxxxx or such Subsidiary,
(c) so long as it has been approved by the Board of Directors of the applicable Person, in accordance with applicable law, the payment of fees, expenses, compensation, bonus, separation, severance,
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indemnity or employee benefit arrangements to any Affiliate of any Loan Party or any of its Subsidiaries that is an officer, manager or director of a Loan Party or any of its Subsidiaries in the ordinary course of business, but in the case of separation and severance payments, in an aggregate amount of not more than $5,000,000 in any fiscal year,
(d) transactions permitted by Section 6.3, Section 6.9 or Section 6.11, or any Permitted Intercompany Advance, the BBF Note, the Subordinated CBCL Note, the Subordinated Canadian Holdco Note, transactions contemplated by the Acquisition Documents or any transactions between or among Loan Parties,
(e) the payment, pursuant to the Management Agreement, of:
(i) management, consulting, monitoring, and advisory fees to Equity Sponsor or its Affiliates, so long as (A) no Event of Default has occurred and is continuing or would result therefrom and (B) the aggregate amount of all such fees that may be paid shall not exceed (x) an amount equal to $446,154 for the period beginning on the Closing Date and ending December 31, 2009 (it being the understanding that such fee may be paid on the Closing Date) or (y) an amount equal to $200,000 in advance of each semi-annual period starting on January 1st and July 1st of each calendar year (commencing on January 1, 2010); provided, that if at any time any such management, consulting, monitoring or advisory fees to Equity Sponsor or its Affiliates are not permitted to be paid as a result of the failure to satisfy either of the conditions set forth in clauses (A) and (B) above, then (1) such amounts shall continue to accrue, and (2) any such amounts that have accrued but which were not permitted to be paid may be paid at any time after each of the conditions set forth in clauses (A) and (B) above are satisfied both before and after giving effect to, or waived in writing before the making of, such payments;
(ii) so long as no Event of Default shall have occurred and be continuing, or would result therefrom, any financial advisory, financing, underwriting, or placement fee pursuant to the terms of the Management Agreement in respect of investment banking activities in connection with acquisitions or divestitures that are permitted by this Agreement; provided, that if at any time any such fee to Equity Sponsor or its Affiliates is not permitted to be paid as a result of the existence of an Event of Default, then such fee shall continue to accrue, and may be paid at any time after such Event of Default is cured or waived and, if both before and after giving effect to such payment, no Event of Default has occurred and is continuing; and
(iii) reasonable and documented out-of-pocket expenses and the indemnities payable pursuant to the Management Agreement, and
(f) any transaction set forth on Schedule 6.12(f).
6.13. Use of Proceeds. Use the proceeds of the Advances for any purpose other than (a) on the Closing Date, (i) to repay, in full, the outstanding principal, accrued interest, and accrued fees, expenses and charges owing under the Existing Credit Agreement and all documents related thereto, (ii) to pay a portion of the consideration payable in connection with the consummation of the Closing Date Acquisition, and (iii) to pay transactional fees, costs, and expenses incurred in connection with this Agreement, the other Loan Documents, and the transactions contemplated hereby and thereby, and (b) thereafter, consistent with the terms and conditions hereof, for its lawful and permitted purposes.
6.14. Holding Companies.
(a) Permit Canadian Holdco to have any material liabilities (other than taxes and liabilities arising under the Loan Documents, Senior Term Loan Documents, the Subordinated Loan
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Documents, the Subordinated Canadian Holdco Note or Permitted Intercompany Advances), own any material assets (other than the Stock of the Canadian Borrower and prior to the Amalgamation, 3231021, the Subordinated CBCL Note, and payments received with respect to the Subordinated CBCL Note and Permitted Intercompany Advances) or engage in any operations or business (other than the ownership of 3231021 or the Canadian Borrower and their Subsidiaries, ownership of the Subordinated CBCL Note, Permitted Intercompany Advances and activities reasonably related thereto, including, but not limited to, administrative activities).
(b) Permit Xxxxxxx to have any material liabilities (other than taxes and liabilities arising under the Loan Documents, the Senior Term Loan Documents or the Subordinated Loan Documents), own any material assets (other than the Stock of BB Holdings and the BBF Note and any payments in connection therewith) or engage in any operations or business (other than the ownership of BB Holdings and its Subsidiaries, the ownership of the BBF Note and activities reasonably related thereto, including but not limited to administrative activities).
(c) Except as set forth on Schedule 4.24, permit BB Holdings to have any material liabilities (other than taxes and liabilities arising under the Loan Documents, the Senior Term Loan Documents, the Subordinated Loan Documents or Permitted Intercompany Advances), own any material assets (other than the Stock of U.S. Borrower and Permitted Intercompany Advances) or engage in any operations or business (other than the ownership of U.S. Borrower and its Subsidiaries, Permitted Intercompany Advances and activities reasonably related thereto, including but not limited to administrative activities).
(d) Permit Bumble Bee International (PR), Inc. to have any material liabilities (other than taxes and liabilities arising under the Loan Documents, the Senior Term Loan Documents, the Subordinated Loan Documents, or as a result of its general partnership interest in BB Acquisition (PR), L.P.), own any material assets (other than ownership of a general partnership interest in BB Acquisition (PR), L.P.) or engage in any operations or business (other than ownership of a general partnership interest in BB Acquisition (PR), L.P. and activities reasonably related thereto, including but not limited to administrative activities).
(e) Permit Mexican Subsidiaries to have any material liabilities, own any material assets (other than tax refunds) or engage in any operations or business (other than administrative activities).
6.15. Consignments. Consign any of its or their Inventory or sell any of its or their Inventory, on xxxx and hold, sale or return, sale on approval, or other conditional terms of sale.
6.16. Inventory and Equipment with Bailees. Store the Inventory or Equipment (other than (a) vehicles or Equipment out for repair in the ordinary course of business and (b) Inventory and Equipment for which the aggregate fair market value is less than $250,000 in the aggregate) of any Loan Party or its Subsidiaries at any time now or hereafter with a bailee, warehouseman, or similar party; provided that, any Loan Party or any of its Subsidiaries may store such Inventory or Equipment with a bailee, warehouseman or similar party so long as (x) such Loan Party provides U.S. Agent with notice of its intent to enter into a storage agreement and (y) except with respect to the locations set forth on Schedule 5.15, such Loan Party uses its commercially reasonable efforts to provide U.S. Agent, within 30 days of entering into such storage agreement, with a Collateral Access Agreement with respect to such location, in form and substance reasonably satisfactory to U.S. Agent.
6.17. PSA. Become (a) “packers” who purchase “livestock” (as each such term is defined in the PSA) in excess of $500,000 during any calendar year or (b) “live poultry dealers” who purchase “poultry” (as each such term is defined in the PSA) in excess of $100,000 during any calendar year.
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7. FINANCIAL COVENANT.
Each Borrower covenants and agrees that, until the termination of all of the Commitments and payment in full of the Obligations, if at any time during any fiscal month, Borrowers’ Excess Availability is less than the sum of (i) $35,000,000 plus (ii) the aggregate amount of Net Cash Proceeds received by any Loan Party in connection with any issuance of Indebtedness (other than Permitted Indebtedness) or Stock (except to the extent of any Net Cash Proceeds thereof are used either (x) to finance particular capital expenditure project(s) or specific fees or expenses incurred by the Company (in each case to the extent approved by Agent), or (y) to finance the purchase consideration (or a portion thereof) and related fees and expenses of a Permitted Acquisition) by any Loan Party or their respective Subsidiaries (the “Excess Availability Test”), the Company shall have a Fixed Charge Coverage Ratio of at least the required amount set forth in the following table for the applicable period as set forth opposite thereto, as of the end of the fiscal month immediately preceding the date when Borrowers failed to meet the Excess Availability Test and each following fiscal month so long as Borrowers have not satisfied the Excess Availability Test at all times for at least thirty (30) consecutive days thereafter:
Applicable Ratio |
Applicable Period | |
1.00:1.00 | For the 2 fiscal month period beginning November 23, 2008 and ending on the last day of Borrowers’ first fiscal month of Borrowers’ 2009 fiscal year | |
1.00:1.00 | For the 3 fiscal month period beginning November 23, 2008 and ending on the last day of Borrowers’ second fiscal month of Borrowers’ 2009 fiscal year | |
1.00:1.00 | For the 4 fiscal month period beginning November 23, 2008 and ending on the last day of Borrowers’ third fiscal month of Borrowers’ 2009 fiscal year | |
1.05:1.00 | For the 5 fiscal month period beginning November 23, 2008 and ending on the last day of Borrowers’ fourth fiscal month of Borrowers’ 2009 fiscal year | |
1.05:1.00 | For the 6 fiscal month period beginning November 23, 2008 and ending on the last day of Borrowers’ fifth fiscal month of Borrowers’ 2009 fiscal year | |
1.05:1.00 | For the 7 fiscal month period beginning November 23, 2008 and ending on the last day of Borrowers’ sixth fiscal month of Borrowers’ 2009 fiscal year | |
1.10:1.00 | For the 8 fiscal month period beginning November 23, 2008 and ending on the last day of Borrowers’ seventh fiscal month of Borrowers’ 2009 fiscal year | |
1.10:1.00 | For the 9 fiscal month period beginning November 23, 2008 and ending on the last day of Borrowers’ eighth fiscal month of Borrowers’ 2009 fiscal year | |
1.10:1.00 | For the 10 fiscal month period beginning November 23, 2008 and ending on the last day of Borrowers’ ninth fiscal month of Borrowers’ 2009 fiscal year | |
1.10:1.00 | For the 11 fiscal month period beginning November 23, 2008 and ending on the last day of Borrowers’ tenth fiscal month of Borrowers’ 2009 fiscal year |
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Applicable Ratio |
Applicable Period | |
1.10:1.00 | For the 12 fiscal month period ending on the last day of Borrowers’ eleventh fiscal month of Borrowers’ 2009 fiscal year | |
1.10:1.00 | For the 12 month period ending on the last day of Borrowers’ twelfth fiscal month of Borrowers’ 2009 fiscal year | |
1.025:1.000 | For each 12 month period ending on the last day of any of Borrowers’ fiscal months during Borrowers’ 2010 fiscal year | |
1.05:1.00 | For each 12 month period ending on the last day of any of Borrowers’ fiscal months during Borrowers’ 2011 fiscal year | |
1.05:1.00 | For each 12 month period ending on the last day of any of Borrowers’ fiscal months during Borrowers’ 2012 fiscal year | |
1.10:1.00 | For each 12 month period ending on the last day of any of Borrowers’ first fiscal months during Borrowers’ 2013 fiscal year and for each trailing 12 month period thereafter |
8. EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an event of default (each, an “Event of Default”) under this Agreement:
8.1. If any Borrower fails to pay when due and payable, or when declared due and payable, (a) all or any portion of the Obligations consisting of interest, fees, or charges due the Lender Group, reimbursement of Lender Group Expenses, or other amounts (other than any portion thereof constituting principal) constituting Obligations (including any portion thereof that accrues after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding), and such failure continues for a period of 3 Business Days, or (b) all or any portion of the principal of the Obligations; provided, however, that if any payment of any fee or interest would otherwise be due and payable on a date that is not a Business Day, such failure to pay on such date shall not constitute an Event of Default until the third Business Day after the date when such payment, reimbursement, or other amount is otherwise due;
8.2. If any Loan Party or any of its Subsidiaries:
(a) fails to perform or observe any covenant or other agreement contained in any of (i) Sections 5.1, 5.2, 5.3(a), 5.6, 5.7, 5.11, 5.14(b), 5.16, 5.17, or 5.18 of this Agreement, (ii) Sections 6.1 through 6.17 of this Agreement, or (iii) Section 7 of this Agreement;
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(b) fails to perform or observe any covenant or other agreement contained in (i) any of Sections 5.3(b), 5.4, 5.5, 5.8, 5.10, 5.12, 5.13, 5.14(a), and 5.15 of this Agreement, (ii) Section 6 of the Security Agreement, or (iii) Section 7 of the security agreement charging all assets and interests in assets and proceeds thereof now owned or hereafter acquired by the Canadian Loan Parties, and such failure continues for a period of 15 days after the earlier of (x) the date on which such failure shall first become known to any officer of any Loan Party or (y) the date on which written notice thereof is given to any Loan Party by U.S. Agent; or
(c) fails to perform or observe any covenant or other agreement contained in this Agreement, or in any of the other Loan Documents, in each case, other than any such covenant or agreement that is the subject of another provision of this Section 8 (in which event such other provision of this Section 8 shall govern), and such failure continues for a period of 30 days after the earlier of (i) the date on which such failure shall first become known to any officer of any Loan Party or (ii) the date on which written notice thereof is given to any Loan Party by any Agent;
8.3. If one or more judgments, orders, or awards for the payment of money involving an aggregate amount of $2,000,000, or more (in excess of any applicable insurance with respect to which the insurer has not denied liability) is entered or filed against a Loan Party or any of its Subsidiaries, or with respect to any of their respective assets, and either (a) there is a period of 30 consecutive days at any time after the entry of any such judgment, order, or award during which a stay of enforcement thereof is not in effect, or (b) enforcement proceedings are commenced upon such judgment, order, or award;
8.4. If an Insolvency Proceeding is commenced by a Loan Party or any of its material Subsidiaries;
8.5. If an Insolvency Proceeding is commenced against a Loan Party or any of its material Subsidiaries and any of the following events (or analogous events under other applicable laws) occur: (a) such Loan Party or such Subsidiary consents to the institution of such Insolvency Proceeding against it, (b) the petition commencing the Insolvency Proceeding is not timely controverted, (c) the petition commencing the Insolvency Proceeding is not dismissed within 60 calendar days of the date of the filing thereof, (d) an interim trustee is appointed to take possession of all or any substantial portion of the properties or assets of, or to operate all or any substantial portion of the business of, such Loan Party or its material Subsidiary, or (e) an order for relief shall have been issued or entered therein;
8.6. If (a) any Borrower is enjoined, restrained, or in any way prevented by court order from continuing to conduct all or any material part of its business affairs, or (b) the Loan Parties and their respective Subsidiaries, taken as a whole, are enjoined, restrained, or in any way prevented by court order from continuing to conduct all or any material part of their business affairs;
8.7. If there is a default (after all applicable grace periods) in one or more agreements to which a Loan Party or any of its Subsidiaries is a party with one or more third Persons relative to a Loan Party’s or any of its Subsidiaries’ Indebtedness involving an aggregate amount of $2,000,000 or more, and such default (i) occurs at the final maturity of the obligations thereunder, or (ii) results in a right by such third Person, irrespective of whether exercised, to accelerate the maturity of such Loan Party’s or its Subsidiary’s obligations thereunder;
8.8. If any warranty or representation made herein or in any other Loan Document or delivered in writing to any Agent or any Lender in connection with this Agreement or any other Loan Document proves to be untrue in any material respect (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of the date of issuance or making or deemed making thereof;
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8.9. If the obligation of any Guarantor under the Guaranty is limited or terminated by operation of law or by such Guarantor;
8.10. If the Security Agreement, any Canadian Security Document, or any other Loan Document that purports to create a Lien, shall, for any reason, fail or cease to create a valid and perfected and, except to the extent permitted by the terms hereof or thereof, first priority Lien on the Collateral covered thereby (subject to Permitted Liens), except as a result of a disposition of the applicable Collateral in a transaction permitted under this Agreement;
8.11. Any provision of any Loan Document shall at any time for any reason be declared to be null and void, or the validity or enforceability thereof shall be contested by a Loan Party or its Subsidiaries, or a proceeding shall be commenced by a Loan Party or its Subsidiaries, or by any Governmental Authority having jurisdiction over a Loan Party or its Subsidiaries, seeking to establish the invalidity or unenforceability thereof, or a Loan Party or its Subsidiaries shall deny that such Loan Party or its Subsidiaries has any liability or obligation purported to be created under any Loan Document;
8.12. The occurrence of any of the following events with respect to any U.S. Loan Party or any of its ERISA Affiliates: (i) any U.S. Loan Party or any ERISA Affiliate fails to make full payment when due of all amounts which, under the provisions of any Pension Plan or Section 412 or 430 of the IRC, any U.S. Loan Party or any ERISA Affiliate is required to pay as contributions thereto, and such failure (x) could reasonably be expected to result in liability in excess of $2,000,000, either individually or in the aggregate, or (y) could reasonably be expected to result in the imposition of a Lien on any of the assets of any Loan Party or any of their respective Subsidiaries, (ii) an “accumulated funding deficiency” (as defined in Section 431 of the IRC) or “funding shortfall” (as defined in Section 430 of the RC) occurs or exists, whether or not waived, with respect to any Pension Plan, except, in any such case, individually or in the aggregate, to the extent that such deficiency or shortfall (x) could not reasonably be expected to result in liability in excess of $2,000,000, either individually or in the aggregate, and (y) could not reasonably be expected to result in the imposition of a Lien on any of the assets of any Loan Party or any of their respective Subsidiaries, (iii) a Termination Event which (x) could reasonably be expected to result in liability in excess of $2,000,000, either individually or in the aggregate, or (y) could reasonably be expected to result in the imposition of a Lien on any of the assets of any Loan Party or any of their respective Subsidiaries, or (iv) any U.S. Loan Party or any ERISA Affiliate as employers under one or more Multiemployer Plans makes a complete or partial withdrawal from any such Multiemployer Plan and incurs a withdrawal liability except to the extent that such liability (x) could not reasonably be expected to result in liability in excess of $2,000,000, either individually or in the aggregate, and (y) could not reasonably be expected to result in the imposition of a Lien on any of the assets of any Loan Party or any of their respective Subsidiaries;
8.13. [Intentionally Omitted].]
8.14. If (a) except as expressly set forth in the Subordination Agreement any of the Obligations for any reason shall cease to be “Senior Indebtedness” or “Designated Senior Indebtedness” (or any comparable terms) under, and as defined in, any document evidencing or governing any Indebtedness that has been contractually subordinated in right of payment to the Obligations, (b) except as expressly set forth in the Subordination Agreement any Indebtedness other than the Obligations shall constitute “Designated Senior Indebtedness” (or any comparable term) under, and as defined in, any document evidencing or governing any Indebtedness that has been contractually subordinated in right of payment to the Obligations, (c) any holder of any Indebtedness that has been contractually subordinated in right of payment to the Obligations shall fail to
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perform or comply with any of the subordination provisions of the documents evidencing or governing such Indebtedness (if any) or with the provisions of any applicable subordination agreement in a manner materially adverse to the interests of the Lender Group, or (d) the subordination provisions (if any) of any document evidencing or governing any Indebtedness that has been contractually subordinated in right of payment to the Obligations shall, in whole or in part (other than pursuant to its terms), terminate, cease to be effective or cease to be legally valid, binding and enforceable against any holder of such Indebtedness.
9. RIGHTS AND REMEDIES.
9.1. Rights and Remedies. Upon the occurrence and during the continuation of an Event of Default, the Required Lenders (at their election but without notice of their election and without demand) may authorize and instruct Agent to any one or more of the following on behalf of the Lender Group (and Agent, acting upon instructions of the Required Lenders, shall do the same on behalf of the Lender Group), in each case by written notice to Borrowers and in addition to any other rights or remedies provided for hereunder or under any other Loan Document or by applicable law, do any one or more of the following on behalf of the Lender Group:
(a) declare all or a portion of the Obligations, whether evidenced by this Agreement, by any of the other Loan Documents, or otherwise, immediately due and payable, whereupon the same shall become and be immediately due and payable, without presentment, demand, protest, or further notice or other requirements of any kind, all of which are hereby expressly waived by each Borrower; and
(b) declare the Revolver Commitments terminated, whereupon the Revolver Commitments shall immediately be terminated together with any obligation of any Lender hereunder to make Advances and the obligation of each Issuing Lender to issue Letters of Credit.
The foregoing to the contrary notwithstanding, (x) upon the occurrence of any Event of Default described in Section 8.4 or Section 8.5, in addition to the remedies set forth above, without any notice to any Borrower or any other Person or any act by the Lender Group, the Commitments shall automatically terminate and the Obligations then outstanding, together with all accrued and unpaid interest thereon and all fees and all other amounts due under this Agreement and the other Loan Documents, shall automatically and immediately become due and payable, without presentment, demand, protest, or notice of any kind, all of which are expressly waived by each Borrower and (y) upon the acceleration of the Subordinated Indebtedness, in addition to the remedies set forth above, without any notice to any Borrower or any other Person or any act by the Lender Group, the Obligations then outstanding, together with all accrued and unpaid interest thereon and all fees and all other amounts due under this Agreement and the other Loan Documents, shall automatically and immediately become due and payable, without presentment, demand, protest, or notice of any kind, all of which are expressly waived by each Borrower.
9.2. Remedies Cumulative. The rights and remedies of the Lender Group under this Agreement, the other Loan Documents, and all other agreements shall be cumulative. The Lender Group shall have all other rights and remedies not inconsistent herewith as provided under the Code, by law, or in equity. No exercise by the Lender Group of one right or remedy shall be deemed an election, and no waiver by the Lender Group of any Event of Default shall be deemed a continuing waiver. No delay by the Lender Group shall constitute a waiver, election, or acquiescence by it.
10. WAIVERS; INDEMNIFICATION.
10.1. Demand; Protest; etc. Each Borrower waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment, nonpayment at maturity, release, compromise, settlement, extension, or renewal of documents, instruments, chattel paper, and guarantees at any time held by the Lender Group on which such Borrower may in any way be liable.
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10.2. The Lender Group’s Liability for Collateral. Each Borrower hereby agrees that: (a) so long as U.S. Agent complies with its obligations, if any, under the Code or other applicable law, the Lender Group shall not in any way or manner be liable or responsible for: (i) the safekeeping of the Collateral, (ii) any loss or damage thereto occurring or arising in any manner or fashion from any cause, (iii) any diminution in the value thereof, or (iv) any act or default of any carrier, warehouseman, bailee, forwarding agency, or other Person, and (b) all risk of loss, damage, or destruction of the Collateral shall be borne by Borrowers.
10.3. Indemnification. Each Borrower shall pay, indemnify, defend, and hold the Agent-Related Persons, the Lender-Related Persons, and each Participant (each, an “Indemnified Person”) harmless (to the fullest extent permitted by law) from and against any and all claims, demands, suits, actions, investigations, proceedings, liabilities, fines, costs, penalties, and damages, and all reasonable and documented out of pocket fees and disbursements of attorneys (other than the allocated costs of internal counsel), experts, or consultants and all other costs and expenses actually incurred in connection therewith or in connection with the enforcement of this indemnification (as and when they are incurred and irrespective of whether suit is brought), at any time asserted against, imposed upon, or incurred by any of them (a) in connection with or as a result of or related to the execution and delivery (provided that Borrowers shall not be liable for costs and expenses (including attorneys fees) of any. Lender (other than WIT) incurred in advising, structuring, drafting, reviewing, administering or syndicating the Loan Documents), enforcement, performance, or administration (including any restructuring or workout with respect hereto) of this Agreement, any of the other Loan Documents, or the transactions contemplated hereby or thereby or the monitoring of such Borrower’s and its Subsidiaries’ compliance with the terms of the Loan Documents (other than disputes solely between the Lenders), (b) with respect to any investigation, litigation, or proceeding related to this Agreement, any other Loan Document, or the use of the proceeds of the credit provided hereunder (irrespective of whether any Indemnified Person is a party thereto), or any act, omission, event, or circumstance in any manner related thereto, and (e) in connection with or arising out of any presence or release of Hazardous Materials at, on, under, to or from any assets or properties owned, leased or operated by any Loan Party or any of its Subsidiaries or any Environmental Actions, Environmental Liabilities and Costs or Remedial Actions related in any way to any such assets or properties of any Loan Party or any of its Subsidiaries (each and all of the foregoing, the “Indemnified Liabilities”). The foregoing to the contrary notwithstanding, Borrowers (x) shall have no obligation to any Indemnified Person under this Section 10.3 with respect to any Indemnified Liability that a court of competent jurisdiction finally determines to have resulted from the gross negligence or willful misconduct of such Indemnified Person or its officers, directors, employees, attorneys, or agents or a breach of any Loan Document by any Indemnified Person and (y) shall have no obligation to pay for the fees and disbursements of more than one outside counsel (in addition to any reasonably necessary special counsel and up to one local counsel in each applicable jurisdiction) for all of the Lenders unless, in the written opinion of outside counsel, representation of all such Lenders would be inappropriate due to the existence of any actual or potential conflict of interest. This provision shall survive the termination of this Agreement and the repayment of the Obligations. If any Indemnified Person makes any payment to any other indemnified Person with respect to an Indemnified Liability as to which Borrower was required to indemnify the Indemnified Person receiving such payment, the Indemnified Person making such payment is entitled to be indemnified and reimbursed by Borrower with respect thereto. WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY OTHER PERSON.
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10.4. Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable law, no Borrower shall assert, and each Borrower hereby waives, any claim against any Indemnified Person, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Advance or Letter of Credit or the use of the proceeds thereof. No Indemnified Person shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it though telecommunications, electronic or other information transmission system in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.
11. NOTICES.
Unless otherwise provided in this Agreement, all notices or demands relating to this Agreement or any other Loan Document shall be in writing and (except for financial statements and other informational documents which may be sent by first-class mail, postage prepaid) shall be personally delivered or sent by registered or certified mail (postage prepaid, return receipt requested), overnight courier, electronic mail (at such email addresses as a party may designate in accordance herewith), or telefacsimile. In the case of notices or demands to U.S. Borrower, Canadian Borrower, U.S. Agent or Canadian Agent, as the case may be, they shall be sent to the respective address set forth below:
If to either Borrower: |
BUMBLE BEE FOODS, LLC 0000 Xxxxxxx Xxxxx Xx., Xxxxx 000 Xxx Xxxxx, XX 00000 Attn: Xxxx XxXxxx Fax No. (000) 000-0000 | |
with copies to: | CENTRE PARTNERS MANAGEMENT LLC 00 Xxxxxxxxxxx Xxxxx, 00xx Xxxxx Xxx Xxxx, XX 00000 Attn: Xxxxx Xxxxxxxxx, Esq. Fax No.: (000) 000-0000 | |
and: | DECHERT LLP 0000 Xxxxxx xx xxx Xxxxxxxx Xxx Xxxx, XX 00000 - 6797 Attn.: Xxxx X. Xxxxxxxxxxx, Esq. Fax No.: (000) 000-0000 | |
If to U.S. Agent: | XXXXX FARGO FOOTHILL, LLC 0000 Xxxxxxxx Xxxxxx, Xxxxx 0000 Xxxx Xxxxx Xxxxxx, XX 00000 Attn: Business Finance Manager Fax No.: (000) 000-0000 | |
If to Canadian Agent: | XXXXX FARGO FOOTHILL CANADA ULC 00 Xxxx Xxxxxx Xxxx, Xxxxx 0000 Xxxxxxx, Xxxxxxx X00-X 0X0 Attn: Business Finance Manager Fax No.: (000) 000-0000 | |
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in each case with copies to: | PAUL, HASTINGS, XXXXXXXX & XXXXXX LLP 000 X. Xxxxxx Xxxxxx Xxxxxx-Xxxxx Xxxxx | |
Xxx Xxxxxxx, Xxxxxxxxxx 00000 Attn: Xxxx Xxxxxxx Hilson, Esq. Fax No.: (000) 000-0000 |
Any party hereto may change the address at which they are to receive notices hereunder by notice in writing in the foregoing manner given to the other party. All notices or demands sent in accordance with this Section 11, shall be deemed received on the earlier of the date of actual receipt or 3 Business Days after the deposit thereof in the mail; provided, that (a) notices sent by overnight courier service shall be deemed to have been given when received, (b) notices by facsimile 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 on business on the next Business Day for the recipient) and (c) notices by electronic mail shall be deemed received upon the sender’s receipt of an acknowledgment from the intended recipient (such as by the “return receipt requested” function, as available, return email or other written acknowledgment).
12. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT ANY AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE ANY AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH BORROWER AND EACH MEMBER OF THE LENDER GROUP WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 11(b).
(c) EACH BORROWER AND EACH MEMBER OF THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH BORROWER AND EACH MEMBER OF THE LENDER GROUP REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
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13. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.
13.1. Assignments and Participations.
(a) With the prior written consent of (1) in the case of an assignment by a Canadian Lender, Canadian Agent, or (2) in the case of an assignment by a U.S. Lender, U.S. Agent, which consent of such Agent shall not be unreasonably withheld, delayed or conditioned, and shall not be required in connection with an assignment to a Person that is a Lender or an Affiliate (other than individuals) of a Lender, any Lender may assign and delegate to one or more assignees (each an “Assignee”) all or any portion of the Obligations, the Commitments and the other rights and obligations of such Lender hereunder and under the other Loan Documents, in a minimum amount (unless waived by the applicable Agent) of $5,000,000 (except such minimum amount shall not apply to (x) an assignment or delegation by any Lender to any other Lender or an Affiliate of any Lender or (y) a group of new Lenders, each of which is an Affiliate of each other or a Related Fund of such new Lender to the extent that the aggregate amount to be assigned to all such new Lenders is at least $5,000,000); provided, however, that each Borrower and each Agent may continue to deal solely and directly with such Lender in connection with the interest so assigned to an Assignee until (1) in the case of an assignment by a Canadian Lender, (A) written notice of such assignment, together with payment instructions, addresses, and related information with respect to the Assignee, have been given to Canadian Borrower and Canadian Agent by such Canadian Lender and the Assignee, (B) such Canadian Lender and its Assignee have delivered to Canadian Borrower and Canadian Agent an Assignment and Acceptance and Canadian Agent has notified the assigning Lender of its receipt thereof in accordance with Section 13.1(b), and (C) unless waived by Canadian Agent, the assigning Lender or Assignee has paid to Canadian. Agent for Canadian Agent’s separate account a processing fee in the amount of $3,500, or (ii) in the case of an assignment by a U.S. Lender, (A) written notice of such assignment, together with payment instructions, addresses, and related information with respect to the Assignee, have been given to U.S. Borrower and U.S. Agent by such U.S. Lender and the Assignee, (13) such U.S. Lender and its Assignee have delivered to U.S. Borrower and U.S. Agent an Assignment and Acceptance and U.S. Agent has notified the assigning Lender of its receipt thereof in accordance with Section 13.1(b), and (C) unless waived by U.S. Agent, the assigning Lender or Assignee has paid to U.S. Agent for U.S. Agent’s separate account a processing fee in the amount of $3,500.
(b) From and after the date that the applicable Agent notifies the assigning Lender (with a copy to the applicable Borrower) that it has received an executed Assignment and Acceptance and, if applicable, payment of the required processing fee, (i) the Assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, shall have the rights and obligations of a Lender under the Loan Documents, and (ii) the assigning Lender shall, to the extent that rights and obligations hereunder and under the other Loan Documents have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights (except with respect to Section 10.3 hereof) and be released from any future obligations under this Agreement (and in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender’s rights and obligations under this Agreement and the other Loan Documents, such Lender shall cease to be a party hereto and thereto), and such assignment shall effect a novation among the applicable Borrower, the assigning Lender, and the Assignee; provided, however, that nothing contained herein shall release any assigning Lender from obligations that survive the termination of this Agreement, including such assigning Lender’s obligations under Section 15 and Section 17.9(a) of this Agreement.
(c) By executing and delivering an Assignment and Acceptance, the assigning Lender thereunder and the Assignee thereunder confirm to and agree with each other and the other parties hereto as
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follows: (i) other than as provided in such Assignment and Acceptance, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other Loan Document furnished pursuant hereto, (ii) such assigning Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Borrower or the performance or observance by any Borrower of any of its obligations under this Agreement or any other Loan Document furnished pursuant hereto, (iii) such Assignee confirms that it has received a copy of this Agreement, together with such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance, (iv) such Assignee will, independently and without reliance upon either Agent, such assigning Lender or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement, (v) such Assignee appoints and authorizes each Agent to take such actions and to exercise such powers under this Agreement and the other Loan Documents as are delegated to such Agent, by the terms hereof and thereof, together with such powers as are reasonably incidental thereto, and (vi) such Assignee agrees that it will perform all of the obligations which by the terms of this Agreement are required to be performed by it as a Lender.
(d) Immediately upon the applicable Agent’s receipt of the required processing fee, if applicable, and delivery of notice to the assigning Lender pursuant to Section 13.1(b), this Agreement shall be deemed to be amended to the extent, but only to the extent, necessary to reflect the addition of the Assignee and the resulting adjustment of the Commitments arising therefrom. The Commitment allocated to each Assignee shall reduce such Commitments of the assigning Lender pro tanto.
(e) Any Lender may at any time sell to one or more commercial banks, financial institutions, or other Persons (a “Participant”) participating interests in all or any portion of its Obligations, its Commitment, and the other rights and interests of that Lender (the “Originating Lender”) hereunder and under the other Loan Documents; provided, however, that (i) the Originating Lender shall remain a “Lender” for all purposes of this Agreement and the other Loan Documents and the Participant receiving the participating interest in the Obligations, the Commitments, and the other rights and interests of the Originating Lender hereunder shall not constitute a “Lender” hereunder or under the other Loan Documents and the Originating Lender’s obligations under this Agreement shall remain unchanged, (ii) the Originating Lender shall remain solely responsible for the performance of such obligations, (iii) Borrowers, Agents, and the Lenders shall continue to deal solely and directly with the Originating Lender in connection with the Originating Lender’s rights and obligations under this Agreement and the other Loan Documents, (iv) no Lender shall transfer or grant any participating interest under which the Participant has the right to approve any amendment to, or any consent or waiver with respect to, this Agreement or any other Loan Document, except to the extent such amendment to, or consent or waiver with respect to this Agreement or of any other Loan Document would (A) extend the final maturity date of the Obligations hereunder in which such Participant is participating, (B) reduce the interest rate applicable to the Obligations hereunder in which such Participant is participating, (C) release all or a material portion of the Collateral or guaranties (except to the extent expressly provided herein or in any of the Loan Documents) supporting the Obligations hereunder in which such Participant is participating, (D) postpone the payment of, or reduce the amount of, the interest or fees payable to such Participant through such Lender, or (E) change the amount or due dates of scheduled principal repayments or prepayments or premiums, and (v) all amounts payable by any Borrower hereunder shall be determined as if such Lender had not sold such participation (except, where applicable, for purposes of Section 16), except that, if amounts outstanding under this Agreement are due and unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall be deemed to have the right of set off in respect of its participating interest in amounts owing under this Agreement to the same extent as if the amount of its participating interest were owing directly to it as a Lender under this Agreement.
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The rights of any Participant only shall be derivative through the Originating Lender with whom such Participant participates and no Participant shall have any rights under this Agreement or the other Loan Documents or any direct rights as to the other Lenders, Agents, Borrowers, the Collections of the Loan Parties and their respective Subsidiaries, the Collateral, or otherwise in respect of the Obligations. No Participant shall have the right to participate directly in the making of decisions by the Lenders among themselves.
(f) In connection with any such assignment or participation or proposed assignment or participation or any grant of a security interest in, or pledge of, its rights under and interest in this Agreement, a Lender may, subject to the provisions of Section 17.9, disclose all documents and information which it now or hereafter may have relating to the Loan Parties and their respective Subsidiaries and their respective businesses.
(g) Any other provision in this Agreement notwithstanding, any Lender may at any time create a security interest in, or pledge, all or any portion of its rights under and interest in this Agreement in favor of any Federal Reserve Bank in accordance with Regulation A of the Federal Reserve Bank or U.S. Treasury Regulation 31 CFR §203.24, and such Federal Reserve Bank may enforce such pledge or security interest in any manner permitted under applicable law.
(h) U.S. Agent (as a non-fiduciary agent on behalf of U.S. Borrower) shall maintain, or cause to be maintained, a register (the “U.S. Register”) on which it enters the name and address of each U.S. Lender as the registered owner of the Advances (and the principal amount thereof and stated interest thereon) held by such U.S. Lender (each, a “U.S. Registered Loan”). Other than in connection with an assignment by a U.S. Lender of all or any portion of its portion of the U.S. Advances to an Affiliate of such U.S. Lender or a Related Fund of such U.S. Lender (i) a U.S. Registered Loan (and the registered note, if any, evidencing the same) may be assigned or sold in whole or in part only by registration of such assignment or sale on the U.S. Register (and each registered note shall expressly so provide) and (ii) any assignment or sale of all or part of such Registered Loan (and the registered note, if any, evidencing the same) may be effected only by registration of such assignment or sale on the Register, together with the surrender of the registered note, if any, evidencing the same duly endorsed by (or accompanied by a written instrument of assignment or sale duly executed by) the holder of such registered note, whereupon, at the request of the designated assignee(s) or transferee(s), one or more new registered notes in the same aggregate principal amount shall be issued to the designated assignee(s) or transferee(s). Prior to the registration of assignment or sale of any U.S. Registered Loan (and the registered note, if any evidencing the same), U.S. Borrower shall treat the Person in whose name such U.S. Registered Loan (and the registered note, if any, evidencing the same) is registered as the owner thereof for the purpose of receiving all payments thereon and for all other purposes, notwithstanding notice to the contrary. In the case of any assignment by a U.S. Lender of all or any portion of the U.S. Advances to an Affiliate of such U.S. Lender or a Related Fund of such U.S. Lender, and which assignment is not recorded in the U.S. Register, the assigning U.S. Lender, on behalf of U.S. Borrower, shall maintain a register comparable to the U.S. Register.
(i) Canadian Agent (as a non-fiduciary agent on behalf of Canadian Borrower) shall maintain, or cause to be maintained, a register (the “Canadian Register”) on which it enters the name and address of each Canadian Lender as the registered owner of the Advances (and the principal amount thereof and stated interest thereon) held by such Canadian Lender (each, a “Canadian Registered Loan”). Other than in connection with an assignment by a Canadian Lender of all or any portion of its portion of the Canadian Advances to an Affiliate of such Canadian Lender or a Related Fund of such Canadian Lender (i) a Canadian Registered Loan (and the registered note, if any, evidencing the same) may be assigned or sold in whole or in part only by registration of such assignment or sale on the Canadian Register (and each registered note shall expressly so provide) and (ii) any assignment or designated assignee(s) or transferee(s), one or more new registered notes in the same aggregate principal amount shall be issued to the designated assignee(s) or
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transferee(s). Prior to the registration of assignment or sale of any Canadian Registered Loan (and the registered note, if any evidencing the same), Canadian Borrower shall treat the Person in whose name such Canadian Registered Loan (and the registered note, if any, evidencing the same) is registered as the owner thereof for the purpose of receiving all payments thereon and for all other purposes, notwithstanding notice to the contrary. In the case of any assignment by a Canadian Lender of all or any portion of the Canadian Advances to an Affiliate of such Canadian Lender or a Related Fund of such Canadian Lender, and which assignment is not recorded in the Canadian Register, the assigning Canadian Lender, on behalf of Canadian Borrower, shall maintain a register comparable to the Canadian Register.
(j) In the event that a U.S. Lender sells participations in the U.S. Registered Loan, such U.S, Lender, as a non-fiduciary agent on behalf of U.S. Borrower, shall maintain a register on which it enters the name of all participants in the U.S. Registered Loans held by it (the “U.S. Participant Register”). A U.S. Registered Loan (and the Registered Note, if any, evidencing the same) may be participated in whole or in part only by registration of such participation on the U.S. Participant Register (and each registered note shall expressly so provide). Any participation of such U.S. Registered Loan (and the registered note, if any, evidencing the same) may be effected only by the registration of such participation on the U.S. Participant Register.
(k) In the event that a Canadian Lender sells participations in the Canadian Registered Loan, such Canadian Lender, as a non-fiduciary agent on behalf of Canadian Borrower, shall maintain a register on which it enters the name of all participants in the Canadian Registered Loans held by it (the “Canadian Participant Register”). A Canadian Registered Loan (and the Registered Note, if any, evidencing the same) may be participated in whole or in part only by registration of such participation on the Canadian Participant Register (and each registered note shall expressly so provide). Any participation of such Canadian Registered Loan (and the registered note, if any, evidencing the same) may be effected only by the registration of such participation on the Canadian Participant Register.
(l) U.S. Agent shall make a copy of the U.S. Register (and each U.S. Lender shall make a copy of its U.S. Participant Register in the extent it has one) available for review by U.S. Borrower or any Lender from time to time as U.S. Borrower or any Lender may reasonably request. Canadian Agent shall make a copy of the Canadian Register (and each Canadian Lender shall make a copy of its Canadian Participant Register in the extent it has one) available for review by Canadian Borrower or any Lender from time to time as Canadian Borrower or any Lender may reasonably request.
(m) Notwithstanding anything to the contrary contained herein, in no event shall any Lender: (i) assign, delegate or grant a participation in any of its rights or obligations under, or interest in, this Agreement or any of the other Loan Documents to a Disqualified Person; or (ii) in connection with any assignment, delegation or participation or any proposed assignment, delegation or participation in any of its rights or obligations under, or interest in, this Agreement or any of the other Loan Documents, disclose any confidential information covered by Section 17.9 relating to the Loan. Parties or any of their respective Subsidiaries or respective businesses to a Disqualified Person, in the case of each of clauses (i) and (ii), without the prior written consent of the U.S. Borrower.
13.2. Successors. This Agreement shall bind and inure to the benefit of the respective successors and assigns of each of the parties; provided, however, that no Borrower may assign this Agreement or any rights or duties hereunder without the Lenders’ prior written consent and any prohibited assignment shall be absolutely void ab initio. No consent to assignment by the Lenders shall release any Borrower from its Obligations. A Lender may assign this Agreement and the other Loan Documents and its rights and duties hereunder and thereunder pursuant to Section 13.1 hereof and no consent or approval by any Loan Party is required in connection with any such assignment.
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14. AMENDMENTS; WAIVERS.
14.1. Amendments and Waivers.
(a) No amendment, waiver or other modification of any provision of this Agreement or any other Loan Document (other than Bank Product Agreements or the Fee Letter), and no consent with respect to any departure by any Borrower therefrom, shall be effective unless the same shall be in writing and signed by the Required Lenders (or by Agents at the written request of the Required Lenders) and Borrowers and then any such waiver or consent shall be effective, but only in the specific instance and for the specific purpose for which given; provided, however, that no such waiver, amendment, or consent shall, unless in writing and signed by all of the Lenders directly affected thereby and Borrowers, do any of the following:
(i) increase the amount of or extend the expiration date of any Commitment of any Lender,
(ii) postpone or delay any date fixed by this Agreement or any other Loan Document for any payment of principal, interest, fees, or other amounts due hereunder or under any other Loan Document,
(iii) reduce the principal of, or the rate of interest on, any loan or other extension of credit hereunder, or reduce any fees or other amounts payable hereunder or under any other Loan. Document (except (y) in connection with the waiver of applicability of Section 2.6(c) (which waiver shall be effective with the written consent of the Required Lenders), and (z) that any amendment or modification of defined terms used in the financial covenants in this Agreement shall not constitute a reduction in the rate of interest or a reduction of fees for purposes of this clause (iii)),
(iv) amend or modify this Section or any provision of this Agreement providing for consent or other action by all Lenders,
(v) other than as permitted by Section 15.11, release Agent’s Lien in and to any of the Collateral,
(vi) change the definition of “Required Lenders” or “Pro Rata Share”,
(vii) contractually subordinate any of the Agent’s Liens,
(viii) other than in connection with a merger, liquidation, dissolution or sale of such Person expressly permitted by the terms hereof or the other Loan Documents, release Borrower or any Guarantor from any obligation for the payment of money or consent to the assignment or transfer by the Borrower or any Guarantor of any of its rights or duties under this Agreement or the other Loan Documents,
(ix) amend any of the provisions of Section 2.4(b)(i) or (ii) or
(x) change the definition of U.S. Borrowing Base, Canadian Borrowing Base or any of the defined terms (including the definitions of Eligible Accounts, Eligible Inventory, Eligible In-Transit Inventory and Eligible Landed Inventory) that are used in such definition to the extent that any such change results in more credit being made available to Borrower based upon the U.S. Borrowing Base or the Canadian Borrowing Base, but not otherwise, or the definitions of Maximum U.S. Revolver Amount, or Maximum Canadian Revolver Amount, or change Section 2.1(c), Section 2.2(c), or Section 2.3(d).
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(b) No amendment, waiver, modification, or consent shall amend, modify, or waive (i) the definition of, or any of the terms or provisions of, the Fee Letter, without the written consent of each Agent and each Borrower (and shall not require the written consent of any of the Lenders), and (ii) any provision of Section 15 pertaining to either Agent, or any other rights or duties of such Agent under this Agreement or the other Loan Documents, without the written consent of such Agent, Borrowers, and the Required Lenders,
(c) No amendment, waiver, modification, or consent shall amend, modify, or waive any provision of this Agreement or the other Loan Documents pertaining to Issuing Lender, or any other rights or duties of Issuing Lender under this Agreement or the other Loan Documents, without the written consent of Issuing Lender, U.S. Agent, U.S. Borrower, and the Required Lenders,
(d) No amendment, waiver, modification, or consent shall amend, modify, or waive any provision of this Agreement or the other Loan Documents pertaining to Swing Lenders, or any other rights or duties of Swing Lenders under this Agreement or the other Loan Documents, without the written consent of Swing Lenders, Agents, Borrowers, and the Required Lenders,
(e) Anything in this Section 14.1 to the contrary notwithstanding, any amendment, modification, waiver, consent, termination, or release of, or with respect to, any provision of Section 15 of this Agreement, the Intercreditor Agreement, the Subordination Agreement, or any other agreement to which no Loan Party is a party that relates only to the relationship of the Lender Group among themselves, and that does not affect the rights or obligations of Borrowers, shall not require consent by or the agreement of any Borrower.
(f) Anything in this Section 14.1 to the contrary notwithstanding, no Loan Party, Affiliate of a Loan Party, Equity Sponsor, or Affiliate of Equity Sponsor shall constitute a Lender under this Section 14.1 or the definition of Required Lenders or have any other voting or consent rights as a Lender under this Agreement or any other Loan Document.
14.2. Replacement of Holdout Lender.
(a) If any action to be taken by the Lender Group or Agent hereunder requires the unanimous consent, authorization, or agreement of all Lenders and if such action has received the consent, authorization, or agreement of the Required Lenders but not all of the Lenders, then either Agent, upon at least 5 Business Days prior irrevocable notice, may permanently replace any Lender (a “Holdout Lender”) that failed to give its consent, authorization, or agreement with one or more Replacement Lenders, and the Holdout Lender shall have no right to refuse to be replaced hereunder. Such notice to replace the Holdout Lender shall specify an effective date for such replacement, which date shall not be later than 15 Business Days after the date such notice is given.
(b) Prior to the effective date of such replacement, the Holdout Lender and each Replacement Lender shall execute and deliver an Assignment and Acceptance, subject only to the Holdout Lender being repaid its share of the outstanding Obligations (including an assumption of its Pro Rata Share of the Risk Participation Liability) without any premium or penalty of any kind whatsoever. If the Holdout Lender shall refuse or fail to execute and deliver any such Assignment and. Acceptance prior to the effective date of such replacement, the Holdout Lender shall be deemed to have executed and delivered such Assignment and Acceptance. The replacement of any Holdout Lender shall be made in accordance with the terms of Section 13.1. Until such time as the Replacement Lenders shall have acquired all of the Obligations, the Commitments, and the other rights and obligations of the Holdout Lender hereunder and under the other Loan Documents, the Holdout Lender shall remain obligated to make the Holdout Lender’s Pro Rata Share of Advances and to purchase a participation in each Letter of Credit, in an amount equal to its Pro Rata Share of the Risk Participation Liability of such Letter of Credit.
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14.3. No Waivers; Cumulative Remedies. No failure by either Agent or any Lender to exercise any right, remedy, or option under this Agreement or any other Loan Document, or delay by either Agent or any Lender in exercising the same, will operate as a waiver thereof. No waiver by either Agent or any Lender will be effective unless it is in writing, and then only to the extent specifically stated. No waiver by either Agent or any Lender on any occasion shall affect or diminish either Agent’s or any Lender’s rights thereafter to require strict performance by Borrowers of any provision of this Agreement. Each Agent’s and each Lender’s rights under this Agreement and the other Loan Documents will be cumulative and not exclusive of any other right or remedy that either Agent or any Lender may have.
15. AGENT; THE LENDER GROUP.
15.1. Appointment and Authorization of Agent. Each Lender hereby designates and appoints WFF as its representative under this Agreement and the other Loan Documents, each Canadian Lender hereby designates and appoints WFFC as its representative under this Agreement and the other Loan Documents, and, subject to the terms of Section 14.1, each Lender hereby irrevocably authorizes each Agent to execute and deliver each of the other Loan Documents on its behalf and to take such other action on its behalf under the provisions of this Agreement and each other Loan Document and to exercise such powers and perform such duties as are expressly delegated to such Agent by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental thereto. Each Agent agrees to act as such on the express conditions contained in this Section 15. The provisions of this Section 15 are solely for the benefit of each Agent and the Lenders, and the Loan Parties and their respective Subsidiaries shall have no rights as a third party beneficiary of any of the provisions contained herein. Any provision to the contrary contained elsewhere in this Agreement or in any other Loan Document notwithstanding, no Agent shall have any duties or responsibilities, except those expressly set forth herein, nor shall any Agent have or be deemed to have any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against any Agent; it being expressly understood and agreed that the use of the word “Agent” is for convenience only, that WFF is merely the representative of the Lenders, that WFFC is merely the representative of the Canadian Lenders, and each such Agent only has the contractual duties set forth herein.
Except as expressly otherwise provided in this Agreement, each Agent shall have and may use its sole discretion with: respect to exercising or refraining from exercising any discretionary rights or taking or refraining from taking any actions that such Agent expressly is entitled to take or assert under or pursuant to this Agreement and the other Loan Documents. Without limiting the generality of the foregoing, or of any other provision of the Loan Documents that provides rights or powers to either Agent, Lenders agree that (a) U.S. Agent shall have the right to exercise the following powers as long as this Agreement remains in effect: (i) maintain, in accordance with its customary business practices, ledgers and records reflecting the status of the Obligations, the Collateral, the Collections of Loan Parties and their respective Subsidiaries, and related matters, (ii) execute or file any and all financing or similar statements or notices, amendments, renewals, supplements, documents, instruments, proofs of claim, notices and other written agreements with respect to the Loan Documents, (iii) make U.S. Advances, for itself or on behalf of U.S. Lenders, as provided in the Loan Documents, (iv) exclusively receive, apply, and distribute the Collections of Loan Parties and their respective Subsidiaries as provided in the Loan Documents, (v) open and maintain such bank accounts and cash management arrangements as U.S. Agent deems necessary and appropriate in accordance with the Loan Documents for the foregoing purposes with respect to the Collateral and the Collections of the Loan Parties and their respective Subsidiaries, (vi) perform, exercise, and enforce any and all other rights and remedies of the Lender Group with respect to the Loan Parties or their respective Subsidiaries, the Obligations, the
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Collateral, the Collections of Loan Parties and their respective Subsidiaries, or otherwise related to any of same as provided in the Loan Documents, and (vii) incur and pay such Lender Group Expenses as U.S. Agent may deem necessary or appropriate for the performance and fulfillment of its functions and powers pursuant to the Loan Documents, and (b) Canadian Agent shall have the right to exercise the following powers as long as this Agreement remains in effect: (i) maintain, in accordance with its customary business practices, ledgers and records reflecting the status of the Obligations, the Collateral, the Collections of Loan Parties and their respective Subsidiaries, and related matters, (ii) make Canadian Advances, for itself or on behalf of Canadian Lenders, as provided in the Loan Documents, (iii) exclusively receive, apply, and distribute the Collections of Loan Parties and their respective Subsidiaries as provided in the Loan Documents, (iv) perform, exercise, and enforce any and all other rights and remedies of the Lender Group with respect to the Loan Parties or their respective Subsidiaries, the Obligations, the Collateral, the Collections of Loan Parties and their respective Subsidiaries, or otherwise related to any of same as provided in the Loan Documents, and (v) incur and pay such Lender Group Expenses as Canadian Agent may deem necessary or appropriate for the performance and fulfillment of its functions and powers pursuant to the Loan Documents.
15.2. Delegation of Duties. Each Agent may execute any of its duties under this Agreement or any other Loan Document by or through agents, employees or attorneys in fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. Without limiting the generality of the foregoing, each Agent shall have the right to appoint any other Agent, and any Lender as its sub-agent to execute all or any portion of its rights and duties under this Agreement, including without limitation all or any portion of its rights and duties in respect of the Collateral. No Agent shall be responsible for the negligence or misconduct of any agent or attorney in fact that it selects as long as such selection was made without gross negligence or willful misconduct.
15.3. Liability of Agent. None of the Agent-Related Persons shall (a) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct), or (b) be responsible in any manner to any of the Lenders for any recital, statement, representation or warranty made by any Loan Party or any of its Subsidiaries or Affiliates, or any officer or director thereof, contained in this Agreement or in any other Loan Document, or in any certificate, report, statement or other document referred to or provided for in, or received by Agent under or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document, or for any failure of any Loan Party or its Subsidiaries or any other party to any Loan Document to perform its obligations hereunder or thereunder. No Agent-Related Person shall be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the books and records or properties of any Loan Party or its Subsidiaries.
15.4. Reliance by Agent. Each Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, telegram, telefacsimile or other electronic method of transmission, telex or telephone message, statement or other document or conversation 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 (including counsel to any Borrower or counsel to any Lender), independent accountants and other experts selected by such Agent. Each Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document unless such Agent shall first receive such advice or concurrence of the Lenders as it deems appropriate. If any Agent so requests, it shall first be indemnified to its reasonable satisfaction by the Lenders against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action. Each Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of the requisite Lenders and such request and any action taken or failure to act pursuant thereto shall be binding upon all of the Lenders.
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15.5. Notice of Default or Event of Default. No Agent shall be deemed to have knowledge or notice of the occurrence of any Default or Event of Default, except with respect to defaults in the payment of principal, interest, fees, and expenses required to be paid to such Agent for the account of the applicable Lenders and, except with respect to Defaults or Events of Default of which such Agent has actual knowledge, unless such Agent shall have received written notice from a Lender or Borrower referring to this Agreement, describing such Default or Event of Default, and stating that such notice is a “notice of default.” Each Agent promptly will notify the Lenders of its receipt of any such notice or of any Event of Default of which such Agent has actual knowledge. If any Lender obtains actual knowledge of any Event of Default, such Lender promptly shall notify the other Lenders and each Agent of such Event of Default. Each Lender shall be solely responsible for giving any notices to its Participants, if any. Subject to Section 15.4, U.S. Agent shall take such action with respect to such Default or Event of Default as may be requested by the Required Lenders in accordance with Section 8; provided, however, that unless and until U.S. Agent has received any such request, Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable.
15.6. Credit Decision. Each Lender acknowledges that none of the Agent-Related Persons has made any representation or warranty to it, and that no act by any Agent hereinafter taken, including any review of the affairs of the Loan Parties and their respective Subsidiaries or Affiliates, shall be deemed to constitute any representation or warranty by any Agent-Related Person to any Lender. Each Lender represents to each Agent that it has, independently and without reliance upon any Agent-Related Person and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of any Borrower or any other Person party to a Loan Document, and all applicable bank regulatory laws relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement and to extend credit to the applicable Borrower. Each Lender also represents that it will, independently and without reliance upon any Agent-Related Person and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of Borrowers or any other Person party to a Loan Document. Except for notices, reports, and other documents expressly herein required to be furnished to the Lenders by any Agent, no Agent shall have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of any Borrower or any other Person party to a Loan Document that may come into the possession of any of the Agent-Related Persons.
15.7. Costs and Expenses; Indemnification. Each Agent may incur and pay Lender Group Expenses to the extent such Agent reasonably deems necessary or appropriate for the performance and fulfillment of its functions, powers, and obligations pursuant to the Loan Documents, including court costs, reasonable and documented attorneys fees (but excluding allocated costs of internal counsel) and expenses, fees and expenses of financial accountants, advisors, consultants, and appraisers, costs of collection by outside collection agencies, auctioneer fees and expenses, and costs of security guards or insurance premiums paid to maintain the Collateral, whether or not any Borrower is obligated to reimburse Agents or Lenders for such expenses pursuant to this Agreement or otherwise. Each Agent is authorized and directed to deduct and retain sufficient amounts from the Collections of the Loan Parties and their respective Subsidiaries received by such Agent to reimburse such Agent for such out-of-pocket costs and expenses prior to the distribution of any amounts to Lenders. In the event any Agent is not reimbursed for such costs and expenses by the Loan Parties and their respective Subsidiaries, each Lender hereby agrees that it is and shall be obligated to pay to such
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Agent such Lender’s Pro Rata Share thereof. Whether or not the transactions contemplated hereby are consummated, the Lenders shall indemnify upon demand the Agent-Related Persons (to the extent not reimbursed by or on behalf of Borrower and without limiting the obligation of Borrower to do so), according to their Pro Rata Shares, from and against any and all Indemnified Liabilities; provided, however, that no Lender shall be liable for the payment to any Agent-Related Person of any portion of such Indemnified Liabilities resulting solely from such Person’s gross negligence or willful misconduct nor shall any Lender be liable for the obligations of any Defaulting Lender in failing to make an Advance or other extension of credit hereunder. Without limitation of the foregoing, each Lender shall reimburse the applicable Agent upon demand for such Lender’s Pro Rata Share of any costs or out of pocket expenses (including attorneys, accountants, advisors, and consultants fees and expenses) incurred by such Agent in connection with the preparation, execution, delivery, administration, modification, amendment, or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or referred to herein, to the extent that such Agent is not reimbursed for such expenses by or on behalf of Borrowers. The undertaking in this Section shall survive the payment of all Obligations hereunder and the resignation or replacement of any Agent.
15.8. Agent in Individual Capacity. WFF, WFFC and their respective Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, acquire equity interests in, and generally engage in any kind of banking, trust, financial advisory, underwriting, or other business with the Loan Parties and their respective Subsidiaries and Affiliates and any other Person party to any Loan Documents as though WFF or WFFC (as applicable) were not an Agent hereunder, and, in each case, without notice to or consent of the other members of the Lender Group. The other members of the Lender Group acknowledge that, pursuant to such activities, WFF, WFFC or their respective Affiliates may receive information regarding the Loan Parties, their respective Affiliates or any other Person party to any Loan Documents that is subject to confidentiality obligations in favor of the Loan Parties or such other Person and that prohibit the disclosure of such information to the Lenders, and the Lenders acknowledge that, in such circumstances (and in the absence of a waiver of such confidentiality obligations, which waiver such Agent will use its reasonable best efforts to obtain), such Agent shall not be under any obligation to provide such information to them. The terms “Lender” and “Lenders” include WFF in its individual capacity.
15.9. Successor Agent. Each Agent may resign as an Agent upon 30 days prior written notice to the Lenders (unless such notice is waived by the Required Lenders) and Borrowers (unless such notice is waived by Borrowers). If any Agent resigns under this Agreement, the Required Lenders shall be entitled, with (so long as no Event of Default has occurred and is continuing) the consent of Borrowers if the proposed successor Agent is a Person other than a Lender or an Affiliate or Related Fund of a Lender (such consent not to be unreasonably withheld, delayed, or conditioned), appoint (x) a successor Agent for the Lenders or (y) a successor Canadian Agent for the Canadian Lenders. If, at the time that an Agent’s resignation is effective, it is acting as an Issuing Lender or a Swing Lender, such resignation shall also operate to effectuate its resignation as such Issuing Lender or such Swing Lender, as applicable, and it shall automatically be relieved of any further obligation to issue Letters of Credit or make Swing Loans. If no successor Agent is appointed prior to the effective date of the resignation of such Agent, such Agent may appoint, after consulting with the Lenders and Borrowers, a successor U.S. Agent or Canadian Agent (as applicable). If any Agent has materially breached or failed to perform any material provision of this Agreement or of applicable law, the Required Lenders may agree in writing to remove and replace such Agent with a successor Agent from among the Lenders. In any such event, upon the acceptance of its appointment as successor Agent hereunder, such successor Agent shall succeed to all the rights, powers, and duties of the retiring Agent and the term “U.S. Agent” or “Canadian Agent” (as applicable) shall mean such successor Agent and the retiring Agent’s appointment, powers, and duties as such Agent shall be terminated. After any retiring Agent’s resignation hereunder as such Agent, the provisions of this Section 15 and Section 16 shall inure to its benefit as to any
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actions taken or omitted to be taken by it while it was such Agent under this Agreement. If no successor Agent has accepted appointment as such Agent by the date which is 30 days following a retiring Agent’s notice of resignation, the retiring Agent’s resignation shall nevertheless thereupon become effective and the Lenders shall perform all of the duties of such Agent hereunder until such time, if any, as the Lenders appoint a successor Agent as provided for above.
15.10. Lender in Individual Capacity. Any Lender and its respective Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, acquire equity interests in and generally engage in any kind of banking, trust, financial advisory, underwriting, or other business with the Loan Parties and their respective Subsidiaries and Affiliates and any other Person party to any Loan Documents as though such Lender were not a Lender hereunder without notice to or consent of the other members of the Lender Group. The other members of the Lender Group acknowledge that, pursuant to such activities, such Lender and its respective Affiliates may receive information regarding any Borrower or its Affiliates or any other Person party to any Loan Documents that is subject to confidentiality obligations in favor of any Borrower or such other Person and that prohibit the disclosure of such information to the Lenders, and the Lenders acknowledge that, in such circumstances (and in the absence of a waiver of such confidentiality obligations, which waiver such Lender will use its reasonable best efforts to obtain), such Lender shall not be under any obligation to provide such information to them.
15.11. Collateral Matters.
(a) The Lenders hereby irrevocably authorize U.S. Agent, at its option and in its sole discretion, to release any Lien on any Collateral (i) upon the termination of the Commitments and payment and satisfaction in full by Borrowers of all Obligations, (ii) constituting property being sold or disposed of if a release is required or desirable in connection therewith and if Borrowers certify to U.S. Agent that the sale or disposition is permitted under Section 6.4 of this Agreement or the other Loan Documents (and U.S. Agent may rely conclusively on any such certificate, without further inquiry), (iii) constituting property in which the Loan Parties and their respective Subsidiaries owned no interest at the time the Agent’s Lien was granted nor at any time thereafter, or (iv) constituting property leased to the Loan Parties and their respective Subsidiaries under a lease that has expired or is terminated in a transaction permitted under this Agreement. Except as provided above, U.S. Agent will not execute and deliver a release of any Lien on any Collateral without the prior written authorization of (y) if the release is of all or substantially all of the Collateral, all of the Lenders, or (z) otherwise, the Required Lenders. Upon request by U.S. Agent or any Borrower at any time, the Lenders will confirm in writing U.S. Agent’s authority to release any such Liens on particular types or items of Collateral pursuant to this Section 15.11; provided, however, that (1) U.S. Agent shall not be required to execute any document necessary to evidence such release on terms that, in U.S. Agent’s opinion, would expose U.S. Agent to liability or create any obligation or entail any consequence other than the release of such Lien without recourse, representation, or warranty, and (2) 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 any Borrower in respect of) all interests retained by any Borrower, including, the proceeds of any sale, all of which shall continue to constitute part of the Collateral.
(b) No Agent shall have any obligation whatsoever to any of the Lenders to assure that the Collateral exists or is owned by the Loan Parties and their respective Subsidiaries or is cared for, protected, or insured or has been encumbered, or that the Agent’s Liens 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 such 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, subject to the terms and conditions contained herein, U.S. Agent may act in any manner it may deem appropriate, in its
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sole discretion given U.S. Agent’s own interest in the Collateral in its capacity as one of the Lenders and that U.S. Agent shall have no other duty or liability whatsoever to any Lender as to any of the foregoing, except as otherwise provided herein.
15.12. Restrictions on Actions by Lenders; Sharing of Payments.
(a) Each of the Lenders agrees that it shall not, without the express written consent of U.S. Agent, and that it shall, to the extent it is lawfully entitled to do so, upon the written request of U.S. Agent, set off against the Obligations, upon the occurrence and during the continuance of an Event of Default, any amounts owing by such Lender to any Loan Party or any of their respective Subsidiaries or any deposit accounts of any Loan Party or any of their respective Subsidiaries now or hereafter maintained with such Lender. Each of the Lenders further agrees that it shall not, unless specifically requested to do so in writing by U.S. Agent, take or cause to be taken any action, including, the commencement of any legal or equitable proceedings to enforce any Loan Document against any Borrower or any Guarantor or to foreclose any Lien on, or otherwise enforce any security interest in, any of the Collateral.
(b) If, at any time or times any Lender shall receive (i) by payment, foreclosure, setoff, or otherwise, any proceeds of Collateral or any payments with respect to the Obligations, except for any such proceeds or payments received by such Lender from Agent pursuant to the terms of this Agreement, or (ii) payments from the applicable Agent in excess of such Lender’s Pro Rata Share of all such distributions by such Agent, such Lender promptly shall (A) turn the same over to such Agent, in kind, and with such endorsements as may be required to negotiate the same to such Agent, or in immediately available funds, as applicable, for the account of all of the Lenders and for application to the Obligations in accordance with the applicable provisions of this Agreement, or (B) purchase, without recourse or warranty, an undivided interest and participation in the Obligations owed to the other Lenders so that such excess payment received shall be applied ratably as among the Lenders in accordance with their Pro Rata Shares; provided, however, that to the extent that such excess payment received by the purchasing party is thereafter recovered from it, those purchases of participations shall be rescinded in whole or in part, as applicable, and the applicable portion of the purchase price paid therefor shall be returned to such purchasing party, but without interest except to the extent that such purchasing party is required to pay interest in connection with the recovery of the excess payment.
15.13. Agency for Perfection. U.S. Agent hereby appoints each other Lender as its agent (and each Lender hereby accepts such appointment) for the purpose of perfecting the Agent’s Liens in assets which, in accordance with Article 8 or Article 9, as applicable, of the Code can be perfected by possession or control. Should any Lender obtain possession or control of any such Collateral, such Lender shall notify U.S. Agent thereof, and, promptly upon U.S. Agent’s request therefor shall deliver possession or control of such Collateral to U.S. Agent or in accordance with U.S. Agent’s instructions.
15.14. Payments by Agents to the Lenders. All payments to be made by any Agent to the Lenders shall be made by bank wire transfer of immediately available funds pursuant to such wire transfer instructions as each party may designate for itself by written notice to such Agent. Concurrently with each such payment, such Agent shall identify whether such payment (or any portion thereof) represents principal, premium, fees, or interest of the Obligations.
15.15. Concerning the Collateral and Related Loan Documents. Each member of the Lender Group authorizes and directs U.S. Agent to enter into this Agreement and the other Loan Documents. Each member of the Lender Group agrees that any action taken by U.S. Agent in accordance with the terms of this Agreement or the other Loan Documents relating to the Collateral and the exercise by U.S. Agent 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 Lenders.
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15.16. Audits and Examination Reports; Confidentiality; Disclaimers by Lenders; Other Reports and Information. By becoming a party to this Agreement, each Lender: By becoming a party to this Agreement, each Lender:
(a) is deemed to have requested that each Agent furnish such Lender, promptly after it becomes available, a copy of each field audit or examination report respecting the Loan Parties and their respective Subsidiaries (each a “Report” and collectively, “Reports”) prepared by or at the request of such Agent, and such Agent shall so furnish each Lender with such Reports,
(b) expressly agrees and acknowledges that no Agent (i) makes any representation or warranty as to the accuracy of any Report, and (ii) shall be liable for any information contained in any Report,
(c) expressly agrees and acknowledges that the Reports are not comprehensive audits or examinations, that Agent or other party performing any audit or examination will inspect only specific information regarding the Loan Parties and their respective Subsidiaries and will rely significantly upon the Loan Parties’ and their respective Subsidiaries’ books and records, as well as on representations of Borrowers’ personnel,
(d) agrees to keep all Reports and other material, non-public information regarding the Loan Parties and their respective Subsidiaries and their operations, assets, and existing and contemplated business plans in a confidential manner in accordance with Section 17.9, and
(e) without limiting the generality of any other indemnification provision contained in this Agreement, agrees: (i) to hold each Agent and any other Lender preparing a Report harmless from any action the indemnifying Lender may take or fail to take or any conclusion the indemnifying Lender may reach or draw from any Report in connection with any loans or other credit accommodations that the indemnifying Lender has made or may make to any Borrower, or the indemnifying Lender’s participation in, or the indemnifying Lender’s purchase of, a loan or loans of any Borrower, and (ii) to pay and protect, and indemnify, defend and hold each Agent, and any such other Lender preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts (including, attorneys fees and costs) incurred by such Agent and any such other Lender 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.
In addition to the foregoing: (x) any Lender may from time to time request of any Agent in writing that such Agent provide to such Lender a copy of any report or document provided by any Loan Party or any of its Subsidiaries to such Agent that has not been contemporaneously provided by such Loan Party or such Subsidiary to such Lender, and, upon receipt of such request, such Agent promptly shall provide a copy of same to such Lender, (y) to the extent that any Agent is entitled, under any provision of the Loan Documents, to request additional reports or information from the Loan Parties and their respective Subsidiaries, any Lender may, from time to time, reasonably request such Agent to exercise such right as specified in such Lender’s notice to such Agent, whereupon such Agent promptly shall request of Borrowers the additional reports or information reasonably specified by such Lender, and, upon receipt thereof from such Borrower, such Agent promptly shall provide a copy of same to such Lender, and (z) any time that any Agent renders to any Borrower a statement regarding the Loan Account, such Agent shall send a copy of such statement to each Lender.
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15.17. Several Obligations; No Liability. Notwithstanding that certain of the Loan Documents now or hereafter may have been or will be executed only by or in favor of U.S. Agent in its capacity as such, and not by or in favor of the Lenders, any and all obligations on the part of any Agent (if any) to make any credit available hereunder shall constitute the several (and not joint) obligations of the respective Lenders on a ratable basis, according to their respective Commitments, to make an amount of such credit not to exceed, in principal amount, at any one time outstanding, the amount of their respective Commitments. Nothing contained herein shall confer upon any Lender any interest in, or subject any Lender to any liability for, or in respect of, the business, assets, profits, losses, or liabilities of any other Lender. Each Lender shall be solely responsible for notifying its Participants of any matters relating to the Loan Documents to the extent any such notice may be required, and no Lender shall have any obligation, duty, or liability to any Participant of any other Lender. Except as provided in Section 15.7, no member of the Lender Group shall have any liability for the acts of any other member of the Lender Group. No Lender shall be responsible to any Borrower or any other Person for any failure by any other Lender to fulfill its obligations to make credit available hereunder, nor to advance for it or on its behalf in connection with its Commitment, nor to take any other action on its behalf hereunder or in connection with the financing contemplated herein.
For greater certainty, and without limiting the powers of the Agents, or any other Person acting as an agent or mandatary for the Agents hereunder or under any of the other Loan Documents, each Borrower hereby acknowledges that, for purposes of holding any security (“Quebec Security”) granted by any Loan Party on property pursuant to the laws of the Province of Quebec to secure obligations of such Loan Party under any debenture, note, bond or other title of indebtedness, the U.S. Agent shall be the holder of an irrevocable power of attorney (fondé de pouvoir) (within the meaning of the Civil Code of Québec) for all present and future Lenders, Issuing Lenders, Swing Lenders and Bank Product Providers and in particular for all present and future holders of any debenture, note, bond or other title of indebtedness issued by any Loan Party. Each Lender, Issuing Lender, Swing Lender and Bank Product Provider hereby irrevocably constitutes, to the extent necessary, the U.S. Agent as the holder of an irrevocable power of attorney (fondé de pouvoir) (within the meaning of Article 2692 of the Civil Code of Québec) in order to hold Quebec Security granted by any Loan Party in order to secure the obligations of any of them under any debenture, note, bond or other title of indebtedness that may be issued by any of them. Each Lender, Issuing Lender, Swing Lender and Bank Product Provider hereby agrees that the U.S. Agent may act as the bondholder and mandatary (i.e. agent) with respect to any debenture, note, bond or other title of indebtedness that may be issued by any Loan Party and pledged to the U.S. Agent, for the benefit of each Agent, the Lenders, Issuing Lenders, Swing Lenders and Bank Product Providers. The execution by the U.S. Agent, acting as fondé de pouvoir and mandatary, prior to the execution of this Agreement, of any Quebec Security documents is hereby ratified and confirmed. Each assignee of a Lender shall be deemed to have confirmed and ratified the constitution of the U.S. Agent as the holder of such irrevocable power of attorney (fondé de pouvoir) by execution of an Assignment and Acceptance. Notwithstanding the provisions of section 32 of An Act respecting the special powers of legal persons (Québec), the U.S. Agent may acquire and be the holder of any debenture, note, bond or other title of indebtedness issued under any Quebec Security Documents. Each Loan Party hereby acknowledges that each such debenture, note, bond or other title of indebtedness constitutes a title of indebtedness, as such term is used in Article 2692 of the Civil Code of Québec. The U.S. Agent, acting as holding of an irrevocable power of attorney (fondé de pouvoir), shall have the same rights, powers, immunities, indemnities and exclusions from liability as are prescribed in favour of each Agent in this Agreement, which shall apply mutatis mutandis. Without limitation, the provisions of Section 15.9 of this Agreement shall apply mutatis mutandis to the resignation and appointment of a successor U.S. Agent, acting as the holder of an irrevocable power of attorney (fondé de pouvoir).
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16. WITHHOLDING TAXES.
(a) All payments made by any Loan Party hereunder or under any note or other Loan Document will be made without setoff, counterclaim, or other defense. In addition, all such payments will be made free and clear of, and without deduction or withholding for, any present or future Taxes, and in the event any deduction or withholding of Taxes is required, each Loan Party shall comply with the next sentence of this Section 16(a). If any Taxes are so levied or imposed, each Loan Party agrees to deduct and withhold and to timely pay and remit the full amount of such Taxes to the applicable Governmental Authority in accordance with applicable laws, and to pay such additional amounts as may be necessary so that every payment of all amounts due under this Agreement, any note, or Loan Document, including any amount paid pursuant to this Section 16(a) after withholding or deduction for or on account of any Taxes, will not be less than the amount provided for herein. U.S. Borrower will furnish to U.S. Agent as promptly as possible after the date the payment of any Tax is due pursuant to applicable law, certified copies of tax receipts evidencing such payment by U.S. Borrower. Canadian Borrower will furnish to Canadian Agent as promptly as possible after the date the payment of any Tax is due pursuant to applicable law, certified copies of tax receipts evidencing such payment by Canadian Borrower.
(b) Each Loan Party agrees to pay in accordance with applicable law any present or future stamp, value added or documentary taxes or any other excise or property taxes, charges, or similar levies (hereinafter, “Other Taxes”) that arise from any payment made hereunder or under any of the Loan Documents, or from the execution, delivery, performance, recordation, or filing of, or otherwise with respect to this Agreement or any other Loan Document. Each Loan Party shall indemnify and hold harmless each Lender (including for purposes of this section any Participant) and each Agent (and, in the case of any Lender or Agent that is a partnership or other “flow-through” entity for tax purposes, each beneficial owner thereof (each, a “Beneficial Owner”)) for the full amount of Taxes and Other Taxes imposed on or paid by such Person and any liability (including penalties, interest, additions to and expenses) arising from or with respect to such Taxes, whether or not they were correctly or legally asserted. Payment under this indemnification shall be made within 30 days from the date the applicable Agent or the relevant Lender makes written demand for it. A certificate containing reasonable detail as to the amount of such Taxes or Other Taxes submitted to a Loan Party by an Agent or the relevant Lender shall be conclusive evidence, absent manifest error, of the amount due from such Loan Party to an Agent or such Lender (or their Beneficial Owners). The provisions of this Section 16 shall survive the termination of the Agreement and the repayment of all Obligations.
(c) If a Lender or Participant is entitled to claim an exemption or reduction from United States withholding tax (including backup withholding tax), such Lender or Participant agrees with and in favor of Agents, to deliver to U.S. Borrower and the applicable Agent (or, in the case of a Participant, to the Lender granting the participation only) one of the following before receiving its first payment under this Agreement:
(i) if such Lender or Participant is entitled to claim an exemption from United States withholding tax pursuant to its portfolio interest exception, (A) a statement of the Lender or Participant, signed under penalty of perjury, that it is not a (I) a “bank” as described in Section 881(c)(3)(A) of the IRC, (II) a 10% shareholder of Borrower (within the meaning of Section 871(h)(3)(B) of the IRC), or (III) a controlled foreign corporation related to Borrower within the meaning of Section 864(d)(4) of the IRC, and (B) a properly completed and executed IRS Form W-8BEN or Form W-8IMY (with proper attachments);
(ii) if such Lender or Participant is entitled to claim an exemption from, or a reduction of, withholding tax under a United States tax treaty, a properly completed and executed copy of IRS Form W-8BEN;
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(iii) if such Lender or Participant is entitled to claim that interest paid under this Agreement is exempt from United States withholding tax because it is effectively connected with a United States trade or business of such Lender, a properly completed and executed copy of IRS Form W-8ECI;
(iv) if such Lender or Participant is entitled to claim that interest paid under this Agreement is exempt from United States withholding tax because such Lender or Participant serves as an intermediary, a properly completed and executed copy of IRS Form W-8IMY (with proper attachments); or
(v) a properly completed and executed copy of any other form or forms, including IRS Form W-9, as may be required under the IRC or other laws of the United States as a condition to exemption from, or reduction of, United States withholding or backup withholding tax.
Each Lender or Participant shall provide new forms (or successor forms) upon the expiration or obsolescence of any previously delivered forms and shall promptly notify the U.S. Borrower and the applicable Agent (or, in the case of a Participant, the Lender granting the participation only) of any change in circumstances which would modify or render invalid any claimed exemption or reduction.
(d) If a Lender or Participant claims an exemption from withholding tax in a jurisdiction other than the United States, such Lender or such Participant agrees with and in favor of each Agent, to deliver to the Borrowers and the applicable Agent (or, in the case of a Participant, to the Lender granting the participation only) any such form or forms, as may be required under the laws of such jurisdiction as a condition to exemption from, or reduction of, foreign withholding or backup withholding tax before receiving its first payment under this Agreement, but only if such Lender or such Participant is legally able to deliver such forms, provided, however, that nothing in this Section 16(d) shall require a Lender or Participant to disclose any information that it deems to be confidential (including without limitation, its tax returns). Each Lender and each Participant shall provide new forms (or successor forms) upon the expiration or obsolescence of any previously delivered forms and shall promptly notify the Borrowers and the applicable Agent (or, in the case of a Participant, to the Lender granting the participation only) of any change in circumstances which would modify or render invalid any claimed exemption or reduction.
(e) If a Lender or Participant claims exemption from, or reduction of, withholding tax and such Lender or Participant sells, assigns, grants a participation in, or otherwise transfers all or part of the Obligations of Borrowers to such Lender or Participant, such Lender or Participant agrees to notify the Borrowers and the applicable Agent (or, in the case of a sale of a participation interest, to the Lender granting the participation only) of the percentage amount in which it is no longer the beneficial owner of Obligations of Borrowers to such Lender or Participant. To the extent of such percentage amount, the applicable Agent will treat such Lender’s or such Participant’s documentation provided pursuant to Section 16(c) or 16(d) as no longer valid. With respect to such percentage amount, such Participant or Assignee may provide new documentation, pursuant to Section 16(c) or 16(d), if applicable. Each Borrower agrees that each Participant shall be entitled to the benefits of this Section 16 with respect to its participation in any portion of the Commitments and the Obligations so long as such Participant complies with the obligations set forth in this Section 16 with respect thereto.
(f) If a Lender or a Participant is entitled to a reduction in the applicable withholding tax, the applicable Borrower and the applicable Agent (or, in the case of a Participant, the Lender granting the participation) may withhold from any interest payment to such Lender or such Participant an amount equivalent to the applicable withholding tax after taking into account such reduction. If the forms or other documentation required by subsection (c) or (d) of this Section 16 are not delivered to the applicable Borrower and the applicable Agent (or, in the case of a Participant, to the Lender granting the participation), then such Borrower or Agent (or, in the case of a Participant, to the Lender granting the participation) may withhold from any interest payment to such Lender or such Participant not providing such forms or other documentation an amount equivalent to the applicable withholding tax.
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(g) If the IRS or any other Governmental Authority of the United States or other jurisdiction asserts a claim that a Borrower or Agent (or, in the case of a Participant, to the Lender granting the participation) did not properly withhold tax from amounts paid to or for the account of any Lender or any Participant due to a failure on the part of the Lender or any Participant (because the appropriate form was not delivered, was not properly executed, or because such Lender failed to notify such Borrower or such Agent (or such Participant failed to notify the Lender granting the participation) of a change in circumstances which rendered the exemption from, or reduction of, withholding tax ineffective, or for any other reason) such Borrower or such Lender shall indemnify and hold such Borrower or such Agent harmless (or, in the case of a Participant, such Participant shall indemnify and hold the Lender granting the participation harmless) for all amounts paid, directly or indirectly, by such Borrower or such Agent (or, in the case of a Participant, to the Lender granting the participation), as tax or otherwise, including penalties and interest, and including any taxes imposed by any jurisdiction on the amounts payable to such Borrower or such Agent (or, in the case of a Participant, to the Lender granting the participation only) under this Section 16, together with all costs and expenses (including attorneys fees and expenses). The obligation of the Lenders and the Participants under this subsection shall survive the payment of all Obligations and the resignation or replacement of either Agent.
(h) If either Agent or a Lender determines, in its sole discretion, that it has received a refund of any Taxes as to which it has been indemnified by Borrowers or with respect to which any Borrower has paid additional amounts pursuant to this Section 16, so long as no Default or Event of Default has occurred and is continuing, it shall pay over the amount of such refund to the applicable Borrower (but only to the extent of payments made, or additional amounts paid, by such Borrower under this Section 16 with respect to Taxes giving rise to such a refund), net of all out-of-pocket expenses of such Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such a refund); provided, that such Borrower, upon the request of such Agent or such Lender, agrees to repay the amount paid over to such Borrower (plus any penalties, interest or other charges, imposed by the relevant Governmental Authority, other than such penalties, interest or other charges imposed as a result of the willful misconduct or gross negligence of such Agent hereunder) to such Agent or such Lender in the event such Agent or such Lender is required to repay such refund to such Governmental Authority. Notwithstanding anything in this Agreement to the contrary, this Section 16 shall not be construed to require either Agent or any Lender to make available its tax returns (or any other information which it deems confidential) to any Borrower or any other Person or to arrange its affairs in whatever manner it thinks fit and, in particular, no Agent or Lender shall be under any obligation to claim relief for tax purposes or to claim such relief in priority to other claims, credits or deductions.
17. GENERAL PROVISIONS.
17.1. Effectiveness. This Agreement shall be binding and deemed effective when executed by each Borrower, each Agent, and each Lender whose signature is provided for on the signature pages hereof.
17.2. Section Headings. Headings and numbers have been set forth herein for convenience only. Unless the contrary is compelled by the context, everything contained in each Section applies equally to this entire Agreement.
17.3. Interpretation. Neither this Agreement nor any uncertainty or ambiguity herein shall be construed against the Lender Group or any Borrower, whether under any rule of construction or otherwise. On the contrary, this Agreement has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to accomplish fairly the purposes and intentions of all parties hereto.
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17.4. Severability of Provisions. Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision.
17.5. Bank Product Providers. Each Bank Product Provider shall be deemed a third party beneficiary hereof and of the provisions of the other Loan Documents for purposes of any reference in a Loan Document to the parties for whom Agent is acting; it being understood and agreed that the rights and benefits of such Bank Product Provider under the Loan Documents consist exclusively of such Bank Product Provider’s right to share in payments and collections out of the Collateral as more fully set forth herein. In connection with any such distribution of payments and collections, each Agent shall be entitled to assume no amounts are due to any Bank Product Provider unless such Bank Product Provider has notified such Agent in writing of the amount of any such liability owed to it prior to such distribution.
17.6. Debtor-Creditor Relationship. The relationship between the Lenders and Agents, on the one hand, and the Loan Parties, on the other hand, is solely that of creditor and debtor. No member of the Lender Group has (or shall be deemed to have) any fiduciary relationship or duty to any Loan Party arising out of or in connection with the Loan Documents or the transactions contemplated thereby, and there is no agency or joint venture relationship between the members of the Lender Group, on the one hand, and the Loan Parties, on the other hand, by virtue of any Loan Document or any transaction contemplated therein.
17.7. Counterparts; Electronic Execution. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement. Delivery of an executed counterpart of this Agreement by telefacsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Agreement. Any party delivering an executed counterpart of this Agreement by telefacsimile or other electronic method of transmission also shall deliver an original executed counterpart of this Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement. The foregoing shall apply to each other Loan Document mutatis mutandis.
17.8. Revival and Reinstatement of Obligations. If the incurrence or payment of the Obligations by any Borrower or any Guarantor or the transfer to the Lender Group of any property should for any reason subsequently be asserted, or declared, to be void or voidable under applicable law relating to creditors’ rights, including provisions of applicable law relating to fraudulent conveyances, preferences, or other voidable or recoverable payments of money or transfers of property (each, a “Voidable Transfer”), and if the Lender Group is required to repay or restore, in whole or in part, any such Voidable Transfer, or elects to do so upon the reasonable advice of its counsel, then, as to any such Voidable Transfer, or the amount thereof that the Lender Group is required or elects to repay or restore, and as to all reasonable costs, expenses, and attorneys fees of the Lender Group related thereto, the liability of such Borrower or such Guarantor automatically shall be revived, reinstated, and restored and shall exist as though such Voidable Transfer had never been made.
17.9. Confidentiality.
(a) Agents and Lenders each individually (and not jointly or jointly and severally) agree that material, non-public information regarding the Loan Parties and their respective Subsidiaries, their operations, assets, and existing and contemplated business plans shall be treated by Agents and the Lenders in a confidential manner, and shall not be disclosed by Agents and the Lenders to Persons who are not parties to
80
this Agreement, except: (i) on a confidential basis, to attorneys for and other advisors, accountants, auditors, and consultants to any member of the Lender Group, (ii) to Subsidiaries and Affiliates of any member of the Lender Group (including the Bank Product Providers), provided that any such Subsidiary or Affiliate shall have agreed to receive such information hereunder subject to the terms of this Section 17.9 (it being acknowledged and agreed by the parties hereby that Borrowers shall be deemed to be third party beneficiaries of such agreements), (iii) as may be required by statute, decision, or judicial or administrative order, rule, or regulation, (iv) as may be agreed to in advance by Borrowers or as requested or required by any Governmental Authority pursuant to any subpoena or other legal process, (v) as to any such information that is or becomes generally available to the public (other than as a result of prohibited disclosure by Agents or the Lenders), (vi) subject to the limitations of Section 13.1(k) in connection with any assignment, participation or pledge (including any prospective assignment, participation or pledge) of any Lender’s interest under this Agreement, provided that any such assignee, participant, or pledgee shall have agreed in writing to receive such information hereunder subject to the terms of this Section and agrees only to use such information for evaluating its investment hereunder, (vii) in connection with any litigation or other adversary proceeding involving, parties hereto which such litigation or adversary proceeding involves claims related to the rights or duties of such parties under this Agreement or the other Loan Documents, and (viii) subject to the limitations of Section 13.1(k) by any partner of any Lender or any representative to any stockholders, partners and members of such partner or any prospective investor in an investment vehicle affiliated with such partner; provided, that any such stockholder, representative or prospective investor agrees’ to keep such information confidential in accordance with this Section 17.9 (it being acknowledged and agreed by the parties hereby that the Borrower shall be deemed a third party beneficiary of such agreements). Each Agent and each Lender-agrees that, upon receipt of a request or identification of the requirement for disclosure pursuant to clause (iii) or clause (iv) hereof, it will make reasonable efforts to keep the Loan Parties informed of such request or identification; provided that each Loan Party acknowledges that each Agent and each Lender may make disclosure as required or requested by any Governmental Authority or representative thereof and that each Agent and each Lender may be subject to review by regulatory agencies and may be required to provide to, or otherwise make available for review by, the representatives of such parties or agencies any such non-public information.
(b) Anything in this Agreement to the contrary notwithstanding, either Agent may provide information concerning the terms and conditions of this Agreement and the other Loan Documents to loan syndication and pricing reporting services.
17.10. Lender Group Expenses. Each Borrower agrees to pay any and all Lender Group Expenses promptly after demand therefor by either Agent and agrees that its obligations contained in this Section 17.10 shall survive payment or satisfaction in full of all other Obligations.
17.11. USA PATRIOT Act. Each Lender that is subject to the requirements of the Patriot Act hereby notifies the Borrowers that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies the Borrowers, which information includes the name and address of the Borrowers and other information that will allow such Lender to identify the Borrowers in accordance with the Patriot Act.
17.12. Applicable Currency. Each payment in respect of any Obligation (other than Obligations in respect of Canadian Advances) shall be made in Dollars with respect to such Obligation, and each payment in respect of any Obligation in respect of Canadian Advances shall be made in Canadian Dollars. The specification under this Agreement of (x) Dollars in respect of the Obligations (other than Obligations in respect of Canadian Advances), and (y) Canadian Dollars in respect of the Obligations in respect of Canadian Advances, is of the essence in each case. Each Loan Party’s obligations hereunder and under the other Loan Documents to make payments in. Dollars (in the case of Obligations (other than Obligations in respect of
81
Canadian Advances) or Canadian Dollars (in the case of Obligations in respect of Canadian Advances) shall not be discharged or satisfied by any tender or recovery in any other currency (including any tender pursuant to any judgment expressed in or converted into any currency other than such applicable currency), except to the extent that such tender or recovery results in the effective receipt by the Agents and Lenders of the full amount of Dollars or Canadian Dollars, as applicable, expressed to be payable to the Agents and the Lenders under this Agreement or the other Loan Documents. if for any reason it is necessary to convert into or from any currency other than. Dollars (in the case of Obligations (other than Obligations in respect of Canadian Advances) or Canadian Dollars (in the case of Obligations in respect of Canadian Advances) (such other currency being hereinafter referred to as the “Tendered Currency”), the rate of exchange used shall be the Exchange Rate on the Business Day preceding that on which such other currency is tendered to the applicable Agent. The obligation of each Loan Party in respect of any such sum due from it to any Agent or any Lender hereunder shall, notwithstanding any tender or any judgment in such Tendered Currency, be discharged only to the extent that the applicable Agent, in accordance with its customary or other reasonable procedures, purchases Dollars (in the case of Obligations (other than Obligations in respect of Canadian Advances) or Canadian Dollars (in the case of Obligations in respect of Canadian Advances) with the Tendered Currency so received. If the amount of Dollars (in the case of Obligations (other than Obligations in respect of Canadian Advances) or Canadian Dollars (in the case of Obligations in respect of Canadian Advances) so purchased is less than the sum originally due to such Agent or such Lender, as applicable, in Dollars (in the case of Obligations (other than Obligations in respect of Canadian Advances) or Canadian Dollars (in the case of Obligations in respect of Canadian Advances), each Loan Party agrees, as a separate obligation and notwithstanding any judgment, to indemnify the Agents and the Lenders against such loss, and if the Dollars (in the case of Obligations (other than Obligations in respect of Canadian Advances) or Canadian Dollars (in the case of Obligations in respect of Canadian Advances) so purchased exceed the sum originally due to any Lender in Dollars (in the case of Obligations (other than Obligations in respect of Canadian Advances) or Canadian Dollars (in the case of Obligations in respect of Canadian Advances), such Agent or such Lender, as applicable, agrees to remit to such Loan Party such excess.
17.13. Integration. This Agreement, together with the other Loan Documents, reflects the entire understanding of the parties with respect to the transactions contemplated hereby and shall not be contradicted or qualified by any other agreement, oral or written, before the date hereof.
17.14. Canadian Fishing Licenses. The Agents and the Lenders acknowledge that (a) the holder of a Canadian fishing license does not have a common law property interest in the license and (b) the issuance, reissuance or transfer of a Canadian fishing license, and accordingly the effective enforcement of any security interest taken against such license, remains subject to the discretion of the Minister of Fisheries and Oceans pursuant to the Fisheries Act (Canada).
17.15. Clam Quotas. The Agents and the Lenders acknowledge that (a) the assignment of ocean quahog allocations issued by the U.S. Department of Commerce, National Oceanic Atmospheric Administration (“Clam Quotas”) contemplated by the Security Agreement will not be effective until January 1, 2009 (“Quota Transfer Date”) and (b) until the Quota Transfer Date, notwithstanding anything to the contrary contained in this Agreement, the Security Agreement or the other Loan Documents, any failure to create a valid, perfected lien in Clam Quotas or any impairment of the Lender’s security interest therein, in each case to the extent resulting from the foregoing, shall not be deemed to violate any representation, warranty, covenant or other requirement whatsoever hereunder or under the Loan Documents.
17.16. Mexican Subsidiaries. Notwithstanding anything to the contrary contained in this Agreement or any of the other Loan Documents that is governed by the laws of a jurisdiction within the United States of America, no representation, warranty or covenant is given herein or in any such other Loan Document as to the enforceability or validity of any guaranty given by any Mexican Subsidiary, the pledge of the assets of any Mexican Subsidiary or the Stock issued by any Mexican Subsidiary (including, without limitation, any required consents or the registration or perfection of any Lien granted thereon).
[Signature pages to follow.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered as of the date first above written.
Bumble Bee Foods, LLC | ||
A Delaware limited liability company | ||
By: | /S/ XXXXXXXXXXX XXXXXXXXXX | |
Title: | President and Chief Executive Officer | |
3231021 Nova Scotia Company | ||
A Nova Scotia unlimited company | ||
By: | /S/ XXXX XXXXXX | |
Title: | Vice President | |
Xxxxx Fargo Foothill, LLC | ||
A Delaware limited liability company, as U.S. Agent and as a U.S. Lender | ||
By: | /S/ XXXXX XXXXXXX | |
Title: | Vice President and Senior Underwriter | |
Xxxxx Fargo Foothill Canada, ULC | ||
An Alberta unlimited corporation, as Canadian Agent and as Canadian Lender | ||
By: | /S/ XXXX X. XXXXXXXX | |
Title: | Senior Vice President |
EXHIBIT A-1
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (“Assignment Agreement”) is entered into as of between (“Assignor”) and (“Assignee”). Reference is made to the Agreement described in Annex I hereto (the “Credit Agreement”). Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Credit Agreement.
1. In accordance with the terms and conditions of Section 13 of the Credit Agreement, the Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, that interest in and to the Assignor’s rights and obligations under the Loan Documents as of the date hereof with respect to the Obligations owing to the Assignor, and Assignor’s portion of the Commitments, all to the extent specified on Annex I.
2. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim and (ii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment Agreement and to consummate the transactions contemplated hereby; (b) makes no representation or warranty and assumes no responsibility with respect to (i) any statements, representations or warranties made in or in connection with the Loan Documents, or (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any other instrument or document furnished pursuant thereto; (c) makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Borrower or any Guarantor or the performance or observance by any Borrower or any Guarantor of any of their respective obligations under the Loan Documents or any other instrument or document furnished pursuant thereto; and (d) represents and warrants that the amount set forth as the Purchase Price on Annex I represents the amount owed by Borrowers to Assignor with respect to Assignor’s share of the U.S. Advances and the Canadian Advances assigned hereunder, as reflected on Assignor’s books and records.
3. The Assignee (a) confirms that it has received copies of the Credit Agreement and the other Loan Documents, together with copies of the financial statements referred to therein and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment Agreement; (b) agrees that it will, independently and without reliance upon any Agent, Assignor, or any other Lender, based upon such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking any action under the Loan Documents; (c) appoints and authorizes each Agent to take such action as agent on its behalf and to exercise such powers under the Loan Documents as are delegated to such Agent by the terms thereof, together with such powers as are reasonably incidental thereto; (d) agrees that 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; [and (e) attaches the forms prescribed by the Internal Revenue Service of the United States certifying as to the Assignee’s status for purposes of
determining exemption from United States withholding taxes with respect to all payments to be made to the Assignee under the Credit Agreement or such other documents as are necessary to indicate that all such payments are subject to such rates at a rate reduced by an applicable tax treaty.]
4. Following the execution of this Assignment Agreement by the Assignor and Assignee, the Assignor will deliver this Assignment Agreement to the Agent for recording by the applicable Agent. The effective date of this Assignment (the “Settlement Date”) shall be the latest to occur of (a) the date of the execution and delivery hereof by the Assignor and the Assignee, (b) the receipt by the applicable Agent for its sole and separate account a processing fee in the amount of $3,500 (if required by the Credit Agreement), (c) the receipt of any required consent of the applicable Agent, and (d) the date specified in Annex I.
5. As of the Settlement Date (a) the Assignee shall be a party to the Credit Agreement and, to the extent of the interest assigned pursuant to this Assignment Agreement, have the rights and obligations of a Lender thereunder and under the other Loan Documents, and (b) the Assignor shall, to the extent of the interest assigned pursuant to this Assignment Agreement, relinquish its rights and be released from its obligations under the Credit Agreement and the other Loan Documents, provided, however, that nothing contained herein shall release any assigning Lender from obligations that survive the termination of the Credit Agreement, including such assigning Lender’s obligations under Article 15 and Section 17.9 of the Credit Agreement.
6. Upon the Settlement Date, Assignee shall pay to Assignor the Purchase Price (as set forth in Annex I). From and after the Settlement Date, the applicable Agent shall make all payments that are due and payable to the holder of the interest assigned hereunder (including payments of principal, interest, fees and other amounts) to Assignor for amounts which have accrued up to but excluding the Settlement Date and to Assignee for amounts which have accrued from and after the Settlement Date. On the Settlement Date, Assignor shall pay to Assignee an amount equal to the portion of any interest, fee, or any other charge that was paid to Assignor prior to the Settlement Date on account of the interest assigned hereunder and that are due and payable to Assignee with respect thereto, to the extent that such interest, fee or other charge relates to the period of time from and after the Settlement Date.
7. This Assignment Agreement may be executed in counterparts and by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. This Assignment Agreement may be executed and delivered by telecopier or other facsimile transmission all with the same force and effect as if the same were a fully executed and delivered original manual counterpart.
8. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment Agreement and Annex I hereto to be executed by their respective officers, as of the first date written above.
[NAME OF ASSIGNOR] | ||
as Assignor | ||
By: |
| |
Name: | ||
Title: | ||
[NAME OF ASSIGNEE] | ||
as Assignee | ||
By: |
| |
Name: | ||
Title: |
ACCEPTED THIS DAY OF | ||
__________ | ||
[XXXXX FARGO FOOTHILL, LLC, | ||
a Delaware limited liability company, as U.S. Agent | ||
By: |
| |
Name: | ||
Title:]1 | ||
[XXXXX FARGO FOOTHILL CANADA ULC, | ||
an Alberta unlimited corporation, as Canadian Agent | ||
By: |
| |
Name: | ||
Title:]2 |
1 | Include to the extent required by Section 13.1(a) of the Credit Agreement. |
2 | Include to the extent required by Section 13.1(a) of the Credit Agreement. |
ANNEX FOR ASSIGNMENT AND ACCEPTANCE
ANNEX I
1. | Borrowers: BUMBLE BEE FOODS, LLC, a Delaware limited liability company, and 3231021 NOVA SCOTIA COMPANY, a Nova Scotia unlimited liability company |
2. | Name and Date of Credit Agreement: |
Senior Revolving Credit Agreement, dated as of November 18, 2008, by and among the Borrowers, the lenders from time to time a party thereto (the “Lenders”), XXXXX FARGO FOOTHILL, LLC, a Delaware limited liability company, as the arranger and United States administrative agent for the Lenders, and XXXXX FARGO FOOTHILL CANADA ULC, an Alberta unlimited corporation, as the arranger and Canadian administrative agent for the Canadian Lenders
3. | Date of Assignment Agreement: | ______ __, ____ | ||
4. | Amounts: | |||
a. Assignment Amount of U.S. Revolver Commitment |
$__________ | |||
b. Assigned Amount of U.S. Advances |
$__________ | |||
c. Assigned Amount of Canadian Revolver Commitment |
$__________ | |||
d. Assigned Amount of Canadian Advances |
$__________ | |||
5. | Settlement Date: | ______ __, ____ | ||
6. | Purchase Price: | $__________ | ||
7. | Notice and Payment Instructions, etc. |
Assignee: | Assignor: | |
|
| |
|
| |
|
|
EXHIBIT C-1
FORM OF CANADIAN BORROWING BASE CERTIFICATE
Xxxxx Fargo Foothill Canada ULC, as Canadian Agent
under the below referenced Credit Agreement
00 Xxxx Xxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Business Finance Manager
The undersigned, 3231021 NOVA SCOTIA COMPANY, a Nova Scotia unlimited liability company (“3231021”), pursuant to Schedule 5.2 of that certain Credit Agreement dated as of November 18, 2008 (as amended, restated, modified, supplemented, refinanced, renewed, or extended from time to time, the “Credit Agreement”), entered into among BUMBLE BEE FOODS, LLC, a Delaware limited liability company, 3231021, the lenders signatory thereto from time to time, XXXXX FARGO FOOTHILL, LLC, a Delaware limited liability company, in its capacity as United States administrative agent for the Lender Group and the Bank Product Providers (in such capacity, together with its successors and assigns in such capacity, “U.S. Agent”), and XXXXX FARGO FOOTHILL CANADA ULC, an Alberta unlimited corporation, as the arranger and Canadian administrative agent for the Canadian Lenders, hereby certifies to Canadian Agent that the following items, calculated in accordance with the terms and definitions set forth in the Credit Agreement for such items are true and correct, and that 3231021 is in compliance with and, after giving effect to any currently requested Advances, will be in compliance with, the terms, conditions, and provisions of the Credit Agreement.
All initially capitalized terms used in this Canadian Borrowing Base Certificate have the meanings set forth in the Credit Agreement unless specifically defined herein.
[Remainder of page intentionally left blank.]
Effective Date of Calculation:
A. | Canadian Borrowing Base Calculation |
1. |
Eligible Accounts | |||||||
a. |
(i) 85% of Canadian Borrower’s Eligible Accounts1 |
$ | ||||||
(ii) the amount, if any, of the Canadian Dilution Reserve |
$ | |||||||
(iii) Item 1.a.(i) minus Item 1.a.(ii) |
$ | |||||||
b. | an amount equal to Canadian Borrower’s Collections with respect to Accounts for the immediately preceding 30 day period | $ | ||||||
c. | The lesser of Items l.a.(iii) and 1.b. | $ | ||||||
2. | Eligible Inventory | $ | ||||||
a. | C$37,500,000 |
C$37,500,000 |
||||||
b. | 65% of Canadian Borrower’s Eligible Landed Inventory2 | $ | ||||||
c. | the lesser of (i) C$6,430,000 and (ii) 50%of Canadian Borrower’s Eligible In-Transit Inventory | $ | ||||||
d. | Item 2.b. plus Item 2.c. | $ | ||||||
e. | (i) 85% times the Net Liquidation Percentage |
$ | ||||||
(ii) the book value of Canadian Borrower’s Inventory |
$ | |||||||
(iii) Item 2.e.(i) times Item 2.e.(ii) |
$ | |||||||
f. | The lowest of Items 2.a., 2.d., and 2.e.(iii) | $ |
1 | See Annex A. |
2 | See Annex B. |
3. | Reserves | |||||||
a. | Canadian Priority Payables Reserves | $ | ||||||
b. | Canadian Bank Product Reserves | $ | ||||||
c. | Canadian Inventory Reserves | $ | ||||||
d. | the sum of the aggregate amount of reserves, if any, established by Canadian Agent under Section 2.2(c) of the Credit Agreement | $ | ||||||
e. | Sum of Items 3.a., 3.b., 3.c., and 3.d | $ | ||||||
4. | Canadian Borrowing Base (Item 1.c. plus Item 2.f. minus Item 3.e.): | $ | ||||||
5. | Availability Calculation | |||||||
a. | (i) Maximum Canadian Revolver Amount |
[C$45,000,000] | ||||||
(ii) outstanding Canadian Advances |
$ | |||||||
(iii) Item 5.a.(i) minus Item 5.a.(ii) |
$ | |||||||
b. | (i) Canadian Borrowing Base |
$ | ||||||
(ii) outstanding Canadian Advances |
$ | |||||||
(iii) Canadian Inventory Reserves |
$ | |||||||
(iv) Canadian Priority Payables Reserves |
$ | |||||||
(v) Item 5.b.(i) minus Item 5.b.(ii) minus Item 5.b.(iii) minus Item 5.b.(iv) |
$ | |||||||
c. |
lesser of Item 5.a.(iii) and 5.b.(v) | $ |
3
Additionally, the undersigned hereby certifies and represents and warrants to the Lender Group on behalf of 3231021 that (i) as of the date hereof, each representation or warranty contained in or pursuant to any Loan Document, any agreement, instrument, certificate, document or other writing furnished at any time under or in connection with any Loan Document, and as of the effective date of any advance, continuation or conversion requested above is true and correct in all material respects (except to the extent any representation or warranty expressly related to an earlier date), (ii) each of the covenants and agreements contained in any Loan Document have been performed (to the extent required to be performed on or before the date hereof or each such effective date), (iii) no Default or Event of Default has occurred and is continuing on the date hereof, nor will any thereof occur after giving effect to the request above, and (iv) all of the foregoing is true and correct as of the effective date of the calculations set forth above and that such calculations have been made in accordance with the requirements of the Credit Agreement.
3231021 NOVA SCOTIA COMPANY, a Nova Scotia unlimited liability company | ||
By: |
| |
Name: |
| |
Title: |
|
4
Annex A
Accounts created in the ordinary course arising out of sale of goods complying with each of the representations and warranties respecting Eligible Accounts made in the Loan Documents | $ | |||||||
less (without duplication) | ||||||||
Accounts that the Account Debtor has failed to pay within 90 days of original invoice date or Accounts with selling terms of more than 60 days |
$ | |||||||
Accounts owed by an Account Debtor (or its Affiliates) where 50% or more of all Accounts owed by that Account Debtor (or its Affiliates) are deemed ineligible under the immediately preceding clause |
$ | |||||||
Accounts with respect to which the Account Debtor is an Affiliate of Canadian Borrower or an employee or agent of Canadian Borrower or any Affiliate of Canadian Borrower |
$ | |||||||
Accounts arising in a transaction wherein goods are placed on consignment or are sold pursuant to a guaranteed sale, a sale or return, a sale on approval, a xxxx and hold, or any other terms by reason of which the payment by the Account Debtor may be conditional |
$ | |||||||
Accounts that are not payable in Canadian Dollars |
$ | |||||||
Accounts with respect to which the Account Debtor either (i) does not maintain its chief executive office in Canada, or (ii) is not organized under the laws of Canada or any province thereof, or (iii) is the government of any foreign country or sovereign state, or of any state, province, municipality, or other political subdivision thereof, or of any department, agency, public corporation, or other instrumentality thereof, unless (y) the Account is supported by an irrevocable letter |
5
of credit satisfactory to Canadian Agent (as to form, substance, and issuer or domestic confirming bank) that has been delivered to Canadian Agent and is directly drawable by Canadian Agent, or (z) the Account is covered by credit insurance in form, substance, and amount, and by an insurer, satisfactory to Canadian Agent | $ | |||||||
Accounts with respect to which the Account Debtor is either (i) the United States or any department, agency, or instrumentality of the United States (exclusive, however, of Accounts with respect to which the Borrower has complied, to the reasonable satisfaction of U.S. Agent, with the Assignment of Claims Act, 31 USC § 3727), or (ii) any state of the United States | $ | |||||||
Accounts with respect to which the Account Debtor is a creditor of Canadian Borrower, has or has asserted a right of setoff, or has disputed its obligation to pay all or any portion of the Account, to the extent of such claim, right of setoff, or dispute | $ | |||||||
Accounts with respect to an Account Debtor whose total obligations owing to Canadian Borrower exceed 10% (such percentage, as applied to a particular Account Debtor, being subject to reduction by Canadian Agent in its Permitted Discretion if the creditworthiness of such Account Debtor deteriorates) of all Eligible Accounts, to the extent of the obligations owing by such Account Debtor in excess of such percentage; provided, however, that, in each case, the amount of Eligible Accounts that are excluded because they exceed the foregoing percentage shall be determined by Canadian Agent based on all of the otherwise Eligible Accounts prior to giving effect to any eliminations based upon the foregoing concentration limit | $ | |||||||
Accounts with respect to which the Account Debtor is subject to an Insolvency |
6
Proceeding, is not Solvent, has gone out of business, or as to which Canadian Borrower has received notice of an imminent Insolvency Proceeding or a material impairment of the financial condition of such Account Debtor, |
$ | |||
Accounts, the collection of which, Canadian Agent, in its Permitted Discretion, believes to be doubtful by reason of the Account Debtor’s financial condition, |
$ | |||
Accounts that are not subject to a valid and perfected first priority Agent’s Lien, |
$ | |||
Accounts with respect to which (i) the goods giving rise to such Account have not been shipped and billed to the Account Debtor, or (ii) the services giving rise to such Account have not been performed and billed to the Account Debtor |
$ | |||
Accounts with respect to which the Account Debtor is a Sanctioned Person or a Sanctioned Entity |
$ | |||
Accounts that represent the right to receive progress payments or other advance xxxxxxxx that are due prior to the completion of performance by Canadian Borrower of the subject contract. |
$ | |||
Total Excluded Accounts | $ | |||
Eligible Accounts (Total Accounts less Total Excluded Accounts): | $ | |||
7
Annex B
Inventory consisting of first quality finished goods, raw materials, or work in progress held for sale in the ordinary course of Canadian Borrower’s business, that complies with each of the representations and warranties respecting Eligible Inventory made in the Loan Documents | $ | |||||||
less (without duplication) |
||||||||
Inventory which Canadian Borrower does not have good, valid, and marketable title thereto |
$ | |||||||
Inventory not located at one of the locations set forth on Schedule E-1 to the Credit Agreement (or in-transit from one such location to another such location) |
$ | |||||||
Inventory located on real property leased by Canadian Borrower or in a contract warehouse, in each case, unless it is subject to a Collateral Access Agreement executed by the lessor or warehouseman, as the case may be, and unless it is segregated or otherwise separately identifiable from goods of others, if any, stored on the premises |
$ | |||||||
Inventory not subject to a valid and perfected first priority Agent’s Lien |
$ | |||||||
Inventory consisting of goods returned or rejected by Canadian Borrower’s customers |
$ | |||||||
Inventory consisting of goods that are obsolete or slow moving, spoiled or contaminated goods, or goods that constitute packaging and shipping materials, supplies used or consumed in Canadian Borrower’s business, xxxx and hold goods, defective goods, “seconds,” or Inventory acquired on consignment |
$ | |||||||
Total Excluded Inventory | $ | |||||||
Eligible Inventory (Total Inventory less Total Excluded Inventory): | $ | |||||||
8
EXHIBIT C-2
FORM OF COMPLIANCE CERTIFICATE
[on U.S. Borrower’s letterhead]
To: | Xxxxx Fargo Foothill, LLC, as U.S. Agent |
under the below referenced Credit Agreement
0000 Xxxxxxxx Xxxxxx
Xxxxx 0000 Xxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attn: Business Finance Manager
Xxxxx Fargo Foothill Canada ULC, as Canadian Agent
under the below referenced Credit Agreement
00 Xxxx Xxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx X0X 0X0
Attn: Business Finance Manager
Re: Compliance Certificate dated
Ladies and Gentlemen:
Reference is made to that certain Senior Revolving Credit Agreement (the “Credit Agreement”) dated as of November 18, 2008, by and among the lenders identified on the signature pages thereof (such lenders, together with their respective successors and permitted assigns, are referred to hereinafter each individually as a “Lender” and collectively as the “Lenders”), XXXXX FARGO FOOTHILL, LLC, a Delaware limited liability company, as the arranger and United States administrative agent for the Lenders (“U.S. Agent”), XXXXX FARGO FOOTHILL CANADA ULC, an Alberta unlimited corporation, as the arranger and Canadian administrative agent for the Canadian Lenders (“Canadian Agent”), 3231021 NOVA SCOTIA COMPANY, a Nova Scotia unlimited liability company, and BUMBLE BEE FOODS, LLC, a Delaware limited liability company. Capitalized terms used in this Compliance Certificate have the meanings set forth in the Credit Agreement unless specifically defined herein.
Pursuant to Schedule 5.1 of the Credit Agreement, the undersigned officer of U.S. Borrower and the undersigned officer of Canadian Borrower each hereby certify in their capacities as officers of U.S. Borrower and Canadian Borrower and not in their personal capacities that:
1. The financial information of the Loan Parties and their respective Subsidiaries furnished in Schedule 1 attached hereto, has been prepared in accordance with GAAP (except for year-end adjustments and the lack of footnotes), and fairly presents in all material respects the financial condition of the Loan Parties and their respective Subsidiaries as of the date of such financial information.
2. Such officers have reviewed the terms of the Credit Agreement and have made, or caused to be made under their supervision, a review in reasonable detail of the condition of the Loan Parties and their respective Subsidiaries during the accounting period covered by the financial statements delivered pursuant to Schedule 5.1 of the Credit Agreement.
3. Such review has not disclosed the existence on and as of the date hereof, and each of the undersigned does not have knowledge of the existence as of the date hereof, of any event or condition that constitutes a Default or Event of Default, except for such conditions or events listed on Schedule 2 attached hereto, specifying the nature and period of existence thereof and what actions the Loan Parties and their respective Subsidiaries have taken, are taking, or propose to take with respect thereto.
4. The representations and warranties of the Loan Parties and their respective Subsidiaries set forth in the Credit Agreement and the other Loan Documents are true and correct in all material respects on and as of the date hereof (except to the extent they relate to a specified date), except as set forth on Schedule 3 attached hereto.
5. Borrowers and their respective Subsidiaries are in compliance with the applicable covenants contained in Section 7 of the Credit Agreement as demonstrated on Schedule 4 hereof.
IN WITNESS WHEREOF, this Compliance Certificate is executed by the undersigned this day of , .
BUMBLE BEE FOODS, LLC, a Delaware limited liability company, as U.S. Borrower | ||
By: |
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Name: |
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Title: |
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3231021 NOVA SCOTIA COMPANY, a Nova Scotia unlimited liability company, as Canadian Borrower | ||
By: |
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Name: |
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Title: |
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SCHEDULE 1
Financial Information
SCHEDULE 2
Default or Event of Default
SCHEDULE 3
Representations And Warranties
SCHEDULE 4
Financial Covenants
1. | Fixed Charge Coverage Ratio. |
a. | (i) | Borrower’s Excess Availability was at all times during the prior month greater than $ . | ||
(ii) | The aggregate amount of Net Cash Proceeds received by any Loan Party in connection with the issuance of Indebtedness (other than Permitted Indebtedness) or Stock by any Loan Party or their respective Subsidiaries after the Closing Date is $ . | |||
(iii) | The amount in Section 1.a.(i) above [is/is not] greater than the sum of (A) $35,000,000 plus (B) the amount in Section 1.a.(ii) above. | |||
b. | [The Company’s Fixed Charge Coverage Ratio, measured on a month-end basis, for the month period ending , is :1.00, which ratio [is/is not] greater than or equal to the ratio set forth in Section 7 of the Credit Agreement for the corresponding period.]1 |
1 | Include to the extent that the Fixed Charge Coverage Ratio is tested pursuant to the provisions of Section 7 of the Credit Agreement. |
EXHIBIT I-1
FORM OF INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT is dated as of , 2008, and entered into by and between XXXXX FARGO FOOTHILL, LLC a Delaware limited liability company (“WFF”), in its capacity as United States administrative agent under the Revolver Loan Documents (as defined below), including its successors and assigns in such capacity from time to time (“Revolver Agent”), and WFF, in its capacity as administrative agent under the Term Loan Documents (as defined below), including its successors and assigns in such capacity from time to time (“Term Loan Agent”).
RECITALS
Revolver Agent, XXXXX FARGO FOOTHILL CANADA ULC, a Nova Scotia unlimited liability company, as the arranger and Canadian administrative agent for the lenders (in such capacity, together with its successors and assigns in such capacity, “Revolver Canadian Agent”; and together with Revolver Agent, the “Revolver Administrative Agents”), 3231021 NOVA SCOTIA COMPANY, a Nova Scotia unlimited company (“3231021”), and BUMBLE BEE FOODS, LLC, a Delaware limited liability company (“U.S. Borrower”), and the lenders party thereto have entered into that certain Senior Revolving Credit Agreement dated as of the date hereof providing for a revolving credit facility (the “Revolver Credit Agreement”);
X.X. Xxxxxxxx, 0000000, the lenders party thereto, and Term Loan Agent have entered into that certain Senior Term Loan Credit Agreement dated as of the date hereof providing for a term loan facility (the “Term Loan Credit Agreement”);
The obligations of (i) U.S. Borrower and Canadian Borrower (as defined in the Revolver Credit Agreement) under the Revolver Credit Agreement, and (ii) each Guarantor under any Revolver Guaranty are to be secured by liens on substantially all the assets of U.S. Borrower, Canadian Borrower, and the Guarantors;
The obligations of (i) U.S. Borrower under the Term Loan Credit Agreement, and (ii) 3231021 and each other Guarantor under any Term Loan Guaranty are to be secured by liens on substantially all the assets of U.S. Borrower and the Guarantors;
The Revolver Loan Documents and the Term Loan Documents provide, among other things, that the parties thereto shall set forth in this Agreement their respective rights and remedies with respect to the Collateral and certain other matters; and
Revolver Agent and Term Loan Agent have agreed to the intercreditor and other provisions set forth in this Agreement.
AGREEMENT
In consideration of the foregoing, the mutual covenants and obligations herein set forth and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
SECTION 1. Definitions.
1.1. Defined Terms. As used in the Agreement, the following terms shall have the following meanings:
“Adequate Protection” means the granting of additional Liens, replacement Liens, cash payments or any other court ordered charge over any of a Grantor’s property or assets in order to preserve or substitute value where pre-existing security is diminished by the granting of prior ranking charges to secure Revolver DIP Financing, Term Loan DIP Financing (each as defined below), court ordered administrative or directors’ and officers’ charges or where pre-existing security is otherwise diminished.
“Agreement” means this Intercreditor Agreement.
“Bank Product Agreements” means the “Bank Product Agreements,” as that term is defined in the Revolver Credit Agreement (as in effect on the date hereof).
“Bank Product Obligations” means the “Bank Product Obligations,” as that term is defined in the Revolver Credit Agreement (as in effect on the date hereof).
“Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy,” as now and hereafter in effect, or any successor statute.
“Bankruptcy Law” means (i) the BIA, (ii) the CCAA, (iii) the Bankruptcy Code, (iv) any other federal, state, or foreign law for the relief of debtors, and (v) any other similar statute or law, in each case as applicable and as now and hereafter in effect, or any successor statute.
“BIA” means the Bankruptcy and Insolvency Act (Canada), as now and hereafter in effect, or any successor statute.
“Borrowers” means, collectively, U.S. Borrower and Canadian Borrower.
“Business Day” means any day other than a Saturday, Sunday, or day on which banks in New York City, New York are authorized or required by law to close.
“Canadian Borrower” has the meaning set forth in the Revolver Credit Agreement.
“Canadian Revolver Availability” means, at any time, the aggregate amount of the revolving loans, letter of credit accommodations and other financial accommodations available to the Canadian Borrower from the Revolver Lenders based on the applicable
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percentages (as in effect on the date hereof and as amended from time to time, to the extent that the aggregate effect of all such amendments to such percentages, taken together with the aggregate effect of all such amendments to the following terms, is not to increase the amount of the Canadian Revolver Availability by more than 5% in excess of the amount of the Canadian Revolver Availability as in effect on the date hereof) of Eligible Accounts, Eligible In-Transit Inventory and Eligible Landed Inventory (as such terms are defined in the Revolver Credit Agreement as in effect on the date hereof and as such terms may be amended from time to time, to the extent that the aggregate effect of all such amendments, taken together with the aggregate effect of all such amendments to the preceding percentages, is not to increase the amount of the Canadian Revolver Availability by more than 5% in excess of the amount of the Canadian Revolver Availability as in effect on the date hereof) of the Canadian Borrower, determined without regard to any revolving loans, letter of credit accommodations or other financial accommodations then outstanding. Accordingly, the term “Canadian Revolver Availability” is used herein to mean the aggregate amount of revolving loans, letter of credit accommodations and other financial accommodations available to the Canadian Borrower without any reduction for the amount of revolving loans, letter of credit accommodations and other financial accommodations outstanding.
“Canadian Revolver Cap” means, on any date of determination, the sum of (a) the result of (i) the product of (A) the lesser of (1) C$75,000,000, which amount represents the Maximum Canadian Revolver Amount on the date of this Agreement and (2) the Canadian Revolver Availability on such date, multiplied by (B) 115% minus (ii) the amount of all payments of Revolver Obligations under the Revolver Credit Agreement that result in a permanent reduction of the Canadian Revolver Commitments under the Revolver Credit Agreement (other than payments of such Revolver Obligations in connection with a Refinancing thereof) plus (b) the portion of the aggregate outstanding principal amount of revolving loans and letter of credit accommodations made or issued to the Canadian Borrower under the Revolver Credit Agreement, but that are not made or issued intentionally or with actual knowledge that such revolving loans and letter of credit accommodations cause the aggregate outstanding principal amount of revolving loans, letter of credit accommodations and other financial accommodations made or issued to the Canadian Borrower to exceed the Canadian Revolver Availability, calculated at the time made or issued.
“Canadian Revolver Commitments” means the “Canadian Revolver Commitments,” as that term is defined in the Revolver Credit Agreement (as in effect on the date of this Agreement).
“CCAA” means the Companies’ Creditors Arrangement Act, as now and hereafter in effect, or any successor statute.
“Claimholders” means Revolver Claimholders and Term Loan Claimholders.
“Collateral” means all of the assets and property of any Grantor, whether real, personal or mixed, constituting Revolver Collateral or Term Loan Collateral.
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“Discharge of Revolver Obligations” means, except to the extent otherwise expressly provided in Section 5.5:
(a) payment in full in cash of the Revolver Obligations (other than outstanding Letters of Credit and Bank Product Obligations);
(b) termination or expiration of all commitments, if any, to extend credit that would constitute Revolver Obligations; and
(c) termination or cash collateralization (in an amount and in the manner required by the Revolver Credit Agreement (as such cash collateralization requirements are in effect on the date hereof)) of all outstanding Letters of Credit and all Bank Product Obligations (in an amount and in the manner required by the Revolver Credit Agreement (as such cash collateralization requirements are in effect on the date hereof)).
“Discharge of Revolver Priority Obligations” means, except to the extent otherwise expressly provided in Section 5.5:
(a) payment in full in cash of the Revolver Priority Obligations (other than outstanding Letters of Credit and Bank Product Obligations);
(b) termination or expiration of all commitments, if any, to extend credit that would constitute Revolver Priority Obligations; and
(c) termination or cash collateralization (in an amount and in the manner required by the Revolver Credit Agreement (as such cash collateralization requirements are in effect on the date hereof)) of all outstanding Letters of Credit and all Bank Product Obligations (in an amount and in the manner required by the Revolver Credit Agreement (as such cash collateralization requirements are in effect on the date hereof)).
“Discharge of Term Loan Obligations” means, except to the extent otherwise expressly provided in Section 5.5:
(a) payment in full in cash of the Term Loan Obligations; and
(b) termination or expiration of all commitments, if any, to extend credit that would constitute Term Loan Obligations.
“Discharge of Term Loan Priority Obligations” means, except to the extent otherwise expressly provided in Section 5.5:
(a) payment in full in cash of the Term Loan Priority Obligations; and
(b) termination or expiration of all commitments, if any, to extend credit that would constitute Term Loan Priority Obligations.
“Disposition” or “Dispose” means the sale, assignment, transfer, license, lease (as lessor), or other disposition (including any sale and leaseback transaction) of any property by any person (or the granting of any option or other right to do any of the foregoing).
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“Early Payment Charges” shall mean all fees, premiums, penalties or other charges, if any, payable to any Revolver Claimholder or any Term Loan Claimholder as liquidated damages on account of the prepayment of any Revolver Obligations or Term Loan Obligations, as the case may be, or the termination of any commitments to extend credit that would constitute. Revolver Obligations under the Revolver Credit Agreement, but excluding any LIBOR breakage amounts owed as a result of payment of any LIBOR Loan prior to the last day of the applicable interest period.
“Excess Revolver Obligations” means the sum of (a) the portion of the principal amount of the loans (including any Intentional Overadvances and any Protective Advances) outstanding under the Revolver Loan Documents, the undrawn amount of all outstanding Letters of Credit, and the outstanding amount of the Bank Product Obligations that is in excess of the Revolver Cap, plus (b) the portion of interest and fees on account of such portion of the loans, Letters of Credit, and Bank Product Obligations described in clause (a) of this definition.
“Excess Term Loan Obligations” means the sum of (a) the portion of the principal amount of the loans outstanding under the Term Loan Documents in excess of the Term Loan Cap, plus (b) the portion of interest and fees on account of such portion of the loans described in clause (a) of this definition.
“Exercise any Secured Creditor Remedies” or “Exercise of Secured Creditor Remedies” means (a) the taking of any action to enforce any Lien in respect of the Collateral, including the institution of any enforcement or foreclosure proceedings in respect of the Collateral, the noticing of any public or private sale or other disposition pursuant to Article 9 of the UCC or the PPSA in respect of the Collateral or any diligently pursued in good faith attempt to vacate or obtain relief from a stay or other injunction restricting any other action described in this definition, (b) the exercise of any right or remedy provided to a secured creditor under the Revolver Loan Documents or the Term Loan Documents (including, in either case, any delivery of any notice to otherwise seek to obtain payment directly from any account debtor of any Grantor or the taking of any action or the exercise of any right or remedy in respect of the setoff or recoupment against the Collateral or proceeds of Collateral), under applicable law, at equity, in an Insolvency Proceeding or otherwise, including the acceptance of Collateral in full or partial satisfaction of a Lien, (c) the sale, assignment, transfer, lease, license, or other Disposition of all or any portion of the Collateral, by private or public sale or any other means, (d) the solicitation of bids from third parties to conduct the liquidation of all or any portion of Collateral to the extent undertaken and being diligently pursued in good faith to consummate the Disposition of such Collateral within a commercially reasonable time, (e) the engagement or retention of sales brokers, marketing agents, investment bankers, accountants, appraisers, auctioneers, or other third parties for the purposes of valuing, marketing, or Disposing of, all or any portion of the Collateral to the extent undertaken and being diligently pursued in good faith to consummate the Disposition of such Collateral within a commercially reasonable time, (f) the exercise of any other enforcement right relating to the Collateral (including the exercise of any voting rights relating to any capital stock composing a portion of the Collateral) whether under the Revolver Loan Documents, the Term Loan Documents, under applicable law of any jurisdiction, in equity, in an Insolvency Proceeding, or otherwise, or (h) the pursuit of Revolver Default Dispositions or Term Loan Default Dispositions relative to all or any portion of the Collateral to the extent undertaken and being diligently pursued in good faith to consummate the Disposition of such Collateral within a commercially reasonable time.
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“Governmental Authority” means the government of the United States of America, Canada or any other nation, any political subdivision thereof, whether state, provincial or local, and any agency, authority, instrumentality, regulatory body, court, central bank, or other entity exercising executive, legislative, judicial, taxing, regulatory, or administrative powers or functions of or pertaining to government.
“Grantors” means U.S. Borrower, Canadian Borrower, and each of the Guarantors, and each other person that may from time to time execute and deliver a Revolver Collateral Document or a Term Loan Collateral Document as a “debtor,” “grantor,” or “pledgor” (or the equivalent thereof).
“Guarantors” means (a) each “Guarantor” as defined in the Revolver Credit Agreement and (b) each “Guarantor” as defined in the Term Loan Credit Agreement, and “Guarantor” means any one of them.
“Insolvency Proceeding” means:
(a) any voluntary or involuntary case or proceeding under any Bankruptcy Law with respect to any Grantor;
(b) any filing under the BIA of a notice of intention to make a proposal, or a proposal is made, under the BIA;
(c) any other voluntary or involuntary insolvency or bankruptcy case or proceeding, or any receivership, interim receivership, liquidation or other similar case or proceeding with respect to any Grantor or with respect to a material portion of its assets;
(d) any liquidation, dissolution, or winding up of any Grantor whether voluntary or involuntary and whether or not involving insolvency or bankruptcy; or
(e) any assignment for the general benefit of creditors or any other marshaling of assets and liabilities of any Grantor.
“Intentional Overadvances” shall mean the aggregate outstanding principal amount of all revolving loans, letter of credit accommodations and other financial accommodations that are made or issued pursuant to the Revolver Credit Agreement intentionally or with actual knowledge that such revolving loans, letter of credit accommodations or other financial accommodations cause the aggregate outstanding principal amount of all revolving loans, letter of credit accommodations and other financial accommodations made or issued pursuant to the Revolver Credit Agreement to exceed the Canadian Revolver Availability or the U.S. Revolver Availability.
“IP Collateral” means any Term Loan Priority Collateral consisting of any Intellectual Property (as defined in any Revolver Collateral Document or any Term Loan Collateral Document).
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“Letters of Credit” means the “Letters of Credit,” as that term is defined in the Revolver Credit Agreement.
“Letter of Credit Usage” means the “Letter of Credit Usage,” as that term is defined in the Revolver Credit Agreement.
“Lien” means any lien (statutory or otherwise), mortgage, deed of trust, pledge, hypothecation, assignment, security interest, charge, or encumbrance of any kind (including any agreement to give any of the foregoing, deposit arrangement, easement, encumbrance or other security arrangement or any other preference, priority or preferential arrangement of any kind or nature whatsoever, any conditional sale contract or other title retention agreement, and any lease in the nature thereof) and any option, trust, or other preferential arrangement or the interest of a lessor under a lease that is require to be capitalized for financial reporting purposes in accordance with GAAP, and any synthetic or other financing lease having the practical effect of any of the foregoing.
“person” shall mean any natural person, corporation, trust, business trust, joint venture, joint stock company, association, company, limited liability company, partnership, Governmental Authority, or other entity.
“Pledged Collateral” has the meaning set forth in Section 5.4(a).
“PPSA” means the Personal Property Security Act (Ontario) or the Personal Property Security Act of any province to which relevant property is subject, or any other applicable federal or provincial statute (including the Civil Code of Quebec) pertaining to the granting, perfecting, priority or ranking of security interests, liens, hypothecs or personal property, and any successor statutes, together with any regulations thereunder, in each case as in effect from time to time.
“Protective Advance” means a “Protective Advance,” as that term is defined in the Revolver Credit Agreement (as in effect on the date hereof) or any similar term in any Refinancing thereof
“Refinance” means, in respect of any indebtedness, to refinance, extend, renew, defease, supplement, restructure, replace, refund or repay, or to issue other indebtedness in exchange or replacement for such indebtedness, in whole or in part, whether with the same or different lenders, arrangers and/or agents. “Refinanced” and “Refinancing” shall have correlative meanings.
“Revolver Administrative Agents” has the meaning set forth in the recitals to this Agreement.
“Revolver Agent” has the meaning set forth in the preamble to this Agreement.
“Revolver Availability” means the Canadian Revolver Availability and/or the U.S. Revolver Availability, as the context may require.
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“Revolver Cap” means an amount equal to the sum of the Canadian Revolver Cap and the U.S. Revolver Cap. For purposes of clarification, the “Revolver Cap” is an overall cap and is not intended to impose limitations on changes in the allocations between the Canadian Borrower and the U.S. Borrower or the allocations between Dollar and Canadian Dollar denominations, in each case, so long as they fit within the overall Revolver Cap.
“Revolver Cash Collateral” has the meaning set forth in Section 6.2.
“Revolver Claimholders” means, at any relevant time, the holders of Revolver Obligations at that time, including Revolver Agent, the Revolver Administrative Agents, and the Revolver Lenders.
“Revolver Collateral” means all of the assets and property of any Grantor, whether real, personal or mixed, with respect to which a consensual Lien is granted as security for any Revolver Obligations.
“Revolver Collateral Documents” means the Security Agreement (as defined in the Revolver Credit Agreement), the Canadian Security Documents (as defined in the Revolver Credit Agreement), and any other agreement, document, or instrument pursuant to which a Lien is granted securing any Revolver Obligation or under which rights or remedies with respect to such Liens are governed.
“Revolver Credit Agreement” has the meaning set forth in the recitals to this Agreement.
“Revolver Default” means any “Event of Default”, as such term is defined in any Revolver Loan Document.
“Revolver Default Disposition” has the meaning set forth in Section 5.1(a)(iv).
“Revolver DIP Financing” has the meaning set forth in Section 6.2.
“Revolver Guaranty” means each guaranty made by any Guarantor in favor of Revolver Agent.
“Revolver Lenders” means the “Lenders” as defined in the Revolver Credit Agreement.
“Revolver Loan Documents” means the Revolver Collateral Documents, the Revolver Credit Agreement, each Revolver Guaranty, the Revolver Mortgages, and each of the other Loan Documents (as defined in the Revolver Credit Agreement).
“Revolver Mortgages” means each mortgage, hypothec, deed of trust, and other document or instrument under which any Lien on real property owned or leased by any Grantor is granted to secure any Revolver Obligations or under which rights or remedies with respect to any such Liens are governed.
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“Revolver Obligations” means all obligations and all amounts owing, due, or secured under the terms of the Revolver Credit Agreement or any other Revolver Loan Document, whether now existing or arising hereafter, including all principal, premium, interest, fees, attorneys fees, costs, charges, expenses, reimbursement obligations, obligations to post cash collateral in respect of Letters of Credit or Bank Product Obligations or indemnities in respect thereof, any other indemnities or guarantees, and all other amounts payable under or secured by any Revolver Loan Document (including, in each case, all amounts accruing on or after the commencement of any Insolvency Proceeding relating to any Grantor, or that would have accrued or become due under the terms of the Revolver Loan Documents but for the effect of the Insolvency Proceeding and irrespective of whether a claim for all or any portion of such amounts is allowable or allowed in such Insolvency Proceeding).
“Revolver Priority Collateral” means all of the types and items of Revolver Collateral described or identified on
Exhibit A attached hereto, whether now owned or hereafter acquired or existing and wherever located.
“Revolver Priority Obligations” means all Revolver Obligations exclusive of the Excess Revolver Obligations, which Excess Revolver Obligations shall be excluded from (and shall not constitute) Revolver Priority Obligations.
“Revolver Purchase Notice” has the meaning set forth in Section 5.6(a).
“Revolver Recovery” has the meaning set forth in Section 6.8.
“Revolver Triggering Event” means (a) the acceleration of any Teem Loan Priority Obligations, (b) Term Loan Agent’s Exercise of Secured Creditor Remedies with respect to all or a material portion of the Term Loan Priority Collateral, (c) the occurrence of a Revolver Default as a result of a failure to make payment of any Revolver Priority Obligation when due under the terms of the Revolver Loan Documents, or (d) the commencement of an Insolvency Proceeding with respect to any Grantor.
“Subsidiary” of a person means a corporation, partnership, limited liability company, or other entity in which that person directly or indirectly owns or controls the shares of capital stock having ordinary voting power to elect a majority of the board of directors (or appoint other comparable managers) of such corporation, partnership, limited liability company, or other entity.
“Term Loan Agent” has the meaning set forth in the preamble to this Agreement.
“Term Loan Cap” means the result of (a) $168,000,000, minus (b) the aggregate amount of all payments of the principal of the Term Loan Obligations under the Term Loan Credit Agreement (other than payments of such Term Loan Obligations in connection with a Refinancing thereof).
“Term Loan Cash Collateral” has the meaning set forth in Section 6.2.
“Term Loan Claimholders” means, at any relevant time, the holders of Term Loan Obligations at that time, including Term Loan Lenders and Term Loan Agent.
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“Term Loan Collateral” means all of the assets and property of any Grantor, whether real, personal, or mixed, with respect to which a consensual Lien is granted as security for any Term Loan Obligations.
“Term Loan Collateral Documents” means the Security Agreement (as defined in the Term Loan Credit Agreement), the Canadian Security Documents (as defined in the Term Loan Credit Agreement), and any other agreement, document, or instrument pursuant to which a Lien is granted securing any Term Loan Obligations or under which rights or remedies with respect to such Liens are governed.
“Term Loan Credit Agreement” has the meaning set forth in the recitals to this Agreement.
“Term Loan Default” means any “Event of Default”, as such term is defined in any Term Loan Document.
“Term Loan Default Disposition” has the meaning set forth in Section 5.1(b)(iv).
“Term Loan DIP Financing” has the meaning set forth in Section 6.2.
“Term Loan Guaranty” means each guaranty made by any Guarantor in favor of Term Loan Agent.
“Term Loan Lenders” means the “Lenders” as defined in the Term Loan Credit Agreement.
“Term Loan Documents” means the Term Loan Collateral Documents, the Term Loan Credit Agreement, each Term Loan Guaranty, the Term Loan Mortgages, and each of the other Loan Documents (as defined in the Term Loan Credit Agreement).
“Term Loan Mortgages” means each mortgage, deed of trust, hypothec, and any other document or instrument under which any Lien on real property owned or leased by any Grantor is granted to secure any Term Loan Obligations or under which rights or remedies with respect to any such Liens are governed.
“Term Loan Obligations” means all obligations and all amounts owing, due, or secured under the terms of the Term Loan Credit Agreement or any other Term Loan Document, whether now existing or arising hereafter, including all principal, premium, interest, fees, attorneys fees, costs, charges, expenses, reimbursement obligations, indemnities, guarantees, and all other amounts payable under or secured by any Term Loan Document (including, in each case, all amounts accruing on or after the commencement of any Insolvency Proceeding relating to any Grantor, or that would have accrued or become due under the terms of the Term Loan Documents but for the effect of the Insolvency Proceeding and irrespective of whether a claim for all or any portion of such amounts is allowable or allowed in such Insolvency Proceeding).
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“Term Loan Priority Collateral” means all Term Loan Collateral, whether now owned or hereafter acquired or existing and wherever located, other than Revolver Priority Collateral.
“Term Loan Priority Obligations” means all Term Loan Obligations exclusive of the Excess Term Loan Obligations, which Excess Term Loan Obligations shall be excluded from (and shall not constitute) Term Loan Priority Obligations.
“Term Loan Purchase Notice” has the meaning set forth in Section 5.6(b).
“Term Loan Recovery” has the meaning set forth in Section 6.8.
“Term Loan Triggering Event” means (i) the acceleration of any Revolver Priority Obligations, (ii) Revolver Agent’s Exercise of Secured Creditor Remedies with respect to all or a material portion of the Revolver Priority Collateral, (iii) the occurrence of a Term Loan Default as a result of a failure to make payment of any Term Loan Priority Obligation when due under the terms of the Term Loan Documents, or (iv) the commencement of an Insolvency Proceeding with respect to any Grantor.
“Third Party Purchaser” has the meaning ascribed to such term in Section 3.8(a).
“UCC” means the Uniform Commercial Code (or any similar or equivalent legislation) as in effect in any applicable jurisdiction.
“U.S. Borrower” has the meaning set forth in the recitals to this Agreement.
“U.S. Revolver Availability” means, at any time, the aggregate amount of the revolving loans, letter of credit accommodations and other financial accommodations available to the U.S. Borrower from the Revolver Lenders based on the applicable percentages (as in effect on the date hereof and as amended from time to time, to the extent that the aggregate effect of all such amendments to such percentages, taken together with the aggregate effect of all such amendments to the following terms, is not to increase the amount of the U.S. Revolver Availability by more than 5% in excess of the amount of the U.S. Revolver Availability as in effect on the date hereof) of Eligible Accounts, Eligible In-Transit Inventory and Eligible Landed Inventory (as such terms are defined in the Revolver Credit Agreement as in effect on the date hereof and as such terms may be amended from time to time, to the extent that the aggregate effect of all such amendments, taken together with the aggregate effect of all such amendments to the preceding percentages, is not to increase the amount of the U.S. Revolver Availability by more than 5% in excess of the amount of the U.S. Revolver Availability as in effect on the date hereof) of the U.S. Borrower, determined without regard to any revolving loans, letter of credit accommodations or other financial accommodations then outstanding. Accordingly, the term “U.S. Revolver Availability” is used herein to mean the aggregate amount of revolving loans, letter of credit accommodations and other financial accommodations available to the U.S. Borrower without any reduction for the amount of revolving loans, letter of credit accommodations and other financial accommodations outstanding.
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“U.S. Revolver Cap” means, on any date of determination, the sum of (a) the result of (i) the product of (A) the lesser of (1) $150,000,000, which amount represents the Maximum U.S. Revolver Amount on the date of this Agreement and (2) the U.S. Revolver Availability on such date, multiplied by (B) 115%, minus (ii) the amount of all payments of Revolver Obligations under the Revolver Credit Agreement that result in a permanent reduction of the U.S. Revolver Commitments under the Revolver Credit Agreement (other than payments of such Revolver Obligations in connection with a Refinancing thereof) plus (b) the portion of the aggregate outstanding principal amount of revolving loans and letter of credit accommodations made or issued to the U.S. Borrower under the Revolver Credit Agreement, but that are not made or issued intentionally or with actual knowledge that such revolving loans and letter of credit accommodations cause the aggregate outstanding principal amount of revolving loans, letter of credit accommodations and other financial accommodations made or issued to the U.S. Borrower to exceed the U.S. Revolver Availability, calculated at the time made or issued.
“U.S. Revolver Commitments” means the “U.S. Revolver Commitments,” as that term is defined in the Revolver Credit Agreement (as in effect on the date of this Agreement).
1.2. Construction. The definitions of terms in this Agreement shall apply equally to the singular and plural foul’s of the xxxxx defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine, and neuter forms. The words “include,” “includes,” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” The term “or” shall be construed to have, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.” Any term used in this Agreement and not defined in this Agreement shall have the meaning set forth in the Revolver Credit Agreement (as in effect on the date hereof). Unless the context requires otherwise:
(a) except as otherwise provided herein, any definition of or reference to any agreement, instrument, or other document herein shall be construed as referring to such agreement, instrument, or other document as from time to time amended, restated, supplemented, modified, renewed, extended, Refinanced, refunded, or replaced;
(b) any reference to any agreement, instrument, or other document herein “as in effect on the date hereof’ shall be construed as referring to such agreement, instrument, or other document without giving effect to any amendment, restatement, supplement, modification, or Refinance after the date hereof;
(c) any definition of or reference to Revolver Obligations or the Term Loan Obligations herein shall be construed as referring to the Revolver Obligations or the Term Loan Obligations (as applicable) as from time to time amended, restated, supplemented, modified, renewed, extended, Refinanced, refunded, or replaced;
(d) any reference herein to any person shall be construed to include such person’s successors and assigns;
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(e) the words “herein,” “hereof,” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof;
(f) all references herein to Sections shall be construed to refer to Sections of this Agreement; and
(g) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts, and contract rights.
SECTION 2. Lien Priorities.
2.1. Relative Priorities. Notwithstanding the date, time, method, manner, or order of grant, attachment, execution, delivery, registration (to the extent registration is required), crystallization, perfection or enforcement of any Liens securing the Term Loan Obligations granted with respect to the Collateral or of any Liens securing the Revolver Obligations granted with respect to the Collateral and notwithstanding any contrary provision of the UCC, the PPSA or any other applicable law or the Term Loan Documents or the Revolver Loan Documents or any defect or deficiencies in, the Liens securing the Term Loan Obligations or the Revolver Obligations, or any other circumstance whatsoever, Term Loan Agent and Revolver Agent each hereby agree that:
(a)(i) any Lien with respect to the Revolver Priority Collateral securing any Revolver Priority Obligations now or hereafter held by or on behalf of, or created for the benefit of, Revolver Agent or any Revolver Claimholders or any agent or trustee therefor shall be senior in all respects and prior to any Lien with respect to the Revolver Priority Collateral securing (x) any Term Loan Obligations or (y) any Excess Revolver Obligations, and (ii) any Lien with respect to the Revolver Priority Collateral securing (y) any Term Loan Obligations now or hereafter held by or on behalf of, or created for the benefit of, Term Loan Agent, any Term Loan Claimholders or any agent or trustee therefor or (z) any Excess Revolver Obligations now or hereafter held by or on behalf of, or created for the benefit of, Revolver Agent, any Revolver Claimholders or any agent or trustee therefor, in each case, shall be junior and subordinate in all respects to all Liens with respect to the Revolver Priority Collateral securing any Revolver Priority Obligations.
(b)(i) any Lien with respect to the Term Loan Priority Collateral securing any Term Loan Priority Obligations now or hereafter held by or on behalf of, or created for the benefit of, Term Loan Agent or any Term Loan Claimholders or any agent or trustee therefor shall be senior in all respects and prior to any Lien with respect to the Term Loan Priority Collateral securing (x) any Revolver Obligations or (y) any Excess Term Loan Obligations, and (ii) any Lien with respect to the Term Loan Priority Collateral securing (y) any Revolver Obligations now or hereafter held by or on behalf of, or created for the benefit of, Revolver Agent, any Revolver Claimholders or any agent or trustee therefor or (z) any Excess Term Loan Obligations now or hereafter held by or on behalf of, or created for the benefit of, Term Loan Agent, any Term Loan Claimholders or any agent or trustee therefor, in each case, shall be junior and subordinate in all respects to all Liens with respect to the Term Loan Priority Collateral securing any Term Loan Priority Obligations.
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(c)(i) any Lien with respect to the Revolver Priority Collateral securing any Term Loan Priority Obligations now or hereafter held by or on behalf of, or created for the benefit of, Term Loan Agent or any Term Loan Claimholders or any agent or trustee therefor shall be senior in all respects and prior to any Lien with respect to the Revolver Priority Collateral securing (x) any Excess Term Loan Obligations or (y) any Excess Revolver Obligations, and (ii) any Lien with respect to the Revolver Priority Collateral securing (y) any Excess Revolver Obligations now or hereafter held by or on behalf of, or created for the benefit of, Revolver Agent, any Revolver Claimholders or any agent or trustee therefor or (z) any Excess Term Loan Obligations now or hereafter held by or on behalf of, or created for the benefit of, Term Loan Agent, any Term Loan Claimholders or any agent or trustee therefor, in each case, shall be junior and subordinate in all respects to all Liens with respect to the Revolver Priority Collateral securing any Term Loan Priority Obligations.
(d)(i) any Lien with respect to the Term Loan Priority Collateral securing any Revolver Priority Obligations now or hereafter held by or on behalf of, or created for the benefit of, Revolver Agent or any Revolver Claimholders or any agent or trustee therefor shall be senior in all respects and prior to any Lien with respect to the Term Loan Priority Collateral securing (x) any Excess Revolver Obligations or (y) any Excess Term Loan Obligations, and (ii) any Lien with respect to the Term Loan Priority Collateral securing (y) any Excess Revolver Obligations now or hereafter held by or on behalf of, or created for the benefit of, Revolver Agent, any Revolver Claimholders or any agent or trustee therefor or (z) any Excess Term Loan Obligations now or hereafter held by or on behalf of, or created for the benefit of, Term Loan Agent, any Term Loan Claimholders or any agent or trustee therefor, in each case, shall be junior and subordinate in all respects to all Liens with respect to the Term Loan Priority Collateral securing any Revolver Priority Obligations.
(e)(i) any Lien with respect to the Revolver Priority Collateral securing any Excess Revolver Obligations now or hereafter held by or on behalf of, or created for the benefit of, Revolver Agent or any Revolver Claimholders or any agent or trustee therefor shall be senior in all respects and prior to any Lien with respect to the Revolver Priority Collateral securing any Excess Term Loan Obligations, and (ii) any Lien with respect to the Revolver Priority Collateral securing any Excess Term Loan Obligations now or hereafter held by or on behalf of, or created for the benefit of, Term Loan Agent, any Term Loan Claimholders or any agent or trustee therefor shall be junior and subordinate in all respects to all Liens with respect to the Revolver Priority Collateral securing any Excess Revolver Obligations.
(f)(i) any Lien with respect to the Term Loan Priority Collateral securing any Excess Term Loan Obligations now or hereafter held by or on behalf of, or created for the benefit of, Term Loan Agent or any Term Loan Claimholders or any agent or trustee therefor shall be senior in all respects and prior to any Lien with respect to the Term Loan Priority Collateral securing any Excess Revolver Obligations, and (ii) any Lien with respect to the Term Loan Priority Collateral securing any Excess Revolver Obligations now or hereafter held by or on behalf of, or created for the benefit of, Revolver Agent, any Revolver Claimholders or any agent or trustee therefor shall be junior and subordinate in all respects to all Liens with respect to the Term Loan Priority Collateral securing any Excess Term Loan Obligations.
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The priority and subordination provisions set forth in clauses (a) through (f) above with respect to the Liens on the Collateral securing all or any portion of the Revolver Obligations or the Term Loan Obligations are intended to be effective whether or not such Liens are subordinated to any Lien securing any other obligation of any Grantor or any other person (but only to the extent that such subordination is permitted pursuant to the terms of the Revolver Credit Agreement and the Term Loan Credit Agreement, or as contemplated in Section 6.2).
The foregoing and any other provision to the contrary contained in this Agreement notwithstanding, (i) except as expressly provided in this Agreement, Revolver Agent agrees not to contractually subordinate its Lien in any Collateral to the Lien of any other creditor of Grantors without the prior written consent of Term Loan Agent and (ii) except as expressly provided in this Agreement, Term Loan Agent agrees not to contractually subordinate its Lien in any Collateral to the Lien of any other creditor of Grantors without the prior written consent of Revolver Agent.
2.2. Prohibition on Contesting Liens. Each of Term Loan Agent, for itself and on behalf of each Term Loan Claimholder, and Revolver Agent, for itself and on behalf of each Revolver Claimholder, agrees that it will not (and hereby waives any right to), directly or indirectly, contest, or support any other person in contesting, in any proceeding (including any Insolvency Proceeding), the priority, validity, perfection or enforceability of a Lien held by or on behalf of any Revolver Claimholders in the Revolver Collateral or by or on behalf of any Term Loan Claimholders in the Term Loan Collateral, as the case may be, or the provisions of this Agreement; provided, however that nothing in this Agreement shall be construed to prevent or impair the rights of Revolver Agent, any Revolver Claimholder, Term Loan Agent, or any Term Loan Claimholder to enforce the terms of this Agreement, including the provisions of this Agreement relating to the priority of the Liens securing the Revolver Obligations as provided in Sections 2.1 and 3.
2.3. New Liens. So long as no Insolvency Proceeding has been commenced by or against any Grantor, the parties hereto agree that, unless either the Discharge of Revolver Obligations or the Discharge of Term Loan Obligations has occurred, no Grantor shall:
(a) grant any additional Liens on any asset to secure any Term Loan Obligation unless such Grantor gives Revolver Agent at least five (5) Business Days prior written notice thereof and unless such notice also offers to xxxxx x Xxxx on such asset to secure the Revolver Obligations concurrently with the grant of a Lien thereon in favor of Term Loan Agent; or
(b) grant any additional Liens on any asset to secure any Revolver Obligations unless such Grantor gives Term Loan Agent at least five (5) Business Days prior written notice thereof and unless such notice also offers to xxxxx x Xxxx on such asset to secure the Term Loan Obligations concurrently with the grant of a Lien thereon in favor of Revolver Agent.
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To the extent that the foregoing provisions are not complied with for any reason, without limiting any other rights and remedies available to Revolver Agent, Revolver Claimholders, Term Loan Agent, or Term Loan Claimholders, Revolver Agent, on behalf of Revolver Claimholders, and Term Loan Agent, on behalf of Term Loan Claimholders, agree that any amounts received by or distributed to any of them pursuant to or as a result of Liens granted in contravention of this Section 2.3 shall be subject to Section 4.2.
2.4. Similar Liens and Agreements. The parties hereto agree that it is their intention that the Revolver Collateral and the Term Loan Collateral be identical. In furtherance of the foregoing and of Section 9.8, the parties hereto agree, subject to the other provisions of this Agreement:
(a) upon request by Revolver Agent or Term Loan Agent, to cooperate in good faith (and to direct their counsel to cooperate in good faith) from time to time in order to determine the specific items included in the Revolver Collateral and the Term Loan Collateral and the steps taken or to be taken to perfect their respective Liens thereon and the identity of the respective parties obligated under the Revolver Loan Documents and the Term Loan Documents;
(b) that the Revolver Collateral Documents and Term Loan Collateral Documents and guarantees for the Revolver Obligations and the Term Loan Obligations, shall be in all material respects the same forms of documents; and
(c) upon request by Term Loan Agent after the Discharge of the Revolver Priority Obligations, Revolver Agent will provide written notice thereof to each Cash Management Bank (as such term is defined in the Revolver Loan Documents).
The foregoing to the contrary notwithstanding, it is understood by each of the parties that to the extent that Revolver Agent or Term Loan Agent obtains a Lien in an asset (of a type that is not included in the types of assets included in the Collateral as of the date hereof or which would not constitute Collateral without a grant of a security interest or lien separate from the Revolver Loan Documents or Term Loan Documents, as applicable, as in effect immediately prior to obtaining such Lien on such asset) which the other party to this Agreement is directed not to obtain by the requisite Revolver Lenders under the Revolver Credit Agreement or requisite Term Loan Lenders under the Term Loan Credit Agreement, as the case may be, after receiving prior written notice thereof in accordance with the provisions of Section 2.3, the Collateral securing the Revolver Loan Obligations and the Term Loan Obligations will not be identical, and the provisions of the documents, agreements and instruments evidencing such Liens also will not be substantively similar, and any such difference in the scope or extent of perfection with respect to the Collateral resulting therefrom are hereby expressly permitted by this Agreement.
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SECTION 3. Exercise of Remedies.
3.1. Standstill.
(a) Until the Discharge of Revolver Priority Obligations has occurred, whether or not any Insolvency Proceeding has been commenced by or against any Grantor, Term Loan Agent and Term Loan Claimholders:
(i) will not exercise or seek to exercise any rights or remedies with respect to any Revolver Priority Collateral (including any Exercise of Secured Creditor Remedies with respect to any Revolver Priority Collateral);
(ii) will not contest, protest, or object to any Exercise of Secured Creditor Remedies with respect to the Revolver Priority Collateral by Revolver Agent or any Revolver Claimholder and has no right to direct Revolver Agent to Exercise any Secured Creditor Remedies with respect to the Revolver Priority Collateral or take any other action under the Revolver Loan Documents; and
(iii) will not object to (and waive any and all claims with respect to) the forbearance by Revolver Agent or Revolver Claimholders from Exercising any Secured Creditor Remedies with respect to the Revolver Priority Collateral.
(b) Until the Discharge of Term Loan Priority Obligations has occurred, whether or not any Insolvency Proceeding has been commenced by or against any Grantor, Revolver Agent and Revolver Claimholders:
(i) will not exercise or seek to exercise any rights or remedies with respect to any Term Loan Priority Collateral (including any Exercise of Secured Creditor Remedies with respect to any Term Loan Priority Collateral);
(ii) will not contest, protest, or object to any Exercise of Secured Creditor Remedies with respect to the Term Loan Priority Collateral by Term Loan Agent or any Term Loan Claimholder and has no right to direct Term Loan Agent to Exercise any Secured Creditor Remedies with respect to the Term Loan Priority Collateral or take any other action under the Term Loan Documents; and
(iii) will not object to (and waive any and all claims with respect to) the forbearance by Term Loan Agent or Term Loan Claimholders from Exercising any Secured Creditor Remedies with respect to the Term Loan Priority Collateral.
3.2. Exclusive Enforcement Rights.
(a) Until the Discharge of Revolver Priority Obligations has occurred, whether or not any Insolvency Proceeding has been commenced by or against any Grantor, Revolver Agent and Revolver Claimholders shall have the exclusive right to Exercise any Secured Creditor Remedies with respect to the Revolver Priority Collateral without any consultation with or the consent of Term Loan Agent or any Term Loan Claimholder. In connection with any such Exercise of Secured Creditor Remedies with respect to the Revolver Priority Collateral, Revolver Agent and the Revolver Claimholders may enforce the provisions of the Revolver Loan Documents and exercise remedies thereunder, all in such order and in such manner as they may determine in the exercise of their sole discretion. Such exercise and enforcement shall include the rights of an agent appointed by them to Dispose of Revolver Priority Collateral, to incur expenses in connection with such Disposition, and to exercise all the rights and remedies of a secured creditor under applicable law.
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(b) Until the Discharge of Term Loan Priority Obligations has occurred, whether or not any Insolvency Proceeding has been commenced by or against any Grantor, Term Loan Agent and Term Loan Claimholders shall have the exclusive right to Exercise any Secured Creditor Remedies with respect to the Term Loan Priority Collateral without any consultation with or the consent of Revolver Agent or any Revolver Claimholder. In connection with any such Exercise of Secured Creditor Remedies with respect to the Teem Loan Priority Collateral, Term Loan Agent and the Term Loan Claimholders may enforce the provisions of the Term Loan Documents and exercise remedies thereunder, all in such order and in such manner as they may determine in the exercise of their sole discretion. Such exercise and enforcement shall include the rights of an agent appointed by them to Dispose of Term Loan Priority Collateral, to incur expenses in connection with such Disposition, and to exercise all the rights and remedies of a secured creditor under applicable law.
3.3. Permitted Actions.
(a) Anything to the contrary in this Section 3 notwithstanding, Term Loan Agent and any Term Loan Claimholder may:
(i) if an Insolvency Proceeding has been commenced by or against any Grantor, file a claim, proof of claim or statement of interest with respect to the Term Loan Obligations;
(ii) take any action (not adverse to the priority status of the Liens on the Revolver Priority Collateral securing the Revolver Priority Obligations, or the rights of Revolver Agent or any Revolver Claimholders to Exercise any Secured Creditor Remedies with respect to the Revolver Priority Collateral) in order to create, register, file, perfect or preserve its Lien in and to the Revolver Priority Collateral;
(iii) file any necessary responsive or defensive pleadings or appeal in opposition to any motion, claim, adversary proceeding, or other pleading made by any person objecting to or otherwise seeking the disallowance of the claims of Term Loan Claimholders or any disallowance of such claims, including any claims secured by the Revolver Priority Collateral, if any;
(iv) vote on any plan of reorganization, compromise, arrangement or proposal and make any filings and motions that are, in each case, in accordance with, the terms of this Agreement, with respect to the Term Loan Obligations and the Term Loan Collateral;
(v) join (but not exercise any control with respect to) any judicial foreclosure proceeding or other judicial lien enforcement proceeding with respect to the Revolver Priority Collateral initiated by Revolver Agent or any Revolver Claimholder to the extent that any such action could not reasonably be expected, in any material respect, to restrain, hinder, limit, delay for any material period or otherwise interfere with the Exercise of Secured Creditor Remedies by Revolver Agent with respect to the Revolver Priority Collateral (it being understood that neither Term Loan Agent nor any Term Loan Claimholder shall be entitled to receive any proceeds thereof unless otherwise expressly permitted herein); and
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(vi) exercise any remedies that would be available to an unsecured creditor (to the extent not prohibited by any other provision of this Agreement).
(b) Anything to the contrary in this Section 3 notwithstanding, Revolver Agent and any Revolver Claimholder may:
(i) if an Insolvency Proceeding has been commenced by or against any Grantor, file a claim, proof of claim or statement of interest with respect to the Revolver Obligations;
(ii) take any action (not adverse to the priority status of the Liens on the Term Loan Priority Collateral securing the Term Loan Priority Obligations, or the rights of Term Loan Agent or any Term Loan Claimholders to Exercise any Secured Creditor Remedies with respect to the Term Loan Priority Collateral) in order to create , register, file, perfect or preserve its Lien in and to the Term Loan Priority Collateral;
(iii) file any necessary responsive or defensive pleadings or appeal in opposition to any motion, claim, adversary proceeding, or other pleading made by any person objecting to or otherwise seeking the disallowance of the claims of Revolver Claimholders or any disallowance of such claims, including any claims secured by the Term Loan Priority Collateral, if any;
(iv) vote on any plan of reorganization, compromise, arrangement or proposal and make any filings and motions that are, in each case, in accordance with, the terms of this Agreement, with respect to the Revolver Obligations and the Revolver Collateral;
(v) join (but not exercise any control with respect to) any judicial foreclosure proceeding or other judicial lien enforcement proceeding with respect to the Term Loan Priority Collateral initiated by Term Loan Agent or any Term Loan Claimholder to the extent that any such action could not reasonably be expected, in any material respect, to restrain, hinder, limit, delay for any material period or otherwise interfere with the Exercise of Secured Creditor Remedies by Term Loan Agent with respect to the Term Loan Priority Collateral (it being understood that neither Revolver Agent nor any Revolver Claimholder shall be entitled to receive any proceeds thereof unless otherwise expressly permitted herein);
(vi) exercise any remedies that would be available to an unsecured creditor (to the extent not prohibited by any other provision of this Agreement); and
(vii) access and use the Term Loan Priority Collateral to the extent
provided in Section 3.8.
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3.4. Retention of Proceeds.
(a) Revolver Agent and Term Loan Agent each agrees that prior to the Discharge of Revolver Priority Obligations, Term Loan Claimholders will not be permitted to retain any proceeds of Revolver Priority Collateral in connection with any Exercise of Secured Creditor Remedies unless and until the Discharge of Revolver Priority Obligations has occurred, and any such proceeds received or retained in any other circumstance will be subject to Section 4.2.
(b) Revolver Agent and Term Loan Agent each agrees that prior to the Discharge of Term Loan Priority Obligations, Revolver Claimholders will not be permitted to retain any proceeds of Term Loan Priority Collateral in connection with any Exercise of Secured Creditor Remedies unless and until the Discharge of Term Loan Priority Obligations has occurred, and any such proceeds received or retained in any other circumstance will be subject to Section 4.2.
3.5. Non-Interference.
(a) Subject to Sections 3.1, 3.3, and 6.5, Term Loan Agent, for itself and on behalf of Term Loan Claimholders, hereby:
(i) agrees that, except as permitted pursuant to the terms of this Agreement, Term Loan Agent and Term Loan Claimholders will not take any action with respect to the Revolver Priority Collateral that would restrain, hinder, limit, delay, or otherwise interfere with any Exercise of Secured Creditor Remedies by Revolver Agent or any Revolver Claimholder with respect to the Revolver Priority Collateral, or that is otherwise prohibited hereunder, including any Disposition of Revolver Priority Collateral, whether by enforcement, foreclosure or otherwise;
(ii) subject to Section 3.7, until the Discharge of Revolver Priority Obligations, waives any and all rights it or any Term Loan Claimholder may have as a junior lien creditor with respect to the Revolver Priority Collateral or otherwise to object to the manner in which Revolver Agent or Revolver Claimholders seek to enforce or collect the Revolver Priority Obligations (except to the extent such enforcement or collection is in violation of the terms of this Agreement) or the Liens securing the Revolver Priority Obligations granted in any of the Revolver Priority Collateral, regardless of whether any action or failure to act by or on behalf of Revolver Agent or Revolver Claimholders is adverse to the interest of Term Loan Claimholders; and
(iii) acknowledges and agrees that no covenant, agreement or restriction contained in the Term Loan Collateral Documents or any other Term Loan Document (other than this Agreement) shall be deemed to restrict in any way the rights and remedies of Revolver Agent or Revolver Claimholders with respect to the Revolver Priority Collateral as set forth in this Agreement and the Revolver Loan Documents.
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(b) Subject to Sections 3.1, 3.3, and 6.5, Revolver Agent, for itself and on behalf of Revolver Claimholders, hereby:
(i) agrees that, except as permitted pursuant to the terms of this Agreement, Revolver Agent and Revolver Claimholders will not take any action with respect to the Term Loan Priority Collateral that would restrain, hinder, limit, delay, or otherwise interfere with any Exercise of Secured Creditor Remedies by Term Loan Agent or any Term Loan Claimholder with respect to the Term Loan Priority Collateral, or that is otherwise prohibited hereunder, including any Disposition of Term Loan Priority Collateral, whether by enforcement, foreclosure or otherwise;
(ii) subject to Section 3.7, until the Discharge of Term Loan Priority Obligations, waives any and all rights it or any Revolver Claimholder may have as a junior lien creditor with respect to the Term Loan Priority Collateral or otherwise to object to the manner in which Term Loan Agent or Term Loan Claimholders seek to enforce or collect the Term Loan Priority Obligations (except to the extent such enforcement or collection is in violation of the terms of this Agreement) or the Liens securing the Term Loan Priority Obligations granted in any of the Term Loan Priority Collateral, regardless of whether any action or failure to act by or on behalf of Term Loan Agent or Term Loan Claimholders is adverse to the interest of Revolver Claimholders; and
(iii) acknowledges and agrees that no covenant, agreement or restriction contained in the Revolver Collateral Documents or any other Revolver Loan Document (other than this Agreement) shall be deemed to restrict in any way the rights and remedies of the Term Loan Agent or the Term Loan Claimholders with respect to the Term Loan Priority Collateral as set forth in this Agreement and the Term Loan Documents.
3.6. Unsecured Creditor Remedies. Except as set forth in Sections 3.1, 3.5, and 6 any Term Loan Claimholder or any Revolver Claimholder may exercise rights and remedies as unsecured creditors against any Grantor in accordance with the terms of the Term’ Loan Documents or the Revolver Loan Documents to which such Term Loan Claimholder or Revolver Claimholder is party and applicable law; provided, however, that in the event that any Term Loan Claimholder or Revolver Claimholder becomes an execution creditor with a Lien or a judgment Lien creditor in respect of Collateral as a result of its enforcement of its rights as an unsecured creditor with respect to the Term Loan Obligations or the Revolver Obligations, such judgment Lien shall be subject to the terms of this Agreement for all purposes as the other Liens securing the Term Loan Obligations or the Revolver Obligations.
3.7. Commercially Reasonable Dispositions; Notice of Exercise. Revolver Agent agrees that any Exercise of Secured Creditor Remedies by Revolver Agent with respect to Collateral subject to Article 9 of the UCC shall be conducted by Revolver Agent in a commercially reasonable manner Term Loan Agent agrees that any Exercise of Secured Creditor Remedies by Term Loan Agent with respect to Collateral subject to Article 9 of the UCC shall be conducted by Term Loan Agent in a commercially reasonable manner. Revolver Agent shall provide reasonable prior notice to Term Loan Agent of its initial Exercise of Secured Creditor Remedies. Term Loan Agent shall provide reasonable prior notice to Revolver Agent of its initial Exercise of Secured Creditor Remedies.
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3.8. Access and Use of Teen Loan Priority Collateral.
(a) In the event that Term Loan Agent or any Term Loan Claimholder shall acquire control or possession of any of the Term Loan Priority Collateral or shall, through the exercise of remedies under the Term Loan Documents or otherwise, sell any of the Term Loan Priority Collateral to any third party (a “Third Party Purchaser”), Term Loan Agent or such Term Loan Claimholder shall permit Revolver Agent (or shall require as a condition of such sale to the Third Party Purchaser that the Third Party Purchaser agree to permit Revolver Agent), at its option and in accordance with applicable law: (i) to enter any of the premises of any Grantor constituting Term Loan Priority Collateral under such control or possession (or sold to a Third Party Purchaser) during normal business hours in order to inspect, remove or take any action with respect to the Revolver Priority Collateral or to enforce Revolver Agent’s rights with respect thereto, including, but not limited to, the examination and removal of Revolver Priority Collateral and the examination and duplication of any such Term Loan Priority Collateral under such control or possession (or sold to a Third Party Purchaser) consisting of books and records of any Grantor related to the Revolver Priority Collateral; (ii) to use the Term Loan Priority Collateral for the purpose of processing raw materials (to the extent consisting of fresh or frozen seafood or chicken products) or work-in-process into finished Inventory; (iii) to use any Term Loan Priority Collateral under such control or possession (or sold to a Third Party Purchaser) consisting of computers or other data processing equipment related to the storage or processing of records, documents or files pertaining to the Revolver Priority Collateral and use any Term Loan Priority Collateral under such control or possession (or sold to a Third Party Purchaser) consisting of other equipment to handle, deal with or dispose of any Revolver Priority Collateral pursuant to Revolver Agent’s rights as set forth in the Revolver Loan Documents, the UCC of any applicable jurisdiction, the PPSA and other applicable law, and (iv) to use any IP Collateral (to the extent not prohibited by the terms of such IP Collateral) to sell or otherwise Dispose of any Revolver Priority Collateral. Such use by Revolver Agent of the Term Loan Priority Collateral, including any IP Collateral, shall not be on an exclusive basis.
(b) Revolver Agent hereby acknowledges that, during the period that any Revolver Priority Collateral shall be under control or possession of Term Loan Agent or Term Loan Claimholders, Term Loan Agent and Term Loan Claimholders shall not be obligated to take any action to protect or to procure insurance with respect to such Collateral, it being understood that Term Loan Agent and Term Loan Claimholders shall have no responsibility for loss or damage to the Revolver Priority Collateral (other than as a result of the gross negligence or willful misconduct of the Term Loan Agent and/or the Term Loan Claimholders or their agents, as determined by a final non-appealable judgment of a court of competent jurisdiction) and that all risk of loss or damage to the Revolver Priority Collateral shall remain with the Revolver Agent; provided that to the extent insurance obtained by Term Loan Agent and/or Term Loan Claimholders provides coverage for risks relating to access to or use of Revolver Priority Collateral, Revolver Agent will be made an additional named insured thereunder.
(c) The rights of Revolver Agent set forth in this Section 3.8 with respect to any Term Loan Priority Collateral shall continue until the date one hundred and twenty (120) days after the date Revolver Agent receives written notice from Term Loan Agent that the Term Loan Agent or any Term Loan Claimholder has control or possession of such Term Loan Priority Collateral (except, that such one hundred and twenty (120) day period shall be reduced by the
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number of days, if any, that Revolver Agent has entered or used such Term Loan Priority Collateral as described in Section 3.8(a) or (b) above, to the extent prior to the date that Term Loan Agent has control or possession of such Term Loan Priority Collateral, or has sold such Term Loan Priority Collateral to a Third Party Purchaser); provided, that if Term Loan Agent has entered into an agreement for the sale of such Term Loan Priority Collateral in a bona fide arm’s length transaction with an unaffiliated person, the rights of Revolver Agent set forth in this Section 3.8 shall only continue (i) with respect to Term Loan Priority Collateral other than IP Collateral, until the later of (A) the date that is 60 days after the date the Term Loan Agent provides Revolver Agent with written notice thereof, together with a copy of the agreement for sale, as duly authorized, executed and delivered by the parties thereto and (B) the date that the proposed purchaser shall require as a condition of such sale that possession of such Term Loan Priority Collateral be given by Term Loan Agent to such purchaser and (ii) with respect to Term Loan Priority Collateral consisting of IP Collateral, until the later of (A) the date that is 90 days after the date the Term Loan Agent provides Revolver Agent with written notice thereof, together with a copy of the agreement for sale, as duly authorized, executed and delivered by the parties thereto and (ii) the date that the proposed purchaser shall require as a condition of such sale that possession of such Term Loan Priority Collateral be given by Term Loan Agent to such purchaser; provided, however, that (1) in no event shall the access and use rights of Revolver Agent exceed the one hundred and twenty (120) day period provided for above and (2) notwithstanding the foregoing, the access and use by Revolver Agent of any Collateral are subject to the provisions set forth in this Section 3.8. In connection with any such sale, Term Loan Agent shall use commercially reasonable efforts to cause such purchaser to not require as a condition of the sale that possession of such Term Loan Priority Collateral be given by Term Loan Agent to such purchaser prior to the end of the one hundred and twenty (120) day period provided for above or if such period is not acceptable to the purchaser, then the longest period equal to or greater than the sixty (60) day period or ninety (90) day period, as applicable, provided for above which may be acceptable (provided that such efforts by the Term Agent shall not be required if in the good faith determination of the Term Loan Agent such efforts will result in an adverse change in the terms of the proposed sale or have a reasonable likelihood of causing the sale not to occur). The time periods set forth herein shall be tolled during the pendency of any Insolvency Proceeding of any Grantor or other proceedings pursuant to which both the Revolver Agent and the Term Loan Agent are effectively stayed from enforcing their rights against the Revolver Priority Collateral. In no event shall Term Loan Agent take any action to interfere, limit or restrict the rights of Revolver Agent or the exercise of such rights by Revolver Agent to have access to or to use any of such Term Loan Priority Collateral under such possession or control pursuant to this Section 3.8 prior to the expiration of such periods.
(d) During the actual occupation by Revolver Agent, its agents or representatives, of any real property constituting Term Loan Priority Collateral during the access and use period permitted by this Section 3.8, Revolver Agent shall be (i) obligated to pay to Term Loan Agent any rent payable to third parties and all utilities, taxes and other maintenance and operating costs of such real property during any such period of actual occupation by Revolver Agent, but only to the extent Term Loan Agent is required to pay or is otherwise paying any such rent, utilities, taxes or other maintenance and operating costs during the actual occupation of such real property by Revolver Agent, its agents or representatives, (ii) obligated to maintain insurance for such real property, substantially similar to the insurance maintained by any Grantor on such real property, naming Term Loan Agent as mortgagee, loss payee and
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additional insured, but only to the extent such insurance is not otherwise in effect and (iii) obligated to repair at its expense any physical damage to such real property resulting from any act or omission of Revolver Agent or its agents or representatives pursuant to such access, occupancy, use or control of such equipment or real property, and to leave the premises in a condition substantially similar to the condition of such premises prior to the date of the commencement of the use thereof by Revolver Agent.
(e) Revolver Agent shall indemnify and hold harmless Term Loan Agent, Term Loan Claimholders and any Third Party Purchaser from and against (i) any loss, liability, claim, damage or expense (including fees and expenses of legal counsel) arising out of any claim asserted by any third party as a result of any acts or omissions by Revolver Agent, or any of its agents or representatives, in connection with the exercise by Revolver Agent of the rights of access set forth in this Section 3.8, (b) any damage to any Term Loan Priority Collateral (including, without limitation, any damage to real property constituting Term Loan Priority Collateral) caused by any act of Revolver Agent or its agents or representatives and (c) any injury resulting from any release of hazardous materials on real property occupied by Revolver Agent or any of its agents or representatives or arising in connection with the investigation, removal, clean-up and/or remediation of any hazardous material at such real property caused by the access, occupancy, use or control of such real property by Revolver Agent, or any of its agents or representatives. In no event shall Revolver Agent have any liability to Term Loan Agent, Term Loan Claimholders or any Third Party Purchaser pursuant to this Section 3.8 or otherwise as a result of any condition on or with respect to the Term Loan Priority Collateral existing prior to the date of the exercise by Revolver Agent of its rights under Section 3.8 (except to the extent of any injury to any person on the real property constituting Term Loan Priority Collateral or damage to any Term Loan Priority Collateral as a result of such condition that would not have occurred but for the exercise by Revolver Agent of its rights of access set forth in this Section 3.8) and Revolver Agent shall have no duty or liability to maintain the Term Loan Priority Collateral in a condition or manner better than that in which it was maintained prior to the access and/or use thereof by Revolver Agent.
(f) Books and Records. In the event that any Term Loan Claimholder or any Revolver Claimholder shall, in the exercise of its respective rights under the Term Loan Documents or Revolver Loan Documents, as may be applicable, or otherwise, receive possession or control of any books and records of any Grantor which contain information identifying or pertaining to any Collateral in which any other Claimholder has been granted a Lien, the person receiving possession or control of such books and records shall notify Term Loan Agent (if Revolver Agent is sending such notice) or Revolver Agent (if Term Loan Agent is sending such notice) that it has received such books and records and shall, as promptly as practicable thereafter, make available to the Term Loan Agent (if Revolver Agent is sending such notice) or Revolver Agent (if Term Loan Agent is sending such notice) such books and records for inspection and duplication.
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SECTION 4. Proceeds.
4.1. Application of Proceeds.
(a) Application of Revolver Priority Collateral Proceeds. Whether or not any Insolvency Proceeding has been commenced by or against any Grantor, except as otherwise provided in Section 3.4, any Revolver Priority Collateral or proceeds thereof received in connection with any Exercise of Secured Creditor Remedies shall (at such time as such Revolver Priority Collateral or proceeds has been monetized) be applied: (a) first, to the payment in full in cash of costs and expenses of Revolver Agent in connection with such Exercise of Secured Creditor Remedies, (b) second, to the payment in full in cash or cash collateralization of the Revolver Priority Obligations (excluding any portion thereof consisting of Early Payment Charges) in accordance with the Revolver Loan Documents (as such cash collateralization provisions are in effect on the date hereof), and in the case of payment of any revolving loans, together with the concurrent permanent reduction of any revolving loan commitment thereunder in an amount equal to the amount of such payment, (c) third, to the payment in full in cash of costs and expenses of Term Loan Agent in connection with such Exercise of Secured Creditor Remedies (to the extent Term Loan Agent’s Exercise of Secured Creditor Remedies was permitted hereunder), (d) fourth, to the payment in full in cash of the Teem Loan Priority Obligations (excluding any portion thereof consisting of Early Payment Charges) in accordance with the Term Loan Documents, (e) fifth, to the payment in full in cash of the Early Payment Charges in accordance with the Revolver Loan Documents, (f) sixth, to the payment in full in cash of the Early Payment Charges in accordance with the Term Loan Documents, (g) seventh, to the payment in full in cash or cash collateralization of the Excess Revolver Obligations in accordance with the Revolver Loan Documents (as such cash collateralization provisions are in effect on the date hereof), and (g) eighth, to the payment in full in cash of the Excess Term Loan Obligations in accordance with the Term Loan Documents. If any Exercise of Secured Creditor Remedies with respect to the Revolver Priority Collateral produces non-cash proceeds, then such non-cash proceeds shall be held by the Agent that conducted the Exercise of Secured Creditor Remedies as additional Revolver Priority Collateral and, at such time as such non-cash proceeds are monetized, shall be applied as set forth above.
(b) Application of Term Loan Priority Collateral Proceeds. Whether or not any Insolvency Proceeding has been commenced by or against any Grantor, except as otherwise provided in Section 3.4, any Term Loan Priority Collateral or proceeds thereof received in connection with any Exercise of Secured Creditor Remedies shall (at such time as such Term Loan Priority Collateral or proceeds has been monetized) be applied: (a) first, to the payment in full in cash of costs and expenses of Term Loan Agent in connection with such Exercise of Secured Creditor Remedies, (b) second, to the payment in full in cash of the Term Loan Priority Obligations (excluding any portion thereof consisting of Early Payment Charges) in accordance with the Term Loan Documents, (c) third, to the payment in full in cash of costs and expenses of Revolver Agent in connection with such Exercise of Secured Creditor Remedies (to the extent Revolver Agent’s Exercise of Secured Creditor Remedies was permitted hereunder), (d) fourth, to the payment in full in cash or cash collateralization of the Revolver Priority Obligations (excluding any portion thereof consisting of Early Payment Charges) in accordance with the Revolver Loan Documents (as such cash collateralization provisions are in effect on the date hereof), and in the case of payment of any revolving loans, together with the concurrent
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permanent reduction of any revolving loan commitment thereunder in an amount equal to the amount of such payment, (e) fifth, to the payment in full in cash of the Early Payment Charges in accordance with the Term Loan Documents, (f) sixth, to the payment in full in cash of the Early Payment Charges in accordance with the Revolver Loan Documents, (g) seventh, to the payment in full in cash of the Excess Term Loan Obligations in accordance with the Term Loan Documents, and (h) eighth, to the payment in full in cash or the cash collateralization of the Excess Revolver Obligations in accordance with the Revolver Loan Documents (as such cash collateralization provisions are in effect on the date hereof). If any Exercise of Secured Creditor Remedies with respect to the Term Loan Priority Collateral produces non-cash proceeds, then such non-cash proceeds shall be held by the Agent that conducted the Exercise of Secured Creditor Remedies as additional Term Loan Priority Collateral and, at such time as such non-cash proceeds are monetized, shall be applied as set forth above.
(c) Mixed Collateral Proceeds. In the event that proceeds of Collateral are received in connection with a Disposition of Collateral that involves a combination of Revolver Priority Collateral and Term Loan Priority Collateral, the portion of such proceeds that shall be allocated as proceeds of Revolver Priority Collateral for purposes of this Agreement shall be an amount equal to the net book value of such Revolver Priority Collateral.
4.2. Turnover.
(a) Unless and until the Discharge of Revolver Priority Obligations has occurred, whether or not any Insolvency Proceeding has been commenced by or against any Grantor, except as otherwise provided in Section 3.4, any Revolver Priority Collateral or proceeds thereof (including assets or proceeds subject to Liens referred to in the final sentence of Section 2.3 or the proviso in Section 3.6) received by Term Loan Agent or any Term Loan Claimholder (a) in connection with the Exercise of Secured Creditor Remedies with respect to the Revolver Priority Collateral by Term Loan Agent or any Term Loan Claimholder, or (b) as a result of Term Loan Agent’s or any Term Loan Claimholder’s collusion with any Grantor in violating the rights of Revolver Agent or any Revolver Claimholder (within the meaning of Section 9-332 of the UCC), shall be segregated and held in trust and forthwith paid over to Revolver Agent for the benefit of Revolver Claimholders in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct, for application to the Revolver Obligations and the Term Loan Obligations in accordance with Section 4.1. Revolver Agent is hereby authorized to make any such endorsements as agent for Term Loan Agent or any such Term Loan Claimholders. This authorization is coupled with an interest and is irrevocable until the Discharge of Revolver Priority Obligations.
(b) Unless and until the Discharge of Term Loan Priority Obligations has occurred, whether or not any Insolvency Proceeding has been commenced by or against any Grantor, except as otherwise provided in Section 3.4, any Term Loan Priority Collateral or proceeds thereof (including assets or proceeds subject to Liens referred to in the final sentence of Section 2.3 or the proviso in Section 3.6) received by Revolver Agent or any Revolver Claimholder (a) in connection with the Exercise of Secured Creditor Remedies with respect to the Term Loan Priority Collateral by Revolver Agent or any Revolver Claimholder, or (b) as a result of Revolver Agent’s or any Revolver Claimholder’s collusion with any Grantor in violating the rights of Term Loan Agent or any Term Loan Claimholder (within the meaning of
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Section 9-332 of the UCC), shall be segregated and held in trust and forthwith paid over to Term Loan Agent for the benefit of Term Loan Claimholders in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct, for application to the Revolver Obligations and the Term Loan Obligations in accordance with Section 4.1. Term Loan Agent is hereby authorized to make any such endorsements as agent for Revolver Agent or any such Revolver Claimholders. This authorization is coupled with an interest and is irrevocable until the Discharge of Term Loan Priority Obligations.
4.3. No Subordination of the Relative Priority of Claims. Anything to the contrary contained herein notwithstanding, the subordination of the Liens set forth herein is with respect to the priority of the respective Liens held only and shall not constitute a subordination of any of the Term Loan Obligations to any of the Revolver Obligations or of any of the Revolver Obligations to any of the Term Loan Obligations.
SECTION 5. Releases; Dispositions; Other Agreements.
5.1. Releases.
(a) Until the Discharge of Revolver Priority Obligations occurs,
(i) Revolver Agent shall have the exclusive right to make determinations regarding the release or Disposition of any Revolver Priority Collateral pursuant to the terms of the Revolver Loan Documents or in accordance with the provisions of this Agreement, in each case without any consultation with, consent of, or notice to Term Loan Agent or any Term Loan Claimholder.
(ii) If in connection with the Exercise of Secured Creditor Remedies with respect to the Revolver Priority Collateral by Revolver Agent as provided for in Section 3 (with the proceeds thereof being applied in accordance with Section 4.1), Revolver Agent releases any of its Liens on any part of the Revolver Priority Collateral, then the Liens of Term Loan Agent on such Revolver Priority Collateral shall be automatically, unconditionally, and simultaneously released. Term Loan Agent, for itself or on behalf of any such Term Loan Claimholders, promptly shall execute and deliver to Revolver Agent such termination or amendment statements, releases, and other documents as Revolver Agent may request to effectively confirm such release.
(iii) If, in connection with any Disposition of any Revolver Priority Collateral permitted under the terms of the Revolver Loan Documents as in effect as of the date hereof, Revolver Agent, for itself or on behalf of any Revolver Claimholders, releases any of its Liens on the portion of the Revolver Priority Collateral that is the subject of such Disposition other than (1) in connection with the Discharge of Revolver Priority Obligations, or (2) after the occurrence and during the continuance of any Term Loan Default, then the Liens of Term Loan Agent on such Revolver Priority Collateral shall be automatically, unconditionally, and simultaneously released (with the proceeds thereof being applied in accordance with Section 4.1). Term Loan Agent, for itself or on behalf of any such Term Loan Claimholders, promptly shall execute and deliver to Revolver Agent such termination or amendment statements, releases, and other documents as Revolver Agent may request to effectively confirm such release.
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(iv) In the event of any private or public Disposition of all or any portion of the Revolver Priority Collateral by one or more Grantors with the consent of Revolver Agent after the occurrence and during the continuance of a Revolver Default (and prior to the Discharge of Revolver Priority Obligations), which Disposition is conducted by such Grantors with the consent of Revolver Agent in connection with good faith efforts by Revolver Agent to collect the Revolver Obligations through the Disposition of Revolver Priority Collateral (any such Disposition, a “Revolver Default Disposition”), then the Liens of Term Loan Agent on such Revolver Priority Collateral shall be automatically, unconditionally, and simultaneously released; provided that (1) Revolver Agent also releases its Liens on such Revolver Priority Collateral, (2) the net cash proceeds of any such Revolver Default Disposition are applied in accordance with Section 4.1(a) (as if they were proceeds received in connection with an Exercise of Secured Creditor Remedies), and (3) with respect to Revolver Priority Collateral that is subject to Article 9 of the UCC, the Grantors consummating such Revolver Default Disposition have (a) provided Term Loan Agent with the prior written notice that would have been required if the Revolver Default Disposition were a disposition of collateral by a secured creditor under Article 9 of the UCC, and (b) conducted such Revolver Default Disposition in a commercially reasonable manner as if such Revolver Default Disposition were a disposition of collateral by a secured creditor in accordance with Article 9 of the UCC.
(v) Term Loan Agent, for itself and on behalf of Term Loan Claimholders, hereby irrevocably constitutes and appoints Revolver Agent and any officer or agent of Revolver Agent, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of Term Loan Agent or such Term Loan Claimholder or in Revolver Agent’s own name, from time to time in Revolver Agent’s discretion, for the purpose of carrying out the terms of this Section 5.1(a), to take any and all appropriate action and to execute any and all documents and instruments that may be necessary to accomplish the purposes of this Section 5.1(a), including any endorsements or other instruments of transfer or release.
(vi) To the extent that Revolver Agent or Revolver Claimholders have released any Lien on Revolver Priority Collateral and such Lien is later reinstated, then Term Loan Agent, for itself and for Term Loan Claimholders, shall be entitled to obtain a Lien on such Revolver Priority Collateral, subject to the terms (including the lien subordination provisions) of this Agreement.
(b) Until the Discharge of Term Loan Priority Obligations occurs,
(i) Term Loan Agent shall have the exclusive right to make determinations regarding the release or Disposition of any Term Loan Priority Collateral pursuant to the terms of the Term Loan Documents or in accordance with the provisions of this Agreement, in each case without any consultation with, consent of, or notice to Revolver Agent or any Revolver Claimholder.
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(ii) If, in connection with the Exercise of Secured Creditor Remedies with respect to the Term Loan Priority Collateral by Term Loan Agent as provided for in Section 3 (with the proceeds thereof being applied in accordance with Section 4.1), Term Loan Agent releases any of its Liens on any part of the Term Loan Priority Collateral (provided that, no Grantor shall be released unless the Stock of such Grantor is sold in connection with such Exercise of Secured Creditor Remedies), then the Liens of Revolver Agent on such Term Loan Priority Collateral shall be automatically, unconditionally, and simultaneously released. Revolver Agent, for itself or on behalf of any such Revolver Claimholders, promptly shall execute and deliver to Term Loan Agent such termination or amendment statements, releases, and other documents as Term Loan Agent may request to effectively confirm such release.
(iii) If, in connection with any Disposition of any Term Loan Priority Collateral permitted under the terms of the Term Loan Documents as in effect as of the date hereof, Term Loan Agent, for itself or on behalf of any Term Loan Claimholders, releases any of its Liens on the portion of the Teen Loan Priority Collateral that is the subject of such Disposition, or releases any Grantor from its obligations in respect of the Term Loan Obligations (provided that, no Grantor shall be released unless the Stock of such Grantor is the subject of such Disposition), in each case other than (1) in connection with the Discharge of Term Loan Priority Obligations, or (2) after the occurrence and during the continuance of any Revolver Loan Default, then the Liens of Revolver Agent on such Term Loan Priority Collateral, and the obligations of such Grantor in respect of the Revolver Obligations, shall be automatically, unconditionally, and simultaneously released (with the proceeds thereof being applied in accordance with Section 4.1). Revolver Agent, for itself or on behalf of any such Revolver Claimholders, promptly shall execute and deliver to Term Loan Agent such termination or amendment statements, releases, and other documents as Term Loan Agent may request to effectively confirm such release.
(iv) In the event of any private or public Disposition of all or any portion of the Term Loan Priority Collateral by one or more Grantors with the consent of Term Loan Agent after the occurrence and during the continuance of a Term Loan Default (and prior to the Discharge of Term Loan Priority Obligations), which Disposition is conducted by such Grantors with the consent of Term Loan Agent in connection with good faith efforts by Term Loan Agent to collect the Term Loan Obligations through the Disposition of Term Loan Priority Collateral (any such Disposition, a “Term Loan Default Disposition”), then the Liens of Revolver Agent on such Term Loan Priority Collateral shall be automatically, unconditionally, and simultaneously released (and, if the Term Loan Default Disposition includes equity interests in any Grantor, Revolver Agent further agrees to release those persons whose equity interests are Disposed of from all of their obligations under the Revolver Loan Documents); provided that (1) Term Loan Agent also releases its Liens on such Term Loan Priority Collateral (and, if the Term Loan Default Disposition includes equity interests in any Grantor, Term Loan Agent is also releasing those persons whose equity interests are Disposed of from all of their obligations under the Term Loan Documents), (2) the net cash proceeds of any such Term Loan Default Disposition are applied in accordance with Section 4.1(b) (as if they were proceeds received in connection with an
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Exercise of Secured Creditor Remedies), and (3) with respect to Term Loan Priority Collateral that is subject to Article 9 of the UCC, the Grantors consummating such Term Loan Default Disposition have (a) provided Revolver Agent with the prior written notice that would have been required if the Term Loan Default Disposition were a disposition of collateral by a secured creditor under Article 9 of the UCC, and (b) conducted such Term Loan Default Disposition in a commercially reasonable manner as if such Term Loan Default Disposition were a disposition of collateral by a secured creditor in accordance with Article 9 of the UCC.
(v) Revolver Agent, for itself and on behalf of Revolver Claimholders, hereby irrevocably constitutes and appoints Term Loan Agent and any officer or agent of Term Loan Agent, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of Revolver Agent or such Revolver Claimholder or in Term Loan Agent’s own name, from time to time in Term Loan Agent’s discretion, for the purpose of carrying out the terms of this Section 5.1(b), to take any and all appropriate action and to execute any and all documents and instruments that may be necessary to accomplish the purposes of this Section 5.1(b), including any endorsements or other instruments of transfer or release.
(vi) To the extent that Term Loan Agent or Term Loan Claimholders have released any Lien on Term Loan Priority Collateral or any Grantor with respect to the Term Loan Priority Obligations, and any such Liens or obligations are later reinstated, then Revolver Agent, for itself and for Revolver Claimholders, shall be entitled to obtain a Lien on such Term Loan Priority Collateral, subject to the terms (including the lien subordination provisions) of this Agreement, and a guaranty from such Grantor, as the case may be.
5.2. Insurance.
(a) Unless and until the Discharge of the Revolver Obligations has occurred,
(i)(1) Revolver Agent and the Revolver Claimholders shall have the sole and exclusive right, subject to the rights of Grantors under the Revolver Loan Documents, to adjust and settle any claim under any insurance policy covering the Revolver Priority Collateral in the event of any loss thereunder and to approve any award granted in any condemnation or similar proceeding (or any deed in lieu of condemnation) affecting the Revolver Priority Collateral; and (2) all proceeds of any such insurance policy and any such award (or any payments with respect to a deed in lieu of condemnation or an expropriation or similar proceeding) shall be paid, subject to the rights of Grantors under the Revolver Loan Documents and the Term Loan Documents, first to Revolver Claimholders and Term Loan Claimholders in accordance with the priorities set forth in Section 4.1, until paid in full in cash, and second, to the owner of the subject property, such other person as may be entitled thereto, or as a court of competent jurisdiction may otherwise direct; and
(ii) if Term Loan Agent or any Term Loan Claimholders shall, at any time, receive any proceeds of any such insurance policy or any such award or payment in contravention of this Section 5.2(a), it shall pay such proceeds over to Revolver Agent in accordance with the terms of Section 4.2.
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(b) Unless and until the Discharge of the Term Loan Obligations has occurred,
(i)(1) Term Loan Agent and the Term Loan Claimholders shall have the sole and exclusive right, subject to the rights of Grantors under the Term Loan Documents, to adjust and settle any claim under any insurance policy covering the Term Loan Priority Collateral in the event of any loss thereunder and to approve any award granted in any condemnation or similar proceeding (or any deed in lieu of condemnation) affecting the Term Loan Priority Collateral; and (2) all proceeds of any such insurance policy and any such award (or any payments with respect to a deed in lieu of condemnation or an expropriation or similar proceeding) shall be paid, subject to the rights of Grantors under the Revolver Loan Documents and the Term Loan Documents, first to Revolver Claimholders and Term Loan Claimholders in accordance with the priorities set forth in Section 4.1, until paid in full in cash, and second, to the owner of the subject property, such other person as may be entitled thereto, or as a court of competent jurisdiction may otherwise direct; and
(ii) if Revolver Agent or any Revolver Claimholders shall, at any time, receive any proceeds of any such insurance policy or any such award or payment in contravention of this Section 5.2(b), it shall pay such proceeds over to Term Loan Agent in accordance with the terms of Section 4.2.
(c) Unless and until either the Discharge of the Revolver Obligations or the Discharge of the Term Loan Obligations, if any claim under any insurance policy relates to a casualty event involving both Revolver Priority Collateral and Term Loan Priority Collateral, then the adjustment and settlement of such claim shall require the consent of both the Term Loan Agent and the Revolver Agent.
5.3. Amendments; Refinancings.
(a) The Revolver Loan Documents may be amended, supplemented, or otherwise modified in accordance with their terms and the Revolver Obligations may be Refinanced, in each case without notice to, or the consent of, Term Loan Agent or Term Loan Claimholders, all without affecting the lien subordination or other provisions of this Agreement; provided, however, that, in the case of a Refinancing, the holders of such Refinancing debt bind themselves (in a writing addressed to Term Loan Agent for the benefit of itself and the Term Loan Claimholders) to the terms of this Agreement; provided further, however, that any such amendment, supplement, modification, or Refinancing shall not, without the prior written consent of Term Loan Agent (which it shall be authorized to consent to based upon an affirmative vote of Term Loan Claimholders holding a majority of the debt under the Term Loan Credit Agreement):
(i) contravene the provisions of this Agreement;
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(ii) increase the outstanding principal amount of the loans (including any Intentional Overadvances and Protective Advances) plus the amount of outstanding undrawn Letters of Credit and outstanding Bank Product Obligations to an amount that would exceed the Revolver Cap;
(iii) increase the “Applicable Margin” or similar component of the interest rate by more than 3.00 percentage points per annum (excluding increases resulting from the accrual of interest at the default rate);
(iv) extend the scheduled final maturity of the Revolver Credit Agreement or any Refinancing thereof beyond the scheduled maturity of the Term Loan Credit Agreement;
(v) modify (or have the effect of a modification of) the mandatory prepayment provisions of the Revolver Credit Agreement or any Revolver Loan Document in a manner that makes them more restrictive to Grantors or in any manner materially adverse to the Teen Loan Claimholders; or
(vi) add any prohibition on payment of the Term Loan Obligations in addition to those set forth under the Revolver Credit Agreement as in effect on the date hereof.
(b) The Term Loan Documents may be amended, supplemented, or otherwise modified in accordance with their terms and the Term Loan Obligations may be Refinanced, in each case without notice to, or the consent of, Revolver Agent or Revolver Claimholders, all without affecting the lien subordination or other provisions of this Agreement; provided, however, that, in the case of a Refinancing, the holders of such Refinancing debt bind themselves (in a writing addressed to Revolver Agent for the benefit of itself and the Revolver Claimholders) to the terms of this Agreement; provided further, however, that any such amendment, supplement, modification, or Refinancing shall not, without the prior written consent of Revolver Agent (which it shall be authorized to consent to based upon an affirmative vote of Revolver Claimholders holding a majority of the debt under the Revolver Credit Agreement):
(i) contravene the provisions of this Agreement;
(ii) increase the outstanding principal amount of the loans to an amount that would exceed the Term Loan Cap;
(iii) increase the “Applicable Margin” or similar component of the cash pay portion of any interest rate by more than 3.00 percentage points per annum (excluding increases resulting from the accrual of interest at the default rate);
(iv) change to earlier dates any dates upon which payments of principal or interest are due thereon;
(v) modify (or have the effect of a modification of) the mandatory prepayment provisions of the Term Loan Credit Agreement or any Term Loan Document in a manner that makes them more restrictive to Grantors or in any manner materially adverse to the Revolver Claimholders; or
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(vi) add any prohibition on payment of the Revolver Obligations in addition to those set forth under the Term Loan Credit Agreement as in effect on the date hereof
(c) Revolver Agent agrees that it shall not consent to any request by any Borrower, or otherwise agree with any Borrower, to voluntarily reduce any revolving credit commitment under the Revolver Credit Agreement without the prior written consent of Term Loan Agent.
5.4. Bailee for Perfection.
(a) Revolver Agent and Term Loan Agent each agree to hold or control that part of the Collateral that is in its possession or control (or in the possession or control of its agents or bailees), to the extent that possession or control thereof is taken to perfect a Lien thereon under the UCC, the PPSA or other applicable law (such Collateral being referred to as the “Pledged Collateral”), as bailee and as a non-fiduciary agent for Term Loan Agent or Revolver Agent, as applicable (such bailment and agency being intended, among other things, to satisfy the requirements of possession or control under the PPSA or Sections 8-301(a)(2), 9313(c), 9-104, 9-105, 9-106, and 9-107 of the UCC), solely for the purpose of perfecting the security interest granted under the Term Loan Documents or the Revolver Loan Documents, as applicable, subject to the terms and conditions of this Section 5.4. Unless and until the Discharge of Revolver Priority Obligations, Term Loan Agent agrees to promptly notify Revolver Agent of any Pledged Collateral that is Revolver Priority Collateral held by it or by any Term Loan Claimholders, and, immediately upon the request of Revolver Agent at any time prior to the Discharge of Revolver Priority Obligations, Term Loan Agent agrees to deliver to Revolver Agent any such Pledged Collateral held by it or by any Term Loan Claimholders, together with any necessary endorsements (or otherwise allow Revolver Agent to obtain possession or control of such Pledged Collateral). Revolver Agent hereby agrees that upon the Discharge of Revolver Priority Obligations, upon the written request of Term Loan Agent, to the extent that the applicable control agreement is in full force and effect and has not been terminated, Revolver Agent shall continue to act as such a bailee and non-fiduciary agent for Term Loan Agent (solely for the purpose of perfecting the security interest granted under the Term Loan Documents and at the expense of Term Loan Agent) with respect to the deposit account or securities account that is the subject of such control agreement, until the earlier to occur of (x) 30 days after the date when the Discharge of Revolver Priority Obligations has occurred, and (y) the date when a control agreement is executed in favor of Term Loan Agent with respect to such deposit account or securities account. Unless and until the Discharge of Term Loan Priority Obligations, Revolver Agent agrees to promptly notify Terra Loan Agent of any Pledged Collateral that is Term Loan Priority Collateral held by it or by any Revolver Claimholders, and, immediately upon the request of Term Loan Agent at any time prior to the Discharge of Term Loan Priority Obligations, Revolver Agent agrees to deliver to Term Loan Agent any such Pledged Collateral held by it or by any Revolver Claimholders, together with any necessary endorsements (or otherwise allow Term Loan Agent to obtain control of such Pledged Collateral). Term Loan Agent hereby agrees that upon the Discharge of Term Loan Priority
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Obligations, upon the written request of Revolver Agent, to the extent that the applicable control agreement is in full force and effect and has not been terminated, Term Loan Agent shall continue to act as such a bailee and non-fiduciary agent for Revolver Agent (solely for the purpose of perfecting the security interest granted under the Revolver Documents and at the expense of Revolver Agent) with respect to the deposit account or securities account that is the subject of such control agreement, until the earlier to occur of (x) 30 days after the date when the Discharge of Term Loan Priority Obligations has occurred, and (y) the date when a control agreement is executed in favor of Revolver Agent with respect to such deposit account or securities account.
(b) Revolver Agent shall have no obligation whatsoever to Term Loan Agent or any Term Loan Claimholder to ensure that the Pledged Collateral is genuine or owned by any of Grantors or to preserve rights or benefits of any person except as expressly set forth in this Section 5.4. Term Loan Agent shall have no obligation whatsoever to Revolver Agent or any Revolver Claimholder to ensure that the Pledged Collateral is genuine or owned by any of Grantors or to preserve rights or benefits of any person except as expressly set forth in this Section 5.4. The duties or responsibilities of Revolver Agent under this Section 5.4 shall be limited solely to holding or controlling the Pledged Collateral as bailee and agent in accordance with this Section 5.4 and delivering the Pledged Collateral upon a Discharge of Revolver Priority Obligations as provided in paragraph (d) of this Section 5.4. The duties or responsibilities of Term Loan Agent under this Section 5.4 shall be limited solely to holding or controlling the Pledged Collateral as bailee and agent in accordance with this Section 5.4 and delivering the Pledged Collateral upon a Discharge of Revolver Priority Obligations as provided in paragraph (e) of this Section 5.4.
(c) Revolver Agent acting pursuant to this Section 5.4 shall not have by reason of the Revolver Collateral Documents, the Term Loan Collateral Documents, or this Agreement a fiduciary relationship in respect of Term Loan Agent or any Term Loan Claimholder. Term Loan Agent acting pursuant to this Section 5.4 shall not have by reason of the Revolver Collateral Documents, the Term Loan Collateral Documents, or this Agreement a fiduciary relationship in respect of Revolver Agent or any Revolver Claimholder.
(d) Upon the payment (or cash collateralization, as applicable) in full in cash of all Revolver Priority Obligations, Revolver Agent shall deliver the remaining Pledged Collateral (if any) that is Revolver Priority Collateral together with any necessary endorsements, first, to Term Loan Agent to the extent Term Loan Obligations remain outstanding as confirmed in writing by Term Loan Agent, and, to the extent that Term Loan Agent confirms no Term Loan Obligations are outstanding, second, to the Grantors to the extent no Revolver Obligations or Term Loan Obligations remain outstanding (in each case, so as to allow such person to obtain possession or control of such Pledged Collateral). At such time, Revolver Agent further agrees to take all other action reasonably requested by Term Loan Agent at the expense of Grantors (including amending any outstanding control agreements) to enable Term Loan Agent to obtain a first priority security interest in the Revolver Priority Collateral.
(e) Upon the payment (or cash collateralization, as applicable) in full in cash of all Term Loan Priority Obligations, Term Loan Agent shall deliver the remaining Pledged Collateral (if any) that is Term Loan Priority Collateral together with any necessary
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endorsements, first, to Revolver Agent to the extent Revolver Obligations remain outstanding as confirmed in writing by Revolver Agent, and, to the extent that Revolver Agent confirms no Revolver Obligations are outstanding, second, to Grantors to the extent no Revolver Obligations or Term Loan Obligations remain outstanding (in each case, so as to allow such person to obtain possession or control of such Pledged Collateral). At such time, Term Loan Agent further agrees to take all other action reasonably requested by Revolver Agent at the expense of Grantors (including amending any outstanding control agreements) to enable Revolver Agent to obtain a first priority security interest in the Tear Loan Priority Collateral.
5.5. When Discharge of Revolver Priority Obligations, Discharge of Revolver Obligations, Discharge of Term Loan Priority Obligations, or Discharge of Term Loan Obligations Deemed to Not Have Occurred.
(a) If Borrowers enter into any Refinancing of the Revolver Priority Obligations, then a Discharge of Revolver Priority Obligations shall be deemed not to have occurred for all purposes of this Agreement, and the obligations under such Refinancing of such Revolver Priority Obligations shall be treated as Revolver Priority Obligations for all purposes of this Agreement, including for purposes of the Lien priorities and rights in respect of Collateral set forth herein, and Revolver Agent under the Revolver Loan Documents effecting such Refinancing shall be Revolver Agent for all purposes of this Agreement. Revolver Agent under such Revolver Loan Documents shall agree (in a writing addressed to Term Loan Agent for the benefit of itself and the Term Loan Claimholders) to be bound by the terms of this Agreement.
(b) If U.S. Borrower enters into any Refinancing of the Term Loan Priority Obligations, then a Discharge of Term Loan Priority Obligations shall be deemed not to have occurred for all purposes of this Agreement, and the obligations under such Refinancing of such Term Loan Priority Obligations shall be treated as Term Loan Priority Obligations for all purposes of this Agreement, including for purposes of the Lien priorities and rights in respect of Collateral set forth herein, and Term Loan Agent under the Term Loan Documents effecting such Refinancing shall be Term Loan Agent for all purposes of this Agreement. Term Loan Agent under such Term Loan Documents shall agree (in a writing addressed to Revolver Agent for the benefit of itself and the Revolver Claimholders) to be bound by the terms of this Agreement.
(c) If Borrowers enter into any Refinancing of the Revolver Obligations, then a Discharge of Revolver Obligations shall be deemed not to have occurred for all purposes of this Agreement, and the obligations under such Refinancing of such Revolver Obligations shall be treated as Revolver Obligations for all purposes of this Agreement, including for purposes of the Lien priorities and rights in respect of Collateral set forth herein, and Revolver Agent under the Revolver Loan Documents effecting such Refinancing shall be Revolver Agent for all purposes of this Agreement. Revolver Agent under such Revolver Loan Documents shall agree (in a writing addressed to Term Loan Agent for the benefit of itself and the Term Loan Claimholders) to be bound by the terms of this Agreement.
(d) If Borrowers enter into any Refinancing of the Term Loan Obligations, then a Discharge of Term Loan Obligations shall be deemed not to have occurred for all purposes of this Agreement, and the obligations under such Refinancing of such Term Loan
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Obligations shall be treated as Term Loan Obligations for all purposes of this Agreement, including for purposes of the Lien priorities and rights in respect of Collateral set forth herein, and Term Loan Agent under the Term Loan Documents effecting such Refinancing shall be Term Loan Agent for all purposes of this Agreement. Term Loan Agent under such Term Loan Documents shall agree (in a writing addressed to Revolver Agent for the benefit of itself and the Revolver Claimholders) to be bound by the terms of this Agreement.
5.6. Purchase Options.
(a) Revolver Claimholders Purchase Option.
(i) Upon the occurrence and during the continuation of a Revolver Triggering Event, then, in any such case, any one or more of Revolver Claimholders (acting in their individual capacity or through one or more affiliates) shall have the right, but not the obligation (each Revolver Claimholder having a ratable right to make the purchase, with each Revolver Claimholder’s right to purchase being automatically proportionately increased by the amount not purchased by another Revolver Claimholder), upon 5 Business Days advance written notice from such Revolver Claimholders (a “Revolver Purchase Notice”) to Term Loan Agent, for the benefit of the Term Loan Claimholders, to acquire from the Term Loan Claimholders all (but not less than all) of the right, title, and interest of Term Loan Claimholders in and to the Term Loan Priority Obligations and the Term Loan Documents. The Revolver Purchase Notice, if given, shall be irrevocable.
(ii) On the date specified by Revolver Agent in the Revolver Purchase Notice (which shall not be more than 5 Business Days after the receipt by Revolver Agent of the Revolver Purchase Notice), Term Loan Claimholders shall sell to the purchasing Revolver Claimholders and purchasing Revolver Claimholders shall purchase from the Term Loan Claimholders, the Term Loan Priority Obligations.
(iii) On the date of such purchase and sale, purchasing Revolver Claimholders shall (A) pay to Term Loan Agent, for the benefit of Term Loan Claimholders, as the purchase price therefor the full amount of all the Term Loan Obligations (other than the Excess Term Loan Obligations) then outstanding and unpaid and (B) agree to reimburse Tutu Loan Agent and Term Loan Claimholders for all expenses to the extent earned or due and payable in accordance with the Term Loan Documents (including the reimbursement of extraordinary expenses, financial examination expenses, and appraisal fees). Anything contained in this paragraph to the contrary notwithstanding, in the event that (X) purchasing Revolver Claimholders receive all or a portion of any Early Payment Charges payable pursuant to the Term Loan Documents in cash, and (Y) all Term Loan Obligations purchased by such purchasing Revolver Claimholders and all of the Revolver Obligations (other than the Excess Revolver Obligations), including principal, interest and fees thereon and costs and expenses of collection thereof (including reasonable attorneys fees and legal expenses), are repaid in full in cash, in each case, within 120 days following the date on which the purchasing Revolver Claimholders pay the purchase price described in clauses (A)-(B) of this paragraph, then, within 3 Business Days after receipt by such Revolver Claimholders
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of such amounts, purchasing Revolver Claimholders shall pay a supplemental purchase price to Term Loan Agent, for the benefit of the Term Loan Claimholders, in respect of their purchase under this Section 5.6 in an amount equal to the portion of the Early Termination Charges received by purchasing Revolver Claimholders to which Term Loan Claimholders would have been entitled to receive had the purchase under this paragraph not occurred. Such purchase price shall be remitted by wire transfer in federal funds to such bank account of Term Loan Agent as Term Loan Agent may designate in writing to Revolver Agent for such purpose. Interest shall be calculated to but excluding the Business Day on which such purchase and sale shall occur if the amounts so paid by purchasing Revolver Claimholders to the bank account designated by Term Loan Agent are received in such bank account prior to 2:00 p.m., New York City time, and interest shall be calculated to and including such Business Day if the amounts so paid by purchasing Revolver Claimholders to the bank account designated by Term Loan Agent are received in such bank account later than 2:00 p.m., New York City time.
(iv) Such purchase shall be expressly made without representation or warranty of any kind by Term Loan Agent and Term Loan Claimholders as to the Term Loan Obligations so purchased or otherwise and without recourse to Term Loan Agent or any Term Loan Claimholder, except that each Term Loan Claimholder shall represent and warrant: (A) that the amount quoted by such Term Loan Claimholder as its portion of the purchase price represents the amount shown as owing with respect to the claims transferred as reflected on its books and records, (B) it owns, or has the right to transfer to purchasing Revolver Claimholders, the rights being transferred, and (C) such transfer will be free and clear of Liens.
(v) In the event that any one or more of Revolver Claimholders exercises and consummates the purchase option set forth in this Section 5.6(a), (A) Term Loan Agent shall have the right, but not the obligation, to immediately resign under the Term Loan Credit Agreement, and (B) purchasing Revolver Claimholders shall have the right, but not the obligation, to require Term Loan Agent to immediately resign under the Term Loan Credit Agreement.
(b) Term Loan Claimholders Purchase Option.
(i) Upon the occurrence and during the continuation of a Term Loan Triggering Event, then, in any such case, any one or more of Term Loan Claimholders (acting in their individual capacity or through one or more affiliates) shall have the right, but not the obligation (each Term Loan Claimholder having a ratable right to make the purchase, with each Term Loan Claimholder’s right to purchase being automatically proportionately increased by the amount not purchased by another Term Loan Claimholder), upon 5 Business Days advance written notice from such Term Loan Claimholders (a “Term Loan Purchase Notice”) to Revolver Agent, for the benefit of Revolver Claimholders, to acquire from Revolver Claimholders all (but not less than all) of the right, title, and interest of Revolver Claimholders in and to the Revolver. Priority Obligations and the Revolver Loan Documents. The Term Loan Purchase Notice, if given, shall be irrevocable.
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(ii) On the date specified by Term Loan Agent in the Term Loan Purchase Notice (which shall not be more than 5 Business Days after the receipt by Revolver Agent of the Term Loan Purchase Notice), Revolver Claimholders shall sell to the purchasing Term Loan Claimholders and purchasing Term Loan Claimholders shall purchase from Revolver Claimholders, the Revolver Priority Obligations.
(iii) On the date of such purchase and sale, purchasing Term Loan Claimholders shall (A) pay to Revolver Agent, for the benefit of Revolver Claimholders, as the purchase price therefor the full amount of all the Revolver Obligations (other than the Excess Revolver Obligations and other than Revolver Obligations cash collateralized in accordance with clause (iii)(B) below) then outstanding and unpaid, (B) furnish cash collateral to Revolver Agent to secure Revolver Agent and Revolver Claimholders in connection with (1) any issued and outstanding Letters of Credit (but not in any event in an amount greater than 105% of the aggregate undrawn amount of such Letters of Credit) and (2) Bank Product Obligations in accordance with the Revolver Loan Documents (as such cash collateralization provisions are in effect on the date hereof), and (C) agree to reimburse Revolver Agent and Revolver Claimholders for all expenses to the extent earned or due and payable in accordance with the Revolver Loan Documents (including the reimbursement of extraordinary expenses, financial examination expenses, and appraisal fees). Anything contained in this paragraph to the contrary notwithstanding, in the event that (X) purchasing Term Loan Claimholders receive all or a portion of any Early Payment Charges payable pursuant to the Revolver Loan Documents in cash, (Y) all Revolver Obligations purchased by such purchasing Term Loan Claimholders and all of the Term Loan Obligations (other than the Excess Term Loan Obligations), including principal, interest and fees thereon and costs and expenses of collection thereof (including reasonable attorneys fees and legal expenses), are repaid in full in cash, and (Z) the Revolver Credit Agreement is terminated, in each case, within 120 days following the date on which the purchasing Term Loan Claimholders pay the purchase price described in clauses (A)-(C) of this paragraph, then, within 3 Business Days after receipt by such Term Loan Claimholders of such amounts, purchasing Term Loan Claimholders shall pay a supplemental purchase price to Revolver Agent, for the benefit of Revolver Claimholders, in respect of their purchase under this Section 5.6 in an amount equal to the portion of the Early Payment Charges received by purchasing Term Loan Claimholders to which Revolver Claimholders would have been entitled to receive had the purchase under this paragraph not occurred. Such purchase price and cash collateral shall be remitted by wire transfer in federal funds to such bank account of Revolver Agent as Revolver Agent may designate in writing to Term Loan Agent for such purpose. Interest shall be calculated to but excluding the Business Day on which such purchase and sale shall occur if the amounts so paid by purchasing Term Loan Claimholders to the bank account designated by Revolver Agent are received in such bank account prior to 2:00 p.m., New York City time, and interest shall be calculated to and including such Business Day if the amounts so paid by purchasing Term Loan Claimholders to the bank account designated by Revolver Agent are received in such bank account later than 2:00 p.m., New York City time.
(iv) After giving effect to any payment made as described in clause (iii)(B) above, those amounts (if any) then on deposit with the Revolver Agent which
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exceed the sum of (A) one hundred five percent (105%) of the sum of the aggregate undrawn amount of all then outstanding Letters of Credit plus (B) the amount of cash collateral reasonably determined by Revolver Agent to be sufficient to collateralize the reasonably estimated credit exposure with respect to the then existing Bank Products, shall be returned to the purchasing Term Loan Claimholders (as their interests appear). Furthermore, at such time as all such Letters of Credit have been cancelled, expired or been fully drawn, and all Bank Product Obligations have been paid, terminated or otherwise satisfied, as the case may be, any excess cash collateral deposited as described in clause (iii)(B) above (and not previously applied to such Revolver Priority Obligations) shall be returned to the purchasing Term Loan Claimholders (as their interests appear). The Revolver Agent agrees not to amend, modify, renew or extend any such Letters of Credit or Bank Product Obligations during the period during which such cash collateral is deposited as described in clause (iii)(B) above.
(v) Such purchase shall be expressly made without representation or warranty of any kind by Revolver Agent and Revolver Claimholders as to the Revolver Obligations so purchased or otherwise and without recourse to Revolver Agent or any Revolver Claimholder, except that each Revolver Claimholder shall represent and warrant: (A) that the amount quoted by such Revolver Claimholder as its portion of the purchase price represents the amount shown as owing with respect to the claims transferred as reflected on its books and records, (B) it owns, or has the right to transfer to purchasing Term Loan Claimholders, the rights being transferred, and (C) such transfer will be free and clear of Liens.
(vi) In the event that any one or more of Term Loan Claimholders exercises and consummates the purchase option set forth in this Section 5.6(b), (A) Revolver Agent shall have the right, but not the obligation, to immediately resign under the Revolver Credit Agreement, and (B) purchasing Term Loan Claimholders shall have the right, but not the obligation, to require Revolver Agent to immediately resign under the Revolver Credit Agreement.
5.7. Injunctive Relief. Should any Term Loan Claimholder in any way take, attempt to, or threaten to take any action contrary to terms of this Agreement with respect to the Collateral, or fail to take any action required by this Agreement, Revolver Agent or any Revolver Claimholder may obtain relief against such Term Loan Claimholder by injunction, specific performance, or other appropriate equitable relief, it being understood and agreed by Term Loan Agent that (a) Revolver Claimholders’ damages from such actions may at that time be difficult to ascertain and may be irreparable, and (b) each Term Loan Claimholder waives any defense that such Grantor and/or Revolver Claimholders cannot demonstrate damage and/or be made whole by the awarding of damages. Should any Revolver Claimholder in any way take, attempt to, or threaten to take any action contrary to terms of this Agreement with respect to the Collateral, or fail to take any action required by this Agreement, Term Loan Agent or any Term Loan Claimholder (in its or their own name or in the name of any Grantor) or any Grantor may obtain relief against such Revolver Claimholder by injunction, specific performance, and/or other appropriate equitable relief, it being understood and agreed by Revolver Claimholders that (i) Term Loan Claimholders’ damages from such actions may at that time be difficult to ascertain and may be irreparable, and (ii) each Revolver Claimholder waives any defense that such
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Grantor and/or Term Loan Claimholders cannot demonstrate damage and/or be made whole by the awarding of damages. Revolver Agent and Term Loan Agent hereby irrevocably waive any defense based on the adequacy of a remedy at law and any other defense which might be asserted to bar the remedy of specific performance in any action which may be brought by Revolver Agent or Revolver Claimholders or Term Loan Agent or Term Loan Claimholders, as the case may be.
SECTION 6. Insolvency Proceedings.
6.1. Enforceability and Continuing Priority. This Agreement shall be applicable both before and after the commencement of any Insolvency Proceeding and all converted or succeeding cases in respect thereof. The relative rights of Claimholders in or to any distributions from or in respect of any Collateral or proceeds of Collateral, shall continue after the commencement of any Insolvency Proceeding. Accordingly, the provisions of this Agreement are intended to be and shall be enforceable as a subordination agreement within the meaning of Section 510 of the Bankruptcy Code.
6.2. Financing.
(a) Until the Discharge of Revolver Priority Obligations has occurred, if any Grantor shall be subject to any Insolvency Proceeding and Revolver Agent consents to the use of Revolver Priority Collateral that is post-filing/post-petition cash collateral (including as such term is defined in Section 363(a) of the Bankruptcy Code, “Revolver Cash Collateral”) on which Revolver Agent has a Lien or permits any Grantor to obtain financing provided by any one or more Revolver Claimholders under Section 364 of the Bankruptcy Code or any similar Bankruptcy Law or pursuant to an order granted in an Insolvency Proceeding granting a priority debtor-in-possession or interim financing charge, that is secured by Revolver Priority Collateral (but not any Term Loan Priority Collateral) (such financing, a “Revolver DIP Financing”), then Term Loan Agent agrees that it will raise no objection to such use of Revolver Cash Collateral or provision of Revolver DIP Financing (but may otherwise object to the need for or the terms of such use of Revolver Cash Collateral or Revolver DIP Financing) and, to the extent the Liens on Revolver Priority Collateral securing the Revolver Obligations are subordinated to or pari passu with the Liens on the Revolver Priority Collateral securing such Revolver DIP Financing, Term Loan Agent will subordinate its Liens in the Revolver Priority Collateral to the Liens on Revolver Priority Collateral securing such Revolver DIP Financing; provided that (a) the principal amount of any such Revolver DIP Financing plus the outstanding principal amount of other Revolver Obligations does not exceed the Revolver Cap, (b) the interest rate, fees, advance rates, lending sublimits and limits, and other terms of such Revolver DIP Financing are commercially reasonable under the circumstances, (c) the Term Loan Agent receives a replacement Lien on post-petition assets to the same extent granted to the Revolver Claimholders providing the Revolver DIP Financing, which Lien will be subordinated to the Liens securing the Revolver Obligations and such Revolver DIP Financing (and all obligations relating, thereto) on the same basis as the other Liens on Revolver Priority Collateral securing the Term Loan Obligations are so subordinated to the Liens on Revolver Priority Collateral securing the Revolving Obligations under this Agreement, (d) such Revolver Cash Collateral use or Revolver DIP Financing does not compel any Grantor to seek confirmation of a specific plan of reorganization for which any of the material terms are set forth in the Revolver Cash Collateral
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order or Revolver DIP Financing documentation, (e) any Revolver Cash Collateral order or Revolver DIP Financing documentation does not expressly require the liquidation of the Revolver Priority Collateral prior to a default under the Revolver Cash Collateral order or Revolver DIP Financing documentation, and (f) such Revolver DIP Financing is otherwise subject to the terms of this Agreement. If Revolver Claimholders offer, and are prepared, to provide Revolver DIP Financing that meets the requirements set forth in clauses (a) through (f) above, Term Loan Agent agrees that it shall not, directly or indirectly, provide, offer to provide, or support any Revolver DIP Financing secured by a Lien on Revolver Priority Collateral senior to or pari passu with the Liens on Revolver Priority Collateral securing the Revolver Priority Obligations. The foregoing provisions of this Section 6.2(a) shall not prevent the Term Loan Agent or the Term Loan Claimants from objecting to any provision in any Revolver Cash Collateral order or Revolver DIP Financing documentation relating to any provision or content of a plan of reorganization.
(b) Until the Discharge of Term Loan Priority Obligations has occurred, if any Grantor shall be subject to any Insolvency Proceeding and Term Loan Agent consents to the use of Term Loan Priority Collateral that is post-filing/post-petition cash collateral (including as such term is defined in Section 363(a) of the Bankruptcy Code herein, “Term Loan Cash Collateral”) on which Term Loan Agent has a Lien or permits any Grantor to obtain financing provided by any one or more Term Loan Claimholders under Section 364 of the Bankruptcy Code or any similar Bankruptcy Law or pursuant to an order granted in an Insolvency Proceeding granting a priority debtor-in-possession or interim financing charge that is secured by Term Loan Priority Collateral (but not any Revolver Priority Collateral) (such financing, a “Term Loan DIP Financing”), then Revolver Agent agrees that it will raise no objection to such use of Term Loan Cash Collateral or provision of Term Loan DIP Financing (but may otherwise object to the need for or the terms of such use of Term Loan Cash Collateral or Term Loan DIP Financing) and, to the extent the Liens on Term Loan Priority Collateral securing the Term Loan Obligations are subordinated to or pari passu with the Liens on the Term Loan Priority Collateral securing such Term Loan DIP Financing, Revolver Agent will subordinate its Liens in the Term Loan Priority Collateral to the Liens on Term Loan Priority Collateral securing such Term Loan DIP Financing; provided that (a) the principal amount of any such Term Loan DIP Financing plus the outstanding principal amount of other Term Loan Obligations does not exceed the Term Loan Cap, (b) the interest rate, fees, advance rates, lending sublimits and limits, and other terms of such Term Loan DIP Financing are commercially reasonable under the circumstances, (c) the Revolver Agent receives a replacement Lien on post-petition assets to the same extent granted to the Term Loan Claimholders providing the Term Loan DIP Financing, which Lien will be subordinated to the Liens securing the Term Loan Obligations and such Term Loan DIP Financing (and all obligations relating thereto) on the same basis as the other Liens on Term Loan Priority Collateral securing the Revolver Obligations are so subordinated to the Liens on Term Loan Priority Collateral securing the Term Loan Obligations under this Agreement, (d) such Term Loan Cash Collateral use or Term Loan DIP Financing does not compel any Grantor to seek confirmation of a specific plan of reorganization for which any of the material terms are set forth in the Term Loan Cash Collateral order or Term Loan DIP Financing documentation, (e) any Term Loan Cash Collateral order or Term Loan DIP Financing documentation does not expressly require the liquidation of the Term Loan Priority Collateral prior to a default under the Term Loan Cash Collateral order or Term Loan DIP Financing documentation, and (f) such Term Loan DIP Financing is otherwise subject to the terms of this
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Agreement. If Term Loan Claimholders offer, and are prepared, to provide Term Loan DIP Financing that meets the requirements set forth in clauses (a) through (e) above, Revolver Agent agrees that it shall not, directly or indirectly, provide, offer to provide, or support any Term Loan DIP Financing secured by a Lien on Term Loan Priority Collateral senior to or pari passu with the Liens on Term Loan Priority Collateral securing the Term Loan Priority Obligations. The foregoing provisions of this Section 6.2(b) shall not prevent the Revolver Agent or the Revolver Claimants from objecting to any provision in any Term Loan Cash Co