Exhibit 99.1
AMENDMENT NO. 2
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
This Amendment No. 2 to Amended and Restated Credit Agreement (this
"Amendment"), dated as of December 27, 2002, amends that certain Amended and
Restated Credit Agreement, dated as of June 27, 2002 (as amended, the
"Agreement"), among Mail-Well, Inc., a Colorado corporation ("Parent"),
Mail-Well I Corporation, a Delaware corporation ("Mail-Well I"), and certain
subsidiaries of Mail-Well I (Mail-Well I and each such subsidiary, individually,
a "Borrower", and, collectively, the "Borrowers"), a syndicate of financial
institutions party thereto (the "Lenders"), and Bank of America, N.A., with an
office at 00 Xxxxx Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxxxx 00000, as
administrative agent for the Lenders (the "Agent"). Capitalized terms used and
not otherwise defined herein shall have the meanings ascribed to such terms in
the Agreement.
R E C I T A L S
WHEREAS, Parent, the Borrowers, the Lenders and the Agent have entered
into the Agreement;
WHEREAS, Parent and the Borrowers desire to amend the Agreement
pursuant to Section 14.20 of the Agreement in order to add the Accounts of
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Supremex Inc., Mail-Well Canada Leasing Company, PNG Inc., Classic Envelope
Plus, Ltd., Innova Envelope Inc., 1158673 Ontario, Inc., CML Industries Ltd.,
Mail-Well Alberta Finance, L.P., XxXxxxx, Xxxxxx & Xxxx Company, Precision Fine
Papers Inc., Regional Envelope Products Inc. - Produits Enveloppe Regional Inc.,
Envelope Inc. - Enveloppe Transit Inc., and MM&T Packaging Company, companies
organized under the federal and provincial laws of Canada and indirect
subsidiaries of Parent, to the Borrowing Base; and
WHEREAS, the Agent and the Lenders are willing to do so, subject to the
terms and conditions stated herein including, inter alia, requiring the Canadian
Guarantors (as hereinafter defined) to guarantee the facilities provided to the
Borrowers under the Agreement.
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the Agent, the Lenders, Parent and the Borrowers hereby
agree as follows.
A G R E E M E N T
Section 1. Amendments to the Agreement. The Agent, the Lenders,
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Parent and the Borrowers agree that the Agreement shall be amended as follows:
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A. The definition of "Accounts" in Annex A of the Agreement
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is hereby amended and restated in its entirety to read as follows:
"Accounts" means, as to any Person, all of such Person's
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now owned or hereafter acquired or arising accounts, as defined
in the UCC (or with respect to the Accounts of the Canadian
Guarantors, as defined in the PPSA), including any rights to payment
for the sale or lease of goods or rendition of services, whether or not
they have been earned by performance.";
B. The definition of "Blocked Account Agreement" in Annex A of
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the Agreement is hereby amended by deleting the term "Borrowers", in the second
line thereof, and replacing it with the term "Loan Parties";
C. The definition of "Borrowing Base" in Annex A of the
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Agreement is hereby amended and restated in its entirety to read as follows:
"Borrowing Base" means, at any time, an amount equal
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to the sum of: (a) 85% of the sum of (i) the Net Amount of Eligible
Accounts, plus (ii) the Net Amount of Eligible Canadian Accounts; plus
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(b) the lesser of (i) 65% of Eligible Inventory valued at the lower of
cost (on a first-in, first-out basis) or market, or (ii) 85% of the
orderly liquidation value of appraised Eligible Inventory, net of
expenses of liquidation; plus (c) the lesser of (i) the Maximum PP&E
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Loan Amount, or (ii) the sum of (1) 80% of the orderly liquidation
value of appraised Eligible Equipment, plus (2) 65% of the fair market
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value of Eligible Real Estate; minus (d) such other Reserves from time
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to time established by the Agent in its reasonable credit judgment;
provided, however, that at no time shall the Borrowing Base include any
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assets acquired as a result of a Permitted Acquisition until the
consent of the Lenders under Section 11.1 has been obtained.";
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D. The definition of "Eligible Accounts" in Annex A of the
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Agreement is hereby amended as follows:
(i) by deleting, in clause (g)(i) therein, the
parenthetical "(excluding the Province of Newfoundland)" in both the
second and fourth lines thereof;
(ii) by deleting, in clause (g)(ii) therein, the term
"foreign" and adding, immediately after the term "sovereign state"
the following: "other than the United States of America or Canada";
(iii) by deleting, clause (k) therein, and replacing it
with the following:
"(k) owed by the government of the United States of
America or Canada, or any department, agency, public corporation, or
other instrumentality thereof, unless, in the case of the United States
of America, the Federal Assignment of Claims Act of 1940, as amended
(31 U.S.C. Section 3727 et seq.), and
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any other steps necessary or desirable to perfect or protect the
Agent's Liens therein, have been complied with to the Agent's
satisfaction with respect to such Account (but only to the extent
that all such Accounts, together with all Accounts of the Canadian
Guarantors that would have been deemed ineligible under clause (k)
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of the "Eligible Canadian Accounts" definition herein, in the
--------------------------
aggregate, exceed 5% of the aggregate gross accounts receivable
of the Borrowers and the Canadian Guarantors)";
E. The definition of "Excluded Subsidiaries" in Annex A of
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the Agreement is hereby amended and restated in its entirety to read as follows:
"Excluded Subsidiaries" means, collectively, Graphic
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Arts Center de Mexico, a company organized under the laws of Mexico,
and any Subsidiaries of Parent (other than the Canadian Guarantors)
presently existing or hereafter created or acquired that are not
organized under the laws of one of the United States.";
F. The definition of "Governmental Authority" in Annex A of
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the Agreement is hereby amended as follows:
(i) by adding, immediately after the term "state" in the
first line thereof, ", province, municipality, region";
(ii) by deleting the word "and" in the third to last line
thereof; and
(iii) by adding, immediately after the term "foregoing" at
the end thereof, "and any department, agency, board, commission,
tribunal, committee or instrumentality of any of the foregoing.";
G. The definition of "Guarantors" in Annex A of the Agreement
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is hereby amended and restated in its entirety to read as follows:
""Guarantors" means, collectively, Parent, each
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direct and indirect wholly owned domestic Subsidiary of Parent that is
not a Borrower, and the Canadian Guarantors.";
H. The definition of "Insolvency Proceeding" in Annex A of
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the Agreement is hereby amended as follows:
(i) by adding, immediately after the first reference to
the "Bankruptcy Code" therein, ", BIA, or CCAA"; and
(ii) by adding, immediately after all references to the
"United States" therein, ", Canada";
I. The definition of "Lien" in Annex A of the Agreement is
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hereby amended and restated in its entirety to read as follows:
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""Lien" means: (a) any interest in property securing
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an obligation owed to, or a claim by, a Person other than the owner of
the property, whether such interest is based on the common law,
statute, or contract, and including a security interest, hypothec,
charge, claim, or lien arising from a mortgage, deed of trust, charge,
encumbrance, pledge, hypothecation, assignment, deposit arrangement,
agreement, security agreement, conditional sale or trust receipt or a
lease, consignment or bailment for security purposes; (b) to the extent
not included under clause (a), (i) any reservation, exception,
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encroachment, easement, right-of-way, covenant, condition, restriction,
lease or other title exception or encumbrance affecting property and
(ii) any other lien, charge, privilege, secured claim, title retention,
garnishment right, deemed trust, encumbrance or other right affecting
property, xxxxxx or inchoate, whether or not crystallized or fixed,
whether or not for amounts due or accruing due, arising by any statute,
act or law of any jurisdiction, at common law, in equity or by any
agreement; and (c) any contingent or other agreement to provide any of
the foregoing.";
J. The definition of "Loan Documents" in Annex A of the
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Agreement is hereby amended and restated in its entirety to read as follows:
""Loan Documents" means this Agreement, the Notes,
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the Intellectual Property Security Agreement, the Security Agreement,
the Mortgages, the Pledge Agreement, the Parent/Subsidiary Guarantee,
the Canadian Guarantee, the Canadian Security Documents, and any other
agreements, instruments, and documents heretofore, now or hereafter
evidencing, securing, guaranteeing or otherwise relating to the
Obligations, the Collateral, or any other aspect of the transactions
contemplated by this Agreement."
K. The definition of "Parent/Subsidiary Guaranty" in Annex A
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of the Agreement is hereby amended and restated in its entirety to read as
follows:
""Parent/Subsidiary Guaranty" means the Guaranty
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dated as of the Initial Funding Date from Parent and the Subsidiaries
of Parent (other than the Borrowers, the Canadian Guarantors, and any
Excluded Subsidiaries) to the Agent, for its benefit and the benefit of
the Lenders.";
L. The definition of "Payment Account" in Annex A of the
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Agreement is hereby amended by adding "or any other Loan Document" immediately
after the "Security Agreement" therein;
M. The definition of "Reserves" in Annex A of the Agreement
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is hereby amended and restated in its entirety to read as follows:
""Reserves" means reserves that limit the availability
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of credit hereunder, consisting of reserves against Availability,
Eligible Accounts, Eligible Canadian Accounts, Eligible Equipment,
or Eligible Inventory, established by Agent from time to time
in Agent's reasonable credit judgment. Without limiting the
generality of the foregoing, the following reserves shall be deemed to
be a reasonable exercise of Agent's credit judgment: (a) Bank Product
Reserves, (b) a
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reserve for accrued, unpaid interest on the Obligations, (c) reserves
for at least three months of rent at leased locations subject to
statutory or contractual landlord liens or where Agent has not
received an acceptable agreement from the landlord, (d) Environmental
Compliance Reserves, (e) customs charges, (f) Dilution Reserve,
(g) Canadian Reserves, (h) warehousemen's or bailees' charges,
and (i) reserves for deficiencies in any Plan or Foreign Plan which
could potentially result in statutory liens that are not junior in
priority to the Agent's Lien.";
N. The following new definitions are hereby added to Annex A
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of the Agreement in appropriate alphabetical order:
""BIA" means the Bankruptcy and Insolvency Act
---
(Canada) and all regulations thereunder, as amended from time to time,
and any successor legislation.";
""Canadian Guarantee" means the guarantee, dated as
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of December , 2002, signed by each Canadian Guarantor in favor of
--
the Agent, for its benefit and the benefit of the Lenders.";
""Canadian Guarantor(s)" means, collectively, Supremex Inc.,
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Mail-Well Canada Leasing Company, PNG Inc., Classic Envelope Plus,
Ltd., Innova Envelope Inc., 1158673 Ontario, Inc., CML Industries
Ltd., Mail-Well Alberta Finance, L.P., XxXxxxx, Xxxxxx & Xxxx Company,
Precision Fine Papers Inc., Regional Envelope Products Inc. - Produits
Enveloppe Regional Inc., Envelope Inc. - Enveloppe Transit Inc., and
MM&T Packaging Company, companies organized under the federal and
provincial laws of Canada.";
""Canadian Reserves" means reserves (in addition to
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any other Reserves) against Eligible Canadian Accounts, established by
Agent from time to time in Agent's reasonable credit judgment. Without
limiting the generality of the foregoing, the following reserves shall
be deemed to be a reasonable exercise of Agent's credit judgment: (a)
reserves for exchange rate fluctuations between reporting periods, to
the extent of any resulting reduction in the Dollar value of Eligible
Canadian Accounts reported on the most recent Borrowing Base
Certificate, and (b) the Priority Payable Reserve."
""Canadian Security Documents" means, collectively,
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the general security agreements, deeds of hypothec and collection
account agreements, all dated as of December , 2002, signed by each
--
Canadian Guarantor in favor of the Agent, for its benefit and the
benefit of the Lenders.";
""CCAA" means The Companies' Creditors Arrangement
----
Act (Canada) and all regulations thereunder, as amended from time to
time, and any successor legislation.";
""Civil Code" means the Civil Code of Quebec, and all
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regulations thereunder, as amended from time to time, and any successor
legislation."
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""Eligible Canadian Accounts" means, only so long as
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the Canadian Guarantee is in full force and effect, the Accounts of the
Canadian Guarantors which the Agent in the exercise of its reasonable
commercial discretion determines to be Eligible Canadian Accounts.
Without limiting the discretion of the Agent to establish other
criteria of ineligibility, Eligible Canadian Accounts shall not, unless
the Agent in its sole discretion elects (which discretion cannot be
exercised without the consent of the Required Lenders), include any
Account:
(a) with respect to which more than 90 days have elapsed
since the date of the original invoice therefor or which is more than
60 days past due;
(b) with respect to which any of the representations,
warranties, covenants, and agreements contained in the Canadian
Security Documents or in this Agreement are incorrect or have been or
be breached;
(c) with respect to which Account (or any other Account
due from the Account Debtor thereon), in whole or in part, a check,
promissory note, draft, trade acceptance or other instrument for the
payment of money has been received, presented for payment and returned
uncollected for any reason;
(d) which represents a progress billing (as hereinafter
defined) or as to which a Canadian Guarantor has extended the time for
payment to a date more than 60 days past the original due date or 90
days past the original invoice date without the consent of the Agent;
for the purposes hereof, "progress billing" means any invoice for
goods sold or leased or services rendered under a contract or
agreement pursuant to which the Account Debtor's obligation to pay
such invoice is conditioned upon the completion by such Canadian
Guarantor of any further performance under the contract or agreement;
(e) with respect to which any one or more of the following
events has occurred to the Account Debtor on such Account: death or
judicial declaration of incompetency of an Account Debtor who is an
individual; the filing by or against the Account Debtor of an
Insolvency Proceeding or of any formal or informal proceeding for the
dissolution or liquidation of, settlement of claims against, or
winding up of affairs of, the Account Debtor; the sale, assignment, or
transfer of all or any material part of the assets of the Account
Debtor; the nonpayment generally by the Account Debtor of its debts as
they become due; or the cessation of the business of the Account
Debtor as a going concern;
(f) if 50% or more of the aggregate Canadian Dollar amount
of outstanding Accounts owed at such time by the Account Debtor
thereon is classified as ineligible under clause (a) above;
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(g) owed by an Account Debtor which: (i) neither (1)
maintains its chief executive office in the United States of America
or Canada; nor (2) is organized under the laws of the United States of
America or Canada or any state or province thereof; or (ii) is the
government of any country or sovereign state
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other than the United States of America or Canada, or of any state,
province, municipality, or other political subdivision thereof or of
any department, agency, public corporation, or other instrumentality
thereof; except to the extent that such Account is secured or payable
by a letter of credit satisfactory to the Agent in its discretion;
(h) owed by an Account Debtor which is an Affiliate or
employee of any Loan Party;
(i) except as provided in clause (k) below, with respect
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to which either the perfection, enforceability, or validity of the
Agent's Liens in such Account, or the Agent's right or ability to
obtain direct payment to the Agent of the proceeds of such Account, is
governed by any federal, state, or local statutory requirements other
than those of the UCC, PPSA or Civil Code;
(j) owed by an Account Debtor to which any Borrower or any
of its Subsidiaries is indebted in any way, or which is subject to any
right of setoff or recoupment by the Account Debtor, unless the
Account Debtor has entered into an agreement acceptable to the Agent
to waive setoff rights; or if the Account Debtor thereon has disputed
liability or made any claim with respect to any other Account due from
such Account Debtor; but in each such case only to the extent of such
indebtedness, setoff, recoupment, dispute, or claim;
(k) owed by the government of the United States of America
or Canada, or any department, agency, public corporation, or other
instrumentality thereof, unless, in the case of the United States of
America, the Federal Assignment of Claims Act of 1940, as amended (31
U.S.C. Section 3 727 et seq.), and any other steps necessary or
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desirable to perfect or protect the Agent's Liens therein, have been
complied with to the Agent's satisfaction with respect to such Account
(but only to the extent that all such Accounts, together with all
Accounts of the Borrowers that would have been deemed ineligible under
clause (k) of the "Eligible Accounts" definition herein, in the
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aggregate, exceed 5% of the aggregate gross accounts receivable of the
Canadian Guarantors and the Borrowers);
(l) owed by any state, province, municipality, or other
political subdivision of the United States of America or Canada, or
any other country, or any department, agency, public corporation, or
other instrumentality thereof, as to which the Agent determines that
its Lien therein is not or cannot be perfected;
(m) which represents a sale on a xxxx-and-hold, guaranteed
sale, sale and return, sale on approval, consignment, or other
repurchase or return basis;
(n) which is evidenced by a promissory note or other
instrument or by chattel paper;
(o) if the Agent believes, in the exercise of its reasonable
judgment, that the prospect of collection of such Account is impaired
or that the
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Account may not be paid by reason of the Account Debtor's financial
inability to pay;
(p) with respect to which the Account Debtor is located
in any state requiring the filing of a Notice of Business Activities
Report or similar report in order to permit the relevant Canadian
Guarantor to seek judicial enforcement in such state of payment of
such Account, unless such Canadian Guarantor has qualified to do
business in such state or has filed a Notice of Business Activities
Report or equivalent report for the then current year;
(q) which arises out of a sale not made in the ordinary
course of the relevant Canadian Guarantor's business;
(r) with respect to which the goods giving rise to such
Account have not been shipped in full and delivered to and accepted by
the Account Debtor or the services giving rise to such Account have
not been performed by the relevant Canadian Guarantor, and, if
applicable, accepted by the Account Debtor, or the Account Debtor
revokes its acceptance of such goods or services, or for which a
chargeback or debit memo exists;
(s) owed by an Account Debtor which is obligated to the
Canadian Guarantors respecting Accounts the aggregate unpaid balance
of which exceeds 15% of the aggregate unpaid balance of all Accounts
owed to the Canadian Guarantors at such time by all of the Canadian
Guarantors' Account Debtors, but only to the extent of such excess;
(t) which is not subject to a first priority and perfected
security interest in favor of the Agent for the benefit of the
Lenders; or
(u) that is a COD/cash account.
If any Account at any time ceases to be an Eligible
Canadian Account, then such Account shall promptly be excluded from the
calculation of Eligible Canadian Accounts."
""Foreign Plan" means any benefit plan established or
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maintained outside of the United States which a Loan Party maintains,
sponsors, or to which such Person has any obligation or liability and
which provides or otherwise makes available retirement or deferred
benefits of any kind whatsoever to employees."
""Net Amount of Eligible Canadian Accounts" means, at
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any time, the gross amount of Eligible Canadian Accounts, calculated in
US Dollars, less sales, excise or similar taxes, and less returns,
discounts, claims, credit, allowances, accrued rebates, offsets,
deductions, counterclaims, disputes, unapplied cash, and other defenses
of any nature at any time issued, owing, granted, outstanding,
available or claimed."
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""PPSA" means the Personal Property Security Act of
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Ontario, and all regulations thereunder, as amended from time to time,
and any successor legislation."
""Priority Payable Reserve" means any reserve that
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the Agent may from time to time establish (in its sole discretion) with
respect to the Canadian Guarantors to cover any amount payable by any
Canadian Guarantor which is secured by a Lien in favor of a
Governmental Authority which would rank or would be capable of ranking
prior to or pari passu with the Agent's Liens (in the event Agent were
granted Liens) on any Accounts of such Canadian Guarantor, including
amounts owing for wages, vacation pay, severance pay, employee
deductions, sales tax, excise tax, tax payable pursuant to Part IX of
the Excise Tax Act (Canada) (net of GST input credits) or similar
applicable provincial legislation, income tax, workers compensation,
government royalties, pension fund obligations, overdue rents, and
other statutory or other claims that would have or might have priority
over any Liens granted to Agent in the future."
""Specified Canadian Guarantors" means Precision Fine
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Papers Inc., Regional Envelope Products Inc. - Produits Enveloppe
Regional Inc., and Envelope Inc. - Enveloppe Transit Inc., companies
organized under the federal and provincial laws of Canada.";
O. Subsection 3(i) of Annex A to the Agreement is hereby
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amended by adding, immediately after the reference to "the Parent," in the
second line thereof, "the Canadian Guarantors,";
P. Section 4.1 of the Agreement is hereby amended by deleting
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all references to "Borrower" or "Borrowers" and substituting, respectively,
"Loan Party" or "Loan Parties" therefor;
Q. Section 5.2 of the Agreement is hereby amended as follows:
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(i) by amending Subsection (f) thereof to read as follows:
"(f) Promptly after filing with the PBGC,
the IRS, or any other Governmental Authority, a copy of each
annual report or other filing filed with respect to each Plan
or Foreign Plan of Parent and any of its Subsidiaries; and
upon request by Agent, from time to time, a company prepared
report respecting each Plan or Foreign Plan reflecting the
current actuarial calculations for such Plan or Foreign Plan
and indicating the extent, if any, by which the assets in such
Plan or Foreign Plan are insufficient to pay anticipated
future benefits as they become due."
(ii) by adding, immediately before Subsection (l) thereof:
"(l) the Parent shall cause the Canadian Guarantors
to furnish to the Agent, from time to time upon the request of
the Agent,
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statements of all its bank accounts, including, without
limitation, all of its Canadian bank accounts, and promptly
upon opening any new bank accounts, a statement of any such
new bank account, all such statements to be treated as
confidential pursuant to Section 14.17; and"
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(iii) by deleting "(l)" in the last Subsection thereof and
substituting "(m)" therefor;
R. Subsection 5.3(n) of the Agreement is hereby amended by
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adding, immediately after each reference to "Plan" therein, "or Foreign Plan";
S. Section 5.3 of the Agreement is hereby amended by adding a
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new clause (p) therein, which shall read as follows:
"(p) Upon the Agent's request, or, in the event that
a filing referenced in this clause (p) reflects a significant change
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with respect to the matters covered thereby which could foreseeably
have, or has resulted in, any liability to any Loan Party in excess of
$2,000,000, within 3 Business Days of the filing thereof with any
Governmental Authority, copies of the following: (i) each filing,
report or notice filed with any Governmental Authority with respect to
each Foreign Plan; (ii) any notices received from a Governmental
Authority or relating to or concerning either the funding status of any
Foreign Plan or any claims against any Loan Party regarding any Foreign
Plan;";
T. Subsection 6.19(b) of the Agreement is hereby amended by
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adding, immediately after each reference to "Plan" therein, "or Foreign Plan";
U. Section 6.19 of the Agreement is hereby amended by adding
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a new clause (d) therein, which shall read as follows:
"(d) Each Foreign Plan is in compliance in all
material respects with the laws and regulations applicable to such
Foreign Plan and each Loan Party has satisfied all contribution
obligations in all material respects with respect to such Foreign Plan
(to the extent applicable). Each Foreign Plan and related funding
arrangement that is intended to qualify for tax-favored status has been
reviewed and approved for such status by the appropriate Governmental
Authority (or has been submitted for such review and approval within
the applicable time period), and nothing has occurred and no condition
exists that is likely to cause the loss or denial of such tax-favored
status. No Foreign Plan has any liabilities in excess of the current
value of such Foreign Plan's assets in an amount in excess of
$10,000,000, as determined in accordance with the assumptions used for
funding such Foreign Plan pursuant to reasonable accounting standards
in accordance with applicable law. No Loan Party has incurred or
reasonably expects to incur any material liability as a result of the
termination or other insolvency of any Foreign Plan or any material
liability which is not otherwise funded or satisfied with readily
available assets set aside with respect to such Foreign Plan.";
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V. Section 6.20 of the Agreement is hereby amended by adding,
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immediately after each reference to "federal" therein, ", provincial, state";
W. Section 7.8 of the Agreement is hereby amended by adding,
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immediately after the word "ERISA" in the eighth line thereof, the following:
"(f) maintain each Foreign Plan in compliance in all
material respects with Requirements of Law applicable to such Foreign
Plan; (g) satisfy all contribution obligations in all material respects
with respect to such Foreign Plan; and (h) cause each Foreign Plan and
related funding arrangements that are intended to qualify for
tax-favored status to maintain such tax-favored status.";
X. Subsection 7.9(d) of the Agreement is hereby amended by
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adding the following at the end thereof:
", and any Canadian Guarantor may merge with, or sell
all or substantially all of its assets to, a Loan Party that is not a
Borrower; provided, that in the event of a merger of a Canadian
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Guarantor with any Loan Party organized in the United States that is
not a Borrower, such United States Loan Party shall be the surviving
Person and shall enter into any documentation reasonably requested by
Agent to evidence the continuing liability of such United States Loan
Party for any obligations of the disappearing Canadian Guarantor to the
Agent, and the Agent's Liens on all Collateral of such United States
Loan Party to secure the same; and";
Y. Subsection 7.14(b) of the Agreement is hereby amended and
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restated in its entirety to read as follows:
"(b) the prepayment of any Debt owed by one Loan
Party to another Loan Party (other than Parent), to the extent such
Debt is permitted hereunder and no Default or Event of Default exists
or would result therefrom (taking such prepayment into account).";
Z. Subsection 7.20(c) of the Agreement is hereby amended by
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adding, immediately after the reference to "domestic" in the fourth line
thereof, "or Canadian";
AA. Subsection 7.20(d) of the Agreement is hereby amended as
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follows:
(i) by adding, immediately after each reference to
"domestic" therein, "or Canadian";
(ii) by adding, in clause (ii) therein, immediately
after "Agreement" in the fourth line thereof, "and any other
applicable Loan Documents";
(iii) by deleting, in clause (iii) therein, the word
"Security Agreement", and replacing it with "Loan Documents";
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(iv) by adding, in clause (iii) therein, immediately
after "UCC-1 financing statements", "or equivalent PPSA or other
applicable filings in Canada";
BB. Section 7.25 of the Agreement is hereby amended by
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deleting section reference "7.25" and substituting section reference "7.27"
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therefor;
CC. The Agreement is hereby amended by adding, immediately
after Section 7.24, the following:
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"7.25 Proceeds from Surplus Cash Deposits. Parent
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shall cause Canadian Guarantors, to the extent that they have on
deposit in any bank accounts unapplied cash (being surplus cash not
used for general working capital needs) exceeding $10,000,000 in the
aggregate, at any time, to transfer such unapplied cash to a Borrower
by loan, Distribution or other intercompany offer.
7.26 Excess Collections, Investments etc. Parent
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shall not permit Canadian Guarantors to have, in the aggregate, a sum
exceeding the equivalent amount of $10,000,000 in the form of (i) a
deposit of cash in any bank accounts, (ii) securities (other than
intercompany promissory notes permitted under this Agreement and in the
possession of Agent), and/or (iii) property that is a Restricted
Investment.
7.27 Specified Canadian Guarantors. The Accounts of
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the Specified Canadian Guarantors shall not be considered Eligible
Canadian Accounts for purposes of calculating the Borrowing Base
hereunder, nor may Parent or any other Loan Party make advances,
distributions or otherwise transfer assets to any Specified Canadian
Guarantor, until such time as the Agent shall have completed its due
diligence of the Specified Canadian Guarantors, and obtained such
estoppels, releases or other documentation as may be necessary or
useful to ensure the priority of Agent's Lien on such Specified
Canadian Guarantors' Collateral, in each case to the Agent's
satisfaction.";
DD. Subsections 9.1(e), (f) and (g) of the Agreement are
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hereby amended and restated in their entirety to read as follows:
"(e) Parent or any Subsidiary of Parent shall (i)
file a voluntary petition in bankruptcy or file a voluntary petition or
an answer or file a proposal or notice of intent to file a proposal or
otherwise commence any action or proceeding seeking reorganization,
arrangement, consolidation or readjustment of its debts or which seeks
to stay or has the effect of staying any creditor or for any other
relief under the Bankruptcy Code, the BIA or CCAA, as amended, or under
any other bankruptcy, insolvency, liquidation, winding up, corporate or
similar legislation of the United States, Canada or any foreign
country, and any provincial, state or federal political subdivision
thereof, now or hereafter existing, or consent to, approve of, or
acquiesce in, any such petition, proposal, action or proceeding; (ii)
apply for or acquiesce in the appointment of a receiver, assignee,
liquidator, sequestrator, custodian, monitor, administrator, trustee or
similar officer for it or
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for all or any part of its property; (iii) make an assignment for the
benefit of creditors; or (iv) be unable generally to pay its debts as
they become due;
(f) an involuntary petition shall be filed or an
action or proceeding otherwise commenced seeking reorganization,
arrangement, consolidation or readjustment of the debts of Parent or
any Subsidiary of Parent or for any other relief under the Bankruptcy
Code, the BIA or CCAA, as amended, or under any other bankruptcy,
insolvency, liquidation, winding up, corporate or similar legislation
of the United States, Canada, any foreign country, and any provincial,
state or federal political subdivision thereof, now or hereafter
existing and such petition, proposal or proceeding shall not be
dismissed within 30 days after the filing or commencement thereof or an
order of relief (or comparable order under any other Requirement of
Law) against any Loan Party shall be entered with respect thereto;
(g) a receiver, assignee, liquidator, sequestrator,
custodian, monitor, administrator, trustee or similar officer for
Parent or any Subsidiary of Parent or for all or any part of its
property shall be appointed or a warrant of attachment, execution, writ
of seizure or seizure and sale or similar process shall be issued
against any part of the property of Parent or any Subsidiary of Parent
or any distress or analogous process is levied upon all or any part of
Parent or any Subsidiary of Parent.";
EE. Subsection 9.1(h) of the Agreement is hereby amended as
-----------------
follows:
(i) by adding, immediately after the term "dissolution"
in the second line thereof, "or like process"; and
(ii) by adding, immediately after the term "state" in the
third line thereof, ", provincial or federal";
FF. Subsection 9.1(o) of the Agreement is hereby amended by
-----------------
adding, immediately before the word "or" in the ninth line thereof, the
following:
"or (iv) the Foreign Plans in the aggregate have
liabilities in excess of assets (determined in accordance with the
assumptions under each such Foreign Plan and under Requirements of Law
used for funding each Foreign Plan pursuant to reasonable accounting
standards in accordance with Requirements of Law) in an amount in
excess of $10,000,000;";
GG. Subsection 9.2(b) of the Agreement is hereby amended by
-----------------
adding, immediately after the reference to "UCC" in the first line thereof,
"PPSA and the Civil Code";
HH. Subsection 11.2(c)(v) of the Agreement is hereby amended
---------------------
by adding, immediately after the reference to "Agreement" therein, "and the
other Loan Documents";
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II. Section 12.13 of the Agreement is hereby amended by
-------------
adding, immediately after the reference to "UCC" in the third line thereof,
"or the applicable provisions of the PPSA or Civil Code";
JJ. Section 12.17 of the Agreement is hereby amended by
-------------
adding a second paragraph thereto, reading as follows:
"Without limiting the generality of the above
paragraph, for the purposes of creating a solidarite active in
accordance with Article 1541 of the Civil Code of Quebec, between each
Lender, on the one hand, and the Agent, on the other hand, each Loan
Party and each such Lender acknowledge and agree with the Agent that
such Lender and the Agent are hereby conferred the legal status of
solidary creditors of each Loan Party in respect of all Obligations,
present and future, owed by each Loan Party to each such Lender and the
Agent (collectively, the "Solidary Claim"). Each Loan Party which is
not a signatory of this Agreement but is or may become a signatory to
any other Loan Document shall be deemed to have accepted the provisions
contained in this paragraph by its execution of such other Loan
Document. Accordingly, but subject (for the avoidance of doubt) to
Article 1542 of the Civil Code of Quebec, the Loan Parties are
irrevocably bound towards the Agent and each Lender in respect of the
entire Solidary Claim of the Agent and such Lender. As a result of the
foregoing, the parties hereto acknowledge that the Agent and each
Lender shall at all times have a valid and effective right of action
for the entire Solidary Claim of the Agent and such Lender and the
right to give full acquittance for it. Accordingly, without limiting
the generality of the foregoing, the Agent, as solidary creditor with
each Lender, shall at all times have a valid and effective right of
action in respect of all Obligations, present and future, owed by each
Loan Party to the Agent and to the Lenders or any of them and the right
to give a full acquittance for same. The parties further agree and
acknowledge that the Agent's Liens on the Collateral shall be granted
to the Agent, for its own benefit and for the benefit of the Lenders.";
KK. Section 14.20 of the Agreement is hereby amended by
-------------
deleting such section in its entirety and replacing it with the following:
"[Intentionally Deleted]".
LL. The form of the Borrowing Base Certificate attached to the
Agreement as Exhibit B is hereby amended and restated in its entirety to read as
---------
set forth on Exhibit B attached hereto and by this reference made a part of the
---------
Agreement, as amended hereby;
MM. The form of Assignment and Acceptance Agreement attached
to the Agreement as Exhibit F is hereby amended and restated in its entirety to
---------
read as set forth on Exhibit F attached hereto and by this reference made a part
---------
of the Agreement, as amended hereby;
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NN. All Schedules attached to the Agreement are hereby amended
and restated in their entirety and are attached hereto and by this reference
made a part of the Agreement, as amended hereby.
Section 2. Conditions. The effectiveness of this Amendment is subject
----------
to the satisfaction of the following conditions precedent:
A. Amendment. A fully executed copy of this Amendment signed
---------
by Parent, the Borrowers, and the Required Lenders shall be delivered to the
Agent;
B. Canadian Guarantee. A fully executed copy of the Canadian
------------------
Guarantee signed by the Canadian Guarantors in favor of the Lenders shall be
delivered to the Agent;
C. Canadian Security Documents. Fully executed copies of the
---------------------------
Canadian Security Documents signed by the Canadian Guarantors shall be delivered
to the Agent, which shall, as applicable, include any landlord waivers, bailee's
(processor) waivers or warehouseman's waivers;
D. Canadian Organizational Documents. True and correct copies
---------------------------------
of the Articles and Certificate of Incorporation/Amendment of the Canadian
Guarantors certified by the appropriate governmental authority of the place of
organization in Canada, together with true and correct copies of each Canadian
Guarantor's bylaws and corporate resolutions authorizing the execution and
delivery of the Canadian Guarantee and Canadian Security Documents certified by
a duly authorized officer;
E. Financing Statement, Registrations. Agent shall have
----------------------------------
received copies of proper financing statements, duly filed on or before the date
hereof under the Civil Code of Quebec, the PPSA or under the personal property
regimes of all jurisdictions that the Agent may deem necessary or desirable in
order to perfect the Agent's liens;
F. Legal Opinions. Agent shall have received opinions of U.S.
--------------
counsel to the Canadian Guarantors and Canadian counsel to the Canadian
Guarantors in the various provincial jurisdictions of Canada in form and
substance satisfactory to Agent and Agent's counsel;
G. Pledge Agreement Amendment. A fully executed copy of
--------------------------
Amendment No. 1 to Pledge Agreement (which amends that certain Stock and LLC
Membership Pledge, dated as of June 27, 2002, by and among the Pledgors and
Agent) shall be delivered to the Agent;
H. Other Documents. Parent, the Borrowers, and Canadian
---------------
Guarantors shall have executed and delivered to the Agent such other documents
and instruments as the Agent may reasonably require in furtherance of this
Amendment, the Canadian Guarantee and the Canadian Security Documents.
Section 3. Miscellaneous.
-------------
A. Survival of Representations and Warranties. All
------------------------------------------
representations and warranties made in the Agreement or any other document or
documents relating thereto, including, without limitation, any Loan Document
furnished in connection with this Amendment,
15
shall survive the execution and delivery of this Amendment and the other Loan
Documents, and no investigation by Agent or Lenders or any closing shall affect
the representations and warranties or the right of Agent or Lenders to rely
thereon;
B. Reference to Agreement. The Agreement, each of the Loan
----------------------
Documents, and any and all other agreements, documents or instruments now or
hereafter executed and delivered pursuant to the terms hereof, or pursuant to
the terms of the Agreement as amended hereby, are hereby amended so that any
reference therein to the Agreement shall mean a reference to the Agreement as
amended hereby;
C. Agreement Remains in Effect. The Agreement and the Loan
---------------------------
Documents, as amended hereby, remain in full force and effect and the Borrowers
ratify and confirm their agreements and covenants contained therein. Parent and
the Borrowers hereby confirm that, after giving effect to this Amendment, no
Event of Default or Default exists as of such date;
D. Severability. Any provision of this Amendment held by a
------------
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable;
E. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND
--------------
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICT OF
LAWS PROVISIONS PROVIDED THAT ISSUES WITH RESPECT TO THE CREATION, PERFECTION,
AND ENFORCEMENT OF LIENS UNDER DIVISION 9 OF THE UCC MAY GIVE EFFECT TO
APPLICABLE CHOICE OR CONFLICT OF LAW RULES SET FORTH IN ARTICLE 9 OF THE UCC) OF
THE STATE OF CALIFORNIA; PROVIDED, THAT THE AGENT AND THE LENDERS SHALL RETAIN
--------
ALL RIGHTS ARISING UNDER FEDERAL LAW;
F. Successors and Assigns. This Amendment is binding upon
----------------------
and shall inure to the benefit of Agent, the Lenders, Parent and the Borrowers
and their respective successors and assigns; provided, however, that Parent and
-------- -------
the Borrowers may not assign or transfer any of their rights or obligations
hereunder without the prior written consent of the Lenders;
G. Counterparts. This Amendment may be executed in one or
------------
more counterparts, each of which when so executed shall be deemed to be an
original, but all of which when taken together shall constitute one and the same
instrument;
H. Headings. The headings, captions and arrangements used
--------
in this Amendment are for convenience only and shall not affect the
interpretation of this Amendment;
I. NO ORAL AGREEMENTS. THIS AMENDMENT, TOGETHER WITH THE
------------------
OTHER LOAN DOCUMENTS AS WRITTEN, REPRESENTS THE FINAL AGREEMENT AMONG THE AGENT,
THE LENDERS, PARENT AND THE BORROWERS AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
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THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE AGENT, THE LENDERS, PARENT AND
THE BORROWERS;
J. Canadian Guarantors as Loan Parties. By signing below,
-----------------------------------
each Canadian Guarantor acknowledges and agrees that from and after the
effective date hereof such Canadian Guarantor shall become a Loan Party, subject
to all provisions in the Agreement relating to a Loan Party, with effect from
the effective date hereof.
*****
17