Exhibit 99
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XXXXXXXX COMMERCIAL CORPORATION
as Domestic Borrower
XXXXXXXX COMMERCIAL CANADA INC.
as Canadian Borrower
XXXXXXXX COMMERCIAL EUROPE LIMITED
XXXXXXXX LIMITED
as UK Borrowers
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LOAN AND SECURITY AGREEMENT
Dated: September 25, 2002
$25,000,000
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FLEET CAPITAL CORPORATION
Individually and as Administrative Agent
FLEET CAPITAL CANADA CORPORATION
Individually and as Canadian Agent
FLEET NATIONAL BANK, LONDON U.K. BRANCH,
TRADING AS FLEETBOSTON FINANCIAL
Individually and as UK Agent
THE LENDERS NAMED HEREIN
__________________________________________________
TABLE OF CONTENTS
SECTION 1. CREDIT FACILITY ....................................... 1
1.1 Revolving Credit Facility. ............................................ 2
1.2 Letters of Credit; LC Guaranties. ..................................... 5
1.3 Term Loan Facilities. ................................................. 7
1.4 UK Borrowers. ......................................................... 8
SECTION 2. INTEREST, FEES AND CHARGES ............................ 9
2.1 Interest. ............................................................. 9
2.2 Computation of Interest and Fees. ..................................... 11
2.3 Fee Letter. ........................................................... 11
2.4 Letter of Credit and LC Guaranty Fees. ................................ 11
2.5 Unused Line Fee. ...................................................... 12
2.6 Fronting Fees and Participation Fees. ................................. 12
2.7 Prepayment Fee. ....................................................... 13
2.8 Audit Fees. ........................................................... 14
2.9 Reimbursement of Expenses. ............................................ 14
2.10 Bank Charges. ......................................................... 15
2.11 Collateral Protection Expenses; Appraisals. ........................... 15
2.12 Payment of Charges. ................................................... 16
2.13 Taxes. ................................................................ 16
SECTION 3. LOAN ADMINISTRATION ................................... 23
3.1 Manner of Borrowing Loans. ............................................ 23
3.2 Payments. ............................................................. 31
3.4 Application of Payments and Collections. .............................. 41
3.5 All Loans to Constitute One Obligation. ............................... 44
3.6 Loan Accounts. ........................................................ 44
3.7 Statements of Account. ................................................ 44
3.8 Sharing of Payments, Etc. ............................................. 45
3.9 Increased Costs. ...................................................... 46
3.10 Basis for Determining Interest Rate Inadequate or Unfair. ............. 48
3.11 Location of Payments .................................................. 48
SECTION 4. TERM AND TERMINATION .................................. 49
4.1 Term of Agreement. .................................................... 49
4.2 Termination. .......................................................... 49
SECTION 5. SECURITY INTERESTS .................................... 51
5.1 Security Interest in Collateral. ...................................... 51
5.2 Other Collateral. ..................................................... 57
5.3 Lien Perfection; Further Assurances. .................................. 58
5.4 Lien on Realty. ....................................................... 58
5.5 UK Real Estate ........................................................ 59
SECTION 6. COLLATERAL ADMINISTRATION ............................. 60
6.1 General. .............................................................. 60
6.2 Administration of Accounts. ........................................................... 61
6.3 Records and Reports of Inventory ...................................................... 64
6.4 Administration of Equipment. .......................................................... 65
SECTION 7. REPRESENTATIONS AND WARRANTIES ....................................... 66
7.1 General Representations and Warranties. ............................................... 66
7.2 Continuous Nature of Representations and Warranties. .................................. 77
7.3 Survival of Representations and Warranties. ........................................... 77
SECTION 8. COVENANTS AND CONTINUING AGREEMENTS .................................. 77
8.1 Affirmative Covenants. ................................................................ 77
8.2 Negative Covenants. ................................................................... 85
8.3 Specific Financial Covenants. ......................................................... 91
SECTION 9. CONDITIONS PRECEDENT ................................................. 92
9.1 Documentation. ........................................................................ 92
9.2 No Default. ........................................................................... 92
9.3 Other Conditions. ..................................................................... 92
9.4 No Litigation. ........................................................................ 92
9.5 Material Adverse Effect. .............................................................. 92
9.6 Fees. ................................................................................. 93
9.7 Collateral. ........................................................................... 93
9.8 Diligence. ............................................................................ 93
9.9 Corporate Matters. .................................................................... 94
9.10 Environmental Matters. ................................................................ 94
9.11 Insurance. ............................................................................ 94
9.12 Legal Opinions. ....................................................................... 94
9.13 Reference Checks. ..................................................................... 94
9.14 Financial Statements. ................................................................. 94
9.15 Updated Audit. ........................................................................ 95
9.16 Costs and Expenses. ................................................................... 95
9.17 Representations and Warranties. ....................................................... 95
9.18 Availability. ......................................................................... 95
9.19 Cash Management ....................................................................... 95
SECTION 10. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT .................... 95
10.1 Events of Default. .................................................................... 95
10.2 Acceleration of the Obligations. ...................................................... 100
10.3 Other Remedies. ....................................................................... 100
10.4 Set Off and Sharing of Payments. ...................................................... 103
10.5 Remedies Cumulative; No Waiver. ....................................................... 105
SECTION 11. THE ADMINISTRATIVE AGENT, THE CANADIAN AGENT AND THE UK AGENT ........ 106
11.1 Authorization and Action. ............................................................. 106
11.2 Administrative Agent's, Canadian Agent's and UK Agent's Reliance, Etc. ................ 000
00.0 Xxxxx, Xxxxx Xxxxxx, Xxxxx XX and Affiliates. ................................... 108
11.4 Lender Credit Decision. ......................................................... 108
11.5 Indemnification. ................................................................ 109
11.6 Rights and Remedies to be Exercised by Administrative Agent, Canadian Agent and
UK Agent Only. ........................................................................ 109
11.7 Agency Provisions Relating to Collateral. ....................................... 110
11.8 Administrative Agent's, Canadian Agent's and UK Agent's Right to Purchase
Commitments. .......................................................................... 111
11.9 Right of Sale, Assignment, Participations. ...................................... 111
11.10 Amendment. ...................................................................... 113
11.11 Resignation of Administrative Agent, Canadian Agent or UK Agent; Appointment of
Successor. ............................................................................ 114
SECTION 12. MISCELLANEOUS ................................................... 115
12.1 Power of Attorney. .............................................................. 115
12.2 Indemnity. ...................................................................... 116
12.3 Sale of Interest. ............................................................... 117
12.4 Severability. ................................................................... 117
12.5 Successors and Assigns. ......................................................... 117
12.6 Cumulative Effect; Conflict of Terms. ........................................... 118
12.7 Execution in Counterparts. ...................................................... 118
12.8 Notices. ........................................................................ 118
12.9 Consent. ........................................................................ 120
12.10 Credit Inquiries. ............................................................... 120
12.11 Time of Essence. ................................................................ 120
12.12 Entire Agreement. ............................................................... 120
12.13 Interpretation. ................................................................. 121
12.14 Confidentiality. ................................................................ 121
12.15 Judgment. ....................................................................... 121
12.16 GOVERNING LAW; CONSENT TO FORUM. ................................................ 122
12.17 WAIVERS BY BORROWERS. ........................................................... 123
12.18 Joint and Several ............................................................... 124
12.19 Further Assurances. ............................................................. 124
12.20 Interest Act (Canada). .......................................................... 125
12.21 Australian Indebtedness ......................................................... 125
LIST OF EXHIBITS AND SCHEDULES
Exhibit 1.2 Form of Revolving Note
Exhibit 1.3 Form of Term Note
Exhibit 1.4 Joinder Agreement
Exhibit 8.1.3 Compliance Certificate
Exhibit 8.1.3(g) Statutory Payables Certificate
Exhibit 8.1.4 Borrowing Base Certificate
Exhibit 8.3 Financial Covenants
Exhibit 12.18 Joint Borrower Provisions
Schedule A Mandatory Costs
Schedule 1.1 Lender Commitments
Schedule 1.1.4 Existing Indebtedness to be Repaid with Loan Proceeds
Schedule 6.1.1 Business Locations
Schedule 7.1.1 Jurisdictions in which Borrowers and each Subsidiary are
Authorized to do Business
Schedule 7.1.4 Capital Structure of Borrowers and each Subsidiary
Schedule 7.1.4A Corporate Organization Chart
Schedule 7.1.4B Closing Date Restricted Subsidiaries
Schedule 7.1.5 Names, State of Incorporation, Type of Organization and
Organizational I.D. Number.
Schedule 7.1.12 Solvency
Schedule 7.1.13 Surety Obligations
Schedule 7.1.14 Taxes
Schedule 7.1.15 Brokers' Fees
Schedule 7.1.16 Patents, Trademarks, Copyrights and Licenses
Schedule 7.1.18 Compliance With Laws
Schedule 7.1.20 Litigation
Schedule 7.1.22 Capitalized and Operating Leases
Schedule 7.1.23 Pension Plans
Schedule 7.1.25 Labor Relations
Schedule 8.2.3(b) Existing Indebtedness
Schedule 8.2.3(i) Certain existing guaranties
Schedule 8.2.4 Affiliate Transactions
Schedule 8.2.5 Permitted Liens
Schedule 8.2.9 Operating Leases
Schedule 8.2.13 Restricted Investments
List of Exhibits and Schedules
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT is made as of September 25, 2002, by
and among FLEET CAPITAL CORPORATION ("Fleet"), a Rhode Island corporation with
an office at 00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx Xxxx, Xxxxxxxxxx 00000,
individually as a Lender and as administrative agent ("Administrative Agent")
for itself and any other financial institution which is or becomes a party
hereto (each such financial institution, including Fleet, Fleet Canada (as
defined below) as Canadian Lender, each Canadian Participating Lender (as
defined in Appendix A attached hereto), Fleet UK (as defined below) as UK
Lender, and each UK Participating Lender (as defined in Appendix A attached
hereto), is referred to hereinafter individually as a "Lender" and collectively
as the "Lenders"), Fleet Capital Canada Corporation ("Fleet Canada"), a Canadian
corporation with an office at 000 Xxx Xxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx X0X
0X0 Canada, individually as the Canadian Lender and as Canadian agent ("Canadian
Agent") for itself, the Canadian Lender and any other financial entity which is
or becomes a Canadian Participating Lender (as defined in Appendix A attached
hereto), Fleet National Bank, London U.K. branch, trading as FleetBoston
Financial, a Rhode Island corporation, with an office at 00 Xxxxxxxx Xxxxxx,
Xxxxxx XX0X XXX, Xxxxxx Xxxxxxx ("Fleet UK"), individually as the UK Lender and
as United Kingdom agent ("UK Agent") for itself, the UK Lender and any other
financial entity which is or becomes a UK Participating Lender (as defined in
Appendix A attached hereto), the Lenders, Xxxxxxxx Commercial Corporation, a
Delaware corporation, with its chief executive office and principal place of
business at 00000 Xxxx Xxxx, Xxxxxxxx, Xxxxxxxxxx 00000-0000 ("Domestic
Borrower"), Xxxxxxxx Commercial Canada Inc., an Ontario corporation, with its
chief executive office and principal place of business at 0000 Xxxxxx Xxxx,
Xxxxx 0-0, Xxxxxxxxxxx, Xxxxxxx X0X 0X0 Xxxxxx ("Canadian Borrower") and the UK
Borrowers which become a party hereto pursuant to Section 1.4. Domestic
Borrower, Canadian Borrower and UK Borrowers are referred to collectively in
this Agreement as "Borrowers". Capitalized terms used in this Agreement have the
meanings assigned to them in Appendix A, General Definitions. Accounting terms
not otherwise specifically defined herein shall be construed in accordance with
GAAP consistently applied.
SECTION 1. CREDIT FACILITY
Subject to the terms and conditions of, and in reliance upon the
representations and warranties made in, this Agreement and the other Loan
Documents, Lenders agree to make a total credit facility of up to $25,000,000
available upon Borrower Representative's request therefor, as follows:
1.1 Revolving Credit Facility.
1.1.1 Domestic Revolving Credit Loans. Each Lender having a
Domestic Revolving Credit Commitment (each, a "Domestic Lender") agrees,
severally and not jointly, for so long as no Default or Event of Default exists,
to make loans denominated in U.S. Dollars (such loans relative to such Lender,
its "Domestic Revolving Credit Loans") to Domestic Borrower from time to time
during the period from the date hereof to but not including the last day of the
Term, as requested by Borrower Representative in the manner set forth in Section
3.1.1(a) hereof, provided, that no Domestic Revolving Credit Loan shall be made
if, after giving effect to the making of such Loan and the simultaneous
application of the proceeds thereof, (a) the amount of the Domestic Revolving
Credit Exposure of such Lender (which, for purposes of clarification, includes
the Domestic LC Amount and outstanding Domestic LC Obligations, as further set
forth in the definition of "Domestic Revolving Credit Exposure") would exceed
such Lender's Domestic Revolving Credit Commitment minus the aggregate principal
amount of that portion of the Domestic Term Loan owing to such Lender minus such
Lender's Domestic Revolving Loan Percentage of Reserves, if any, (b) the
aggregate amount of the Domestic Revolving Credit Exposure of all the Domestic
Lenders would exceed the Domestic Borrowing Base then in effect minus the
outstanding principal amount of the Domestic Term Loan minus Reserves applicable
to Domestic Revolving Credit Loans, if any, or (c) the aggregate amount of the
Domestic Revolving Credit Exposure of all the Domestic Lenders (which, for
purposes of clarification, includes the Domestic LC Amount and outstanding
Domestic LC Obligations, as further set forth in the definition of "Domestic
Revolving Credit Exposure") would exceed the Revolving Credit Maximum Amount
minus the outstanding principal amount of the Domestic Term Loan minus the
Dollar Equivalent of the aggregate principal amount of the outstanding Canadian
Revolving Credit Loans minus the Dollar Equivalent of the aggregate principal
amount of the outstanding UK Revolving Credit Loans minus the Dollar Equivalent
of the outstanding principal amount of the UK Term Loans minus the Dollar
Equivalent of the UK LC Amount minus Reserves, if any. Domestic Revolving Credit
Loans may be borrowed as Domestic Base Rate Loans or Domestic LIBOR Loans.
Amounts borrowed under this Section 1.1.1 may be repaid in whole or in part and,
up to but excluding the last day of the Term, reborrowed, all in accordance with
the terms and conditions hereof. The Domestic Revolving Credit Loans shall be
further evidenced by, and repayable in accordance with the terms of, the
applicable Revolving Notes and shall be secured by all of the Domestic
Collateral.
1.1.2 Canadian Revolving Credit Loans.
(a) Subject to the terms and conditions hereof, the Canadian
Lender agrees, for so long as no Default or Event of Default exists, to
make loans to Canadian Borrower denominated in Canadian Dollars (each such
loan
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or extension of credit, a "Canadian Revolving Credit Loan") from time to
time during the period from the date hereof to but not including the last
day of the Term, as requested by the Borrower Representative in the manner
set forth in Section 3.1.1(b) hereof; provided that no Canadian Revolving
Credit Loan shall be made if, after giving effect to the making of such
Loan and the simultaneous application of the proceeds thereof, (i) the
aggregate amount of the Canadian Revolving Credit Exposure of the Canadian
Lender would exceed the Canadian Borrowing Base then in effect minus
Reserves applicable to Canadian Revolving Credit Loans, if any, or (ii) the
aggregate amount of the Domestic Revolving Credit Exposure of all the
Lenders would exceed the Revolving Credit Maximum Amount minus the
outstanding principal amount of the Domestic Term Loan minus the Dollar
Equivalent of the aggregate principal amount of the outstanding Canadian
Revolving Credit Loans minus the Dollar Equivalent of the aggregate
principal amount of the outstanding UK Revolving Credit Loans minus the
Dollar Equivalent of the outstanding principal amount of the UK Term Loans
minus the Dollar Equivalent of the UK LC Amount minus Reserves, if any. The
Canadian Revolving Credit Loans shall be further evidenced by, and
repayable in accordance with the terms of, the applicable Revolving Note
and shall be secured by all of the Canadian Collateral. Amounts borrowed
under this Section 1.1.2 may be repaid in whole or in part and, up to but
excluding the last day of the Term, reborrowed, all in accordance with the
terms and conditions hereof. Upon the making of each such Canadian
Revolving Credit Loan and subject to Section 3.2.6, each Canadian
Participating Lender shall be deemed to have irrevocably and
unconditionally purchased from the Canadian Lender, without recourse or
warranty, an undivided interest and participation in each Canadian
Revolving Credit Loan to the extent of such Canadian Participating Lender's
Canadian Percentage thereof.
(b) The Administrative Agent will determine the Dollar Equivalent
amount with respect to any (i) Canadian Revolving Credit Loans as of the
requested borrowing date, and (ii) outstanding Canadian Revolving Credit
Loans as of the last Business Day of each month, or on such earlier date
during such month as the Administrative Agent reasonably believes
necessary, for all other purposes under this Agreement where the
determination of a Dollar Equivalent is required to be made.
1.1.3 UK Revolving Credit Loans.
(a) Subject to the terms and conditions hereof, the UK Lender
agrees, for so long as no Default or Event of Default exists, to make loans
under an overdraft facility to either UK Borrower denominated in Sterling
(each such loan or extension of credit, a "UK Revolving Credit Loan") from
time to time during the period from the date hereof to but not including
the last day of the
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Term, as requested by the Borrower Representative or either UK Borrower in
the manner set forth in Section 3.1.1(c) hereof; provided that no UK
Revolving Credit Loan shall be made if, after giving effect to the making
of such Loan and the simultaneous application of the proceeds thereof, (i)
the aggregate amount of the UK Revolving Credit Exposure of the UK Lender
(which, for purposes of clarification, includes the UK LC Amount and
outstanding UK LC Obligations, as further set forth in the definition of
"UK Revolving Credit Exposure") would exceed the UK Borrowing Base then in
effect minus Reserves applicable to UK Revolving Credit Loans, if any, or
(ii) the aggregate amount of the Domestic Revolving Credit Exposure of all
the Lenders would exceed the Revolving Credit Maximum Amount minus the
outstanding principal amount of the Domestic Term Loan minus the Dollar
Equivalent of the aggregate principal amount of the outstanding Canadian
Revolving Credit Loans minus the Dollar Equivalent of the aggregate
principal amount of the outstanding UK Revolving Credit Loans minus the
Dollar Equivalent of the outstanding principal amount of the UK Term Loans
minus the Dollar Equivalent of the UK LC Amount minus Reserves, if any. UK
Revolving Credit Loans may be borrowed as UK Base Rate Loans or UK LIBOR
Loans. The UK Revolving Credit Loans shall be further evidenced by, and
repayable in accordance with the terms of, the applicable Revolving Note
and shall be secured by all of the UK Collateral. Amounts borrowed under
this Section 1.1.3 may be repaid in whole or in part and, up to but
excluding the last day of the Term, reborrowed, all in accordance with the
terms and conditions hereof. Upon the making of each such UK Revolving
Credit Loan and subject to Section 3.2.7, each UK Participating Lender
shall be deemed to have irrevocably and unconditionally purchased from the
UK Lender, without recourse or warranty, an undivided interest and
participation in each UK Revolving Credit Loan to the extent of such UK
Participating Lender's UK Percentage thereof.
(b) The Administrative Agent will determine the Dollar Equivalent
amount with respect to any (i) UK Revolving Credit Loans as of the
requested borrowing date, and (ii) outstanding UK Revolving Credit Loans,
UK Letters of Credit and UK LC Guaranties as of the last Business Day of
each month, or on such earlier date during such month as the Administrative
Agent reasonably believes necessary, for all other purposes under this
Agreement where the determination of a Dollar Equivalent is required to be
made.
1.1.4 Use of Proceeds. The Revolving Credit Loans shall be used
by Borrowers solely for (a) the satisfaction of certain existing Indebtedness of
Borrowers identified on Schedule 1.1.4 hereto, (b) for the general operating
capital needs of Borrowers in a manner consistent with the provisions of this
Agreement and all applicable laws, and (c) for other purposes permitted under
this Agreement.
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1.1.5 Reserves. Administrative Agent shall have the right to
establish reserves (collectively, "Reserves") in such amounts, and with respect
to such matters, as Administrative Agent shall reasonably deem necessary or
appropriate, against the amount of Revolving Credit Loans which Borrowers may
otherwise request under this Section 1.1 with respect to (a) price adjustments,
damages, unearned discounts, returned products or other matters for which credit
memoranda are issued in the ordinary course of Borrowers' businesses; (b)
potential dilution related to Accounts of Borrowers, (c) shrinkage, spoilage and
obsolescence of Domestic Borrower's Inventory, (d) slow-moving Inventory of
Domestic Borrower, (e) other sums chargeable against Borrowers' Loan Accounts as
Revolving Credit Loans under any section of this Agreement; (f) amounts owing by
any Borrower to any Person to the extent secured by a Lien on, or trust over,
any Property of a Borrower, including Prior Claims, landlord, bailee and customs
claims which are not subordinated to the satisfaction of Administrative Agent,
(g) with respect to UK Borrowers, claims of Preferential Creditors of the UK
Borrowers in their capacity as such, including, without limitation, a PAYE
Reserve, (h) with respect to Canadian Borrower, claims of Preferential Creditors
of the Canadian Borrower in their capacity as such, (i) liabilities (potential
or otherwise) of Domestic Borrower with respect to state sales tax, which
Reserve shall be in the amount of $644,000 on the Closing Date and shall be
subject to change after the Closing Date in the reasonable credit judgment of
the Administrative Agent, and (j) such other specific events, conditions or
contingencies as to which Administrative Agent, in its reasonable credit
judgment, determines Reserves should be established from time to time hereunder.
Notwithstanding the foregoing, Administrative Agent shall not establish any
Reserves in respect of any matters relating to any items of Collateral that have
been taken into account in determining Eligible Accounts and Eligible Inventory.
1.2 Letters of Credit; LC Guaranties.
(a) Administrative Agent agrees, for so long as no Default or Event
of Default exists and if requested by Borrower Representative on behalf of
Domestic Borrower, to (i) issue its, or cause to be issued by Bank or another
Affiliate of Administrative Agent, Domestic Letters of Credit for the account of
Domestic Borrower on the date requested by Borrower Representative or (ii)
execute Domestic LC Guaranties, by which Fleet, or an Affiliate of
Administrative Agent, on the date requested by Borrower Representative, shall
guaranty the payment or performance by Domestic Borrower of its reimbursement
obligations with respect to Domestic Letters of Credit, provided that the
Domestic LC Amount shall not exceed $1,000,000 at any time. No Domestic Letter
of Credit which is a trade Letter of Credit or Domestic LC Guaranty of a trade
letter of credit may have an expiration date that is more than 180 days after
the date of issuance thereof; and no Domestic Letter of Credit which is a
standby Letter of Credit or Domestic LC Guaranty of a standby letter of credit
may have an expiration date that is more than one year from the date of issuance
thereof,
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which expiration date may be extended for additional periods of up to one year,
subject to the immediately following sentence. No Domestic Letter of Credit or
Domestic LC Guaranty may have an expiration date that is after 30 days prior to
the last day of the Term. Each Domestic Letter of Credit shall be denominated in
U.S. Dollars. Notwithstanding anything to the contrary contained herein,
Domestic Borrower, Administrative Agent and Domestic Lenders hereby agree that
all Domestic LC Obligations and all obligations of Domestic Borrower relating
thereto shall be satisfied by the prompt issuance of one or more Domestic
Revolving Credit Loans that are Domestic Base Rate Loans, which Domestic
Borrower hereby acknowledges are requested and Domestic Lenders hereby agree to
fund. In the event that Domestic Revolving Credit Loans are not, for any reason,
promptly made to satisfy all then existing Domestic LC Obligations, each
Domestic Lender hereby agrees to pay to Administrative Agent, on demand, an
amount equal to such Domestic LC Obligations multiplied by such Domestic
Lender's Domestic Revolving Loan Percentage, and until so paid, such amount
shall be secured by the Domestic Collateral and shall bear interest and be
payable at the same rate and in the same manner as Domestic Base Rate Loans.
Immediately upon the issuance of a Domestic Letter of Credit or a Domestic LC
Guaranty under this Agreement, each Domestic Lender shall be deemed to have
irrevocably and unconditionally purchased and received from Administrative
Agent, without recourse or warranty, an undivided interest and participation
therein equal to such Domestic LC Amount or Domestic LC Obligations multiplied
by such Domestic Lender's Domestic Revolving Loan Percentage.
(b) UK Agent agrees to cause Fleet UK, and Fleet UK agrees, for
so long as no Default or Event of Default exists and if requested by Borrower
Representative on behalf of either UK Borrower or if requested by either UK
Borrower, to (i) issue its, or cause to be issued by an Affiliate of Fleet UK,
UK Letters of Credit for the account of UK Borrowers on the date requested by
Borrower Representative or (b) execute UK LC Guaranties, by which Fleet UK, or
an Affiliate of Fleet UK, on the date requested by Borrower Representative,
shall guaranty the payment or performance by UK Borrowers of its reimbursement
obligations with respect to UK Letters of Credit, provided that the UK LC Amount
shall not exceed the Dollar Equivalent of $250,000 at any time. No UK Letter of
Credit that is a trade Letter of Credit or UK LC Guaranty of a trade Letter of
Credit may have an expiration date that is more than 180 days after the date of
issuance thereof; and no UK Letter of Credit that is a standby Letter of Credit
or UK LC Guaranty of a standby letter of credit may have an expiration date that
is more than one year from the date of issuance thereof, which expiration date
may be extended for additional periods of up to one year, subject to the
immediately following sentence. No UK Letter of Credit or UK LC Guaranty may
have an expiration date that is after 30 days prior to the last day of the Term.
Each UK Letter of Credit shall be denominated in Sterling. Notwithstanding
anything to the contrary contained herein, UK Borrowers, UK Agent and UK Lender
hereby agree that all UK LC Obligations and all obligations of UK
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Borrowers relating thereto shall be satisfied by the prompt issuance of one or
more UK Revolving Credit Loans that are UK Base Rate Loans, which UK Borrowers
hereby acknowledge are requested and UK Lenders hereby agree to fund. In the
event that UK Revolving Credit Loans are not, for any reason, promptly made to
satisfy all then existing UK LC Obligations, UK Lender hereby agrees to pay to
UK Agent, on demand, an amount equal to the Dollar Equivalent of such UK LC
Obligations (paid in the currency of such UK LC Obligations), and until so paid,
such amount shall be secured by the UK Collateral and shall bear interest and be
payable at the same rate and in the same manner as UK Revolving Credit Loans
that are UK Base Rate Loans. Immediately upon the issuance of a UK Letter of
Credit or a UK LC Guaranty under this Agreement, each UK Participating Lender
shall be deemed to have irrevocably and unconditionally purchased and received
from UK Agent, without recourse or warranty, an undivided interest and
participation therein equal to such UK LC Amount or UK LC Obligations multiplied
by such UK Participating Lender's UK Percentage. UK Letters of Credit shall be
issued in accordance with the Uniform Customs and Practice for Documentary
Credits then in effect and adopted by Fleet UK.
1.3 Term Loan Facilities.
1.3.1 Domestic Term Loan Subfacility. Each Domestic Lender,
severally and not jointly, agrees to make a term loan (collectively, the
"Domestic Term Loan") to Domestic Borrower on the Closing Date, in the aggregate
principal amount of such Domestic Lender's Domestic Term Loan Commitment. The
Domestic Term Loan shall be repayable in accordance with the terms of the
applicable Term Note and shall be secured by all of the Domestic Collateral, and
shall be initially funded as a Domestic Base Rate Loan. The Domestic Term Loan
shall constitute a subfacility under the Domestic Revolving Credit Loans
facility, and the proceeds of the Domestic Term Loan shall be used solely for
the purposes for which the proceeds of the Domestic Revolving Credit Loans are
authorized to be used.
1.3.2 UK Term Loan Facility. UK Lender agrees to make a
term loan in Sterling to CCEL on the UK Term Loan Funding Date, in the aggregate
principal amount of the Sterling Equivalent of $244,000 (the "CCEL Term Loan"),
which shall be repayable in accordance with the terms of the applicable Term
Note and shall be secured by all of the UK Collateral. UK Lender agrees to make
a term loan in Sterling to CLU on the UK Term Loan Funding Date, in the
aggregate principal amount of the Sterling Equivalent of $435,000 (the "CLU Term
Loan" and, together with the CCEL Term Loan, the "UK Term Loans"), which shall
be repayable in accordance with the terms of the applicable Term Note and shall
be secured by all of the UK Collateral, and may bear interest either as UK Base
Rate Loans or UK LIBOR Loans subject to the other provisions of this Agreement.
The UK Term Loans shall at all times be denominated in Sterling. The proceeds of
the UK Term Loans shall be used solely for UK Borrowers' general operating
capital needs in a manner consistent
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with the provisions of this Agreement and all applicable laws. Upon the making
of the UK Term Loans and subject to Section 3.2.7, each UK Participating Lender
shall be deemed to have irrevocably and unconditionally purchased from the UK
Lender, without recourse or warranty, an undivided interest and participation in
the UK Term Loans to the extent of such UK Participating Lender's UK Percentage
thereof.
1.4 UK Borrowers.
Reference is made to Xxxxxxxx Commercial Europe Limited, a
limited liability company organized under the laws of England and Wales (Company
number 02837910), with its registered office and principal place of business at
Xxxxxx Road, Xxxxxxx Xxxx, Xxxxxxxxx, Xxxx, Xxxxxx Xxxxxxx XX0 0XX ("CCEL") and
Xxxxxxxx Limited, a limited liability company organized under the laws of
England and Wales (Company number 00912862), with its chief executive office and
principal place of business at Xxxxxx Road, Xxxxxxx Xxxx, Xxxxxxxxx, Xxxx,
Xxxxxx Xxxxxxx XX0 0XX ("CLU" and, together with CCEL, "UK Borrowers").
Notwithstanding anything to the contrary contained herein, the UK Borrowers are
not party to this Agreement as of the Closing Date and the obligations of the UK
Borrowers in this Agreement, and the obligations of UK Agent, UK Lender and UK
Participating Lenders to the UK Borrowers in this Agreement and the terms and
conditions of this Agreement pertaining to the UK Obligations, shall not be
effective unless and until both UK Borrowers have executed and delivered to
Administrative Agent (and Administrative Agent has accepted) a Joinder Agreement
in the form of Exhibit 1.4 hereto (the "Joinder Agreement") and otherwise in
substance satisfactory to Administrative Agent and the UK Closing Date has
occurred (provided that this sentence shall not render inapplicable to UK
Borrowers any covenants, representations or warranties which apply to
Subsidiaries of Domestic Borrower in general). Notwithstanding the definition of
"Loan Parties", the UK Borrowers and Egerton are not "Loan Parties" as of the
Closing Date and will only become "Loan Parties" upon the UK Closing Date, and
the representation contained in Section 7.1.12 shall not apply to UK Borrowers
and Egerton on the Closing Date. The failure of the Joinder Agreement to be
executed and delivered by the UK Borrowers or the failure of the UK Closing Date
to occur shall not be deemed a Default or an Event of Default nor result in any
additional Obligations of Borrowers nor the acceleration of any existing
Obligations of Borrowers nor otherwise impact in any manner whatsoever the
respective obligations of the parties under this Agreement.
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SECTION 2. INTEREST, FEES AND CHARGES
2.1 Interest.
2.1.1 Rates of Interest.
(a) Interest shall accrue on the principal amount of the Domestic
Base Rate Loans outstanding at the end of each day at a fluctuating
rate per annum equal to the Applicable Margin then in effect plus the
Domestic Base Rate. Such rate of interest shall increase or decrease
by an amount equal to any increase or decrease in the Domestic Base
Rate, effective as of the opening of business on the day that any such
change in the Domestic Base Rate occurs.
(b) Interest shall accrue on the principal amount of Canadian
Revolving Credit Loans outstanding at the end of each day at a
fluctuating rate per annum equal to the Applicable Margin then in
effect plus the Canadian Base Rate. Such rate of interest shall
increase or decrease by an amount equal to any increase or decrease in
the Canadian Base Rate, effective as of the opening of business on the
day that any such change in the Canadian Base Rate occurs.
(c) Interest shall accrue on the principal amount of UK Base Rate
Loans outstanding at the end of each day at a fluctuating rate per
annum equal to the Applicable Margin then in effect plus the UK Base
Rate. Such rate of interest shall increase or decrease by an amount
equal to any increase or decrease in the UK Base Rate, effective as of
the opening of business on the day that any such change in the UK Base
Rate occurs.
(d) Interest shall accrue on the principal amount of Domestic
LIBOR Loans outstanding at the end of each day at a fixed rate per
annum equal to the Applicable Margin then in effect plus the LIBOR for
the applicable Interest Period for such Domestic LIBOR Loan.
(e) Interest shall accrue on the principal amount of UK LIBOR
Loans outstanding at the end of each day at a fixed rate per annum
equal to the Applicable Margin then in effect plus the LIBOR for the
applicable Interest Period for such UK LIBOR Loan plus Mandatory
Costs.
(f) Interest shall be paid solely in the same currency as the
underlying Loan is made.
2.1.2 Default Rate of Interest. Upon and after the occurrence of
an Event of Default, and during the continuation thereof, the principal amount
of all Loans shall bear interest at a rate per annum equal to 2.0% plus the
interest rate otherwise applicable thereto (the "Default Rate").
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2.1.3 Maximum Interest.
(a) In no event whatsoever shall the aggregate of all
amounts deemed interest hereunder or under the Notes and charged or collected
pursuant to the terms of this Agreement or pursuant to the Notes exceed the
highest rate permissible under any law which a court of competent jurisdiction
shall, in a final determination, deem applicable hereto (the "Maximum Rate"). If
any provisions of this Agreement or the Notes are in contravention of any such
law, such provisions shall be deemed amended to conform thereto. If at any time,
the amount of interest paid hereunder is limited by the Maximum Rate, and the
amount at which interest accrues hereunder is subsequently below the Maximum
Rate, the rate at which interest accrues hereunder shall remain at the Maximum
Rate, until such time as the aggregate interest paid hereunder equals the amount
of interest that would have been paid had the Maximum Rate not applied.
(b) Without limiting the provisions of Section 2.1.3(a), if
any provision of this Agreement or any of the other Loan Documents would
obligate Canadian Borrower to make any payment of interest under the Canadian
Obligations or other amount in an amount or calculated at a rate which would be
prohibited by law or would result in a receipt by the applicable recipient of
interest under the Canadian Obligations at a criminal rate (as such terms are
construed under the Criminal Code (Canada)) then, notwithstanding such
provision, such amount or rates shall be deemed to have been adjusted with
retroactive effect to the maximum amount or rate of interest, as the case may
be, as would not be so prohibited by law or so result in a receipt by such
recipient of interest under the Canadian Obligations at a criminal rate, such
adjustment to be effected, to the extent necessary, as follows: (1) firstly, by
reducing the amount or rates of interest required to be paid to the recipient
under this Section 2.1.3(b); and (2) thereafter, by reducing any fees,
commissions, premiums and other amounts required to be paid by the Canadian
Borrower which would constitute interest under the Canadian Obligations for
purposes of Section 347 of the Criminal Code (Canada). Notwithstanding the
foregoing, and after giving effect to all adjustments contemplated thereby, if
the recipient of payments by the Canadian Borrower shall have received an amount
in excess of the maximum permitted by that section of the Criminal Code
(Canada), then Canadian Borrower shall be entitled, by notice in writing to
Canadian Agent for the benefit of such recipient, to obtain reimbursement from
such recipient in an amount equal to such excess, and pending such
reimbursement, such amount shall be deemed to be an amount payable by such
recipient to Canadian Borrower. Any amount or rate of interest under the
Canadian Obligations referred to in this Section 2.1.3 shall be determined in
accordance with generally accepted actuarial practices and principles as an
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effective annual rate of interest over the term that any Loan to Canadian
Borrower remains outstanding on the assumption that any charges, fees or
expenses that fall within the meaning of "interest" (as defined in the
Criminal Code (Canada)) shall, if they relate to a specific period of time,
be pro-rated over that period of time and otherwise be pro-rated over the
period from the Closing Date to the date all Obligations have been
indefeasibly paid in full and all commitments to make Canadian Revolving
Credit Loans have been terminated and, in the event of a dispute, a
certificate of a Fellow of the Canadian Institute of Actuaries appointed by
Canadian Agent shall be conclusive for the purposes of such determination.
2.2 Computation of Interest and Fees.
Interest, Letter of Credit and LC Guaranty fees and unused line fees
hereunder shall be calculated daily and shall be computed on the actual number
of days elapsed over a year of 360 days (except for Canadian Obligations, which
shall be based on a 365-day year, and except for UK Obligations, which shall be
based on a 365-day year). For the purpose of computing interest hereunder, (a)
all items of payment received by Administrative Agent shall be applied by
Administrative Agent on account of the Domestic Obligations (subject to final
payment of such items) one (1) Business Day after receipt by Administrative
Agent of such items in Administrative Agent's account located in Hartford,
Connecticut, (b) all items of payment received by Canadian Agent shall be
applied by Canadian Agent on account of the Canadian Obligations (subject to
final payment of such items) on the date of receipt by Canadian Agent of such
items in Canadian Agent's account located in Xxxxxxx, Xxxxxxx, Xxxxxx, and (c)
all items of payment received by UK Agent shall be applied by UK Agent on
account of the UK Obligations (subject to final payment of such items) on the
date of receipt by UK Agent of such items in UK Agent's account located in
London, England. Unless otherwise set forth herein, all fees shall be paid in
the same currency as the underlying Loan is made or Letter of Credit or LC
Guaranty is issued for which such fee is associated.
2.3 Fee Letter.
Borrowers shall pay to Administrative Agent certain fees and other
amounts in accordance with the terms of the fee letter between Borrowers and
Administrative Agent dated as of the date hereof (the "Fee Letter").
2.4 Letter of Credit and LC Guaranty Fees.
Each applicable Borrower shall pay to Administrative Agent or UK
Agent, as applicable, through Administrative Agent's Treasury and International
Services Group, (a) for Administrative Agent's or UK Agent's (as applicable) own
account, a fronting fee equal to 0.25% multiplied by the available amount of
each
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Letter of Credit (and, without duplication, LC Guaranty) at the time of issuance
of such Letter of Credit (or, without duplication, LC Guaranty) and at the time
of any amendment to increase the amount of each such Letter of Credit (or,
without duplication, LC Guaranty)(on the amount of any such increase), (b) for
the ratable benefit of the applicable Lenders, a fee equal to the Domestic LC
Margin or UK LC Margin, as applicable (provided that upon and after the
occurrence of an Event of Default, and during the continuation thereof, the
Domestic LC Margin and the UK LC Margin shall be increased by 2.0% per annum)
multiplied by the aggregate available amount of all Domestic Letters of Credit,
Domestic LC Guaranties, UK Letters of Credit and UK LC Guaranties, as
applicable, outstanding from time to time during the term of this Agreement
(calculated for each such Letter of Credit or LC Guaranty from the date of
issuance), which fees shall be payable monthly in arrears on the first day of
each month hereafter, and (c) for the benefit of Bank and Fleet UK as
applicable, all normal and customary charges associated with the issuance,
amendment, administration, processing, transfer or negotiation of such Letters
of Credit and LC Guaranties, which fees and charges shall be deemed fully earned
and shall be due and payable upon issuance, amendment, transfer or negotiation
of each such Letter of Credit or LC Guaranty or such other times as notified by
Administrative Agent, Bank or Fleet UK, as applicable, and shall not be subject
to rebate or proration upon the termination of this Agreement for any reason.
2.5 Unused Line Fee.
Domestic Borrower shall pay to Administrative Agent, for the ratable
benefit of the Domestic Lenders, a fee (the "Unused Line Fee") equal to 0.375%
per annum multiplied by the average daily amount by which the Revolving Credit
Maximum Amount exceeds the sum of the outstanding principal balance of the
Dollar Equivalent of the Revolving Credit Loans plus the Domestic LC Amount plus
the UK LC Amount plus the outstanding principal balance of the Dollar Equivalent
of the Term Loans. The Unused Line Fee shall be payable in Dollars monthly in
arrears on the first day of each month hereafter.
2.6 Fronting Fees and Participation Fees. The provisions of this
Section 2.6 shall only be effective upon the initial assignment of any of the
Loans hereunder by Fleet, Canadian Lender or UK Lender to another lender in
accordance with the provisions of this Agreement.
(a) When and as interest is collected on Canadian Revolving Credit
Loans, and until the Canadian Revolving Credit Loans are refunded in accordance
with Section 3.2.6, Canadian Borrower shall distribute to the Canadian Lender a
fee (the "Canadian Fronting Fee") equal to 1/8 of one percent (0.125%) per annum
of the outstanding principal balance of the Canadian Revolving Credit Loans, and
Canadian Agent shall distribute to the Canadian Participating Lenders, ratably,
a per annum fee (the "Canadian Participation Fee") equal to the product of such
Canadian Participating
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Xxxxxx'x Xxxxxxxx Percentage times the Applicable Margin then in effect for
Canadian Revolving Credit Loans with respect to the aggregate principal amount
of Canadian Revolving Credit Loans outstanding from time to time during the term
of this Agreement plus any Default Rate then in effect. The Canadian
Participation Fee shall be distributed by the Canadian Agent promptly upon
receipt of the relevant Applicable Margin by the Canadian Agent pursuant to
Section 2.1.1(b). If Canadian Borrower pays less than all of the interest then
due and owing by it for any period, that portion of the interest corresponding
to the Canadian Participation Fee shall be deemed to be the last portion of
interest paid or to be paid. For purposes of Section 2.13, any interest
distributed by Canadian Lender to a Canadian Participating Lender shall be
deemed to have been paid by Canadian Borrower.
(b) When and as interest is collected on UK Revolving Credit Loans
and the UK Term Loans, and until the UK Revolving Credit Loans and the UK Term
Loans are refunded in accordance with Section 3.2.7, UK Borrower shall pay to
the UK Lender a fee (the "UK Fronting Fee") equal to 1/8 of one percent (0.125%)
per annum of the outstanding principal balance of the UK Revolving Credit Loans
and UK Term Loans, and UK Agent shall distribute to the UK Participating
Lenders, ratably, a per annum fee (the "UK Participation Fee") equal to the
product of such UK Participating Lender's UK Percentage times the Applicable
Margins then in effect for UK Revolving Credit Loans and the UK Term Loans with
respect to the aggregate principal amount of UK Revolving Credit Loans and the
UK Term Loans outstanding from time to time during the term of this Agreement
plus any Default Rate then in effect. The UK Participation Fee shall be
distributed by the UK Agent promptly upon receipt of the relevant Applicable
Margin by the UK Agent pursuant to Section 2.1.1(c) and (e). If UK Borrowers pay
less than all of the interest then due and owing by them for any period, that
portion of the interest corresponding to the UK Participation Fee shall be
deemed to be the last portion of interest paid or to be paid.
2.7 Prepayment Fee.
Subject to the next sentence, Domestic Borrower shall pay to
Administrative Agent, for the ratable benefit of the Lenders, a fee in the event
that prior to the second (2/nd/) anniversary of the Closing Date, Borrowers
elect to repay the Loans in full and terminate all credit facilities provided
pursuant to this Agreement. Such fee shall be payable upon repayment of the
Loans and shall be in an amount equal to one percent (1%) of the Revolving
Credit Maximum Amount as of such date. The fee provided for in the foregoing
sentence shall not be payable in the event that subsequent to the Closing Date
FleetBoston Financial experiences a Change of Control and subsequent thereto
either (i) Fleet's business is divested or (ii) the fundamental business
practices of Fleet change to the material detriment of Borrowers.
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2.8 Audit Fees.
Borrowers shall pay to Administrative Agent, Canadian Agent and UK
Agent, as the case may be, an audit fee of $850 per day per auditor which is an
employee of Administrative Agent, Canadian Agent or UK Agent (which daily audit
fee shall be subject to change from time to time without prior notice), and,
with respect to audits conducted by auditors which are not employees of
Administrative Agent, Canadian Agent or UK Agent, such audit fees as shall be
charged by such auditors, together with all reasonable out-of-pocket expenses
incurred by Administrative Agent, Canadian Agent or UK Agent, as the case may
be, in connection with audits of the books and records and Properties of
Borrowers and their Subsidiaries and such other matters as Administrative Agent,
Canadian Agent or UK Agent, as the case may be, shall deem appropriate in its
sole judgment, whether such audits are conducted by employees of Administrative
Agent, Canadian Agent or UK Agent, as the case may be, or by third parties hired
by Administrative Agent, Canadian Agent or UK Agent, as the case may be;
provided that Canadian Borrower and UK Borrowers shall not be responsible for
such fees and expenses incurred with respect to Domestic Borrower. Such fees and
out-of-pocket expenses shall be payable within 10 days following the date of
issuance by Administrative Agent, Canadian Agent or UK Agent, as the case may
be, of a request for payment thereof to Borrower Representative.
2.9 Reimbursement of Expenses.
If, at any time or times regardless of whether or not an Event of
Default then exists, (a) Administrative Agent, Canadian Agent and/or UK Agent
incurs legal or accounting expenses or any other costs or out-of-pocket expenses
(including, without limitation, costs or expenses of any third party
consultants, and costs or expenses relating to due diligence, transportation,
computer, duplication, appraisal, audit, insurance, searches, filing and
recording of documents) in connection with (i) the negotiation and preparation
of this Agreement or any of the other Loan Documents and the closing of the
transactions contemplated hereby, the Administrative Agent's, Canadian Agent's
and UK Agent's due diligence in connection therewith, any amendment of or
modification of this Agreement or any of the other Loan Documents, or any sale
or attempted sale of any interest herein to any assignee (including, without
limitation, printing and distribution of materials to prospective Lenders and
all costs associated with bank meetings, but excluding any closing fees paid to
Lenders in connection therewith) or (ii) the administration of this Agreement or
any of the other Loan Documents and the transactions contemplated hereby and
thereby; or (b) Administrative Agent, Canadian Agent, UK Agent or any Lender
incurs legal or accounting expenses or any other costs or out-of-pocket expenses
(including, without limitation, costs or expenses of any third-party
consultants) in connection with (i) any litigation, contest, dispute, suit,
proceeding or action (whether instituted by Administrative Agent, Canadian
Agent, UK Agent, any Lender, any Borrower or any
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other Person) relating to the Collateral, this Agreement or any of the other
Loan Documents or any Borrower's, any of its Subsidiaries' or any Guarantor's
affairs; (ii) any attempt to enforce any rights of Administrative Agent,
Canadian Agent, UK Agent or any Lender against any Borrower or any other Person
which may be obligated to Administrative Agent, Canadian Agent, UK Agent or any
Lender by virtue of this Agreement or any of the other Loan Documents,
including, without limitation, the Account Debtors; or (iii) any attempt to
inspect, verify, protect, preserve, restore, collect, sell, liquidate or
otherwise dispose of or realize upon the Collateral; then all such reasonable
legal and accounting expenses, other costs and out of pocket expenses of
Administrative Agent, Canadian Agent, UK Agent or any Lender, as applicable,
shall be charged to Borrowers; provided, that Borrowers shall not be responsible
for such costs and out-of-pocket expenses to the extent incurred because of the
gross negligence or willful misconduct of Administrative Agent, Canadian Agent,
UK Agent or any Lender; and provided, further, that Canadian Borrower and UK
Borrowers shall not be responsible for such fees and expenses incurred with
respect to Domestic Borrower. Borrowers shall also reimburse Administrative
Agent, Canadian Agent and UK Agent for expenses incurred by Administrative
Agent, Canadian Agent and UK Agent in their administration of the Collateral to
the extent and in the manner provided in Section 2.11 hereof.
2.10 Bank Charges.
Borrowers shall pay to Administrative Agent, Canadian Agent and UK
Agent any and all fees, costs or expenses which Administrative Agent, Canadian
Agent or UK Agent pays to a bank or other similar institution arising out of or
in connection with (a) the forwarding to Borrowers or any other Person on behalf
of any Borrower, by Administrative Agent, Canadian Agent or UK Agent, of
proceeds of Loans made to any Borrower pursuant to this Agreement and (b) the
depositing for collection by Administrative Agent, Canadian Agent or UK Agent of
any check or item of payment received or delivered to Administrative Agent,
Canadian Agent or UK Agent on account of the Obligations; provided that Canadian
Borrower and UK Borrowers shall not be responsible for such fees, costs or
expenses incurred with respect to Domestic Borrower.
2.11 Collateral Protection Expenses; Appraisals.
All out-of-pocket expenses incurred in protecting, storing,
warehousing, insuring, handling, maintaining and shipping the Collateral, any
and all excise, property, sales, and use taxes imposed by any state, federal,
provincial or local authority on any of the Collateral or in respect of the sale
thereof shall be borne and paid by Borrowers; provided that Canadian Borrower
and UK Borrowers shall not be liable for any such expenses incurred with respect
to Domestic Borrower. If Borrowers fail to promptly pay any portion thereof when
due, Administrative Agent, Canadian Agent or UK Agent, as the case may be, may,
at its option, but shall not be
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required to, pay the same and charge Borrowers therefor. Additionally, from time
to time, if Administrative Agent, Canadian Agent or UK Agent or any Lender
determines that obtaining appraisals is necessary in order for it to comply with
applicable laws or regulations, or is otherwise necessary in the reasonable
credit judgment of Administrative Agent, Canadian Agent or UK Agent, as the case
may be, and at any time if a Default or an Event of Default shall have occurred
and be continuing, Administrative Agent, Canadian Agent or UK Agent, as the case
may be, may, at Borrowers' expense, obtain appraisals from appraisers (who may
be personnel of Administrative Agent, Canadian Agent or UK Agent, as the case
may be), stating the then current fair market value or liquidation value of all
or any portion of the real (or immovable) Property or personal (or movable)
Property of Borrowers or any of their Subsidiaries. Administrative Agent and UK
Agent also shall have the right to obtain such appraisals periodically, at
Borrowers' expense, with respect to the real estate or equipment of Borrowers to
confirm the continuing adequacy of the value of such Collateral as the basis for
the Term Loans. In the event that personnel of Administrative Agent, Canadian
Agent or UK Agent conduct any such appraisal, Administrative Agent's, Canadian
Agent's or UK Agent's, as applicable, then-prevailing internal cost of such
appraisal shall be payable by Borrowers (which cost per appraisal shall be
subject to change from time to time with respect to future appraisals without
prior notice).
2.12 Payment of Charges.
All amounts chargeable to Domestic Borrower under this Agreement shall
be Obligations secured by all of the Domestic Collateral, all amounts chargeable
to Canadian Borrower under this Agreement shall be Obligations secured by all of
the Canadian Collateral, and all amounts chargeable to UK Borrowers under this
Agreement shall be Obligations secured by all of the UK Collateral, and in each
case shall be, unless specifically otherwise provided, payable on demand and
shall bear interest from the date demand was made or such amount is due, as
applicable, until paid in full at the rate applicable to that portion of the
outstanding principal amount of the Domestic Term Loan bearing interest with
reference to the Domestic Base Rate from time to time, with respect to amounts
chargeable to Domestic Borrower, at the rate applicable to Canadian Revolving
Credit Loans, with respect to amounts chargeable to Canadian Borrower, and at
the rate applicable to that portion of the outstanding principal amount of the
UK Term Loans bearing interest with reference to the UK Base Rate from time to
time, with respect to amounts chargeable to UK Borrowers.
2.13 Taxes.
2.13.1 Subject to Section 2.13.5, all payments made by Domestic
Borrower to any Lender under this Agreement or any other Loan Document shall be
made free and clear of, and without deduction or withholding for or on account
of, any
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present or future taxes, levies, assessments, imposts, duties, fees, deductions
or withholdings or similar charges, and all liabilities with respect thereto,
now or hereafter imposed, levied, collected, withheld or assessed by any
governmental authority, excluding, in the case of the Administrative Agent, Bank
and each Lender, any tax based upon or measured by net income (or taxes that are
expressly in substitution for, or relieve the indemnitee from, any tax based on
or measured by net income) imposed on the Administrative Agent, Bank or such
Lender (including, without limitation, any transferee or assignee (including a
participation holder) (any such entity, a "Transferee")), as the case may be, as
a result of a present or former connection between the jurisdiction of the
governmental authority imposing such tax and the Administrative Agent, Bank or
such Lender (excluding a connection arising solely from the Administrative
Agent, Bank or such Lender or Transferee having executed, delivered or performed
its obligations or received a payment under, or enforced, this Agreement or any
other Loan Document) (all such non-excluded taxes, levies, imposts, duties,
charges, fees, deductions and withholdings being hereinafter called "Domestic
Non-Excluded Taxes").
2.13.2 Subject to Section 2.13.5, if Domestic Borrower shall be
required by law to deduct or withhold any Domestic Non-Excluded Taxes or Further
Taxes from or in respect of any sum payable hereunder to any Lender, Bank or the
Administrative Agent, then:
(a) the sum payable shall be increased as necessary so that,
after making all required deductions and withholdings (including deductions
and withholdings applicable to additional sums payable under this Section),
such Lender, Bank or the Administrative Agent, as the case may be, receives
and retains an amount equal to the sum it would have received and retained
had no such deductions or withholdings been made;
(b) Domestic Borrower shall make such deductions and
withholdings;
(c) Domestic Borrower shall pay the full amount deducted or
withheld to the relevant taxing authority or other authority in accordance
with applicable law; and
(d) Domestic Borrower shall also pay to each Lender, Bank or the
Administrative Agent for the account of such Lender or Bank, at the time
interest is paid, Further Taxes in the amount that the respective Lender or
Bank reasonably specifies is necessary to preserve the after-tax yield such
Lender or Bank would have received if such Domestic Non-Excluded Taxes or
Further Taxes had not been imposed.
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2.13.3 Subject to Section 2.13.5, Domestic Borrower agrees to
indemnify and hold harmless each Lender, Bank and the Administrative Agent for
the full amount of Domestic Non-Excluded Taxes and Further Taxes in the amount
that the respective Lender, Bank or the Administrative Agent reasonably
specifies as necessary to preserve the after-tax yield such Lender, Bank or the
Administrative Agent would have received if such Domestic Non-Excluded Taxes or
Further Taxes had not been imposed, and any liability (including penalties,
interest, additions to tax and expenses) arising therefrom or with respect
thereto, whether or not such Domestic Non-Excluded Taxes or Further Taxes were
correctly or legally asserted. Payment under this indemnification shall be made
within 30 days after the date the applicable Lender, Bank or the Administrative
Agent makes written demand therefor specifying the amount and basis for such
determination.
2.13.4 Within 30 days after the date of any payment by Domestic
Borrower of Domestic Non-Excluded Taxes or Further Taxes, Domestic Borrower
shall furnish to each Lender, Bank or the Administrative Agent the original or a
certified copy of a receipt evidencing payment thereof, or other evidence of
payment satisfactory to such Lender, Bank or the Administrative Agent.
2.13.5 (a) Each Lender or Transferee that is not a "United States
Person" within the meaning of Section 7701(a)(30) of the Code, agrees that it
will deliver to the Borrower Representative and the Administrative Agent on or
before the date it becomes a Lender or Transferee two duly completed and signed
copies of Form W-8BEN, Form W-8ECI or Form W-8IMY or successor applicable form
(relating to such Person and entitling it to an exemption from, or reduction of,
withholding tax on all payments to be made to such Person by the Domestic
Borrower pursuant to this Agreement or the other Loan Documents) certifying that
such Person is entitled to receive all payments under this Agreement and the
other Loan Documents without deduction or withholding of any United States
federal income taxes (or, in the case of a Transferee, that any such deduction
or withholding is no greater than it would have been for the Lender (or the
Transferee) that transferred or assigned its interest to such Transferee). A
Form W-8BEN completed and delivered by (i) certain foreign trusts, or (ii)
persons claiming an exemption or reduced rate of withholding at source under an
income tax treaty will not be considered duly completed unless the Form W-8BEN
contains such person's U.S. taxpayer identification number. Each such Lender or
Transferee also agrees (x) to deliver to the Borrower Representative and the
Administrative Agent two further completed and signed copies of one of such
forms (or successor applicable forms) on or before the date that any such
statement or form expires or becomes obsolete or after the occurrence of any
event (including, without limitation, a change in such Lender's or Transferee's
lending office) requiring a change in the most recent statement or form
previously delivered by it to the Borrower Representative and the Administrative
Agent, and (y) to obtain such extensions of the time for filing and to renew
such statements or forms and certifications thereof as may
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reasonably be requested by the Borrower Representative or the Administrative
Agent, unless in any such case an event (including, without limitation, any
change in treaty, law or regulation) has occurred prior to the date on which any
such delivery would otherwise be required which renders all such statements or
forms inapplicable or which would prevent such Lender or Transferee from duly
completing and delivering any such statement or form with respect to it and such
Lender or Transferee so advises the Borrower Representative and the
Administrative Agent. If such Person fails to deliver the above forms or other
documentation, then the Administrative Agent may withhold from any interest
payment to such Person an amount equivalent to the applicable withholding tax
imposed by Sections 1441 and 1442 of the Code, without reduction, provided that
the Domestic Borrower shall not be required to increase any such amounts payable
to any Lender pursuant to Section 2.13.1, unless the obligation to pay such
increased amounts would not have arisen but for a change in law. Each Lender or
Transferee that is a "United States person", as defined under Section
7701(a)(30) of the Code, and that is not a corporation agrees that it will
deliver to the Borrower Representative and the Administrative Agent a Form W-9
stating that it is entitled to an exemption from United States backup
withholding tax.
(b) Domestic Borrower shall not be required to pay any additional
amounts to any Lender or Transferee pursuant to this Section 2.13 if the
obligation to pay such additional amounts arose solely from a failure by
such Lender or Transferee to comply with the provisions of Section
2.13.5(a) above.
2.13.6 If any Lender or Transferee claims exemption from, or
reduction of, withholding tax under a United States tax treaty by providing IRS
Form W-8BEN or W-8IMY (or any successor form) or claims an exemption from
withholding tax by providing an IRS Form W-8ECI (or any successor form) and such
Lender or Transferee sells, assigns or (other than pursuant to Section 2.13.8
below) otherwise transfers all or part of the Obligations of Domestic Borrower
to a transferee Lender or Transferee, such Lender or Transferee agrees to notify
the Administrative Agent of the percentage amount in which it is no longer the
beneficial owner of Obligations of Domestic Borrower to such Lender or
Transferee. To the extent of such percentage amount, the Administrative Agent
will treat such Lender or Transferee's IRS Form W-8BEN or W-8IMY (or any
successor form) as no longer valid.
2.13.7 If any Lender or Transferee claims an exemption from, or
reduction of, withholding tax under a United States tax treaty by providing IRS
Form W-8BEN or W-8IMY (or any successor form) or claims an exemption from
withholding tax by providing Form W-8ECI (or successor form) and such Lender or
Transferee grants a participation in the Obligations of Domestic Borrower to a
transferee Lender or Transferee, such Lender or Transferee agrees to notify the
Administrative Agent of the percentage amount in which it is no longer the
beneficial
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owner of Obligations of Domestic Borrower, and such Lender or Transferee agrees
to undertake responsibility to provide to the Administrative Agent such forms
and documentation (including IRS Form W-8IMY and forms and documentation
provided by each participant to the extent required by the IRS) to enable the
Domestic Borrower to comply with the withholding tax requirements imposed by
Sections 1441 and 1442 of the Code.
2.13.8 (a) If the IRS or any other governmental authority of the
United States or other jurisdiction asserts a claim that the Administrative
Agent or Domestic Borrower did not properly withhold tax or any other amount
from amounts paid to or for the account of any Lender or Transferee (because the
appropriate form was not delivered or was not properly executed, or because such
Lender or Transferee failed to notify the Administrative Agent or Domestic
Borrower of a change in circumstances which rendered the exemption from, or
reduction of, withholding tax ineffective, or for any other reason) such Lender
or Transferee shall indemnify the Administrative Agent or Domestic Borrower
fully for all amounts paid, directly or indirectly, by the Administrative Agent
or Domestic Borrower as tax or otherwise, including penalties and interest, and
including any taxes imposed by any jurisdiction on the amounts payable to the
Administrative Agent or Domestic Borrower under this Section 2.13, together with
all costs and expenses (including reasonable fees and expenses of legal
counsel). The obligation of the Lenders or Transferees under this Section 2.13.8
shall survive the payment of all Obligations and the resignation or replacement
of the Administrative Agent.
(b) If Administrative Agent, Bank or any Lender (or
Transferee), as applicable, receives a refund of a tax for which a payment has
been made by Domestic Borrower pursuant to this Section 2.13, which refund in
the good faith judgment of Administrative Agent, Bank or such Lender (or
Transferee), as the case may be, is attributable to such payment made by
Domestic Borrower, then Administrative Agent, Bank or such Lender (or
Transferee), as the case may be, shall reimburse Domestic Borrower for such
amount as Administrative Agent, Bank or such Lender (or Transferee), as the case
may be, determines will leave it, after such reimbursement, in the same position
it would have been in if the payment of such tax and any payment by Domestic
Borrower under this Section 2.13 had not been made. Administrative Agent, Bank
and each Lender (or Transferee), as the case may be, shall exercise good faith
in determining whether to make a claim for any refund. Subject to this Section
2.13.8(b), upon the request of Domestic Borrower, the Administrative Agent, Bank
or such Lender (or Transferee), as applicable, shall use reasonable efforts to
cooperate with Domestic Borrower with a view to obtaining a refund of any
Domestic Non-Excluded Taxes with respect to which Domestic Borrower has paid any
amounts pursuant to this Section 2.13 and which Domestic Borrower reasonably
believes were not correctly or legally asserted.
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2.13.9 Any and all payments or reimbursements made by the
Canadian Borrower hereunder and under the other Loan Documents to Canadian
Agent, Canadian Lender or any Canadian Participating Lender shall be made in
Canadian Dollars, as applicable, free and clear of and without deduction for any
and all taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto; excluding, however, the following: franchise
taxes and taxes imposed on the net income of Canadian Agent or Canadian Lender
by the jurisdiction under the laws of which Canadian Agent or Canadian Lender is
organized or doing business or any political subdivision thereof and franchise
taxes and taxes imposed on its net income by the jurisdiction of Canadian
Agent's or Canadian Lender's applicable lending office or any political
subdivision thereof (all such taxes, levies, imposts, deductions, charges or
withholdings and all liabilities with respect thereto, excluding such franchise
taxes and taxes imposed on net income, herein "Canadian Non-Excluded Taxes"). If
Canadian Borrower (or Canadian Agent) shall be required by law or the
administration thereof to deduct any such Canadian Non-Excluded Taxes from or in
respect of any sum payable hereunder to Canadian Agent, Canadian Lender or any
Canadian Participating Lender, then the sum payable hereunder shall be increased
as may be necessary so that, after all required deductions are made, Canadian
Agent, Canadian Lender and any such Canadian Participating Lender receives an
amount equal to the sum it would have received had no such deductions been made.
Whenever any Canadian Non-Excluded Taxes are deducted by Canadian Borrower, as
soon as practicable thereafter, the Borrower Representative shall send to
Canadian Agent for its own account or for the account of the Canadian Lender or
Canadian Participating Lenders, as the case may be, a certified copy of an
original official receipt received by Canadian Borrower showing payment thereof
or other evidence of such payment reasonably satisfactory to the Canadian Agent.
If Canadian Borrower fails to pay any Canadian Non-Excluded Taxes when due to
the appropriate taxing authority or fails to remit to Canadian Agent the
required receipts or other required documentary evidence, Canadian Borrower
shall indemnify Canadian Agent, Canadian Lender and Canadian Participating
Lenders for any incremental taxes, interest or penalties that may become payable
by Canadian Agent, Canadian Lender or Canadian Participating Lenders as a result
of any such failure. Without in any way limiting the foregoing, Canadian
Borrower shall indemnify and hold harmless Canadian Agent, Canadian Lender and
Canadian Participating Lenders for any Canadian Non-Excluded Taxes (including
related interest and penalties, if any) that may be incurred by Canadian Agent,
Canadian Lender and/or Canadian Participating Lender in respect of arrangements
pertaining to the refunding, pursuant to Section 3.2.6, of the Canadian
Revolving Credit Loans and the Canadian Participation Fees provided for pursuant
to Section 2.6.
2.13.10 Any and all payments or reimbursements made by UK
Borrowers hereunder and under the other Loan Documents to UK Agent, UK Lender or
any UK Participating Lender shall be made in Sterling, free and clear of and
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without deduction (except as required by law) for any and all taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto; excluding, however, the following: franchise taxes and taxes imposed on
the net income of UK Agent or UK Lender by the jurisdiction under the laws of
which UK Agent or UK Lender is organized or doing business or if different, the
jurisdiction (or jurisdictions) in which the UK Agent or UK Lender is treated as
resident for tax purposes) or any political subdivision thereof and franchise
taxes and taxes imposed on its net income by the jurisdiction of UK Agent's or
UK Lender's applicable lending office or any political subdivision thereof (all
such taxes, levies, imposts, deductions, charges or withholdings and all
liabilities with respect thereto, excluding such franchise taxes and taxes
imposed on net income, herein "UK Non-Excluded Taxes"). If UK Borrowers, UK
Agent or UK Lender shall be required by law or the administration thereof to
deduct any such UK Non-Excluded Taxes from or in respect of any sum payable
hereunder to UK Agent, UK Lender or any UK Participating Lender, then the sum
payable hereunder shall be increased as may be necessary so that, after all
required deductions are made, UK Agent, UK Lender and any such UK Participating
Lender receives an amount equal to the sum it would have received had no such
deductions been made. Whenever any UK Non-Excluded Taxes are deducted by either
UK Borrower, as soon as practicable thereafter, the Borrower Representative
shall send to UK Agent for its own account or for the account of the UK Lender
or UK Participating Lenders, as the case may be, a certified copy of an original
official receipt received by such UK Borrower showing payment thereof or other
evidence of such payment reasonably satisfactory to the UK Agent. If either UK
Borrower fails to pay any UK Non-Excluded Taxes when due to the appropriate
taxing authority or fails to remit to UK Agent the required receipts or other
required documentary evidence, such UK Borrower shall indemnify UK Agent, UK
Lender and UK Participating Lenders for any incremental taxes, interest or
penalties that may become payable by UK Agent, UK Lender or UK Participating
Lenders as a result of any such failure. Without in any way limiting the
foregoing, UK Borrowers shall indemnify and hold harmless UK Agent, UK Lender
and UK Participating Lenders for any UK Non-Excluded Taxes (including related
interest and penalties, if any) that may be incurred by UK Agent, UK Lender
and/or UK Participating Lenders in respect of arrangements pertaining to the
refunding, pursuant to Section 3.2.7, of the UK Revolving Credit Loans and UK
Term Loans and the UK Participation Fees provided for pursuant to Section 2.6.
2.13.11 The agreements in this Section 2.13 shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
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SECTION 3. LOAN ADMINISTRATION
3.1 Manner of Borrowing Loans.
Borrowings under the credit facility established pursuant to Section 1
hereof shall be as follows:
3.1.1 Loan Requests.
(a) Domestic Revolving Credit Loan Requests. A request for a
Domestic Revolving Credit Loan shall be made, or shall be deemed to be
made, in the following manner: (i) Borrower Representative may give
Administrative Agent notice of its intention to borrow, in which notice
Borrower Representative shall specify the amount of the proposed borrowing
and the proposed borrowing date, no later than 10:00 a.m. Los Angeles time
on the proposed borrowing date (or in accordance with Section 3.1.7 in the
case of a request for a Domestic LIBOR Loan), provided, however, that no
such request may be made at a time when there exists a Default or an Event
of Default; and (ii) the becoming due of any amount required to be paid
under this Agreement, or the Notes, by Domestic Borrower, whether as
interest or for any other Domestic Obligation, shall be deemed irrevocably
to be a request for a Domestic Revolving Credit Loan bearing interest in
relation to the Domestic Base Rate on the due date in the amount required
to pay such interest or other Domestic Obligation.
(b) Canadian Revolving Credit Loan Requests. A request for a
Canadian Revolving Credit Loan shall be made, or shall be deemed to be
made, in the following manner: (i) Borrower Representative may give
Administrative Agent and Canadian Agent notice of its intention to borrow,
in a form specified by the Administrative Agent and the Canadian Agent,
which notice must be received by each of the Administrative Agent and the
Canadian Agent prior to 10:00 a.m. (Los Angeles time) one (1) Business Day
prior to the requested borrowing date (provided, however, that no such
request may be made at a time when there exists a Default or an Event of
Default) specifying: (A) the amount of the proposed borrowing (which shall
be no less than cdn$100,000) and (B) the requested borrowing date, which
shall be a Business Day; and (ii) the becoming due of any amount required
to be paid under this Agreement, or the Notes, by Canadian Borrower,
whether as interest or for any other Canadian Obligation, shall be deemed
irrevocably to be a request for a Canadian Revolving Credit Loan on the due
date in the amount required to pay such interest or other Canadian
Obligation.
(c) UK Revolving Credit Loan Requests. A request for a UK
Revolving Credit Loan shall be made, or shall be deemed to be made, in the
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following manner: (i) Borrower Representative or either UK Borrower may
give Administrative Agent and UK Agent notice of its intention to borrow,
in a form specified by Administrative Agent and UK Agent, which notice must
be received by each of Administrative Agent and UK Agent prior to 10:00
a.m. (Los Angeles time) four (4) Business Days prior to the requested
borrowing date, in the case of UK LIBOR Loans and one (1) Business Day
prior to the requested borrowing date, in the case of UK Base Rate Loans
(provided, however, that no such request may be made at a time when there
exists a Default or an Event of Default), specifying: (A) the amount of the
proposed borrowing; (B) the requested borrowing date, which shall be a
Business Day; (C) whether such UK Revolving Credit Loan shall be maintained
as a UK Base Rate Loan or UK LIBOR Loan; and (D) with respect to UK LIBOR
Loans, the duration of the Interest Period applicable to such Loan;
provided, that if the notice fails to specify the duration of the Interest
Period, such Interest Period shall be one month; and (ii) the becoming due
of any amount required to be paid under this Agreement, or the Notes, by
either UK Borrower, whether as interest or for any other UK Obligation,
shall be deemed irrevocably to be a request for a UK Revolving Credit Loan
bearing interest in relation to the UK Base Rate on the due date in the
amount required to pay such interest or other UK Obligation. With respect
to borrowing under the overdraft facility for UK Revolving Credit Loans,
the prior notice requirements may be waived by UK Agent.
3.1.2 Disbursement. Each Borrower hereby irrevocably authorizes
Administrative Agent, Canadian Agent and UK Agent, as the case may be, to
disburse the proceeds of each Revolving Credit Loan requested, or deemed to be
requested, pursuant to Section 3.1.1 as follows: (a) the proceeds of each
Revolving Credit Loan requested under Sections 3.1.1(a)(i), 3.1.1(b)(i) or
3.1.1(c)(i) shall be disbursed by Administrative Agent, Canadian Agent or UK
Agent, as the case may be, in Dollars, Canadian Dollars or Sterling, as the case
may be, in immediately available funds, in the case of the initial borrowing, in
accordance with the terms of the written disbursement letter from Borrower
Representative, and in the case of each subsequent borrowing, by wire transfer
to such bank account as may be agreed upon by Borrower Representative and
Administrative Agent from time to time; and (b) the proceeds of each Revolving
Credit Loan deemed requested under Section 3.1.1(a)(ii), 3.1.1(b)(ii) or
3.1.1(c)(ii) shall be disbursed, as the case may be, by Administrative Agent by
way of direct payment of the relevant interest or other Domestic Obligation, by
Canadian Agent by way of direct payment of the relevant interest or other
Canadian Obligation, or by UK Agent by way of direct payment of the relevant
interest or other UK Obligation.
3.1.3 Payment by Lenders. Administrative Agent shall give to each
Domestic Lender prompt written notice (which notice shall specify the requested
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date and amount of the applicable Domestic Revolving Credit Loan, whether such
Domestic Revolving Credit Loan shall be a Domestic LIBOR Loan, and the amount of
each Domestic Lender's advance thereunder (in accordance with its applicable
Domestic Revolving Loan Percentage)) by facsimile, telex or cable of the receipt
by Administrative Agent from Borrower Representative of any request for a
Domestic Revolving Credit Loan, and Administrative Agent shall give to each
Canadian Participating Lender prompt written notice by facsimile, telex or cable
of the receipt by Administrative Agent from Canadian Lender of any Notice of
Canadian Revolving Loan Refunding (as defined in Section 3.2.6 below), and
Administrative Agent shall give to each UK Participating Lender prompt written
notice by facsimile, telex or cable of the receipt by Administrative Agent from
UK Lender of any Notice of UK Revolving Loan Refunding (as defined in Section
3.2.7 below) or Notice of UK Term Loan Refunding (as defined in Section 3.2.7
below). Each Domestic Lender shall, and each Canadian Participating Lender
shall, and each UK Participating Lender shall, not later than 12:00 p.m. (Los
Angeles time), 12:00 p.m. (Toronto time) or 12:00 p.m. (London time),
respectively, on the applicable requested date of funding, wire to a bank
designated by Administrative Agent the amount of that Domestic Lender's Domestic
Revolving Loan Percentage of the requested Domestic Revolving Credit Loan, or
that Canadian Participating Lender's Canadian Percentage of the outstanding
principal amount of Canadian Revolving Credit Loans, or that UK Participating
Lender's UK Percentage of the outstanding principal amount of UK Revolving
Credit Loans, or that UK Participating Lender's UK Percentage of the outstanding
principal amount of the UK Term Loans. The failure of any Domestic Lender,
Canadian Participating Lender or UK Participating Lender to make the Domestic
Revolving Credit Loans, Canadian Revolving Credit Loans refunding, UK Revolving
Credit Loans refunding or UK Term Loan refunding, as the case may be, to be made
by it shall not release any other Domestic Lender, Canadian Participating Lender
or UK Participating Lender, as the case may be, of its obligations hereunder to
make its Domestic Revolving Credit Loan, Canadian Revolving Credit Loan
refunding, UK Revolving Credit Loan Refunding or UK Term Loan refunding, as the
case may be. Neither Administrative Agent, Canadian Agent, UK Agent nor any
other Domestic Lender, Canadian Participating Lender or UK Participating Lender
shall be responsible for the failure of any other Domestic Lender, Canadian
Participating Lender or UK Participating Lender, as the case may be, to make the
Domestic Revolving Credit Loan, Canadian Revolving Credit Loan refunding, UK
Revolving Credit Loan refunding or UK Term Loan refunding, as the case may be,
to be made by such other Domestic Lender, Canadian Participating Lender or UK
Participating Lender, as the case may be. The foregoing notwithstanding,
Administrative Agent, Canadian Agent or UK Agent, as applicable, in its sole
discretion, may from its own funds make a Domestic Revolving Credit Loan on
behalf of any Domestic Lender, or a Canadian Revolving Credit Loan refunding on
behalf of any Canadian Participating Lender, or a UK Revolving Credit Loan
refunding or UK Term Loan refunding on behalf of any UK Participating Lender. In
such event, the Domestic Lender, Canadian
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Participating Lender or UK Participating Lender on behalf of whom Administrative
Agent, Canadian Agent or UK Agent made the Domestic Revolving Credit Loan,
Canadian Revolving Credit Loan refunding, UK Revolving Credit Loan refunding, or
UK Term Loan refunding, as the case may be, shall reimburse Administrative
Agent, Canadian Agent or UK Agent, as applicable, for the amount of such
Domestic Revolving Credit Loan, Canadian Revolving Credit Loan refunding, UK
Revolving Credit Loan refunding or UK Term Loan refunding, as the case may be,
made on its behalf, on a weekly (or more frequent, as determined by
Administrative Agent, Canadian Agent or UK Agent, as applicable, in its sole
discretion) basis. The entire amount of interest attributable to such Domestic
Revolving Credit Loan, Canadian Revolving Credit Loan refunding, UK Revolving
Credit Loan refunding or UK Term Loan refunding, as the case may be, for the
period from the date on which such Domestic Revolving Credit Loan, Canadian
Revolving Credit Loan refunding, UK Revolving Credit Loan refunding or UK Term
Loan refunding, as the case may be, was made by Administrative Agent, Canadian
Agent or UK Agent on such Domestic Lender's, Canadian Participating Lender's or
UK Participating Lender's, as the case may be, behalf until Administrative
Agent, Canadian Agent or UK Agent, as applicable, is reimbursed by such Domestic
Lender, Canadian Participating Lender or UK Participating Lender, as the case
may be, shall be paid to Administrative Agent, Canadian Agent or UK Agent, as
applicable, for its own account.
3.1.4 Authorization.
(a) Domestic Borrower hereby irrevocably authorizes
Administrative Agent to advance on behalf of Domestic Borrower, and to
charge to Domestic Borrower's Domestic Loan Account hereunder as a Domestic
Revolving Credit Loan (which shall be a Domestic Base Rate Loan), a sum
sufficient to pay all interest accrued on the Domestic Obligations during
the immediately preceding month and to pay all fees, costs and expenses and
other Domestic Obligations at any time owed by Domestic Borrower to any
Agent or any Lender hereunder.
(b) Canadian Borrower hereby irrevocably authorizes Canadian
Agent to advance on behalf of Canadian Borrower, and to charge to Canadian
Borrower's Canadian Loan Account hereunder as a Canadian Revolving Credit
Loan, a sum sufficient to pay interest accrued on the Canadian Obligations
during the immediately preceding month and to pay all fees, costs and
expenses and other Canadian Obligations at any time owed by Canadian
Borrower to Canadian Agent, Canadian Lender, Canadian Participating
Lenders, UK Agent, UK Lender or UK Participating Lenders hereunder.
(c) Each UK Borrower hereby irrevocably authorizes UK Agent to
advance on behalf of UK Borrowers, and to charge to UK Borrowers' UK Loan
Account hereunder as a UK Revolving Credit Loan (which shall be a UK
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Base Rate Loan), a sum sufficient to pay interest accrued on the UK
Obligations during the immediately preceding month and to pay all fees,
costs and expenses and other UK Obligations at any time owed by either UK
Borrower to UK Agent, UK Lender, UK Participating Lender, Canadian Agent,
Canadian Lender or Canadian Participating Lenders hereunder.
3.1.5 Letter of Credit and LC Guaranty Requests. A request for a
Letter of Credit or LC Guaranty shall be made in the following manner: Borrower
Representative may give Administrative Agent and Bank or Fleet UK and UK Agent
(with a copy to Administrative Agent), as applicable, a written notice of its
request for the issuance of a Letter of Credit or LC Guaranty, not later than
10:00 a.m. Los Angeles time, three (3) Business Days before the proposed
issuance date thereof, in which notice Borrower Representative shall specify
whether such Letter of Credit or LC Guaranty is to be issued on behalf of
Domestic Borrower or one of the UK Borrowers, the proposed beneficiary, issuance
date, expiration date and format and wording for the Letter of Credit or LC
Guaranty being requested (which shall be satisfactory to Administrative Agent
and Bank, or UK Agent and Fleet UK, as applicable, or any other Person asked to
issue such Letter of Credit or LC Guaranty); provided, that no such request may
be made at a time when there exists a Default or Event of Default. Such request
shall be accompanied by an executed application and reimbursement agreement in
form and substance satisfactory to Administrative Agent or UK Agent, as
applicable, and the Person being asked to issue the Letter of Credit or LC
Guaranty, as well as any required resolutions.
3.1.6 Method of Making Requests. As an accommodation to
Borrowers, unless a Default or an Event of Default is then in existence, (a)
Administrative Agent shall permit telephonic requests for Domestic Revolving
Credit Loans to Administrative Agent, (b) Administrative Agent and Bank may, in
their discretion, permit electronic transmittal of requests for Domestic Letters
of Credit and Domestic LC Guaranties to them, and (c) Administrative Agent may,
in Administrative Agent's discretion, permit electronic transmittal of
instructions, authorizations, agreements or reports to Administrative Agent. All
other instructions, authorizations, agreements or reports must be in written
hard copy form (including by facsimile). Unless Borrower Representative
specifically directs Administrative Agent or Bank in writing not to accept or
act upon telephonic or electronic communications from Borrower Representative,
neither Administrative Agent nor Bank shall have any liability to Borrowers for
any loss or damage suffered by Borrowers as a result of Administrative Agent's
or Bank's honoring of any requests, execution of any instructions,
authorizations or agreements or reliance on any reports communicated to it
telephonically or electronically and purporting to have been sent to
Administrative Agent or Bank by an authorized officer of Borrower
Representative, and neither Administrative Agent nor Bank shall have any duty to
verify the origin of any such communication or the authority of the Person
sending it. Each telephonic request for a
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Revolving Credit Loan, Domestic Letter of Credit or Domestic LC Guaranty
accepted by Administrative Agent and Bank, if applicable, hereunder shall be
promptly followed by a written confirmation of such request from Borrower
Representative to Administrative Agent and Bank, if applicable.
3.1.7 Domestic LIBOR Loans and UK LIBOR Loans.
(a) Notwithstanding the provisions of Section 3.1.1(a), in the
event Borrower Representative desires to obtain a Domestic LIBOR Loan,
Borrower Representative shall give Administrative Agent prior, written,
irrevocable notice no later than 10:00 a.m. Los Angeles time on the second
(2/nd/) Business Day prior to the requested borrowing date specifying (i)
Borrower Representative's election to obtain a Domestic LIBOR Loan, (ii)
the date of the proposed borrowing (which shall be a Business Day), (iii)
the length of the Interest Period, and (iv) the amount to be borrowed,
which amount shall be in a minimum principal amount of $1,000,000 and may
increase in integral multiples of $500,000. In no event shall Domestic
Borrower be permitted to have outstanding at any one time in the aggregate
more than five (5) different Domestic LIBOR Loans.
(b) Notwithstanding the provisions of Section 3.1.1(c), in the
event either UK Borrower desires to obtain a UK LIBOR Loan, Borrower
Representative or such UK Borrower shall give Administrative Agent and UK
Agent prior, written, irrevocable notice no later than 10:00 a.m. (Los
Angeles time) on the fourth (4/th/) Business Day prior to the requested
borrowing date specifying (i) such UK Borrower's election to obtain a UK
LIBOR Loan, (ii) the date of the proposed borrowing (which shall be a
Business Day), (iii) the length of the Interest Period, and (iv) the amount
to be borrowed (which shall be in Sterling), which amount shall be in a
minimum principal amount of (Pounds)200,000 or an integral multiple of
(Pounds)100,000 in excess thereof. In no event shall UK Borrowers be
permitted to have outstanding at any one time in the aggregate more than
two (2) different UK LIBOR Loans.
3.1.8 Conversion of Domestic Base Rate Loans and UK Base Rate
Loans.
(a) Provided that no Default or Event of Default has occurred
which is then continuing, Borrower Representative may, on any Business Day,
convert any Domestic Base Rate Loan into a Domestic LIBOR Loan. If Borrower
Representative desires to convert a Domestic Base Rate Loan, Borrower
Representative shall give Administrative Agent not less than two (2)
Business Days' prior written notice (prior to 10:00 a.m. Los Angeles time
on such Business Day), specifying the date of such conversion, the amount
to be converted, and the length of the Interest Period. Each conversion
into or
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conversion of a Domestic LIBOR Loan shall be in a minimum principal amount
of $1,000,000 and may increase in integral multiples of $500,000 in excess
thereof. After giving effect to any conversion of Domestic Base Rate Loans
to Domestic LIBOR Loans, the number of Domestic LIBOR Loans outstanding
shall not exceed five (5).
(b) Provided that no Default or Event of Default has occurred
which is then continuing, UK Borrowers may, on any Business Day, convert
any UK Base Rate Loan into a UK LIBOR Loan. If either UK Borrower desires
to convert a UK Base Rate Loan, Borrower Representative or such UK Borrower
shall give Administrative Agent and UK Agent written notice thereof not
less than 10:00 a.m. (Los Angeles time) on the fourth (4/th/) Business Day
prior to the date of the proposed conversion, specifying the date of such
conversion, the amount to be converted, and the length of the Interest
Period. Each conversion into or conversion of a UK LIBOR Loan shall be in a
minimum principal amount of (Pounds)200,000 and may increase in integral
multiples of (Pounds)100,000 in excess thereof. After giving effect to any
conversion of UK Base Rate Loans to UK LIBOR Loans, the number of UK LIBOR
Loans outstanding shall not exceed two (2).
3.1.9 Continuation of Domestic LIBOR Loans and UK LIBOR Loans.
(a) Domestic LIBOR Loans. Borrower Representative shall have
the right on two (2) Business Days' prior irrevocable written notice given
to Administrative Agent by Borrower Representative (prior to 10:00 a.m. Los
Angeles time on such Business Day), subject to the provisions hereof, to
continue any Domestic LIBOR Loan into a subsequent Interest Period of the
same or a different permitted duration, in each case subject to the
satisfaction of the following conditions:
(i) in the case of a continuation of less than all
Domestic LIBOR Loans, the Domestic LIBOR Loans continued shall each be
in a minimum principal amount of $1,000,000 and may increase in
integral multiples of $500,000; and
(ii) no Domestic LIBOR Loan (or portion thereof) may be
continued as a Domestic LIBOR Loan if a Default or Event of Default
has occurred which is then continuing or if, after giving effect to
such continuation, Domestic Borrower shall have outstanding in the
aggregate more than five (5) separate Domestic LIBOR Loans.
If Borrower Representative shall fail to give timely notice of its
election to continue any Domestic LIBOR Loan or portion thereof as provided
above, or if
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such continuation shall not be permitted, such Domestic LIBOR Loan or portion
thereof, unless such Domestic LIBOR Loan shall be repaid, shall automatically be
converted into a Domestic Base Rate Loan at the end of the Interest Period then
in effect with respect to such Domestic LIBOR Loan.
(b) UK LIBOR Loans. Either UK Borrower shall have the right on
four (4) Business Days' prior irrevocable written notice given to
Administrative Agent and UK Agent by Borrower Representative or such UK
Borrower (prior to 10:00 a.m. Los Angeles time on such Business Day),
subject to the provisions hereof, to continue any UK LIBOR Loan made to
such UK Borrower into a subsequent Interest Period of the same or a
different permitted duration, in each case subject to the satisfaction of
the following conditions:
(1) in the case of a continuation of less than all UK
LIBOR Loans, the UK LIBOR Loans continued shall each be in a minimum
principal amount of (Pounds)200,000 and may increase in integral
multiples of (Pounds)100,000; and
(2) no UK LIBOR Loan (or portion thereof) may be continued
as a UK LIBOR Loan if a Default or Event of Default has occurred which
is then continuing or if, after giving effect to such continuation, UK
Borrowers shall have outstanding in the aggregate more than two (2)
separate UK LIBOR Loans.
If Borrower Representative or either UK Borrower shall fail to give
timely notice of such UK Borrower's election to continue any UK LIBOR Loan or
portion thereof made to such UK Borrower as provided above, or if such
continuation shall not be permitted, such UK LIBOR Loan or portion thereof,
unless such UK LIBOR Loan shall be repaid, shall automatically be converted into
a UK Base Rate Loan at the end of the Interest Period then in effect with
respect to such UK LIBOR Loan.
3.1.10 Inability to Make Domestic LIBOR Loans or UK LIBOR Loans.
Notwithstanding any other provision hereof, if any applicable law, treaty,
regulation or directive, or any change therein or in the interpretation or
application thereof, shall make it unlawful for any Lender (for purposes of this
Section 3.1.10, the term "Lender" shall include the office or branch where a
Lender or any corporation or bank then controlling such Lender makes or
maintains any Domestic LIBOR Loans or UK LIBOR Loans, as the case may be) to
make or maintain its Domestic LIBOR Loans or UK LIBOR Loans, as the case may be,
or if with respect to any Interest Period, Administrative Agent or UK Agent is
unable to determine the LIBOR relating thereto, or adverse or unusual conditions
in, or changes in applicable law relating to, the London interbank market make
it, in the reasonable judgment of Administrative Agent or UK Agent, as the case
may be, impracticable to fund therein any of the
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Domestic LIBOR Loans or UK LIBOR Loans, as the case may be, or make the
projected LIBOR unreflective of the actual costs of funds therefor to any
Lender, the obligation of the Administrative Agent, UK Agent and Lenders to make
or continue Domestic LIBOR Loans or UK LIBOR Loans, as the case may be, or
convert Domestic Base Rate Loans to Domestic LIBOR Loans or UK Base Rate Loans
to UK LIBOR Loans, as the case may be, hereunder shall forthwith be suspended
during the pendency of such circumstances and Borrowers shall, if any affected
Domestic LIBOR Loans or UK LIBOR Loans, as the case may be, are then
outstanding, promptly upon request from Administrative Agent or UK Agent, as the
case may be, convert such affected Domestic LIBOR Loans or UK LIBOR Loans, as
the case may be, into Domestic Base Rate Loans or UK Base Rate Loans, as the
case may be.
3.1.11 Borrower Representative. Each Borrower hereby designates
Domestic Borrower as its representative and agent on its behalf for the purposes
of requests for Loans, giving instructions with respect to the disbursement of
the proceeds of the Loans, selecting interest rate options, requesting Letters
of Credit, giving and receiving all other notices and consents hereunder or
under any of the other Loan Documents and taking all other actions (including in
respect of compliance with covenants) on behalf of any Borrower or Borrowers
under the Loan Documents. Domestic Borrower hereby accepts such appointment as
Borrower Representative. Administrative Agent, Canadian Agent, UK Agent and each
Lender may regard any notice or other communication pursuant to any Loan
Document from Borrower Representative as a notice or communication from all
Borrowers, any group of Borrowers or any Borrower, as the case may be, and may
give any notice or communication required or permitted to be given to any
Borrower or Borrowers hereunder to Borrower Representative on behalf of such
Borrower or Borrowers. Each Borrower agrees that each notice, election,
representation and warranty, covenant, agreement and undertaking made on its
behalf by Borrower Representative shall be deemed for all purposes to have been
made by such Borrower and shall be binding upon and enforceable against such
Borrower to the same extent as if the same had been made directly by such
Borrower. Borrower Representative hereby authorizes and appoints each UK
Borrower (who hereby accepts such appointment) as its agent solely for purposes
of giving notices of borrowings to the UK Agent with respect to UK Revolving
Credit Loans.
3.2 Payments.
Except where evidenced by notes or other instruments issued or made by
Borrowers to any Lender and accepted by such Lender specifically containing
payment instructions that are in conflict with this Section 3.2 (in which case
the conflicting provisions of said notes or other instruments shall govern and
control), the Obligations shall be payable as follows:
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3.2.1 Principal.
(a) Domestic Revolving Credit Loans. Principal payable on account
of Domestic Revolving Credit Loans shall be payable by Domestic Borrower to
Administrative Agent for the ratable benefit of Domestic Lenders, in
addition to the circumstances described in Section 3.3.3, immediately upon
the earliest of (i) the receipt by Administrative Agent or Domestic
Borrower of any proceeds of any of the Domestic Collateral (except as
otherwise provided herein), including without limitation pursuant to
Sections 3.3.1, 3.3.2(a) and 6.2.4, to the extent of such proceeds, subject
to Domestic Borrower's rights to reborrow such amounts in compliance with
Section 1.1.1 hereof; (ii) the occurrence of an Event of Default in
consequence of which Administrative Agent or Majority Lenders elect to
accelerate the maturity and payment of the Obligations, or (iii)
termination of this Agreement pursuant to Section 4 hereof. Each payment
(including principal prepayments) by Domestic Borrower on account of
principal of the Domestic Revolving Credit Loans shall be applied first to
Domestic Base Rate Loans, then to Domestic LIBOR Loans.
(b) Canadian Revolving Credit Loans. Principal on account of
Canadian Revolving Credit Loans shall be payable by Canadian Borrower to
Canadian Agent for the ratable benefit of the Canadian Lender and the
Canadian Participating Lenders, in addition to the circumstances described
in Section 3.3.3, immediately upon the earliest of (i) the receipt by
Canadian Borrower of any proceeds of any of the Collateral (except as
otherwise provided herein), including without limitation pursuant to
Sections 3.3.1, 3.3.2(b) and 6.2.4, to the extent of such proceeds, subject
to Canadian Borrower's right to reborrow such amounts in compliance with
Section 1.1.2 hereof, (ii) the occurrence of an Event of Default in
consequence of which Administrative Agent or Majority Lenders elect to
accelerate the maturity and payment of the Obligations, or (iii)
termination of this Agreement pursuant to Section 4 hereof.
(c) UK Revolving Credit Loans. Principal on account of UK
Revolving Credit Loans shall be payable by UK Borrowers to UK Agent for the
ratable benefit of the UK Lender and the UK Participating Lenders, in
addition to the circumstances described in Section 3.3.3, immediately upon
the earliest of (i) the receipt by either UK Borrower of any proceeds of
any of the Collateral (except as otherwise provided herein), including
without limitation pursuant to Sections 3.3.1, 3.3.2(c) and 6.2.4, to the
extent of such proceeds, subject to UK Borrowers' right to reborrow such
amounts in compliance with Section 1.1.2 hereof, (ii) the occurrence of an
Event of Default in consequence of which Administrative Agent or Majority
Lenders elect to accelerate the maturity and payment of the Obligations, or
(iii) termination of this Agreement
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pursuant to Section 4 hereof. Each payment (including principal
prepayments) by UK Borrowers on account of principal of the UK Revolving
Credit Loans shall be applied first to UK Base Rate Loans, then to UK LIBOR
Loans.
3.2.2 Interest. Interest accrued on all Loans shall be due and
payable on each applicable Interest Payment Date and on the earliest of (a) the
occurrence of an Event of Default in consequence of which Administrative Agent
or Majority Lenders elect to accelerate the maturity and payment of the
Obligations or (b) termination of this Agreement pursuant to Section 4 hereof.
3.2.3 Costs, Fees and Charges. Costs, fees and charges payable
pursuant to this Agreement shall be payable by Borrowers to Administrative
Agent, Canadian Agent and UK Agent, as and when provided in Section 2 or Section
3 hereof or to any other Person designated by Administrative Agent, Canadian
Agent or UK Agent in writing.
3.2.4 Other Obligations. The balance of the Domestic Obligations
requiring the payment of money, if any, shall be payable by Domestic Borrower to
Administrative Agent for distribution to Domestic Lenders, any other Lender and
Bank, as appropriate, the balance of the Canadian Obligations requiring the
payment of money, if any, shall be payable by Canadian Borrower to Canadian
Agent for distribution to Canadian Agent, Canadian Lender, the Canadian
Participating Lenders, UK Agent, UK Lender and the UK Participating Lenders, as
appropriate, and the balance of the UK Obligations requiring the payment of
money, if any, shall be payable by UK Borrowers to UK Agent for distribution to
UK Agent, UK Lender, the UK Participating Lenders, Canadian Agent, Canadian
Lender, and the Canadian Participating Lenders, as appropriate, in each case as
and when provided in this Agreement, the Other Agreements or the Security
Documents, or on demand, whichever is later.
3.2.5 Prepayment of or Failure to Borrow Domestic LIBOR Loans and
UK LIBOR Loans. Except as otherwise provided in this Section 3.2.5, repayment of
a Domestic LIBOR Loan or UK LIBOR Loan shall occur only on the last day of the
Interest Period for such Domestic LIBOR Loan or UK LIBOR Loan. Borrowers may
prepay a Domestic LIBOR Loan only upon at least two (2) Business Days prior
written notice, and UK Borrowers may prepay a UK LIBOR Loan only upon at least
four (4) Business Days prior written notice, to Administrative Agent and/or UK
Agent, as applicable (which notice shall be irrevocable), and subject to the
provisions of this Section 3.2.5. Domestic Borrower shall pay to Administrative
Agent, upon request of Administrative Agent, such amount or amounts as shall be
sufficient (in the reasonable opinion of Administrative Agent) to compensate
Domestic Lenders for any loss, cost, or expense incurred as a result of: (a) any
payment of a Domestic LIBOR Loan on a date other than the last day of the
Interest Period for such Loan; (b) any failure by Domestic Borrower to borrow a
Domestic LIBOR Loan on
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the date specified by Borrower Representative's applicable written notice; or
(c) any failure by Domestic Borrower to pay a Domestic LIBOR Loan on the date
for payment specified in Borrower Representative's written notice. UK Borrowers
shall pay to UK Agent, upon request of UK Agent, such amount or amounts as shall
be sufficient (in the reasonable opinion of UK Agent) to compensate UK Lender
and UK Participating Lenders for any loss, cost, or expense incurred as a result
of: (a) any payment of a UK LIBOR Loan on a date other than the last day of the
Interest Period for such Loan; (b) any failure by either UK Borrower to borrow a
UK LIBOR Loan on the date specified by Borrower Representative's or such UK
Borrower's applicable written notice; or (c) any failure by either UK Borrower
to pay a UK LIBOR Loan on the date for payment specified in Borrower
Representative's or such UK Borrower's written notice. Without limiting the
foregoing, in connection with any prepayment of a Domestic LIBOR Loan or UK
LIBOR Loan, Borrowers shall pay, as applicable, to Administrative Agent, for the
ratable benefit of Domestic Lenders or to UK Agent, for the ratable benefit of
UK Lender and, as applicable, UK Participating Lenders, a "yield maintenance
fee" in an amount computed as follows: the greater of (i) $150.00 (which amount
shall be subject to change from time to time without prior notice), and (ii) the
amount obtained when the current rate for United States Treasury securities
(bills on a discounted basis shall be converted to a bond equivalent) (or United
Kingdom equivalent as determined by UK Agent, as applicable) with a maturity
date closest to the Interest Period chosen pursuant to the Domestic LIBOR Loan
or UK LIBOR Loan as to which the prepayment is made, is subtracted from the
LIBOR in effect at the time of prepayment. If the result in clause (ii) above is
zero or a negative number, the yield maintenance fee shall be $150.00. If the
result in clause (ii) above is a positive number, then the resulting percentage
shall be multiplied by the amount of the principal balance being prepaid. The
resulting amount shall be divided by 360 and multiplied by the number of days
remaining in the Interest Period chosen pursuant to the Domestic LIBOR Loan or
UK LIBOR Loan as to which the prepayment is made. Such amount shall be reduced
to present value calculated by using the above referenced United States Treasury
securities rate (or United Kingdom equivalent, as applicable) and the number of
days remaining in the term chosen pursuant to the Domestic LIBOR Loan or UK
LIBOR Loan as to which prepayment is made. The resulting amount shall be, if
greater than $150.00, as applicable, the yield maintenance fee due to
Administrative Agent, for the ratable benefit of Domestic Lenders, upon the
prepayment of a Domestic LIBOR Loan, or the yield maintenance fee due to UK
Agent, for the ratable benefit of UK Lender and the UK Participating Lenders,
upon the prepayment of a UK LIBOR Loan. If by reason of an Event of Default,
Administrative Agent or Majority Lenders elect to declare the Obligations to be
immediately due and payable, then any yield maintenance fee with respect to a
Domestic LIBOR Loan or UK LIBOR Loan, as the case may be, shall become due and
payable in the same manner as though Borrowers had exercised such right of
prepayment.
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3.2.6 Canadian Revolving Credit Loans Refunding.
(a) If any Default or Event of Default shall occur and be
continuing, the Canadian Lender may, in its sole and absolute discretion,
direct that the Canadian Revolving Credit Loans owing to it be refunded by
delivering a notice (with such detail as the Administrative Agent shall
request, a "Notice of Canadian Revolving Loan Refunding") to the
Administrative Agent. Upon receipt of any such notice, the Administrative
Agent shall (i) promptly give notice of the contents thereof to the
Canadian Participating Lenders and, unless an Event of Default described in
Sections 10.1.8 or 10.1.9 shall have occurred, to the Borrower
Representative and (ii) calculate the aggregate principal amount of
Canadian Revolving Credit Loans (the "Canadian Dollar Refunding Amount").
Each such Notice of Canadian Revolving Loan Refunding shall be deemed to
constitute delivery of a notice to the Administrative Agent requesting each
Canadian Participating Lender to immediately transfer to the Canadian
Lender, in immediately available funds, the amount of such Canadian
Participating Lender's participation with reference to the Canadian Dollar
Refunding Amount, as the case may be.
(b) Whenever, at any time after a Canadian Participating Lender
has funded a participating interest in a Canadian Revolving Credit Loan,
the Canadian Lender receives any payment on account thereof, the Canadian
Lender will distribute to the Administrative Agent for delivery to such
Canadian Participating Lender its participating interest in such amount
(appropriately adjusted, in the case of interest payments, to reflect the
period of time during which such Canadian Participating Lender's
participating interest was outstanding and funded); provided, however, that
in the event that such payment received by the Canadian Lender is required
to be returned, such Canadian Participating Lender will return to the
Administrative Agent for delivery to the Canadian Lender any portion
thereof previously distributed by the Administrative Agent or the Canadian
Lender to it.
(c) Each Canadian Participating Lender's obligation to fund the
participating interests referred to in this Section 3.2.6 shall be absolute
and unconditional and shall not be affected by any circumstances,
including, without limitation, (i) any set-off, counterclaim, recoupment,
defense or other right which such Canadian Participating Lender or any
Borrower may have against the Canadian Lender, any Canadian Participating
Lender, any Borrower or any other Person for any reason whatsoever, (ii)
the occurrence or continuance of a Default or an Event of Default, (iii)
any adverse change in the condition (financial or otherwise) of any
Borrower, (iv) any breach of this Agreement or any other Loan Document by
any Borrower, any Guarantor, any Subsidiary of any Borrower or any other
Lender, or (v) any other
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circumstances, happening or event whatsoever, whether or not similar to any
of the foregoing.
3.2.7 UK Revolving Credit Loans and UK Term Loan Refunding.
(a) If any Default or Event of Default shall occur and be
continuing, the UK Lender may, in its sole and absolute discretion, direct
that the UK Revolving Credit Loans owing to it be refunded by delivering a
notice (with such detail as the Administrative Agent shall request, a
"Notice of UK Revolving Loan Refunding") to the Administrative Agent, and
may direct that the UK Term Loans owing to it be refunded by delivering a
notice (with such detail as the Administrative Agent shall request, a
"Notice of UK Term Loan Refunding") to the Administrative Agent. Upon
receipt of any such notice, the Administrative Agent shall (i) promptly
give notice of the contents thereof to the UK Participating Lenders and,
unless an Event of Default described in Sections 10.1.8 or 10.1.9 shall
have occurred, to the Borrower Representative and (ii) calculate the
aggregate principal amount of UK Revolving Credit Loans or the UK Term
Loans, as applicable (the "UK Refunding Amount"). Each such Notice of UK
Revolving Loan Refunding and each such Notice of UK Term Loan Refunding
shall be deemed to constitute delivery of a notice to the Administrative
Agent requesting each UK Participating Lender to immediately transfer to
the UK Lender, in immediately available funds, the amount of such UK
Participating Lender's participation with reference to the UK Refunding
Amount.
(b) Whenever, at any time after a UK Participating Lender has
funded a participating interest in a UK Revolving Credit Loan or the UK
Term Loans, the UK Lender receives any payment on account thereof, the UK
Lender will distribute to the Administrative Agent for delivery to such UK
Participating Lender its participating interest in such amount
(appropriately adjusted, in the case of interest payments, to reflect the
period of time during which such UK Participating Lender's participating
interest was outstanding and funded); provided, however, that in the event
that such payment received by the UK Lender is required to be returned,
such UK Participating Lender will return to the Administrative Agent for
delivery to the UK Lender any portion thereof previously distributed by the
Administrative Agent or the UK Lender to it.
(c) Each UK Participating Lender's obligation to fund
the participating interests referred to in this Section 3.2.7 shall be
absolute and unconditional and shall not be affected by any circumstances,
including, without limitation, (i) any set-off, counterclaim, recoupment,
defense or other right which such UK Participating Lender or any Borrower
may have against
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the UK Lender, any UK Participating Lender, any Borrower or any other
Person for any reason whatsoever, (ii) the occurrence or continuance of a
Default or an Event of Default, (iii) any adverse change in the condition
(financial or otherwise) of any Borrower, (iv) any breach of this Agreement
or any other Loan Document by any Borrower, any Guarantor, any Subsidiary
of any Borrower or any other Lender, or (v) any other circumstances,
happening or event whatsoever, whether or not similar to any of the
foregoing.
3.3 Mandatory and Optional Prepayments.
3.3.1 Proceeds of Sale, Loss, Destruction or Condemnation of
Collateral. Except as provided in Sections 6.4.2, 8.2.10 and 5.5, if any
Borrower or any of its Subsidiaries sells any of the Equipment or real (or
immovable) Property, or if any of the Collateral owned by such Borrower or such
Subsidiary is lost or destroyed or taken by condemnation, such Borrower shall,
unless otherwise agreed by Majority Lenders, pay, in the case of Domestic
Borrower, to Administrative Agent for the benefit of Administrative Agent,
Canadian Agent, UK Agent, the Lenders and Bank, and, in the case of Canadian
Borrower, to Canadian Agent for the benefit of Canadian Agent, Canadian Lender,
the Canadian Participating Lenders, UK Agent, UK Lender and the UK Participating
Lenders, and, in the case of UK Borrowers, to UK Agent for the benefit of UK
Agent, UK Lender, the UK Participating Lenders, Canadian Agent, Canadian Lender
and the Canadian Participating Lenders, as and when received by such Borrower or
such Subsidiary and as a mandatory prepayment of the Loans, as herein provided,
a sum equal to the proceeds (including insurance payments but net of costs and
taxes incurred in connection with such sale or event) received by such Borrower
or such Subsidiary from such sale, loss, destruction or condemnation. Any
prepayment under this Section 3.3.1 with respect to Domestic Collateral shall be
applied first to the installments of principal due under the Term Notes
evidencing the Domestic Term Loan ratably, to be applied to future installment
payments in inverse order of maturity until paid in full, second to repay
ratably outstanding principal of Domestic Revolving Credit Loans (but shall not
permanently reduce the Domestic Revolving Credit Commitments), third to pay any
other Domestic Obligations owing by Domestic Borrower (provided that, subsequent
to an Event of Default, any such payment which is to be applied to amounts
payable by Domestic Borrower under the Domestic Borrower Guaranties shall be
applied first to amounts owing under the Domestic Borrower Guaranty pertaining
to the UK Obligations and second to amounts owing under the Domestic Borrower
Guaranty pertaining to the Canadian Obligations), and fourth, at Administrative
Agent's option, to be held by Administrative Agent as security for repayment of
any remaining Domestic Obligations (or to be released to Domestic Borrower, if
there are no remaining Obligations and the Commitment Termination has occurred),
and any prepayment under this Section 3.3.1 with respect to Canadian Collateral
shall be applied first to repay ratably outstanding principal of Canadian
Revolving Credit Loans (but shall not
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permanently reduce the Canadian Revolving Credit Sub-Limit), second to pay any
other Canadian Obligations owing by Canadian Borrower, and third, at Canadian
Agent's option, to be held by Canadian Agent as security for repayment of any
remaining Canadian Obligations (or to be released to Canadian Borrower, if there
are no remaining Canadian Obligations and the Commitment Termination has
occurred), and any prepayment under this Section 3.3.1 with respect to UK
Collateral shall be applied first to the installments of principal due under the
Term Notes evidencing the UK Term Loans, to be applied ratably to future
installment payments in inverse order of maturity until paid in full, second to
repay ratably outstanding principal of UK Revolving Credit Loans (but shall not
permanently reduce the UK Revolving Credit Sub-Limit), third to pay any other UK
Obligations owing by UK Borrowers, and fourth, at UK Agent's option, to be held
by UK Agent as security for repayment of any remaining UK Obligations (or to be
released to UK Borrowers, if there are no remaining UK Obligations and the
Commitment Termination has occurred). Notwithstanding the foregoing, if the
proceeds of insurance (net of costs and taxes incurred) with respect to any loss
or destruction of Equipment, Inventory or real (or immovable) Property (a) are
less than $250,000, unless an Event of Default is then in existence,
Administrative Agent shall remit such proceeds to the applicable Borrower for
use in replacing or repairing the damaged Collateral or (b) are equal to or
greater than $250,000 and the applicable Borrower has requested that
Administrative Agent agree to permit such Borrower or the applicable Subsidiary
to repair or replace the damaged Collateral, such amounts shall be provisionally
applied to reduce the outstanding principal balance of the applicable Revolving
Credit Loans until the earlier of Administrative Agent's decision with respect
thereto or the expiration of 120 days from such request. If Administrative Agent
agrees, in its reasonable judgment, to permit such repair or replacement under
such clause (b), such amount shall, unless an Event of Default is in existence,
be remitted to the applicable Borrower for use in replacing or repairing the
damaged Collateral; if Administrative Agent declines to permit such repair or
replacement or does not respond to the applicable Borrower within such 120 day
period, such amount shall be applied to the Loans in the manner specified in the
second sentence of this Section 3.3.1 until payment thereof in full.
3.3.2 Prepayment Upon Exceeding Commitments and Borrowing Base.
(a) Domestic Revolving Credit Loans. Domestic Borrower shall
prepay the outstanding principal amount of the Domestic Revolving Credit
Loans on any date on which Domestic Revolving Credit Exposure of all the
Domestic Lenders exceeds the Domestic Borrowing Base then in effect (minus
the outstanding principal amount of the Domestic Term Loan minus Reserves
applicable to Domestic Revolving Credit Loans, if any) or the Revolving
Credit Maximum Amount (minus the outstanding principal amount of the
Domestic Term Loan minus the Dollar Equivalent of the aggregate principal
amount of
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the outstanding Canadian Revolving Credit Loans minus the Dollar Equivalent
of the aggregate principal amount of the outstanding UK Revolving Credit
Loans minus the Dollar Equivalent of the outstanding principal amount of
the UK Term Loans minus Reserves, if any), in the amount of such excess.
Any such prepayment shall be applied to repay ratably outstanding principal
of Domestic Revolving Credit Loans (but shall not permanently reduce the
Domestic Revolving Credit Commitments).
(b) Canadian Revolving Credit Loans. Canadian Borrower shall
prepay the outstanding principal amount of Canadian Revolving Credit Loans
on any date on which the aggregate amount of the Canadian Revolving Credit
Exposure of the Canadian Lender would exceed (including, without
limitation, solely as a result of fluctuation in exchange rates) the
Canadian Borrowing Base then in effect (minus Reserves applicable to
Canadian Revolving Credit Loans, if any), in the amount of such excess and
in the applicable currency; provided, however, that if such excess is
solely as a result of fluctuation in exchange rates, such repayment shall
not be required to be made until two Business Days after notice from the
Canadian Agent and Canadian Borrower shall not be obligated to pay such
amount unless such excess is greater than the Dollar Equivalent of an
amount equal to 1% of the Canadian Revolving Credit Sub-Limit then in
effect. Any such prepayment shall be applied to repay ratably outstanding
principal of Canadian Revolving Credit Loans (but shall not permanently
reduce the Canadian Revolving Credit Sub-Limit).
(c) UK Revolving Credit Loans. UK Borrowers shall prepay the
outstanding principal amount of UK Revolving Credit Loans on any date on
which the aggregate amount of the UK Revolving Credit Exposure of the UK
Lender would exceed (including, without limitation, solely as a result of
fluctuation in exchange rates) the UK Borrowing Base then in effect (minus
Reserves applicable to UK Revolving Credit Loans, if any), in the amount of
such excess and in Sterling; provided, however, that if such excess is
solely as a result of fluctuation in exchange rates, such repayment shall
not be required to be made until two Business Days after notice from the UK
Agent and UK Borrowers shall not be obligated to pay such amount unless
such excess is greater than the Dollar Equivalent of an amount equal to 1%
of the UK Revolving Credit Sub-Limit then in effect. Any such prepayment
shall be applied as follows: first to the installments of principal due
under the Term Notes evidencing the UK Term Loans ratably, to be applied to
future installment payments in inverse order of maturity until paid in
full, and second to repay ratably outstanding principal of UK Revolving
Credit Loans (but shall not permanently reduce the UK Revolving Credit
Sub-Limit).
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3.3.3 Proceeds from Issuance of Additional Indebtedness or
Equity. If any Borrower issues any additional Indebtedness for Money Borrowed or
issues any additional equity in a manner permitted under this Agreement, other
than (provided no Default or Event of Default has occurred and is continuing)
for the purpose of financing an asset or stock acquisition or merger approved by
the Majority Lenders, such Borrower shall pay, in the case of Domestic Borrower,
to Administrative Agent for the benefit of Administrative Agent, Canadian Agent,
UK Agent, the Lenders and Bank, and, in the case of Canadian Borrower, to
Canadian Agent for the benefit of Canadian Agent, Canadian Lender, the Canadian
Participating Lenders, UK Agent, UK Lender and the UK Participating Lenders,
and, in the case of UK Borrowers, to UK Agent for the benefit of UK Agent, UK
Lender, the UK Participating Lenders, Canadian Agent, Canadian Lender and the
Canadian Participating Lenders, when and as received by such Borrower and as a
mandatory prepayment of the Domestic Obligations or the Canadian Obligations or
the UK Obligations, respectively, a sum equal to 100% of the net proceeds to
such Borrower of the issuance of such Indebtedness or equity. Any prepayment
under this Section 3.3.3 with respect to the issuance of such Indebtedness for
Money Borrowed or equity by Domestic Borrower or any of its Subsidiaries (other
than Canadian Borrower and UK Borrowers) shall be applied first to the
installments of principal due under the Term Notes evidencing the Domestic Term
Loan ratably, to be applied to future installment payments in inverse order of
maturity until paid in full, and second to repay ratably the outstanding
principal of Domestic Revolving Credit Loans (but shall not permanently reduce
the Domestic Revolving Credit Commitments), and any prepayment under this
Section 3.3.3 with respect to the issuance of such Indebtedness for Money
Borrowed or equity by Canadian Borrower shall be applied to repay ratably
outstanding principal of Canadian Revolving Credit Loans (but shall not
permanently reduce the Canadian Revolving Credit Sub-Limit), and any prepayment
under this Section 3.3.3 with respect to the issuance of such Indebtedness for
Money Borrowed or equity by UK Borrowers shall be applied first to the
installments of principal due under the Term Notes evidencing the UK Term Loans,
to be applied ratably to future installment payments in inverse order of
maturity until paid in full and second to repay ratably the outstanding
principal of UK Revolving Credit Loans (but shall not permanently reduce the UK
Revolving Credit Sub-Limit).
3.3.4 Domestic LIBOR Loans and UK LIBOR Loans. If the application
of any payment made in accordance with the provisions of this Section 3.3 at a
time when no Event of Default has occurred and is continuing would result in
termination of a Domestic LIBOR Loan or a UK LIBOR Loan prior to the last day of
the Interest Period for such Domestic LIBOR Loan or UK LIBOR Loan, the amount of
such prepayment shall not be applied to such Domestic LIBOR Loan or UK LIBOR
Loan, but will, at Borrower Representative's option, be held by Administrative
Agent, in the case of Domestic Borrower, or UK Agent, in the case of UK
Borrowers, in a non-interest bearing account or deposited by the applicable
Borrower in an interest-
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bearing account at a Lender or another bank satisfactory to Administrative
Agent, in the case of Domestic Borrower, or UK Agent, in the case of UK
Borrowers, in its discretion, which account is in the name of Administrative
Agent, in the case of Domestic Borrower, or UK Agent, in the case of UK
Borrowers, and from which account only Administrative Agent or UK Agent, as the
case may be, can make any withdrawal, in each case to be applied as such amount
would otherwise have been applied under this Section 3.3 at the earlier to occur
of (a) the last day of the relevant Interest Period or (b) the occurrence of a
Default or an Event of Default.
3.3.5 Optional Term Loan Prepayments. Domestic Borrower may, at
its option from time to time upon not less than 3 Business Days' prior written
notice to Administrative Agent, prepay installments of the Term Notes evidencing
the Domestic Term Loan, provided that the amount of any such prepayment is at
least $500,000 and in integral multiples of $100,000 above $500,000, and that
such prepayments are made ratably with respect to all such Term Notes. UK
Borrowers may, at their option from time to time upon not less than 3 Business
Days' prior written notice to UK Agent, prepay installments of the Term Notes
evidencing the UK Term Loans. Except for charges under Section 3.2.5 applicable
to prepayments of Domestic LIBOR Loans and UK LIBOR Loans, such prepayments
shall be without premium or penalty.
3.4 Application of Payments and Collections.
3.4.1 Collections. All items of payment received by
Administrative Agent by 12:00 noon, Los Angeles time, or by Canadian Agent by
12:00 noon, Toronto time, or by UK Agent by 12:00 noon, London time, on any
Business Day shall be deemed received on that Business Day for purposes other
than computation of interest. All items of payment received after 12:00 noon,
Los Angeles time, or 12:00 noon, Toronto time, or 12:00 noon, London time, on
any Business Day shall be deemed received on the following Business Day for
purposes other than computation of interest. Domestic Borrower irrevocably
waives the right to direct the application of any and all payments and
collections at any time or times hereafter received by Administrative Agent from
or on behalf of Domestic Borrower or any of their Subsidiaries (other than
Canadian Borrower and UK Borrowers), and Domestic Borrower does hereby
irrevocably agree that Administrative Agent shall have the continuing exclusive
right to apply and reapply any and all such payments and collections received at
any time or times hereafter by Administrative Agent or its agent against the
Domestic Obligations, in such manner as Administrative Agent may deem advisable,
notwithstanding any entry by Administrative Agent or any Lender upon any of its
books and records. Canadian Borrower irrevocably waives the right to direct the
application of any and all payments and collections at any time or times
hereafter received by Canadian Agent from or on behalf of Canadian Borrower, and
Canadian Borrower does hereby irrevocably agree that Canadian Agent shall have
the continuing
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exclusive right to apply and reapply any and all such payments and collections
received at any time or times hereafter by Canadian Agent or its agent against
the Canadian Obligations, in such manner as Canadian Agent may deem advisable,
notwithstanding any entry by Canadian Agent or Canadian Lender or any Canadian
Participating Lender upon any of its books and records. Each UK Borrower
irrevocably waives the right to direct the application of any and all payments
and collections at any time or times hereafter received by UK Agent from or on
behalf of UK Borrowers, and each UK Borrower does hereby irrevocably agree that
UK Agent shall have the continuing exclusive right to apply and reapply any and
all such payments and collections received at any time or times hereafter by UK
Agent or its agent against the UK Obligations, in such manner as UK Agent may
deem advisable, notwithstanding any entry by UK Agent or UK Lender or any UK
Participating Lender upon any of its books and records. If as the result of
collections of Accounts as authorized by Section 6.2.4 hereof or otherwise, a
credit balance exists in the Domestic Loan Account, such credit balance shall
not accrue interest in favor of Domestic Borrower, but shall be disbursed to
Domestic Borrower or otherwise at Borrower Representative's direction in the
manner set forth in Section 3.1.2, upon Borrower Representative's request at any
time, so long as no Default or Event of Default then exists. If as the result of
collections of Accounts authorized by Section 6.2.4 hereof or otherwise, a
credit balance exists in the Canadian Loan Account, such credit balance shall
not accrue interest in favor of Canadian Borrower, but shall be disbursed to
Canadian Borrower or otherwise at Borrower Representative's direction in the
manner set forth in Section 3.1.2, upon Borrower Representative's request at any
time, so long as no Default or Event of Default then exists. If as the result of
collections of Accounts authorized by Section 6.2.4 hereof or otherwise, a
credit balance exists in the UK Loan Account, such credit balance shall not
accrue interest in favor of UK Borrowers, but shall be disbursed to UK Borrowers
or otherwise at Borrower Representative's direction in the manner set forth in
Section 3.1.2, upon Borrower Representative's request at any time, so long as no
Default or Event of Default then exists. Administrative Agent may at its option,
offset such credit balance with respect to the Domestic Loan Account against any
of the Domestic Obligations upon and during the continuance of an Event of
Default. Canadian Agent may at its option, offset such credit balance with
respect to the Canadian Loan Account against any of the Canadian Obligations
upon and during the continuance of an Event of Default. UK Agent may at its
option, offset such credit balance with respect to the UK Loan Account against
any of the UK Obligations upon and during the continuance of an Event of
Default.
3.4.2 Apportionment; Application and Reversal of Payments.
Principal and interest payments (i) by Domestic Borrower shall be apportioned
ratably among all Domestic Lenders (according to the unpaid principal balance of
the Loans to which such payments related held by each Domestic Lender), (ii) by
Canadian Borrower shall be distributed to Canadian Lender subject to Section 2.6
or, following a
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refunding in accordance with Section 3.2.6, apportioned among Canadian Lender
and all Canadian Participating Lenders (according to the unpaid principal
balance of the Loans to which such payments related held by Canadian Lender and
each Canadian Participating Lender), and (iii) by UK Borrowers shall be
distributed to UK Lender subject to Section 2.6 or, following a refunding in
accordance with Section 3.2.7, apportioned among UK Lender and all UK
Participating Lenders (according to the unpaid principal balance of the Loans to
which such payments related held by UK Lender and each UK Participating Lender).
All payments by Domestic Borrower shall be remitted to Administrative Agent, by
Canadian Borrower shall be remitted to Canadian Agent, and by UK Borrowers shall
be remitted to UK Agent, and all such payments not relating to principal or
interest of specific Loans, or not constituting payment of specific fees, and
all proceeds of Accounts or, except as provided in Section 3.3, other Collateral
received by Administrative Agent, Canadian Agent or UK Agent, as applicable,
shall be applied, ratably, subject to the provisions of this Agreement, first,
to pay any fees, indemnities, or expense reimbursements then due to
Administrative Agent, Canadian Agent, UK Agent, Bank or Lenders from the
applicable Borrower; second, to pay interest due from the applicable Borrower in
respect of all Loans made to such Borrower, third, to pay or prepay principal of
any Term Loan made to such Borrower; fourth, to pay or prepay principal of the
Revolving Credit Loans made to such Borrower and unpaid reimbursement
obligations in respect of Letters of Credit owed by such Borrower; fifth, with
respect to payments by Domestic Borrower, to pay an amount to Administrative
Agent equal to the available amount of all outstanding Domestic Letters of
Credit to be held as cash Collateral for reimbursement and fee obligations in
respect of such Domestic Letters of Credit; sixth, with respect to payments by
UK Borrowers, to pay an amount to UK Agent equal to the available amount of all
outstanding UK Letters of Credit to be held as cash Collateral for reimbursement
and fee obligations in respect of such UK Letters of Credit; and seventh, to the
payment of any other Obligations due to the Administrative Agent, Canadian
Agent, UK Agent, Bank or any Lender by such Borrower. Except as expressly set
forth to the contrary, payments received (i) from Domestic Borrower shall be
applied only to the Domestic Obligations, (ii) from Canadian Borrower shall be
applied only to the Canadian Obligations, and (iii) from UK Borrowers shall be
applied only to the UK Obligations. Subject to the provisions of this Section
3.4.2, after the occurrence and during the continuance of an Event of Default,
Administrative Agent, Canadian Agent and UK Agent shall have the continuing
exclusive right to apply and reapply any and all such payments and collections
received at any time or times hereafter by Administrative Agent, Canadian Agent
or UK Agent or their agents against the Obligations, in such manner as
Administrative Agent, Canadian Agent or UK Agent may deem advisable,
notwithstanding any entry by Administrative Agent, Canadian Agent, UK Agent,
Bank or any Lender upon any of its books and records.
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3.5 All Loans to Constitute One Obligation.
The Domestic Revolving Credit Loans and the Domestic Term Loan shall
constitute one general Obligation of Domestic Borrower, and shall be secured by
Administrative Agent's (for the benefit of itself, Canadian Agent, UK Agent,
Bank and each Lender) Lien upon all of the Domestic Collateral. The Canadian
Revolving Credit Loans shall constitute one general Obligation of Canadian
Borrower, and shall be secured by Canadian Agent's (on behalf of itself,
Canadian Lender, the Canadian Participating Lenders, UK Agent, UK Lender and the
UK Participating Lenders) Lien upon all of the Canadian Collateral. The UK
Revolving Credit Loans and the UK Term Loans shall constitute one general joint
and several Obligation of UK Borrowers, and shall be secured by UK Agent's (on
behalf of itself, UK Lender, the UK Participating Lenders, Canadian Agent,
Canadian Lender and the Canadian Participating Lenders) Lien upon all of the UK
Collateral.
3.6 Loan Accounts.
Administrative Agent shall enter all Domestic Revolving Credit Loans
and the Domestic Term Loan as debits to a loan account (the "Domestic Loan
Account"), Canadian Agent shall enter all Canadian Revolving Credit Loans as
debits to a loan account (the "Canadian Loan Account"), and UK Agent shall enter
all UK Revolving Credit Loans and the UK Term Loans as debits to a loan account
(the "UK Loan Account" and, together with the Domestic Loan Account and the
Canadian Loan Account, each a "Loan Account"), and shall also record in the
relevant Loan Account all payments made by the relevant Borrowers on any
Obligations and all proceeds of the relevant Collateral which are finally paid
to Administrative Agent, Canadian Agent or UK Agent, as the case may be, and may
record therein, in accordance with customary accounting practice, other debits
and credits, including interest and all charges and expenses properly chargeable
to Borrowers pursuant to this Agreement or any other Loan Document.
3.7 Statements of Account.
Administrative Agent will account to Borrower Representative monthly
with a statement of Loans, charges and payments made pursuant to this Agreement
during the immediately preceding month, and such account rendered by
Administrative Agent shall be deemed final, binding and conclusive upon
Borrowers absent demonstrable error unless Administrative Agent is notified by
Borrower Representative in writing to the contrary within 30 days of the date
each accounting is received by Borrower Representative. Such notice shall only
be deemed an objection to those items specifically objected to therein.
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3.8 Sharing of Payments, Etc.
3.8.1 If any Domestic Lender shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of set-off, or
otherwise) on account of any Domestic Revolving Credit Loan or any portion of
the Domestic Term Loan made by it in excess of its ratable share of payments on
account of such Loans made by all Domestic Lenders, such Domestic Lender shall
forthwith purchase from each other Domestic Lender such participation in such
Loans as shall be necessary to cause such purchasing Domestic Lender to share
the excess payment ratably with each other Domestic Lender; provided, that if
all or any portion of such excess payment is thereafter recovered from such
purchasing Domestic Lender, such purchase from each Domestic Lender shall be
rescinded and such Domestic Lenders shall repay to the purchasing Domestic
Lender the purchase price to the extent of such recovery, together with an
amount equal to such Domestic Lender's ratable share (according to the
proportion of (i) the amount of such Domestic Lender's required repayment to
(ii) the total amount so recovered from the purchasing Domestic Lender) of any
interest or other amount paid or payable by the purchasing Domestic Lender in
respect of the total amount so recovered. Each Borrower agrees that any Domestic
Lender so purchasing a participation from another Domestic Lender pursuant to
this Section 3.8.1 may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect to such
participation as fully as if such Domestic Lender were the direct creditor of
Borrowers in the amount of such participation. Notwithstanding anything to the
contrary contained herein, all purchases and repayments to be made under this
Section 3.8.1 shall be made through Administrative Agent.
3.8.2 If Canadian Lender or any Canadian Participating Lender
shall obtain any payment (whether voluntary, involuntary, through the exercise
of any right of set-off, or otherwise) on account of any Canadian Revolving
Credit Loan made or refunded by it in excess of its ratable share of payments on
account of such Loans made or refunded by Canadian Agent and Canadian
Participating Lenders in the aggregate, such Lender shall forthwith purchase
from Canadian Lender and each other Canadian Participating Lender such
participation in such Loans as shall be necessary to cause such purchasing
Lender to share the excess payment ratably with Canadian Lender and each other
Canadian Participating Lender; provided, that if all or any portion of such
excess payment is thereafter recovered from such purchasing Lender, such
purchase from Canadian Lender and each Canadian Participating Lender shall be
rescinded and Canadian Lender and such Canadian Participating Lenders shall
repay to the purchasing Lender the purchase price to the extent of such
recovery, together with an amount equal to such Lender's ratable share
(according to the proportion of (i) the amount of such Lender's required
repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered. Each Borrower
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agrees that Canadian Lender and any Canadian Participating Lender so purchasing
a participation from Canadian Lender or a Canadian Participating Lender pursuant
to this Section 3.8.2 may, to the fullest extent permitted by law, exercise all
its rights of payment (including the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of Borrowers
in the amount of such participation. Notwithstanding anything to the contrary
contained herein, all purchases and repayments to be made under this Section
3.8.2 shall be made through Canadian Agent.
3.8.3 If UK Lender or any UK Participating Lender shall obtain
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off, or otherwise) on account of any UK Revolving Credit Loan or any
portion of the UK Term Loans made or refunded by it in excess of its ratable
share of payments on account of such Loans made or refunded by UK Agent and UK
Participating Lenders in the aggregate, such Lender shall forthwith purchase
from UK Lender and each other UK Participating Lender such participation in such
Loans as shall be necessary to cause such purchasing Lender to share the excess
payment ratably with UK Lender and each other UK Participating Lender; provided,
that if all or any portion of such excess payment is thereafter recovered from
such purchasing Lender, such purchase from UK Lender and each UK Participating
Lender shall be rescinded and UK Lender and such UK Participating Lenders shall
repay to the purchasing Lender the purchase price to the extent of such
recovery, together with an amount equal to such Lender's ratable share
(according to the proportion of (i) the amount of such Lender's required
repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered. Each Borrower agrees that UK Lender and any UK
Participating Lender so purchasing a participation from UK Lender or a UK
Participating Lender pursuant to this Section 3.8.3 may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off) with respect to such participation as fully as if such Lender were the
direct creditor of Borrowers in the amount of such participation.
Notwithstanding anything to the contrary contained herein, all purchases and
repayments to be made under this Section 3.8.3 shall be made through UK Agent.
3.9 Increased Costs.
If any law or any governmental or quasi-governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law) adopted
or implemented after the date of this Agreement and having general applicability
to all banks or finance companies within the jurisdiction in which any Lender
operates (excluding, for the avoidance of doubt, the effect of and phasing in of
capital requirements or other regulations or guidelines passed prior to the date
of this Agreement), or any interpretation or application thereof by any
governmental authority
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charged with the interpretation or application thereof, or the compliance of
such Lender therewith, shall:
(a) (i) subject such Lender to any tax with respect to this
Agreement (other than (A) any tax based on or measured by net income or
otherwise in the nature of a net income tax, including, without limitation,
any franchise tax or any similar tax based on capital, net worth or
comparable basis for measurement and (B) subject to the provisions of
Section 2.13, any tax collected by a withholding on payments and which
neither is computed by reference to the net income of the payee nor is in
the nature of an advance collection of a tax based on or measured by the
net income of the payee) or (ii) change the basis of taxation of payments
to such Lender of principal, fees, interest or any other amount payable
hereunder or under any Loan Documents (other than in respect of (A) any tax
based on or measured by net income or otherwise in the nature of a net
income tax, including, without limitation, any franchise tax or any similar
tax based on capital, net worth or comparable basis for measurement and (B)
subject to the provisions of Section 2.13, any tax collected by a
withholding on payments and which neither is computed by reference to the
net income of the payee nor is in the nature of an advance collection of a
tax based on or measured by the net income of the payee);
(b) impose, modify or hold applicable any reserve (except any
reserve taken into account in the determination of the applicable LIBOR),
special deposit, assessment or similar requirement against assets held by,
or deposits in or for the account of, advances or loans by, or other credit
extended by, any office of such Lender, including (without limitation)
pursuant to Regulation D of the Board of Governors of the Federal Reserve
System; or
(c) impose on such Lender or the London interbank market any
other condition with respect to any Loan Document
and the result of any of the foregoing is to increase the cost to such
Lender of making, renewing or maintaining its Loans hereunder by an amount that
such Lender deems to be material or the result of any of the foregoing is to
reduce the rate of return on such Lender's capital as a consequence of its
obligations hereunder, or the result of any of the foregoing is to reduce the
amount of any payment (whether of principal, interest or otherwise) in respect
of any of such Loans by an amount that such Lender deems to be material, then,
in any such case, the applicable Borrower(s) shall pay such Lender, upon demand
and certification not later than sixty (60) days following Borrower
Representative's receipt of notice of the imposition of such increased costs,
such additional amount as will compensate such Lender for such additional cost
or such reduction, as the case may be, to the extent such Lender has not
otherwise been compensated, with respect to a particular Loan, for such
increased cost as a result of an increase in the Domestic Base Rate, UK Base
Rate, Canadian Base
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Rate or LIBOR. An officer of such Lender shall determine the amount of such
additional cost or reduced amount using reasonable averaging and attribution
methods and shall certify the amount of such additional cost or reduced amount
to Borrower Representative, which certification shall include a written
explanation of such additional cost or reduction to Borrower Representative.
Such certification shall be conclusive absent manifest error. If a Lender claims
any additional cost or reduced amount pursuant to this Section 3.9, then such
Lender shall use reasonable efforts (consistent with legal and regulatory
restrictions) to designate a different lending office or to file any certificate
or document reasonably requested by Borrower Representative if the making of
such designation or filing would avoid the need for, or reduce the amount of,
any such additional cost or reduced amount and would not, in the sole discretion
of such Lender, be otherwise disadvantageous to such Lender.
3.10 Basis for Determining Interest Rate Inadequate or Unfair.
In the event that Administrative Agent or UK Agent or any Lender shall
have determined that:
(a) reasonable means do not exist for ascertaining the LIBOR for
any Interest Period; or
(b) Sterling and Dollar deposits in the relevant amount and for
the relevant maturity are not available in the London interbank market with
respect to a proposed Domestic LIBOR Loan or UK LIBOR Loan, or a proposed
conversion of a Domestic Base Rate Loan into a Domestic LIBOR Loan or of a
UK Base Rate Loan into a UK LIBOR Loan; then
Administrative Agent, UK Agent or such Lender, as applicable, shall
give Borrower Representative prompt written, telephonic or electronic notice of
the determination of such event. If such notice is given, (i) any such requested
Domestic LIBOR Loan shall be made as a Domestic Base Rate Loan, and any such
requested UK LIBOR Loan shall be made as a UK Base Rate Loan, unless Borrower
Representative shall notify Administrative Agent, with respect to Domestic LIBOR
Loans, no later than 10:00 a.m. (Los Angeles time) two (2) Banking Days prior
to, or, with respect to UK LIBOR Loans, no later than 10:00 a.m. (Los Angeles
time) four (4) Business Days prior to, the date of such proposed borrowing that
the request for such borrowing shall be canceled, and (ii) any Domestic Base
Rate Loan or UK Base Rate Loan which was to have been converted to an affected
type of Domestic LIBOR Loan or UK LIBOR Loan shall be continued as or converted
into a Domestic Base Rate Loan or UK Base Rate Loan as the case may be.
3.11 Location of Payments. Notwithstanding anything else herein to the
contrary, all payments made by Borrowers or Borrower Representative on behalf of
Borrowers under this Agreement, whether principal or interest payments, fees,
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expenses or other charges hereunder, shall be made to the applicable Agent at
its address for notices set forth in Section 12.8 of this Agreement.
SECTION 4. TERM AND TERMINATION
4.1 Term of Agreement.
Subject to the right of Lenders to cease making Loans to Borrowers
during the continuance of any Default or Event of Default, this Agreement shall
be in effect from the Closing Date through and including September 30, 2005 (the
"Term"), unless terminated as provided in Section 4.2 hereof.
4.2 Termination.
4.2.1 Termination by Lenders. Administrative Agent may, and at
the direction of Majority Lenders shall, terminate this Agreement without notice
upon or after the occurrence and during the continuance of an Event of Default.
4.2.2 Termination by Borrower Representative. Upon at least 60
days prior written notice to Administrative Agent and Lenders, Borrower
Representative may, at its option, terminate this Agreement; provided, however,
no such termination shall be effective until Borrowers have paid or
collateralized to Administrative Agent's reasonable satisfaction all of the
Obligations in immediately available funds, all Letters of Credit and LC
Guaranties have expired, terminated or have been cash collateralized to
Administrative Agent's and UK Agent's, as applicable, reasonable satisfaction
and Borrowers have complied with Sections 2.7, 3.2.5 and 4.2.3(b) (if
applicable). Any notice of termination given by Borrower Representative shall be
irrevocable unless all Lenders otherwise agree in writing, and no Lender shall
have any obligation to make any Loans or issue or procure any Letters of Credit
or LC Guaranties on or after the termination date stated in such notice.
Borrower Representative may elect to terminate this Agreement in its entirety
only. No section of this Agreement or type of Loan available hereunder may be
terminated singly.
4.2.3 Effect of Termination.
(a) All of the Obligations shall be immediately due and payable
upon the termination date stated in any notice of termination of this Agreement.
All undertakings, agreements, covenants, warranties and representations of
Borrowers and their Subsidiaries contained in the Loan Documents shall survive
any such termination and Administrative Agent, Canadian Agent and UK Agent shall
retain their Liens in the Collateral and Administrative Agent, Canadian Agent,
UK Agent and each Lender shall retain all of its rights and remedies under the
Loan Documents notwithstanding such termination until all Obligations have been
discharged or paid, in full, in immediately available funds, including, without
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limitation, all applicable Obligations under Sections 2.7, 3.2.5 and 4.2.3(b)
resulting from such termination. Notwithstanding the foregoing or the payment in
full of the Obligations, none of Administrative Agent, Canadian Agent and UK
Agent shall be required to terminate its Liens in the Collateral unless, with
respect to any loss or damage Administrative Agent, Canadian Agent or UK Agent
may incur as a result of dishonored checks or other items of payment received by
Administrative Agent, Canadian Agent or UK Agent from Borrowers or any of their
Subsidiaries or any Account Debtor and applied to the Obligations,
Administrative Agent shall, at its option, (i) have received a written agreement
satisfactory to Administrative Agent, executed by Borrowers and/or their
Subsidiaries and by any Person whose loans or other advances to Borrowers and/or
their Subsidiaries are used in whole or in part to satisfy the Obligations,
indemnifying Administrative Agent, Canadian Agent, UK Agent and each Lender from
any such loss or damage or (ii) have retained cash Collateral for such period of
time as Administrative Agent, in its reasonable discretion, may deem necessary
to protect Administrative Agent, Canadian Agent, UK Agent and each Lender from
any such loss or damage.
(b) In the event that Borrower Representative provides less than 60
days prior written notice of termination of this Agreement as required by
Section 4.2.2, in addition to any other amounts which are required to be paid to
Administrative Agent, Canadian Agent, UK Agent or any Lender under the Loan
Documents, (i) Domestic Borrower agrees to pay to Administrative Agent (for the
ratable benefit of the Domestic Lenders), an amount equal to the product of
(A)(I) the product of (X) the aggregate payoff amount of the Domestic
Obligations times (Y) the interest rates applicable to such Domestic
Obligations, divided by (II) 365 times (B) the difference between 60 and the
number of days prior written notice of termination of this Agreement given by
Borrower Representative to Administrative Agent and Lenders (the "Notice Days"),
(ii) Canadian Borrower agrees to pay to Canadian Agent (for the benefit of
Canadian Lender and, subsequent to any Canadian Revolving Credit Loan refunding
pursuant to Section 3.2.6, for the ratable benefit of Canadian Lender and
Canadian Participating Lenders) an amount equal to the product of (A)(I) the
product of (X) the aggregate payoff amount of the Canadian Obligations times (Y)
the interest rates applicable to such Canadian Obligations, divided by (II) 365
times (B) the Notice Days, and (iii) UK Borrowers agree to pay to UK Agent (for
the benefit of UK Lender and, subsequent to any UK Revolving Credit Loan
refunding or UK Term Loan refunding pursuant to Section 3.2.7, for the ratable
benefit of UK Lender and UK Participating Lenders) an amount equal to the
product of (A)(I) the product of (X) the aggregate payoff amount of the UK
Obligations times (Y) the interest rates applicable to such UK Obligations,
divided by (II) 365 times (B) the Notice Days.
(c) Upon termination of this Agreement and repayment in full of the
Obligations, each Agent shall promptly execute and deliver to Borrowers such
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documents as reasonably requested by Borrower Representative to evidence the
release of Agents' Liens in the Collateral.
SECTION 5. SECURITY INTERESTS
5.1 Security Interest in Collateral.
5.1.1 To secure the prompt payment and performance of the
Domestic Obligations (including, without limitation, the obligations of Domestic
Borrower under the Domestic Borrower Guaranties), Domestic Borrower hereby
grants to Administrative Agent for the benefit of itself, Canadian Agent, UK
Agent, Bank and each Lender a continuing Lien upon all of Domestic Borrower's
assets, including all of the following Property and interests in Property of
Domestic Borrower, whether now owned or existing or hereafter created, acquired
or arising and wheresoever located:
(a) Accounts;
(b) Certificated Securities;
(c) Chattel Paper;
(d) Computer Hardware and Software and all rights with respect
thereto, including, any and all licenses, options, warranties, service
contracts, program services, test rights, maintenance rights, support
rights, improvement rights, renewal rights and indemnifications, and any
substitutions, replacements, additions or model conversions of any of the
foregoing;
(e) Contract Rights;
(f) Deposit Accounts;
(g) Documents;
(h) Equipment;
(i) Financial Assets;
(j) Fixtures;
(k) General Intangibles, including Payment Intangibles and
Software;
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(l) Goods (including all of its Equipment, Fixtures and
Inventory), and all accessions, additions, attachments, improvements,
substitutions and replacements thereto and therefor;
(m) Instruments;
(n) Intellectual Property;
(o) Inventory;
(p) Investment Property;
(q) money (of every jurisdiction whatsoever);
(r) Letter-of-Credit Rights;
(s) Payment Intangibles;
(t) Security Entitlements;
(u) Software;
(v) Supporting Obligations;
(w) Uncertificated Securities; and
(x) to the extent not included in the foregoing, all other
personal property of any kind or description;
together with all books, records, writings, data bases, information and other
property relating to, used or useful in connection with, or evidencing,
embodying, incorporating or referring to any of the foregoing, and all Proceeds,
products, offspring, rents, issues, profits and returns of and from any of the
foregoing; provided that (i) to the extent that the provisions of any lease or
license of Computer Hardware and Software or Intellectual Property expressly
prohibit (which prohibition is enforceable under applicable law) any assignment
thereof, and the grant of a security interest therein, Administrative Agent will
not enforce its security interest in Domestic Borrower's rights under such lease
or license (other than in respect of the Proceeds thereof) for so long as such
prohibition continues, it being understood that upon request of Administrative
Agent, Domestic Borrower will in good faith use reasonable efforts (other than
the payment of money) to obtain consent for the creation of a security interest
in favor of Administrative Agent (and to Administrative Agent's enforcement of
such security interest) in Domestic Borrower's rights under such lease or
license, and (ii) with respect to other contracts or agreements, Contract Rights
of Domestic Borrower will be excluded from Domestic Collateral to the extent
assignment is
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expressly prohibited by the underlying contract or agreement (which prohibition
is enforceable under applicable law), it being understood that upon request of
Administrative Agent, Domestic Borrower will in good faith use reasonable
efforts (other than the payment of money) to obtain consent for the creation of
a security interest in favor of Administrative Agent (and to Administrative
Agent's enforcement of such security interest) in Domestic Borrower's rights
under such contract or agreement.
5.1.2 To secure the prompt payment and performance of the
Canadian Obligations, Canadian Borrower hereby grants to Canadian Agent for the
benefit of itself, Canadian Lender, each Canadian Participating Lender, UK
Agent, UK Lender and each UK Participating Lender, a continuing security
interest upon all of Canadian Borrower's assets, including all of the following
Property and interests in Property of Canadian Borrower, whether now owned or
existing or hereafter created, acquired or arising and wheresoever located:
(a) Accounts;
(b) Certificated Securities;
(c) Chattel Paper;
(d) Computer Hardware and Software and all rights with respect
thereto, including, any and all licenses, options, warranties, service
contracts, program services, test rights, maintenance rights, support
rights, improvement rights, renewal rights and indemnifications, and any
substitutions, replacements, additions or model conversions of any of the
foregoing;
(e) Contract Rights;
(f) Deposit Accounts;
(g) Documents;
(h) Equipment;
(i) Financial Assets;
(j) Fixtures;
(k) General Intangibles, including Payment Intangibles and
Software;
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(l) Goods (including all of its Equipment, Fixtures and
Inventory), and all accessions, additions, attachments, improvements,
substitutions and replacements thereto and therefor;
(m) Instruments;
(n) Intellectual Property;
(o) Inventory;
(p) Investment Property;
(q) money (of every jurisdiction whatsoever);
(r) Letter-of-Credit Rights;
(s) Payment Intangibles;
(t) Security Entitlements;
(u) Software;
(v) Supporting Obligations;
(w) Uncertificated Securities; and
(x) to the extent not included in the foregoing, all other
personal property of any kind or description;
together with all books, records, writings, data bases, information and other
property relating to, used or useful in connection with, or evidencing,
embodying, incorporating or referring to any of the foregoing, and all Proceeds,
products, offspring, rents, issues, profits and returns of and from any of the
foregoing; provided, however, that notwithstanding the foregoing this Section
5.1.2 shall not constitute a grant of a security interest in any property to the
extent that such grant of a security interest is prohibited by any applicable
law, requires a consent not obtained of any governmental authority pursuant to
such applicable law or is prohibited by, or constitutes a breach or default
under or results in the termination of or requires any consent not obtained
under any contract, license, agreement, instrument or other document evidencing
or giving rise to such property or, in the case of any Investment Property, any
applicable shareholder or similar agreement, except to the extent that such
applicable law or the term in such contract, license, agreement, instrument or
other document or shareholder or similar agreement providing for such
prohibition, breach, default or termination or requiring such consent is
ineffective under applicable law, it being understood that upon request of
Canadian Agent, Canadian Borrower will in good faith use reasonable
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efforts (other than the payment of money) to obtain any such required consent.
In addition to the foregoing grant of a security interest, Canadian Borrower
shall execute and deliver such debentures, hypothecs, pledges and other security
agreements as Canadian Agent may reasonably request to provide Canadian Agent
with a first-priority perfected Lien on all assets of Canadian Borrower. In the
event of a conflict between this Section 5.1.2 and the Security Documents
executed by Canadian Borrower, the latter shall govern.
5.1.3 To secure the prompt payment and performance of the UK
Obligations, each UK Borrower hereby grants to UK Agent for the benefit of
itself, UK Lender, each UK Participating Lender, Canadian Agent, Canadian Lender
and each Canadian Participating Lender a continuing security interest upon all
of such UK Borrower's assets, including all of the following Property and
interests in Property of such UK Borrower, whether now owned or existing or
hereafter created, acquired or arising and wheresoever located:
(a) Accounts;
(b) Certificated Securities;
(c) Chattel Paper;
(d) Computer Hardware and Software and all rights with respect
thereto, including, any and all licenses, options, warranties, service
contracts, program services, test rights, maintenance rights, support
rights, improvement rights, renewal rights and indemnifications, and any
substitutions, replacements, additions or model conversions of any of the
foregoing;
(e) Contract Rights;
(f) Deposit Accounts;
(g) Documents;
(h) Equipment;
(i) Financial Assets;
(j) Fixtures;
(k) General Intangibles, including Payment Intangibles and
Software;
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(l) Goods (including all of its Equipment, Fixtures and
Inventory), and all accessions, additions, attachments, improvements,
substitutions and replacements thereto and therefor;
(m) Instruments;
(n) Intellectual Property;
(o) Inventory;
(p) Investment Property;
(q) money (of every jurisdiction whatsoever);
(r) Letter-of-Credit Rights;
(s) Payment Intangibles;
(t) Security Entitlements;
(u) Software;
(v) Supporting Obligations;
(w) Uncertificated Securities; and
(x) to the extent not included in the foregoing, all
other personal (or movable) or other property of any kind or description;
together with all books, records, writings, data bases, information and other
property relating to, used or useful in connection with, or evidencing,
embodying, incorporating or referring to any of the foregoing, and all Proceeds,
products, offspring, rents, issues, profits and returns of and from any of the
foregoing; provided that (i) to the extent that the provisions of any lease or
license of Computer Hardware and Software or Intellectual Property expressly
prohibit (which prohibition is enforceable under applicable law) any assignment
thereof, and the grant of a security interest therein, UK Agent will not enforce
its security interest in UK Borrowers' rights under such lease or license (other
than in respect of the Proceeds thereof) for so long as such prohibition
continues, it being understood that upon request of UK Agent, UK Borrowers will
in good faith use reasonable efforts (other than the payment of money) to obtain
consent for the creation of a security interest in favor of UK Agent (and to UK
Agent's enforcement of such security interest) in UK Borrowers' rights under
such lease or license, and (ii) with respect to other contracts or agreements,
Contract Rights of UK Borrowers will be excluded from UK Collateral to the
extent assignment for security is expressly prohibited by the underlying
contract or agreement (which prohibition is
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enforceable under applicable law), it being understood that upon request of UK
Agent, UK Borrowers will in good faith use reasonable efforts (other than the
payment of money) to obtain consent for the creation of a security interest in
favor of UK Agent (and to UK Agent's enforcement of such security interest) in
UK Borrowers' rights under such contract or agreement. In addition to the
foregoing grant of a security interest, UK Borrowers shall execute and deliver
such debentures, pledges and other security agreements as UK Agent may
reasonably request to provide UK Agent a first-priority perfected Lien on all
assets of UK Borrowers. In the event of a conflict between this Section 5.1.3
and the Security Documents executed by UK Borrowers, the latter shall govern.
5.2 Other Collateral.
5.2.1 Commercial Tort Claims. Domestic Borrower shall
promptly notify Administrative Agent in writing upon incurring or otherwise
obtaining a Commercial Tort Claim after the Closing Date against any third party
and, upon request of Administrative Agent, promptly enter into an amendment to
this Agreement and do such other acts or things deemed appropriate by
Administrative Agent to give Administrative Agent a security interest in any
such Commercial Tort Claim.
5.2.2 Other Collateral. Each Borrower shall promptly
notify Administrative Agent, Canadian Agent or UK Agent, as the case may be, in
writing upon acquiring or otherwise obtaining any Collateral after the date
hereof consisting of Deposit Accounts, Investment Property, Letter of Credit
Rights or Electronic Chattel Paper and, upon the request of Administrative
Agent, Canadian Agent or UK Agent, as the case may be, promptly execute such
other documents, and do such other acts or things deemed appropriate by
Administrative Agent, Canadian Agent or UK Agent, as the case may be, to deliver
to Administrative Agent, Canadian Agent or UK Agent, as the case may be, control
with respect to such Collateral; promptly notify Administrative Agent, Canadian
Agent or UK Agent, as the case may be, in writing upon acquiring or otherwise
obtaining any Collateral after the date hereof consisting of Documents (and
Documents of Title, as defined in the PPSA) or Instruments and, upon the request
of Administrative Agent, Canadian Agent or UK Agent, as the case may be, will
promptly execute such other documents, and do such other acts or things deemed
appropriate by Administrative Agent, Canadian Agent or UK Agent, as the case may
be, to deliver to Administrative Agent, Canadian Agent or UK Agent, as the case
may be, possession of such Documents (and Documents of Title, as defined in the
PPSA) which are negotiable and Instruments, and, with respect to nonnegotiable
Documents (and Documents of Title, as defined in the PPSA), to have such
nonnegotiable Documents (and Documents of Title, as defined in the PPSA) issued
in the name of Administrative Agent, Canadian Agent or UK Agent, as the case may
be; and with respect to Collateral in the possession of a third party, other
than Certificated Securities and Goods covered by a Document, obtain an
acknowledgement from the
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third party that it is holding the Collateral for the benefit of Administrative
Agent, Canadian Agent or UK Agent, as the case may be.
5.3 Lien Perfection; Further Assurances.
Each Borrower hereby authorizes Administrative Agent to file
such UCC-1 and PPSA financing statements as are required by the UCC or the PPSA,
and UK Borrowers shall execute such filings as are required by Section 395 of
the Companies Xxx 0000 of England and Wales (as amended), and any other
applicable statutory scheme, and each Borrower shall execute such other
instruments, assignments or documents as are necessary to perfect Administrative
Agent's Lien upon any of the Domestic Collateral, Canadian Agent's Lien upon any
of the Canadian Collateral, and UK Agent's Lien upon any of the UK Collateral,
and each Borrower shall take such other action as may be required to perfect or
to continue the perfection of Administrative Agent's Lien upon the Domestic
Collateral, Canadian Agent's Lien upon the Canadian Collateral and UK Agent's
Lien upon the UK Collateral. Without limiting the generality of the preceding
sentence, each Borrower hereby irrevocably authorizes Administrative Agent,
Canadian Agent and UK Agent, as applicable, to file any such financing
statements, including, without limitation, financing statements that indicate
the portion of the Collateral owned by such Borrower (a) as all assets of such
Borrower or words of similar effect, or (b) as being of an equal or lesser
scope, or with greater or lesser detail, than as set forth in Section 5.1. Each
Borrower also hereby ratifies its authorization for Administrative Agent,
Canadian Agent and UK Agent, as the case may be, to have filed in any
jurisdiction any like financing statements or amendments thereto if filed prior
to the date hereof. The parties agree that a carbon, photographic or other
reproduction of this Agreement shall be sufficient as a financing statement for
the purposes of the UCC and may be filed in any appropriate office in lieu
thereof. At Administrative Agent's, Canadian Agent's or UK Agent's request, each
Borrower shall also promptly execute or cause to be executed and shall deliver
to Administrative Agent, Canadian Agent or UK Agent, as the case may be, any and
all documents, instruments and agreements deemed necessary by Administrative
Agent, Canadian Agent or UK Agent, as the case may be, to give effect to or
carry out the terms or intent of the Loan Documents.
5.4 Lien on Realty.
The due and punctual payment and performance of the Domestic
Obligations shall also be secured by the Lien created by Mortgages upon all real
(or immovable) Property of Domestic Borrower now or hereafter owned. The due and
punctual payment and performance of the Canadian Obligations shall also be
secured by the Lien created by Mortgages upon all real (or immovable) Property
of Canadian Borrower now or hereafter owned. The due and punctual payment and
performance of the UK Obligations shall also be secured by the Lien created by
Mortgages upon all real (or immovable) Property of UK Borrowers now or hereafter
owned. Each
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Mortgage shall be executed by the applicable Borrower in favor of Administrative
Agent, Canadian Agent or UK Agent, as the case may be. Each Mortgage shall be
duly recorded, at the applicable Borrower's expense, in each office where such
recording is required to constitute a fully perfected first Lien on the real (or
immovable) Property covered thereby. Each applicable Borrower shall deliver to
Administrative Agent, Canadian Agent or UK Agent, as the case may be, at such
Borrower's expense, mortgagee title insurance policies (or a Canadian or United
Kingdom equivalent acceptable to the applicable Agent) issued by a title
insurance company satisfactory to Administrative Agent, Canadian Agent or UK
Agent, as the case may be, which policies shall be in form and substance
satisfactory to Administrative Agent, Canadian Agent or UK Agent, as the case
may be, and shall insure a valid first Lien in favor of Administrative Agent
(for the benefit of itself, Canadian Agent, UK Agent, Bank and the Lenders), or
in favor of Canadian Agent (for the benefit of itself, Canadian Lender, the
Canadian Participating Lenders, UK Agent, UK Lender and the UK Participating
Lenders), or in favor of UK Agent (for the benefit of itself, UK Lender, the UK
Participating Lenders, Canadian Agent, Canadian Lender and the Canadian
Participating Lenders) as the case may be, on the Property covered by each
Mortgage, subject only to those exceptions reasonably acceptable to
Administrative Agent, Canadian Agent or UK Agent, as the case may be, and its
counsel. Each applicable Borrower shall deliver to Administrative Agent,
Canadian Agent or UK Agent, as the case may be, such other documents, including,
without limitation, as-built survey prints of the real (or immovable) Property
(to the extent such as-built survey prints are already in existence or, at the
applicable Borrower's sole option, prepared), as Administrative Agent, Canadian
Agent or UK Agent, as the case may be, and its counsel may reasonably request
relating to the real (or immovable) Property subject to the Mortgages.
5.5 UK Real Estate. Subsequent to the UK Closing Date, Agents
and Lenders agree that the lien of UK Agent on the UK Real Estate shall be
released upon the following conditions: (a) the UK Real Estate shall be sold for
net proceeds of not less than the Dollar Equivalent of $1,000,000, or Egerton
shall obtain a loan (the "Egerton Financing") on terms and conditions reasonably
acceptable to Majority Lenders secured by the UK Real Estate the net proceeds of
which shall be not less than the Dollar Equivalent of $1,000,000, and (b) the
proceeds of the sale of the UK Real Estate or of any Egerton Financing shall be
applied (i) if a Default or Event of Default has occurred and is continuing, to
payment of the Obligations in Agents' discretion, and (ii) if no Default or
Event of Default has occurred and is continuing, first to the installments of
principal due under the Term Notes evidencing the UK Term Loans, to be applied
ratably to future installment payments in inverse order of maturity until paid
in full, second to repay ratably outstanding principal of UK Revolving Credit
Loans, third to pay any interest and other payment obligations due and payable
with respect to the UK Term Loans and the UK Revolving Loans, and fourth, to be
returned to UK Borrowers for reinvestment in the business of Borrowers and their
Subsidiaries.
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SECTION 6. COLLATERAL ADMINISTRATION
6.1 General.
6.1.1 Location of Collateral. All tangible Collateral,
other than Inventory in transit and motor vehicles, will at all times be kept by
the applicable Borrowers and their Subsidiaries at one or more of the business
locations identified in Schedule 6.1.1 hereto as a business location for such
Borrower or Subsidiary.
6.1.2 Insurance of Collateral. Each Borrower shall
maintain and pay for insurance upon all Collateral owned by such Borrower
wherever located and with respect to the business of such Borrower and each of
its Subsidiaries, covering casualty, hazard, public liability, workers'
compensation and such other risks in such amounts and with such insurance
companies as are reasonably satisfactory to Administrative Agent. Each Borrower
shall deliver certified copies of such policies to Administrative Agent,
Canadian Agent and UK Agent as promptly as practicable, with satisfactory
lender's loss payable endorsements, naming Administrative Agent, with respect to
Domestic Collateral, Canadian Agent, with respect to Canadian Collateral, and UK
Agent, with respect to UK Collateral, as a loss payee, assignee or additional
insured, as appropriate, as its interest may appear, and showing only such other
loss payees, assignees and additional insureds as are satisfactory to
Administrative Agent, Canadian Agent and UK Agent, as the case may be. Each
policy of insurance or endorsement shall contain a clause (in the case of UK
Collateral, where available) requiring the insurer to give not less than 10
days' prior written notice to Administrative Agent, Canadian Agent or UK Agent,
as the case may be, in the event of cancellation of the policy for nonpayment of
premium and not less than 30 days' prior written notice to Administrative Agent,
Canadian Agent or UK Agent, as the case may be, in the event of cancellation of
the policy for any other reason whatsoever and shall provide in substance that
the interest of Administrative Agent, Canadian Agent or UK Agent, as the case
may be, shall not be impaired or invalidated by any act or neglect of the
applicable Borrower, any of its Subsidiaries or the owner of the Property or by
the occupation of the premises for purposes more hazardous than are permitted by
said policy. Borrower Representative agrees to deliver to Administrative Agent,
Canadian Agent and UK Agent, as the case may be, promptly as rendered, true
copies of all reports made in any reporting forms to insurance companies. All
proceeds of business interruption insurance (if any) of Borrowers and their
Subsidiaries shall be remitted to Administrative Agent, Canadian Agent or UK
Agent, as the case may be, for application to the outstanding balance of the
Revolving Credit Loans.
Unless Borrower Representative provides Administrative Agent,
Canadian Agent and UK Agent, as the case may be, with evidence of the insurance
coverage required by this Agreement, Administrative Agent, Canadian Agent or UK
Agent, as the case may be, may purchase insurance at the applicable Borrowers'
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expense to protect Administrative Agent's, Canadian Agent's and UK Agent's, as
the case may be, interests in the Properties of Borrowers and their
Subsidiaries. This insurance may, but need not, protect the interests of
Borrowers and their Subsidiaries. The coverage that Administrative Agent,
Canadian Agent or UK Agent, as the case may be, purchases may not pay any claim
that Borrowers or any Subsidiary makes or any claim that is made against
Borrowers or any such Subsidiary in connection with said Property. Borrower
Representative may later cancel any insurance purchased by Administrative Agent,
Canadian Agent or UK Agent, but only after (a) providing Administrative Agent,
Canadian Agent or UK Agent, as the case may be, with evidence that Borrowers and
their Subsidiaries have obtained insurance as required by this Agreement, and
(b) Administrative Agent, Canadian Agent or UK Agent, as the case may be, shall
have approved such insurance. If Administrative Agent, Canadian Agent or UK
Agent purchases insurance in accordance with this Section 6.1.2, Borrowers will
be responsible for the costs of that insurance, including interest and any other
charges Administrative Agent, Canadian Agent or UK Agent, as the case may be,
may impose in connection with the placement of insurance, until the effective
date of the cancellation or expiration of the insurance. The costs of the
insurance may be added to the Obligations. The costs of the insurance may be
more than the cost of insurance that Borrowers and their Subsidiaries may be
able to obtain on their own.
6.1.3 Protection of Collateral. Neither Administrative Agent,
Canadian Agent, UK Agent nor Lenders shall be liable or responsible in any way
for the safekeeping of any of the Collateral or for any loss or damage thereto
(except for reasonable care in the custody thereof while any Collateral is in
Administrative Agent's, Canadian Agent's, UK Agent's or any Lender's actual
possession) or for any diminution in the value thereof, or for any act or
default of any warehouseman, carrier, forwarding agency, or other person
whomsoever, but the same shall be at the applicable Borrower's or Subsidiary's
sole risk.
6.2 Administration of Accounts.
6.2.1 Records, Schedules and Assignments of Accounts. Each
Borrower shall keep (and shall cause each of its Subsidiaries to keep) accurate
and complete records of its Accounts and all payments and collections thereon
and Borrowers shall submit to Administrative Agent, Canadian Agent and UK Agent
on such periodic basis as Administrative Agent, Canadian Agent or UK Agent shall
request a sales and collections report for the preceding period, in form
consistent with the reports currently prepared by Borrowers and their
Subsidiaries with respect to such information. Concurrently with the delivery of
each Borrowing Base Certificate required by Section 8.1.4, or more frequently as
reasonably requested by Administrative Agent, Canadian Agent or UK Agent, from
and after the date hereof, Borrower Representative shall deliver to
Administrative Agent, Canadian Agent and UK Agent a detailed aged trial balance
of all Accounts of Borrowers and their
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Subsidiaries, and upon Administrative Agent's, Canadian Agent's or UK Agent's
request therefor, copies of proof of delivery and the original copy of all
documents, including, without limitation, repayment histories and present status
reports relating to the Accounts so scheduled and such other matters and
information relating to the status of then existing Accounts as Administrative
Agent, Canadian Agent or UK Agent shall reasonably request.
6.2.2 If an Account of a Borrower (or any of its Subsidiaries)
includes a charge for any tax payable to any governmental taxing authority,
Administrative Agent, Canadian Agent and/or UK Agent, as the case may be, is
authorized, in its sole discretion, to pay the amount thereof to the proper
taxing authority for the account of the applicable Borrower or Subsidiary and to
charge the applicable Borrowers therefor, except for taxes that (i) are being
actively contested in good faith and by appropriate proceedings and with respect
to which the applicable Borrower or Subsidiary maintains reasonable reserves on
its books therefor and (ii) would not reasonably be expected to result in any
Lien on any material Property of Borrowers other than a Permitted Lien. In no
event shall Administrative Agent, Canadian Agent, UK Agent or any Lender be
liable for any taxes to any governmental taxing authority that may be due by any
Borrower or any Subsidiary of a Borrower.
6.2.3 Account Verification. Any of Administrative Agent's,
Canadian Agent's or UK Agent's officers, employees or agents shall have the
right, at any time or times hereafter, in the name of Administrative Agent,
Canadian Agent or UK Agent, any designee of Administrative Agent, Canadian
Agent, UK Agent or any Borrower or any of its Subsidiaries, to verify the
validity, amount or any other matter relating to any Accounts owned by any such
Person by mail, telephone, telegraph or otherwise; provided, that unless a
Default or an Event of Default is then in existence, prior to conducting each
set of verifications, Administrative Agent, Canadian Agent and UK Agent shall
generally consult with the applicable Borrower or Subsidiary about the
verification process. Each Borrower shall (and shall cause each of its
Subsidiaries to) cooperate fully with Administrative Agent, Canadian Agent and
UK Agent in an effort to facilitate and promptly conclude any such verification
process.
6.2.4 Maintenance of Dominion Accounts. (a) Within thirty (30)
days of the Closing Date and at all times thereafter, Domestic Borrower shall
maintain, and, if requested by Administrative Agent, shall cause each Subsidiary
of such Borrower (other than other Borrowers and Restricted Subsidiaries) to
maintain, at Domestic Borrower's expense, a Dominion Account or Accounts
pursuant to lockbox and blocked account arrangements acceptable to
Administrative Agent, with such banks as may be selected by Domestic Borrower
and be acceptable to Administrative Agent for direct deposit of payments and
other remittances. Domestic Borrower shall issue, and shall cause each of its
Subsidiaries required to maintain such account arrangements hereunder to issue,
to any such banks an irrevocable letter of instruction
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directing such banks to deposit all payments or other remittances received in
the lockbox and blocked accounts to Domestic Borrower's Dominion Account for
application on account of the Domestic Obligations (with all such applications
described in this sentence to be conducted in the manner set forth in the second
sentence of Section 3.3.1).
(b) No later than thirty (30) days subsequent to the Closing
Date, Domestic Borrower shall notify each Account Debtor of Domestic Borrower to
remit all payments and other remittances with respect to Accounts payable by
such Account Debtor to the lockboxes described in Section 6.2.4(a) above.
Domestic Borrower shall use its best efforts to cause all such payments and
other remittances to be deposited in the lockboxes described in Section 6.2.4(a)
above no later than one hundred fifty (150) days subsequent to the Closing Date.
(c) Until such time as the lockboxes and Dominion Accounts
described in Section 6.2.4(a) above shall have been established, Domestic
Borrower shall immediately remit in kind all checks and other instruments for
the payment of money payable to Domestic Borrower to the BofA Account upon
receipt thereof by Domestic Borrower.
(d) Canadian Borrower shall maintain, at Canadian Borrower's
expense, the RBC Account (which is a Dominion Account for purposes of this
Agreement) pursuant to blocked account arrangements acceptable to Administrative
Agent (or other Dominion Account or Accounts pursuant to blocked account
arrangements acceptable to Administrative Agent, with such banks as may be
selected by Canadian Borrower and be acceptable to Administrative Agent) for
direct deposit of payments and other remittances. Amounts deposited in Canadian
Borrower's Dominion Account shall be applied on account of the Canadian
Obligations in the event of the occurrence of an Event of Default (with all such
applications described in this sentence to be conducted in the manner set forth
in the second sentence of Section 3.3.1).
(e) Effective as of the UK Closing Date and at all times
thereafter, UK Borrowers shall maintain, at UK Borrowers' expense, (i) a
Dominion Account or Accounts pursuant to collection account letters acceptable
to UK Agent with Fleet UK for direct deposit of payments and other remittances
and (ii) their primary disbursement accounts and other cash management accounts
with Fleet UK and shall, within a reasonable time after the UK Closing Date,
close all of their other deposit and cash management accounts in the United
Kingdom. Amounts deposited in the UK Borrowers' Dominion Account shall be
applied on account of the UK Obligations (with all such applications described
in this sentence to be conducted in the manner set forth in the second sentence
of Section 3.3.1).
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(f) All funds deposited in any Dominion Account shall, to the
extent of the applicable Obligations, immediately become the property of, in the
case of Domestic Borrower and its Subsidiaries (other than Canadian Borrower, UK
Borrowers and Restricted Subsidiaries), Administrative Agent, for the benefit of
itself, Canadian Agent, UK Agent, Bank and the Lenders, and, in the case of
Canadian Borrower, Canadian Agent, for the benefit of Canadian Lender, the
Canadian Participating Lenders, UK Lender and the UK Participating Lenders, and,
in the case of UK Borrowers, UK Agent, for the benefit of UK Lender, the UK
Participating Lenders, Canadian Agent and the Canadian Participating Lenders,
and the applicable Borrowers shall obtain (and shall cause their applicable
Subsidiaries to obtain) the agreement by such banks in favor of Administrative
Agent, Canadian Agent and UK Agent, as applicable, to waive any recoupment,
compensation rights, offset rights and any security interest or hypothec in, or
against, the funds so deposited. Neither Administrative Agent, Canadian Agent
nor UK Agent assumes any responsibility for such lockbox and blocked account
arrangements, including, without limitation, any claim of accord and
satisfaction or release with respect to deposits accepted by any bank
thereunder.
6.2.5 Collection of Accounts, Proceeds of Collateral. To expedite
collection, each Borrower shall endeavor in the first instance, and shall cause
its Subsidiaries (other than Restricted Subsidiaries) to endeavor in the first
instance, to collect its Accounts for Administrative Agent, Canadian Agent or UK
Agent, as applicable. All remittances received by each applicable Borrower or
Subsidiary on account of Accounts, together with the proceeds of any other
Collateral, shall be held as Administrative Agent's, Canadian Agent's or UK
Agent's, as the case may be, property, for its benefit and the benefit of the
applicable Lenders, other Agents and Bank, by such Borrower or Subsidiary as
trustee of an express trust for Administrative Agent's, Canadian Agent's or UK
Agent's, as the case may be, benefit and such Borrower shall, and shall cause
its applicable Subsidiaries to, immediately deposit same in kind in the
lockboxes or a Dominion Account. Administrative Agent, Canadian Agent and UK
Agent each retains the right at all times after the occurrence and during the
continuance of a Default or an Event of Default to notify Account Debtors that
Borrowers' and their applicable Subsidiaries' Accounts have been assigned to
Administrative Agent, Canadian Agent or UK Agent, as the case may be, and to
collect such Borrowers' and their applicable Subsidiaries' Accounts directly in
its own name and to charge the collection costs and expenses, including legal
fees, to Borrowers.
6.3 Records and Reports of Inventory. Each Borrower shall keep
records of its Inventory which records shall be complete and accurate in all
material respects. Domestic Borrower will furnish to Administrative Agent
Inventory reports concurrently with the delivery of each Borrowing Base
Certificate described in Section 8.1.4 or more frequently as requested by
Administrative Agent, which reports
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will be in such other format and detail as Administrative Agent shall request
and shall include a current list of all locations of Domestic Borrower's
Inventory. Domestic Borrower shall conduct a physical inventory no less
frequently than annually and shall provide to Administrative Agent a report
based on each such physical inventory promptly thereafter, together with such
supporting information as Administrative Agent shall reasonably request. Upon
Administrative Agent's request, Canadian Borrower and UK Borrowers shall furnish
to Administrative Agent perpetual listings of Inventory of such Borrower.
6.4 Administration of Equipment.
6.4.1 Records and Schedules of Equipment. Each Borrower shall
(and shall cause each of its Subsidiaries to) keep records of its Equipment
which shall be complete and accurate in all material respects itemizing and
describing the kind, type, quantity and book value of its Equipment and all
dispositions made in accordance with Section 6.4.2 hereof, and Borrowers shall,
and shall cause each of their Subsidiaries to, furnish Agents with a current
schedule containing the foregoing information on at least an annual basis and
more often if reasonably requested by Agents, which schedule shall contain a
certification that, except as otherwise indicated in such schedule, all such
Equipment is working in a satisfactory manner. Promptly after the reasonable
request therefor by Administrative Agent, Canadian Agent or UK Agent, each
applicable Borrower shall (and shall cause each of its Subsidiaries to) deliver
to Administrative Agent, Canadian Agent or UK Agent, as applicable, any and all
evidence of ownership, if any, of any of its Equipment.
6.4.2 Dispositions of Equipment. No Borrower shall, nor shall it
permit any of its Subsidiaries to, sell, lease or otherwise dispose of or
transfer any of its respective Equipment or other fixed assets or any part
thereof without the prior written consent of Administrative Agent, in the case
of Domestic Borrower, Canadian Agent, in the case of Canadian Borrower, and UK
Agent, in the case of UK Borrowers; provided, however, that the foregoing
restriction shall not apply, for so long as no Default or Event of Default
exists and is continuing, to (a) dispositions of Equipment and other fixed
assets which, in the aggregate during any consecutive twelve-month period, have
a book value of $250,000 or less, provided that all proceeds thereof are
remitted to Administrative Agent, Canadian Agent or UK Agent, as applicable, for
application to the Loans as provided in Section 3.3.1, or (b) replacements of
Equipment or other fixed assets that are substantially worn, damaged or obsolete
with Equipment or other fixed assets which are useful in the business of the
applicable Borrower or one of its Subsidiaries, provided that the replacement
Equipment or other fixed assets shall be acquired within 180 days before or
after any disposition of the Equipment or other fixed assets that are to be
replaced and the replacement Equipment or other fixed assets shall be free and
clear of Liens other than Permitted Liens that are Purchase Money Liens.
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SECTION 7. REPRESENTATIONS AND WARRANTIES
7.1 General Representations and Warranties.
To induce Administrative Agent, Canadian Agent, UK Agent and each
Lender to enter into this Agreement and to make advances hereunder, each
Borrower warrants, represents and covenants to Administrative Agent, Canadian
Agent, UK Agent and each Lender that:
7.1.1 Organization and Qualification. Domestic Borrower is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. Canadian Borrower is a corporation duly organized and
validly existing under the laws of Ontario. CCEL is a private limited liability
company duly incorporated and validly existing under the laws of England and
Wales. CLU is a private limited liability company duly incorporated and validly
existing under the laws of England and Wales. Each of Borrowers' Subsidiaries
not referenced in the preceding sentences is a corporation, limited partnership
or limited liability company duly organized, validly existing and, with respect
to those Subsidiaries organized in the United States, in good standing under the
laws of the jurisdiction of its incorporation or organization. Each Borrower and
each of its Subsidiaries is duly qualified and is authorized to do business and,
with respect to Domestic Borrower and those Subsidiaries organized in the United
States, is in good standing as a foreign limited liability company, limited
partnership or corporation, as applicable, in each state or jurisdiction listed
on Schedule 7.1.1 hereto and in all other states and jurisdictions in which the
failure of such Borrower or any of its Subsidiaries to be so qualified would
reasonably be expected to have a Material Adverse Effect.
7.1.2 Power and Authority. Each Borrower and each of its
Subsidiaries is duly authorized and empowered to enter into, execute, deliver
and perform this Agreement and each of the other Loan Documents to which it is a
party. The execution, delivery and performance of this Agreement by each
Borrower, and the execution, delivery and performance of each of the other Loan
Documents by each Borrower and each of its Subsidiaries, have been duly
authorized by all necessary corporate or other relevant action and do not and
will not (a) require any consent or approval of the shareholders or other equity
holders of any Borrower or any of the shareholders, partners or members, as the
case may be, of any Subsidiary of any Borrower (other than UK Borrowers and
Egerton); (b) contravene any Borrower's or any of its Subsidiaries' charter,
articles or certificate of incorporation, partnership agreement, certificate of
formation, by-laws, limited liability agreement, operating agreement, unanimous
shareholders agreement or other organizational documents (as the case may be);
(c) violate, or cause any Borrower or any of its Subsidiaries to be in default
under, any provision of any law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award in effect having applicability to
such Borrower or any of its Subsidiaries, the violation of which would
reasonably be
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expected to have a Material Adverse Effect; (d) result in a breach of or
constitute a default under any indenture or loan or credit agreement or any
other agreement, lease or instrument to which any Borrower or any of its
Subsidiaries is a party or by which it or its Properties may be bound or
affected, the breach of or default under which would reasonably be expected to
have a Material Adverse Effect; or (e) result in, or require, the creation or
imposition of any Lien (other than Permitted Liens) upon or with respect to any
of the Properties now owned or hereafter acquired by any Borrower or any of its
Subsidiaries.
7.1.3 Legally Enforceable Agreement. This Agreement is, and
each of the other Loan Documents when delivered under this Agreement will be, a
legal, valid and binding obligation of each Borrower party thereto and each of
its Subsidiaries party thereto, enforceable against it in accordance with its
respective terms, except as enforcement may be limited by applicable bankruptcy
or insolvency laws, and by general principles of equity.
7.1.4 Capital Structure. Schedule 7.1.4 hereto states, as of
the date hereof, (a) the correct name of each of the Subsidiaries of each
Borrower, its jurisdiction of incorporation or organization and the percentage
of its Voting Stock owned by Borrowers, (b) the name of each Borrower's and each
of its Subsidiaries' corporate or joint venture relationships and the nature of
the relationship, (c) the number, nature and holder of all outstanding
Securities of Borrowers (other than Domestic Borrower) and the holder of
Securities of each Subsidiary of each Borrower and (d) the number of issued and
treasury Securities of each Borrower (with respect to Domestic Borrower, as of
the date set forth in such schedule). Attached as Schedule 7.1.4A hereto is the
corporate organization chart of the Domestic Borrower and its Subsidiaries as of
the Closing Date. Each Borrower has good title to all of the Securities it
purports to own of each of such Subsidiaries, free and clear in each case of any
Lien other than Permitted Liens. All such Securities have been duly issued and
are fully paid and non-assessable. Except as set forth on Schedule 7.1.4, as of
the date hereof, there are no outstanding options to purchase, or any rights or
warrants to subscribe for, or any commitments or agreements to issue or sell any
Securities or obligations convertible into, or any powers of attorney relating
to, any Securities of any Borrower or any of its Subsidiaries. Except as set
forth on Schedule 7.1.4, as of the date hereof, there are no outstanding
agreements or instruments binding upon any of any Borrower's or any of its
Subsidiaries' partners, members or shareholders, as the case may be, relating to
the ownership of its Securities.
7.1.5 Names. No Borrower nor any of its Subsidiaries has
been known as or has used any legal, fictitious or trade names except those
listed on Schedule 7.1.5 hereto. Except as set forth on Schedule 7.1.5, no
Borrower nor any of its Subsidiaries has been the surviving entity of a merger
or consolidation, or the entity resulting from an amalgamation, or has acquired
all or substantially all of the assets of
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any Person. Each Borrower's and each of its Subsidiaries' respective
jurisdictions of incorporation or organization, Type of Organization and
Organizational I.D. Number, and any United Kingdom and Canadian equivalent
thereof, are set forth on Schedules 7.1.4 and 7.1.5. The respective exact legal
names of each Borrower and each of its Subsidiaries are set forth on Schedule
7.1.5.
7.1.6 Business Locations. Each Borrower's and each of its
Subsidiaries' chief executive office and other places of business as of the date
hereof are as listed on Schedule 6.1.1 hereto as updated from time to time by
Borrower Representative. During the preceding one-year period, no Borrower nor
any of its Subsidiaries has had an office or place of business other than as
listed on Schedule 6.1.1. All tangible Collateral is and will at all times be
kept by each Borrower and its Subsidiaries in accordance with Section 6.1.1.
Except as shown on Schedule 6.1.1, as of the date hereof, no Inventory is stored
with a bailee, distributor, warehouseman or similar party, nor is any Inventory
consigned to any Person.
7.1.7 Title to Properties; Priority of Liens. Each Borrower
and each of its Subsidiaries has good and indefeasible title to and fee simple
ownership of, or valid and subsisting leasehold interests in, all of its real
(or immovable) Property, and good title to all of the Collateral owned by such
Borrower or Subsidiary and all of its other Property, in each case, free and
clear of all Liens except Permitted Liens. Each Borrower and each of its
Subsidiaries has paid or discharged all lawful claims which, if unpaid, might
become a Lien against any Borrower's or such Subsidiary's Properties that is not
a Permitted Lien. The Liens granted to Administrative Agent, Canadian Agent and
UK Agent under Section 5 hereof are first priority Liens, subject only to
Permitted Liens.
7.1.8 Accounts. Administrative Agent, Canadian Agent and UK
Agent may rely, in determining which Accounts are Eligible Accounts, on all
statements and representations made by Borrowers and their Subsidiaries with
respect to any Account or Accounts. With respect to each Account of a Borrower
and each Account of each Subsidiary of a Borrower, whether or not such Account
of such Borrower or such Subsidiary is an Eligible Account, unless otherwise
disclosed to Administrative Agent, Canadian Agent or UK Agent in writing:
(a) It is genuine and in all respects what it purports to
be, and it is not evidenced by a judgment;
(b) It arises out of a completed, bona fide sale and
delivery of goods or rendition of services by such Borrower or such
Subsidiary, in the ordinary course of its business and in accordance with
the terms and conditions of all purchase orders, contracts or other
documents relating thereto to be complied with by any Borrower or any of
its Subsidiaries and forming a part of
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the contract between such Borrower or such Subsidiary and the Account
Debtor and the Account Debtor is not an Affiliate of such Borrower or such
Subsidiary;
(c) It is for a liquidated amount maturing as stated in the
duplicate invoice covering such sale or rendition of services, a copy of
which has been furnished or is available to Administrative Agent, Canadian
Agent or UK Agent, as applicable;
(d) There are no facts, events or occurrences known to
Borrowers which in any way impair the validity or enforceability of any
Accounts or tend to reduce the amount payable thereunder from the face
amount of the invoice and statements delivered or made available to
Administrative Agent, Canadian Agent or UK Agent, as applicable, with
respect thereto;
(e) To the best of such Borrower's knowledge (with
"knowledge" in this clause (e) referring to the actual knowledge of those
officers of such Borrower which are directly involved in the administration
of the credit facilities provided pursuant to this Agreement), the Account
Debtor thereunder (i) had the capacity to contract at the time any contract
or other document giving rise to the Account was executed and (ii) is not
involved in any bankruptcy or insolvency proceeding; and
(f) To the best of such Borrower's knowledge (with
"knowledge" in this clause (f) referring to the actual knowledge of those
officers of such Borrower which are directly involved in the administration
of the credit facilities provided pursuant to this Agreement), there are no
proceedings or actions which are pending against the Account Debtor
thereunder which are reasonably likely to result in any material adverse
change in such Account Debtor's financial condition or the collectability
of such Account.
7.1.9 Equipment. The Equipment of each Borrower and its
Subsidiaries is in good operating condition and repair as of the date hereof,
and all necessary replacements of and repairs thereto shall be made so that the
operating efficiency thereof shall be maintained and preserved, reasonable wear
and tear excepted, except where the failure to so maintain the same would not
reasonably be expected to have a Material Adverse Effect. No Borrower will
permit (nor will it allow any of its Subsidiaries (other than Restricted
Subsidiaries) to permit) any Equipment owned by such Borrower or Subsidiary to
become affixed to any real (or immovable) Property leased to such Borrower or
such Subsidiary so that an interest arises therein under the real estate laws of
the applicable jurisdiction unless the landlord of such real (or immovable)
Property has executed a landlord waiver or leasehold mortgage in favor of and in
form reasonably acceptable to Administrative Agent, Canadian Agent or UK Agent,
as applicable, and no Borrower will permit (nor will it allow any of its
Subsidiaries (other than Restricted Subsidiaries) to permit) any
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of the Equipment of such Borrower or such Subsidiary to become an accession to
any personal (or movable) Property other than Equipment that is subject to first
priority (except for Permitted Liens) Liens in favor of Administrative Agent,
Canadian Agent or UK Agent, as applicable.
7.1.10 Financial Statements; Fiscal Year. The Consolidated
balance sheets of Domestic Borrower and its Subsidiaries (including the accounts
of all Subsidiaries of Domestic Borrower and their respective Subsidiaries for
the respective periods during which a Subsidiary relationship existed) as of
June 30, 2002, and the related statements of income for the periods ended on
such date, except for the absence of footnote disclosures and normal year-end
adjustments, have been prepared in accordance with GAAP, and present fairly in
all material respects the financial positions of Domestic Borrower and such
Persons, taken as a whole, at such dates and the results of Domestic Borrower's
and such Persons' operations, taken as a whole, for such periods. As of the date
hereof, since June 30, 2002, there has been no material adverse change in the
financial position of Domestic Borrower and such other Persons, taken as a
whole, as reflected in the Consolidated balance sheet as of such date. As of the
date hereof, the fiscal year of each Borrower and each of its Subsidiaries ends
on December 31 of each year.
7.1.11 Full Disclosure. The financial statements referred to
in Section 7.1.10 hereof do not, nor does this Agreement or any other written
statement of any Borrower or any of its Subsidiaries to Administrative Agent,
Canadian Agent, UK Agent or any Lender contain any untrue statement of a
material fact or omit a material fact necessary to make the statements contained
therein or herein not misleading. To the best of Borrowers' knowledge, there is
no fact pertaining directly to the business of Borrowers and their Subsidiaries
or their customers which any Borrower or any of its Subsidiaries has failed to
disclose to Administrative Agent, Canadian Agent, UK Agent or any Lender in
writing which would reasonably be expected to have a Material Adverse Effect.
7.1.12 Solvent Financial Condition. Except as set forth on
Schedule 7.1.12, each Borrower and each of its Subsidiaries, is now and, after
giving effect to the initial Loans to be made and the initial Letters of Credit
and LC Guaranties to be issued hereunder and all related transactions, will be,
as of the Closing Date, Solvent.
7.1.13 Surety Obligations. Except as set forth on Schedule
7.1.13, as of the date hereof, no Borrower nor any of its Subsidiaries is
obligated as surety or indemnitor under any surety or similar bond or other
contract issued or entered into to assure payment, performance or completion of
performance of any undertaking or obligation of any Person.
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7.1.14 Taxes. Domestic Borrower's federal tax identification
number is 00-0000000. Canadian Borrower's original corporation number is Ontario
Corporation Number 1244636. The federal tax identification number of each
Domestic Subsidiary of each Borrower is shown on Schedule 7.1.14 hereto. Except
as set forth on Schedule 7.1.14 hereto, each Borrower and each of its
Subsidiaries has filed all federal, national, state, provincial and local tax
returns (including, without limitation, any returns required under its
jurisdiction of organization or incorporation) and other reports relating to
taxes it is required by law to file, except where the failure to so file would
not reasonably be expected to have a Material Adverse Effect, and has paid, or
made provision for the payment of, all material taxes, assessments, fees, levies
and other governmental charges known by it to be due upon it, its income and
Properties as and when such taxes, assessments, fees, levies and charges are due
and payable, unless and to the extent any thereof are being actively contested
in good faith and by appropriate proceedings and each Borrower and each of its
Subsidiaries maintains reasonable reserves on its books therefor. Except as set
forth on Schedule 7.1.14 hereto, no tax Lien has been filed with respect to any
such tax, fee or other charge. To the knowledge of each Borrower, no claim is
being asserted with respect to any such tax, fee or other charge, except (a) as
set forth on Schedule 7.1.14 hereto, and (b) where any such claim would not
reasonably be expected to result in a Material Adverse Effect. The provision for
taxes on the books of each Borrower and its Subsidiaries is adequate for all
years not closed by applicable statutes, and for the current fiscal year. No
Borrower, nor any of its Subsidiaries, has entered into any "listed
transactions" within the meaning of Treasury Regulation 1.6011-4T(b)(2).
7.1.15 Brokers. Except as shown on Schedule 7.1.15 hereto, there
are no claims for brokerage commissions, finder's fees or investment banking
fees in connection with the transactions contemplated by this Agreement arising
from any actions taken by any Borrower or any of its Subsidiaries.
7.1.16 Patents, Trademarks, Copyrights and Licenses. Each
Borrower and each of its Subsidiaries owns, possesses or licenses or has the
right to use all the patents, trademarks, service marks, trade names,
copyrights, licenses and other Intellectual Property necessary for the present
conduct of its business without any known conflict with the rights of others,
except for such conflicts as would not reasonably be expected to have a Material
Adverse Effect. All such patents, registered trademarks, trademark applications,
registered service marks, registered tradenames, registered copyrights,
copyright applications, and licenses of Intellectual Property are listed on
Schedule 7.1.16 hereto. No claim has been asserted against any Borrower or any
of its Subsidiaries which is currently pending that its use of its Intellectual
Property or the conduct of its business does or may infringe upon the
Intellectual Property rights of any third party, except for such claims as would
not reasonably be expected to have a Material Adverse Effect. To the knowledge
of Borrowers and except as set forth on Schedule 7.1.16 hereto, as of the date
hereof, no Person is
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engaging in any activity that infringes in any material respect upon Borrowers'
or any of their Subsidiaries' material Intellectual Property. Except as set
forth on Schedule 7.1.16, each Borrower's and each of its Subsidiaries' material
license agreements and similar arrangements relating to its Inventory (a)
permits, and does not restrict, the assignment by such Borrower or any of its
Subsidiaries to Administrative Agent, Canadian Agent or UK Agent, as the case
may be, or any other Person designated by Administrative Agent, Canadian Agent
or UK Agent, as the case may be, of all of such Borrower's or such Subsidiary's,
as applicable, rights, title and interest pertaining to such license agreement
or such similar arrangement and (b) would permit the continued use by such
Borrower or such Subsidiary, or Administrative Agent, Canadian Agent or UK
Agent, as the case may be, or its assignee, of such license agreement or such
similar arrangement and the right to sell Inventory subject to such license
agreement for a period of no less than 6 months after a default or breach of
such agreement or arrangement. The consummation and performance of the
transactions and actions contemplated by this Agreement and the other Loan
Documents, including without limitation, the exercise by Administrative Agent,
Canadian Agent or UK Agent, as the case may be, of any of its rights or remedies
under Section 10, will not result in the termination or impairment of any of any
Borrower's or any of its Subsidiaries' ownership or rights relating to its
Intellectual Property, except for such Intellectual Property rights the loss or
impairment of which would not reasonably be expected to have a Material Adverse
Effect. Except as listed on Schedule 7.1.16 and except as would not reasonably
be expected to have a Material Adverse Effect, (A) no Borrower nor any of its
Subsidiaries is in breach of, or default under, any term of any license or
sublicense with respect to any of its Intellectual Property and (B) to the
knowledge of Borrowers, no other party to such license or sublicense is in
breach thereof or default thereunder, and such license is valid and enforceable.
7.1.17 Governmental Consents. Each Borrower and each of its
Subsidiaries has, and is in good standing with respect to, all governmental
consents, approvals, licenses, authorizations, permits, certificates,
inspections and franchises necessary to continue to conduct its business as
heretofore or proposed to be conducted by it and to own or lease and operate its
Properties as now owned or leased by it, except where the failure to possess or
so maintain such rights would not reasonably be expected to have a Material
Adverse Effect. No action, consent or approval of, registration or filing with
or any other action by any governmental authority is or will be required in
connection with the borrowings hereunder, the creation of the security interests
contemplated hereby and the other transactions contemplated to occur under the
Loan Documents, except for (a) the filing of UCC and PPSA financing statements
and filings with the United States Patent and Trademark Office, the United
States Copyright Office and foreign equivalent, as applicable, and such other
comparable documents as may be necessary to perfect the security interest of the
Lenders hereunder in any jurisdiction, (b) such filings as are required by
Section
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395 of the Companies Act of England and Wales (as amended) or any applicable act
of Parliament or rule or regulations of England and Wales relating to creation
of security interests over land, and (c) such others as have been made or
obtained and are in full force and effect.
7.1.18 Compliance with Laws. Except as set forth on Schedule
7.1.18, each Borrower and each of its Subsidiaries has duly complied in all
material respects with (except for such noncompliance with respect to which no
action may be taken by the applicable governmental authorities against any
Borrower or any of its Subsidiaries), and its Properties, business operations
and leaseholds are in compliance in all material respects with, the provisions
of all United States of America, Canadian and United Kingdom federal, state,
provincial and local laws, rules and regulations applicable to such Borrower or
such Subsidiary, as applicable, its Properties or the conduct of its business,
except for such non-compliance as would not reasonably be expected to have a
Material Adverse Effect, and there have been no citations, notices or orders of
noncompliance issued to any Borrower or any of its Subsidiaries under any such
law, rule or regulation, except where (i) such noncompliance would not
reasonably be expected to have a Material Adverse Effect or (ii) no action may
be taken by the applicable governmental authorities against any Borrower or any
of its Subsidiaries with respect to such noncompliance. Each Borrower and each
of its Subsidiaries has established and maintains an adequate monitoring system
to insure that it remains in compliance in all material respects with all
federal, state, provincial and local rules, laws and regulations applicable to
it. No Inventory has been produced in violation of the Fair Labor Standards Act
(29 U.S.C. (S)201 et seq.), as amended.
7.1.19 Restrictions. No Borrower nor any of its Subsidiaries is a
party or subject to any contract or agreement which restricts its right or
ability to incur Indebtedness.
7.1.20 Litigation. Except as set forth on Schedule 7.1.20 hereto,
there are no actions, suits, proceedings or investigations pending, or to the
knowledge of Borrowers, threatened, against or involving any Borrower or any of
its Subsidiaries, or the business, operations, Properties, prospects, profits or
condition of any Borrower or any of its Subsidiaries which, singly or in the
aggregate, would reasonably be expected to have a Material Adverse Effect. No
Borrower nor any of its Subsidiaries is in default with respect to any order,
writ, injunction, judgment, decree or rule of any court, governmental authority
or arbitration board or tribunal, which, singly or in the aggregate, would
reasonably be expected to have a Material Adverse Effect.
7.1.21 No Defaults. No event has occurred and no condition exists
which would, upon or after the execution and delivery of this Agreement or
Borrowers' performance hereunder, constitute a Default or an Event of Default.
No Borrower nor any of its Subsidiaries is in default in (and no event has
occurred and no condition exists which constitutes, or which with the passage of
time or the giving of
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notice or both would constitute, a default in) the payment of any Indebtedness
to any Person for Money Borrowed in excess of $250,000.
7.1.22 Leases. Schedule 7.1.22 hereto is a complete listing of
all capitalized and operating personal (or movable) Property leases of Borrowers
and their Subsidiaries and all real (or immovable) Property leases of Borrowers
and their Subsidiaries. Each Borrower and each of its Subsidiaries is in full
compliance with all of the terms of each of its respective capitalized and
operating leases, except where the failure to so comply would not reasonably be
expected to have a Material Adverse Effect.
7.1.23 Pension Plans.
(a) Except as disclosed on Schedule 7.1.23 hereto, no Borrower
nor any of its Subsidiaries has any Plan, Canadian Pension Plan or pension
scheme. Each Borrower and each of its Subsidiaries is in compliance with
the requirements of ERISA and the regulations promulgated thereunder with
respect to each Plan, except where the failure to so comply would not
reasonably be expected to have a Material Adverse Effect. No fact or
situation that would reasonably be expected to have a Material Adverse
Effect exists in connection with any Plan. Neither Domestic Borrower nor
any of its Subsidiaries has any material withdrawal liability in connection
with a Multiemployer Plan.
(b) The Canadian Pension Plans are duly registered under and have
been administered in compliance with the Income Tax Act (Canada) and all
other applicable laws which require registration (except where the failure
to so comply would not reasonably be expected to have a Material Adverse
Effect) and no event has occurred which is reasonably likely to cause the
loss of such registered status. All material obligations of Canadian
Borrower or any of its Subsidiaries (including fiduciary, funding,
investment and administration obligations) required to be performed in
connection with the Canadian Pension Plans and the funding agreements
therefor have been performed in a timely fashion. There have been no
improper withdrawals or applications of the assets of the Canadian Pension
Plans or the Canadian Benefit Plans. There are no outstanding disputes,
actions, suits or claims concerning the assets of the Canadian Pension
Plans or the Canadian Benefit Plans. Each of the Canadian Pension Plans is
fully funded on a solvency basis (using actuarial methods and assumptions
which are consistent with the valuations last filed with the applicable
governmental authorities and which are consistent with generally accepted
actuarial principles). Canadian Borrower and its Subsidiaries have withheld
all employee withholdings and have made all employer contributions to be
withheld and made by it pursuant to Canadian and any provincial applicable
law on account of Canadian Pension Plans, Canadian Benefit Plans,
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Canadian employment insurance and employee income taxes. No condition
exists or transaction has occurred in connection with any Canadian Pension
Plan or Canadian Benefit Plan which could result in the incurrence by
Canadian Borrower or its Subsidiaries of any liability, fine or penalty,
except any liability, fine or penalty the imposition of which would not
reasonably be expected to have a Material Adverse Effect.
(c) All pension schemes of UK Borrowers and any other
Subsidiaries of Domestic Borrower that are organized under the laws of the
United Kingdom are operated and fully funded to the extent required by law
based on reasonable actuarial assumptions applicable in the United Kingdom.
7.1.24 Trade Relations. There exists no actual or, to any
Borrower's knowledge, threatened termination, cancellation or limitation of, or
any modification or change in, the business relationship between any Borrower or
any of its Subsidiaries and any customer or any group of customers whose
purchases individually or in the aggregate are material to the business of any
Borrower and its Subsidiaries, or with any material supplier, except in each
case, where the same would not reasonably be expected to have a Material Adverse
Effect, and there exists no present condition or state of facts or circumstances
which would prevent any Borrower or any of its Subsidiaries from conducting such
business after the consummation of the transaction contemplated by this
Agreement in substantially the same manner in which it has heretofore been
conducted.
7.1.25 Labor Relations. Except as described on Schedule 7.1.25
hereto, as of the date hereof, no Borrower nor any of its Subsidiaries is a
party to any collective bargaining agreement. There are no material grievances,
disputes or controversies with any union or any other organization of any
Borrower's or any of its Subsidiaries' employees, or threats of strikes, work
stoppages or any asserted pending demands for collective bargaining by any union
or organization, except those that would not reasonably be expected to have a
Material Adverse Effect.
7.1.26 Environmental Matters.
(a) The properties now or formerly owned or operated by each
Borrower and its Subsidiaries (as referred to in this Section 7.1.26, the
"Owned Properties") do not contain any Hazardous Materials in amounts or
concentrations which (i) constitute, or constituted a violation of, or (ii)
could give rise to liability under, Environmental Laws resulting from any
Release of Hazardous Materials during such Borrower's or its Subsidiaries'
ownership or operation of the Owned Properties or, to the knowledge of such
Borrower, at any other time, which violations and liabilities, in the
aggregate, could reasonably be expected to result in a Material Adverse
Effect.
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(b) The Owned Properties currently owned or occupied by such
Borrower or any of its Subsidiaries and all operations of such Borrower and
its Subsidiaries are in compliance, and, to the extent that such Borrower
or any of its Subsidiaries owned or operated any Owned Properties in the
past three years, in the last three years have been in compliance, with all
Environmental Laws and all Environmental Permits and all necessary
Environmental Permits have been obtained and are in effect, except to the
extent that such non-compliance or failure to obtain any necessary permits,
in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.
(c) During the time of such Borrower's or its Subsidiaries'
ownership or operation of the Owned Properties and, to the knowledge of
such Borrower, at any other time, there have been no Releases at, from,
under or proximate to the Owned Properties or otherwise in connection with
the operations of such Borrower or its Subsidiaries, which Releases, in the
aggregate, could reasonably be expected to result in a Material Adverse
Effect, and none of the Owned Properties currently owned or operated by
such Borrower and its Subsidiaries are listed on the Federal National
Priorities List (under CERCLA and as defined pursuant to Environmental
Law), or any similar listing in any other relevant jurisdiction.
(d) No Borrower nor any of its Subsidiaries has received any
Environmental Claim in connection with any of the Owned Properties or the
operations of such Borrower or any of its Subsidiaries or with regard to
any Person whose liabilities for environmental matters such Borrower or any
of its Subsidiaries has retained or assumed, in whole or in part,
contractually, by operation of law or otherwise, which Environmental Claim,
in the aggregate, could reasonably be expected to result in a Material
Adverse Effect, nor do such Borrower or any of its Subsidiaries have reason
to believe that notice of any such Environmental Claim will be received or
is being threatened.
Hazardous Materials have not been transported from any of the Owned
Properties by any Borrower or any of its Subsidiaries or, to the knowledge of
Borrowers, any other party, nor have Hazardous Materials been generated,
treated, stored or disposed of at, on or under any of the Owned Properties by
any Borrower or any of its Subsidiaries in a manner that could reasonably be
expected to give rise to liability under any Environmental Law that would
constitute a Material Adverse Effect, nor have any Borrower or any of its
Subsidiaries retained or assumed any liability, contractually, by operation of
law or otherwise, with respect to the generation, treatment, storage or disposal
of Hazardous Materials, which transportation, generation, treatment, storage or
disposal, or retained or assumed liabilities, in the aggregate, could reasonably
be expected to result in a Material Adverse Effect.
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7.2 Continuous Nature of Representations and Warranties.
Each representation and warranty contained in this Agreement and the
other Loan Documents shall be continuous in nature and shall remain accurate,
complete and not misleading at all times during the term of this Agreement,
except for changes in the nature of a Borrower's or one of a Borrower's
Subsidiary's business or operations that would render the information in any
schedule attached hereto or to any other Loan Document either inaccurate,
incomplete or misleading, so long as Majority Lenders have consented to such
changes or such changes are expressly permitted by this Agreement (provided that
the consent of Majority Lenders shall not be required (so long as Borrowers have
notified Administrative Agent of such changes) with respect to the following, to
the extent otherwise expressly permitted by this Agreement: (a) the entry into
any capitalized or operating personal (or movable) Property leases by any
Borrowers or any of their Subsidiaries, or any real (or immovable) Property
leases by any Borrower or any of their Subsidiaries not identified on Schedule
7.1.22 as of the Closing Date, (b) the establishment by any Borrower or any of
their Subsidiaries of any Plan, Canadian Pension Plan or pension scheme not
identified on Schedule 7.1.23 as of the Closing Date, (c) the filing of any tax
Lien permitted by Section 8.2.5(b), or (d) the issuance of additional equity by
Domestic Borrower).
7.3 Survival of Representations and Warranties.
All representations and warranties of Borrowers contained in this
Agreement or any of the other Loan Documents shall survive the execution,
delivery and acceptance thereof by Administrative Agent, Canadian Agent, UK
Agent and each Lender and the parties thereto and the closing of the
transactions described therein or related thereto.
SECTION 8. COVENANTS AND CONTINUING AGREEMENTS
8.1 Affirmative Covenants.
During the term of this Agreement, and thereafter for so long as there
are any Obligations outstanding, each Borrower covenants that, unless otherwise
consented to by Majority Lenders, in writing, it shall (and it shall cause each
of its Subsidiaries to):
8.1.1 Visits and Inspections; Lender Meeting. Permit
representatives of Administrative Agent, Canadian Agent and UK Agent, and during
the continuation of any Default or Event of Default any Lender, from time to
time, as often as may be reasonably requested, but only during normal business
hours, to visit and inspect the Properties of such Borrower and such
Subsidiaries, inspect, audit and make extracts from their books and records, and
discuss with their officers, their
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employees, their consultants and their independent accountants, such Borrower's
and such Subsidiaries' business, assets, liabilities, financial condition,
business prospects and results of operations. Administrative Agent, Canadian
Agent or UK Agent, as applicable, if no Default or Event of Default then exists,
shall give each Borrower or Subsidiary reasonable prior notice of any such
inspection or audit. Without limiting the foregoing, each Borrower will
participate and will cause its Subsidiaries and key management personnel to
participate in a meeting with Administrative Agent, Canadian Agent, UK Agent and
Lenders periodically during each year, which meetings shall be held at such
times and such places as may be reasonably requested by Administrative Agent,
Canadian Agent and UK Agent.
8.1.2 Notices. Promptly notify Administrative Agent in writing of
the occurrence of (a) any Default or Event of Default and (b) any event or the
existence of any fact which renders any representation or warranty in this
Agreement or any of the other Loan Documents inaccurate, incomplete or
misleading in any material respect as of the date made or remade. In addition,
each Borrower agrees to provide Administrative Agent with (i) 10 Business Days'
prior written notice of (A) any change in the legal name of such Borrower or any
of its Subsidiaries, (B) the adoption by such Borrower or any of its
Subsidiaries of any new fictitious name or tradename and (C) any change in the
principal place of business of such Borrower or any of its Subsidiaries, and
(ii) prompt written notice of any change in the information disclosed in any
exhibit or schedule hereto, in each case after giving effect to the materiality
limits and Material Adverse Effect qualifications contained therein.
8.1.3 Financial Statements. Keep, and cause each of its
Subsidiaries to keep, adequate records and books of account with respect to its
business activities in which proper entries are made in accordance with
customary accounting practices reflecting all its financial transactions; and
cause to be prepared and furnished to Administrative Agent, Canadian Agent, UK
Agent and each Lender, the following, all to be prepared in accordance with GAAP
applied on a consistent basis, unless Borrowers' certified public accountants
concur in any change therein and such change is disclosed to Administrative
Agent and is consistent with GAAP:
(a) not later than 90 days after the close of each fiscal year of
Domestic Borrower, unqualified (except for a qualification for a change in
accounting principles with which the accountant concurs) audited financial
statements of Domestic Borrower and its Subsidiaries as of the end of such
year (including without limitation, a balance sheet, statement of income
and statement of cash flow), on a Consolidated basis, certified by a firm
of independent certified public accountants of recognized standing selected
by Borrowers but reasonably acceptable to Administrative Agent and, within
a reasonable time thereafter a copy of any management letter issued in
connection therewith;
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(b) not later than 45 days after the end of each fiscal quarter
of Domestic Borrower (other than the fourth fiscal quarter of each fiscal
year), unaudited financial statements of Domestic Borrower and its
Subsidiaries as of the end of such quarter (including without limitation, a
balance sheet, statement of income and statement of cash flow), on a
Consolidated basis;
(c) not later than 30 days after the end of each month hereafter,
including the last month of Domestic Borrower's fiscal year, unaudited
financial statements of Domestic Borrower and its Subsidiaries as of the
end of such month and of the portion of the fiscal year then elapsed
(including without limitation, a balance sheet, statement of income and
statement of cash flow), on a Consolidated and consolidating basis,
certified by the principal financial officer of Domestic Borrower as
prepared in accordance with GAAP and fairly presenting in all material
respects the financial position and results of operations of Domestic
Borrower and its Subsidiaries for such month and period subject only to
changes from audit and year-end adjustments and except that such statements
need not contain notes;
(d) together with each delivery of financial statements pursuant
to clauses (a) and (c) of this Section 8.1.3, a management report (i)
setting forth in comparative form the corresponding figures for the
corresponding periods of the previous fiscal year and the corresponding
figures from the most recent Projections for the current fiscal year
delivered pursuant to Section 8.1.7 and (ii) identifying the reasons for
any significant variations from such Projections. The information above
shall be presented in reasonable detail and shall be certified by the chief
financial officer of Domestic Borrower to the effect that such information
fairly presents in all material respects the results of operations and
financial condition of Domestic Borrower and its Subsidiaries as at the
dates and for the periods indicated;
(e) promptly after the sending or filing thereof, as the case may
be, copies of any proxy statements or financial statements which any
Borrower has made available to its Securities holders and copies of any
regular, periodic and special reports or registration statements which any
Borrower or any of its Subsidiaries files with the Securities and Exchange
Commission or any governmental authority which may be substituted therefor,
or any national securities exchange;
(f) upon request of Administrative Agent, copies of any annual
report to be filed with the United States Department of Labor in connection
with each Plan;
(g) concurrently with the delivery of the financial statements
described in paragraph (a) and (b) of this Section 8.1.3 and as more
frequently
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as Administrative Agent, Canadian Agent or UK Agent may request, a
statutory payables certificate with respect to Canadian Borrower and UK
Borrowers in the form of Exhibit 8.1.3(g) hereto; and
(h) such other data and information (financial and otherwise) as
Administrative Agent, Canadian Agent, UK Agent or any Lender, from time to
time, may reasonably request, bearing upon or related to the Collateral or
Borrowers' or any of their Subsidiaries' financial condition or results of
operations.
Concurrently with the delivery of the financial statements described
in paragraph (a) of this Section 8.1.3, Borrowers shall forward to
Administrative Agent a copy of the accountants' letter to Domestic Borrower's
management that is prepared in connection with such financial statements and
shall also cause to be prepared and shall furnish to Administrative Agent a
certificate of the aforesaid certified public accountants certifying to
Administrative Agent that, based upon their examination of the financial
statements of Domestic Borrower and its Subsidiaries, they are not aware of any
Default or Event of Default, or, if they are aware of such Default or Event of
Default, specifying the nature thereof. Concurrently with the delivery of the
financial statements described in paragraphs (a) and (c) of this Section 8.1.3,
or more frequently if reasonably requested by Administrative Agent, Canadian
Agent or UK Agent, Borrowers shall cause to be prepared and furnished to
Administrative Agent, Canadian Agent and UK Agent a Compliance Certificate in
the form of Exhibit 8.1.3 hereto executed by the Chief Financial Officer of
Domestic Borrower.
8.1.4 Borrowing Base Certificates. On or before the 15th day of
each month from and after the date hereof, Borrowers shall deliver to
Administrative Agent a Borrowing Base Certificate as of the last day of the
immediately preceding month, with such supporting materials as Administrative
Agent shall reasonably request, which Borrowing Base Certificate shall provide
eligibility information with respect to Accounts of the Account Creditors and
Inventory of Domestic Borrower on a consolidated and consolidating basis. If
Administrative Agent deems it advisable in its sole discretion, Borrowers shall
execute and deliver to Administrative Agent Borrowing Base Certificates more
frequently than as provided above.
8.1.5 Sales Tax Deliveries.
(a) Immediately notify Administrative Agent in writing (with a
copy to Sheppard, Mullin, Xxxxxxx & Xxxxxxx LLP at the address indicated in
Section 12.8) of the receipt of notification from any State of (i) the
imposition by such State of a liability on Domestic Borrower or any Domestic
Subsidiary with respect to sales tax, (ii) a determination by such State that
Domestic Borrower or any Domestic Subsidiary has a sufficient nexus with such
State to require the payment by Domestic Borrower or any Domestic Subsidiary of
sales tax in such State, and (iii) the settlement
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of any dispute with a State pertaining to the liability of Domestic Borrower or
any Domestic Subsidiary to such State with respect to sales tax, together with a
description of the terms of such settlement in form and substance satisfactory
to Administrative Agent, and (b) deliver to Administrative Agent (with a copy to
Sheppard, Mullin, Xxxxxxx & Hampton LLP at the address indicated in Section
12.8), in form and substance satisfactory to Administrative Agent, on the
fifteenth day of each calendar month, a list of all States with respect to which
Domestic Borrower or any Domestic Subsidiary is required to, or could
potentially be required to, pay sales tax, together with any pending or
potential liability of Domestic Borrower or Domestic Subsidiaries to such States
with respect to sales tax and a report on the status of Domestic Borrower's and
Domestic Subsidiaries' payment of any such pending liability.
8.1.6 Landlord, Processor and Storage Agreements. Provide
Administrative Agent, Canadian Agent and UK Agent with copies of all agreements
between each Borrower or any of its Subsidiaries and any landlord, processor,
distributor, warehouseman or consignee which owns any premises at which any
Collateral may, from time to time, be kept.
8.1.7 Projections. No later than thirty (30) days prior to the
end of each fiscal year of Domestic Borrower, deliver to Administrative Agent
Consolidated and consolidating Projections of Domestic Borrower and its
Subsidiaries for the forthcoming fiscal year of Domestic Borrower, month by
month.
8.1.8 Subsidiaries. Cause each Domestic Subsidiary of Domestic
Borrower (other than Restricted Subsidiaries) and upon Administrative Agent's
request each Foreign Subsidiary of Domestic Borrower (other than Canadian
Borrower, UK Borrowers and Restricted Subsidiaries), in each case whether now or
hereafter in existence, to execute and deliver to Administrative Agent a
Guaranty Agreement and a Guaranty Security Agreement pursuant to which such
Subsidiary guaranties the payment of all Obligations and grants to
Administrative Agent (for the benefit of itself, Canadian Agent, UK Agent, Bank
and Lenders) a first priority Lien (subject only to Permitted Liens) on all of
its Properties of the types described in Section 5. Additionally, each Borrower
and each Subsidiary of a Borrower (other than Restricted Subsidiaries) shall
execute and deliver to Administrative Agent a pledge agreement pursuant to which
such Borrower or such Subsidiary grants to Administrative Agent (for the benefit
of itself, Canadian Agent, UK Agent, Bank and Lenders) a first priority Lien
(subject only to Permitted Liens) with respect to (a) all of the issued and
outstanding Securities of each Subsidiary of Domestic Borrower which is not a
Restricted Subsidiary (other than Canadian Borrower (with respect to which 65%
of the issued and outstanding Securities shall be pledged to Administrative
Agent on the Closing Date) and UK Borrowers (with respect to which: (i) 65% of
the issued and outstanding Securities of CCEL shall be pledged to Administrative
Agent on the Closing Date, and (ii) 100% of the issued and outstanding
Securities of CLU shall be
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pledged to UK Agent on the UK Closing Date (but not as security for any Domestic
Obligations)), and (b) 65% of the issued and outstanding Securities, in the
aggregate, of each Restricted Subsidiary described in clause (b) of the
definition of "Restricted Subsidiary" if such Subsidiary possesses 2.5% or
greater of Consolidated assets of Domestic Borrower, determined in accordance
with GAAP, or owns any material Intellectual Property. In addition, Borrowers
shall cause each Restricted Subsidiary of Domestic Borrower which ceases to be a
Restricted Subsidiary to comply with this Section 8.1.8, and Borrowers shall,
and shall cause each Subsidiary of Borrower (other than Restricted Subsidiaries)
which owns equity of such Restricted Subsidiary to, comply with this Section
8.1.8 with respect to each Restricted Subsidiary of Domestic Borrower which
ceases to be a Restricted Subsidiary.
8.1.9 Deposit and Brokerage Accounts. For each deposit account
or brokerage account that any Borrower or any of its Subsidiaries (other than
Restricted Subsidiaries) at any time opens or maintains (other than the BA
Treasury Account), such Borrower shall (or shall cause such Subsidiary to), at
Administrative Agent's, Canadian Agent's or UK Agent's, as the case may be,
request and option, pursuant to an agreement in form and substance satisfactory
to Administrative Agent, Canadian Agent or UK Agent, as the case may be, cause
the depository bank or securities intermediary, as applicable, to agree to
comply at any time with instructions from Administrative Agent, Canadian Agent
or UK Agent, as the case may be, to such depository bank or securities
intermediary, as applicable, directing the disposition of funds from time to
time credited to such deposit or brokerage account, without further consent of
such Borrower or such Subsidiary.
8.1.10 ERISA. Each Borrower will, and will cause each of its
Subsidiaries to, (a) comply with the applicable provisions of ERISA and the Code
(or their Canadian or United Kingdom equivalent) and of the regulations and
published interpretations thereunder, except where the failure to comply
therewith could not reasonably be expected to have a Material Adverse Effect,
and (b) furnish to the Administrative Agent (i) promptly, and in any event
within 30 days after any responsible officer of such Borrower either knows or
has a reasonable basis to know that any Reportable Event has occurred, that
alone or together with any other Reportable Event could reasonably be expected
to result in material liability, of such Borrower, any Subsidiary or any ERISA
Affiliate to the PBGC, a statement of a responsible officer of such Borrower (in
his or her capacity as such) setting forth details as to such Reportable Event
and the action proposed to be taken with respect thereto, together with a copy
of the notice, if any, of such Reportable Event given to the PBGC, (ii) promptly
after receipt thereof, a copy of any notice such Borrower, any Subsidiary or any
ERISA Affiliate receives from the PBGC relating to the intention of the PBGC to
terminate any Plan or Plans or to appoint a trustee to administer any Plan or
Plans, (iii) within 30 days after the due date for filing with the PBGC pursuant
to Section 412(n) of the Code a notice of failure to make a required installment
or other
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payment with respect to a Plan, a statement of a responsible officer of such
Borrower setting forth details as to such failure and the action proposed to be
taken with respect thereto, together with a copy of such notice given to the
PBGC and (iv) promptly and in any event within 30 days after receipt thereof by
such Borrower, any Subsidiary or any ERISA Affiliate from the sponsor of a
Multiemployer Plan, a copy of each notice received by such Borrower, any
Subsidiary or any ERISA Affiliate concerning (A) the imposition of Withdrawal
Liability or (B) a determination that a Multiemployer Plan is, or is expected to
be, terminated or in Reorganization, in each case within the meaning of Title IV
of ERISA; provided, however, that no such notice or statement will be required
under this Section 8.1.10 unless the event, when aggregated with all other
events described in this Section 8.1.10 occurring at the same time, could be
reasonably expected to result in liability to such Borrower, any Subsidiary or
any ERISA Affiliate in an amount that would exceed $250,000 in the aggregate for
such Borrower, its Subsidiaries and all ERISA Affiliates.
8.1.11 Compliance with Environmental Laws. Except as any of the
following, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect, each Borrower will, and will cause each of
its Subsidiaries to, comply, and use its reasonable best efforts to cause all
lessees and other Persons occupying its Properties to comply, in all material
respects with all Environmental Laws and Environmental Permits applicable to its
operations and Properties; obtain and renew all material Environmental Permits
necessary for its operations and Properties; and conduct any remedial action
required by any governmental authority in accordance with Environmental Laws;
provided, however, that no Borrower nor any of its Subsidiaries shall be
required to undertake any remedial action to the extent that its obligation to
do so is being contested in good faith and by proper proceedings and appropriate
reserves are being maintained with respect to such circumstances.
8.1.12 Patents, Trademarks and Copyrights. Each Borrower will,
and will cause each of its Subsidiaries to (a) as it deems appropriate in its
business judgment, use commercially reasonable efforts to register with the
United States Patent and Trademark Office, the United States Copyright Office or
foreign equivalent, as the case may be, all of its or their right, title and
interest in each material patent, trademark and copyright used in its or their
business which is so registrable under applicable law, (b) report each such
filing and registration to the Administrative Agent, with respect to Domestic
Collateral, Canadian Agent, with respect to Canadian Collateral, and UK Agent,
with respect to UK Collateral, within fifteen (15) Business Days after the last
day of the fiscal quarter in which such filing occurs and (c) promptly upon
request by the Administrative Agent, with respect to Domestic Collateral,
Canadian Agent, with respect to Canadian Collateral, and UK Agent, with respect
to UK Collateral, execute and deliver any and all agreements, instruments,
documents, and papers (each of which shall be in form and substance reasonably
satisfactory to the Administrative
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Agent, Canadian Agent or UK Agent, as applicable) as may be necessary or as the
Administrative Agent, Canadian Agent or UK Agent, as applicable, may reasonably
request to grant (to the extent possible) to the Administrative Agent, for the
benefit of itself, Canadian Agent, UK Agent, Bank and the Lenders, and to
Canadian Agent, for the benefit of itself, Canadian Lender, the Canadian
Participating Lenders, UK Agent, UK Lender and the UK Participating Lenders, and
to UK Agent, for the benefit of itself, UK Lender, the UK Participating Lenders,
Canadian Agent, Canadian Lender and the Canadian Participating Lenders, a
perfected, first priority security interest therein and in any goodwill and
general intangibles relating thereto or represented thereby.
8.1.13 Canadian Pension and Benefit Plans.
(a) For each existing Canadian Pension Plan of Canadian
Borrower or any of its Subsidiaries, Canadian Borrower or such
Subsidiary, as applicable, shall ensure that such plan retains its
registered status under and is administered in a timely manner in all
material respects in accordance with the applicable pension plan text,
funding agreement, the Income Tax Act (Canada) and all other applicable
laws.
(b) For each Canadian Pension Plan hereafter adopted by
Canadian Borrower or any of its Subsidiaries which is required to be
registered under the Income Tax Act (Canada) or any other applicable
laws, the Canadian Borrower or such Subsidiary, as applicable, shall use
its best efforts to seek and receive confirmation in writing from the
applicable governmental authorities to the effect that such plan is
unconditionally registered under the Income Tax Act (Canada) and such
other applicable laws.
(c) For each existing and hereafter adopted Canadian
Pension Plan and Canadian Benefit Plan of Canadian Borrower or any of
its Subsidiaries, Canadian Borrower or such Subsidiary, as applicable,
shall in a timely fashion perform in all material respects all
obligations (including fiduciary, funding, investment and administration
obligations) required to be performed in connection with such plan and
the funding media therefor.
(d) Canadian Borrower and each Subsidiary of Canadian
Borrower shall deliver to Administrative Agent and Canadian Agent, if
requested by Administrative Agent or Canadian Agent, promptly after the
filing thereof by Canadian Borrower or such Subsidiary, as applicable,
with any applicable governmental authority, (i) copies of each annual
and other return, report or valuation with respect to each Canadian
Pension Plan of Canadian Borrower or such Subsidiary, as applicable;
(ii) promptly after receipt thereof, a copy of any direction, order,
notice, ruling or opinion that Canadian Borrower or such Subsidiary, as
applicable, may receive from any applicable
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governmental authority with respect to any Canadian Pension Plan of
Canadian Borrower or such Subsidiary, as applicable; and (iii)
notification within 30 days of any increases having a cost to Canadian
Borrower or such Subsidiary, as applicable, in excess of $250,000 per
annum, in the benefits of any existing Canadian Pension Plan or Canadian
Benefit Plan, or the establishment of any new Canadian Pension Plan or
Canadian Benefit Plan, or the commencement of contributions to any such
plan to which Canadian Borrower or such Subsidiary, as applicable, was
not previously contributing.
8.1.14 Bank of America Letter of Credit. In the event
that the beneficiary of the BofA LC accepts Bank's replacement Domestic Letter
of Credit to be issued on the Closing Date, within fifteen (15) Business Days of
the Closing Date, the BofA LC and the cash collateral securing Domestic
Borrower's obligations in connection therewith shall be released and all
reimbursement and similar agreements pertaining thereto shall be terminated. All
such cash collateral shall be remitted immediately upon the release thereof to
Administrative Agent for application to the outstanding principal amount of
Domestic Revolving Credit Loans.
8.1.15 Canadian Landlord Waiver. Canadian Borrower
agrees to use its best efforts to obtain a landlord waiver/consent in form and
substance acceptable to Canadian Agent with respect to Canadian Borrower's
leased location at 0000 Xxxxxx Xxxx, Xxxxx 0-0, Xxxxxxxxxxx, Xxxxxxx X0X 0X0
Xxxxxx, subsequent to the Closing Date.
8.2 Negative Covenants.
During the Term, and thereafter for so long as there are any
Obligations outstanding, each Borrower covenants that, unless otherwise
consented to by Majority Lenders, in writing, it shall not (and it shall not
permit its Subsidiaries to):
8.2.1 Mergers; Consolidations; Acquisitions;
Structural Changes. Merge, amalgamate or consolidate with any Person; or acquire
all or substantially all of the Properties of any Person; or change its state or
other jurisdiction of incorporation or organization or Type of Organization; or
change its legal name, except for:
(a) mergers of any Subsidiary of a Borrower into a
Borrower or another Subsidiary (other than Canadian Borrower, UK
Borrowers or a Restricted Subsidiary) of a Borrower; and
(b) acquisitions of assets consisting of fixed assets
or real (or immovable) Property that constitute Capital Expenditures
permitted under Section 8.2.8.
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8.2.2 Loans and Advances. Make any loans or other advances
of money to any Person, other than (a) for salary, travel advances, advances
against commissions and other similar advances to employees and extensions of
trade credit in the ordinary course of business, (b) deposits with financial
institutions permitted under this Agreement, (c) prepaid expenses, and (d)
Permitted Intercompany Loans.
8.2.3 Total Indebtedness. Create, incur, assume, or suffer
to exist, any Indebtedness, except:
(a) Obligations owing to Administrative Agent, Canadian
Agent, UK Agent, Bank or any Lender under this Agreement or the other
Loan Documents;
(b) Indebtedness existing on the date of this Agreement and
listed on Schedule 8.2.3(b) and any refinancing thereof which does not
increase the amount thereof;
(c) Contingent liabilities arising out of endorsements of
checks and other negotiable instruments for deposit or collection in
the ordinary course of business;
(d) Guaranties of any Indebtedness permitted hereunder;
(e) To the extent not mentioned above, trade payables,
accruals and accounts payable in the ordinary course of business (in
each case to the extent not overdue) not for Money Borrowed;
(f) Subordinated Debt in such amounts as may be approved in
writing by Administrative Agent and the Majority Lenders;
(g) Purchase Money Indebtedness secured by a Purchase Money
Lien and Capitalized Lease Obligations (and any refinancing thereof),
provided that the aggregate unpaid principal amount for Borrowers and
their Subsidiaries of the foregoing (excluding any interest component
thereof) does not exceed $2,600,000 at any time to and including
December 31, 2002 or $2,000,000 at any time thereafter;
(h) Permitted Intercompany Loans (for purposes of
clarification, so long as no Default or Event of Default then exists or
would result therefrom and so long as the applicable UK Borrower is
Solvent, there is no limitation or restriction on the ability of either
UK Borrower to repay any intercompany loan permitted hereunder owing by
such UK Borrower to Domestic Borrower);
(i) Guaranties in the ordinary course of business by any
Borrower of any obligation owed by any Subsidiary to an unrelated third
party, and
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guaranties by Subsidiaries of Domestic Borrower of any obligation owed
by a Borrower to an unrelated third party, provided that the guarantied
obligations are otherwise permitted by this Agreement and do not exceed
at any time the sum of the amount set forth on Schedule 8.2.3(i) hereto
as of the Closing Date plus $75,000;
(j) Indebtedness of Xxxxxxxx Australia referred to in
Section 12.21 to the extent consented to by the Agents and Lenders as
provided in such Section; and
(k) Indebtedness not included in paragraphs (a) through (j)
above which, when added to outstanding Indebtedness permitted under
paragraph (g) above, does not exceed at any time, in the aggregate, the
sum of $1,000,000.
8.2.4 Affiliate Transactions. Enter into, or be a party to,
any transaction with any Affiliate of a Borrower, including without limitation
any management, consulting or similar fees, except, without duplication, (a) in
the ordinary course of and pursuant to the reasonable requirements of such
Borrower's or such Subsidiary's business and upon fair and reasonable terms
which are fully disclosed to Administrative Agent and are no less favorable to
such Borrower or such Subsidiary than would be obtained in a comparable
arms-length transaction with a Person not an Affiliate of such Borrower or such
Subsidiary, (b) those transactions identified on Schedule 8.2.4 hereto, (c)
Permitted Intercompany Loans, and (d) the employment of an Affiliate who is a
natural person by any Borrower as an officer, director or employee of such
Borrower, and (e) as otherwise permitted under this Agreement.
8.2.5 Limitation on Liens. Create or suffer to exist any
Lien upon any of its Property, income or profits, whether now owned or hereafter
acquired, except:
(a) Liens at any time granted in favor of Administrative
Agent, Canadian Agent or UK Agent pursuant to the Loan Documents;
(b) Liens for taxes, assessments or governmental charges
(excluding any Lien imposed pursuant to any of the provisions of ERISA)
not yet due, or being contested in the manner described in Section
7.1.14 hereto, but only if such Lien would not reasonably be expected
to have a Material Adverse Effect;
(c) Liens arising in the ordinary course of the business of
such Borrower or any of its Subsidiaries by operation of law or
regulation, but only if payment in respect of any such Lien is not at
the time required and such Liens do not, in the aggregate, materially
detract from the value of the Property of
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such Borrower or any of its Subsidiaries or materially impair the use thereof in
the operation of the business of such Borrower or any of its Subsidiaries;
(d) Purchase Money Liens securing Permitted Purchase Money
Indebtedness and any renewals or extensions thereof so long as the
obligations secured or benefited thereby are not increased and such
Liens comply with the limitations set forth in the definition of
"Purchase Money Lien";
(e) Such other Liens as appear on Schedule 8.2.5 hereto and
any renewals or extensions thereof so long as the obligations secured
or benefited thereby are not increased and such Liens are not extended
beyond their scope from that existing on the Closing Date;
(f) Liens incurred or deposits made in the ordinary course
of business in connection with (i) worker's compensation, social
security, unemployment insurance and other like laws or (ii) sales
contracts, leases, statutory obligations, work in progress advances and
other similar obligations not incurred in connection with the borrowing
of money or the payment of the deferred purchase price of property;
(g) Reservations, covenants, zoning and other land use
regulations, title exceptions or encumbrances granted in the ordinary
course of business, affecting real (or immovable) Property owned or
leased by such Borrower or one of its Subsidiaries; provided that such
exceptions do not in the aggregate materially interfere with the use of
such Property in the ordinary course of such Borrower's or such
Subsidiary's business;
(h) Judgment Liens that do not give rise to an Event of
Default under Section 10.1.15;
(i)Liens securing Capitalized Lease Obligations permitted
by Section 8.2.3(g) on and limited to the capital assets acquired,
constructed or financed with the proceeds of such Capitalized Lease
Obligations
(j) Liens on assets of Channel Australia securing
Indebtedness of Xxxxxxxx Australia referred to in Section 12.21 to the
extent consented to by the Agents and Lenders as provided in such
Section; and
(j) Such other Liens as Majority Lenders may hereafter
approve in writing.
8.2.6 Payments and Amendments of Certain Debt.
(a) Make any payment of any part or all of any Subordinated
Debt or take any other action or omit to take any other action in
respect of any
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Xxxxxxxxxxxx Xxxx, except in accordance with the subordination
agreement relative thereto or the subordination provisions thereof;
or
(b) Amend or modify any agreement, instrument or
document evidencing or relating to any Subordinated Debt.
8.2.7 Distributions. Declare or make any Distributions,
except for:
(a) Distributions by any Subsidiary of Borrowers to a
Borrower; and
(b) Distributions paid solely in Securities of such
Borrower or any of its Subsidiaries; and
(c) Distributions by Domestic Borrower consisting of
the repurchase of the common stock of Domestic Borrower in the open market in an
amount not to exceed $200,000 in the aggregate during each fiscal year of
Domestic Borrower, subject in the case of each such Distribution to the
following: (i) Aggregate Availability as at such date shall not be less than
$2,000,000, after giving effect to such repurchase, (ii) no Default or Event of
Default shall then exist or would result therefrom, and (iii) Borrowers and
their Subsidiaries shall not be in violation of Section 8.2.19 as of such date.
8.2.8 Capital Expenditures. Make Capital Expenditures
(including, without limitation, by way of capitalized leases (but counting in
any fiscal year the full amount of the obligations under each capitalized lease
entered into during such fiscal year and counting no amount in respect of
capitalized leases entered into during any other fiscal year)) which, in the
aggregate, as to Borrowers and all of their Subsidiaries, exceed $3,000,000
during Domestic Borrower's fiscal year ending December 31, 2002, $5,000,000
during Domestic Borrower's fiscal year ending December 31, 2003, $5,500,000
during Domestic Borrower's fiscal year ending December 31, 2004, and $6,500,000
during Domestic Borrower's fiscal year ending December 31, 2005.
8.2.9 Operating Leases. Incur any obligation to pay
rent under an operating lease in any fiscal year of Domestic Borrower if to do
so would result in the aggregate obligation of Borrowers and their Subsidiaries
to make cash payments under all operating leases in that fiscal year to exceed
the sum of the amount set forth in Schedule 8.2.9 as of the Closing Date plus
$300,000.
8.2.10 Disposition of Assets. Sell, lease or otherwise
dispose of any of its Properties, including any disposition of Property as part
of a sale and leaseback transaction, to or in favor of any Person, except for:
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(a) unless a Default or Event of Default has occurred
and Agents or Lenders are exercising any default remedies pertaining to
mashalling, sale, liquidation or other control of such Inventory, sales
of Inventory in the ordinary course of business;
(b) transfers of Property to such Borrower by a
Subsidiary of such Borrower or by any Subsidiary to a Borrower where
the Liens created by the Security Documents over such Property are not
adversely affected in any material respect;
(c) dispositions of Property that is substantially
worn, damaged, uneconomic or obsolete (subject to Section 6.4.2 hereof);
(d) dispositions of investments described in clauses
(d), (e), (f) and (g) of the definition of the term Restricted
Investments"; and
(e) other dispositions expressly authorized by this
Agreement, including without limitation dispositions of Equipment and
other fixed assets permitted by Section 6.4.2 hereof and the UK Real
Estate pursuant to Section 5.5 hereof.
8.2.11 Securities of Subsidiaries. Permit any
Subsidiaries of Domestic Borrower to issue any additional Securities except to a
Borrower and except for director's qualifying Securities and to any other
Subsidiary of Domestic Borrower provided such Subsidiary pledges such Securities
to the Agents in accordance with this Agreement and the other Loan Documents.
8.2.12 Xxxx-and-Hold Sales, Etc. Make a sale to any
customer on a xxxx-and-hold or consignment basis.
8.2.13 Restricted Investment. Make or have any
Restricted Investment.
8.2.14 Subsidiaries and Joint Ventures. Create,
acquire or otherwise suffer to exist any Subsidiary or joint venture arrangement
not in existence as of the date hereof.
8.2.15 Tax Consolidation. File or consent to the
filing of any consolidated income tax return with any Person other than Domestic
Borrower and its Subsidiaries.
8.2.16 Organizational Documents. Agree to, or suffer
to occur, any amendment, supplement or addition to its or any of its
Subsidiaries' charter, articles or certificate of incorporation, certificate of
formation, limited partnership agreement, bylaws, limited liability agreement,
operating agreement or other
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organizational documents (as the case may be), that would reasonably be expected
to have a Material Adverse Effect.
8.2.17 Fiscal Year End. Change its fiscal year end.
8.2.18 Aggregate Availability. Permit Aggregate
Availability to be less than $1,500,000 at any time.
8.2.19 UK Losses. (a) Permit UK Loss, as of the last
day of each calendar month for the calendar month then ended, to exceed negative
$500,000, or (b) permit UK Loss to exceed negative $900,000 in the aggregate
subsequent to the Closing Date; provided that, notwithstanding anything to the
contrary contained in this Agreement, a violation of this covenant shall not
constitute a Default or an Event of Default under this Agreement nor otherwise
impose upon Borrowers or their Subsidiaries any additional Obligations nor any
acceleration of the payment of any outstanding Obligations, but rather in the
event of a violation of this Section 8.2.19, the sole and exclusive right and
remedy shall consist of the right of UK Agent and UK Lender, in their sole
discretion, to cease funding UK Revolving Credit Loans and, if not funded prior
thereto, the UK Term Loans to UK Borrowers pursuant to this Agreement (unless
and until such breach shall be cured by Borrowers and their Subsidiaries
delivering appropriate information to Administrative Agent indicating, and
Administrative Agent's determination, that Borrowers and their Subsidiaries have
complied with this Section 8.2.19 for three consecutive months subsequent to
such breach (it being acknowledged that only a breach of clause (b) of this
Section 8.2.19 is capable of such cure)).
8.2.20 Bermuda Account. Permit greater than $3,000
(or the equivalent thereof in any other currency) to be on deposit in the
Bermuda Account at any time.
8.3 Specific Financial Covenants.
During the Term, and thereafter for so long as there are any
Obligations outstanding, each Borrower covenants that, unless otherwise
consented to by Majority Lenders in writing, it shall comply (and shall cause
each of its Subsidiaries to comply) with all of the financial covenants set
forth in Exhibit 8.3 hereto. If GAAP changes from the basis used in preparing
the audited financial statements delivered to Administrative Agent by Borrowers
on or before the Closing Date, Borrowers will provide Administrative Agent with
certificates demonstrating compliance with such financial covenants and will
include, at the election of Borrowers or upon the request of Administrative
Agent, calculations setting forth the adjustments necessary to demonstrate how
Borrowers and their Subsidiaries are in compliance with such financial covenants
based upon GAAP as in effect on the Closing Date.
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SECTION 9. CONDITIONS PRECEDENT
Notwithstanding any other provision of this Agreement or any
of the other Loan Documents, and without affecting in any manner the rights of
Administrative Agent, Canadian Agent, UK Agent or any Lender under the other
sections of this Agreement, no Lender shall be required to make any Loan, nor
shall Administrative Agent or UK Agent be required to or issue or procure any
Letter of Credit or LC Guaranty unless and until each of the following
conditions has been and continues to be satisfied:
9.1 Documentation.
Administrative Agent shall have received, in form and
substance reasonably satisfactory to Administrative Agent, Canadian Agent, UK
Agent and their counsel, a duly executed copy of this Agreement and the other
Loan Documents, together with such additional documents, instruments and
certificates as Administrative Agent, Canadian Agent and UK Agent and their
counsel shall require in connection therewith from time to time, all in form and
substance reasonably satisfactory to Administrative Agent, Canadian Agent, UK
Agent and their counsel, including, without limitation, the pledge by Domestic
Borrower to Administrative Agent of 65% of the outstanding equity of Canadian
Borrower, 65% of the outstanding voting equity of Egerton and 100% of the
outstanding non-voting equity of Egerton, and 65% of the outstanding equity of
CCEL.
9.2 No Default.
No Default or Event of Default shall exist.
9.3 Other Conditions.
Each of the conditions precedent set forth in the other Loan
Documents shall have been satisfied.
9.4 No Litigation.
No action, proceeding, investigation, regulation or
legislation shall have been instituted, threatened or proposed before any court,
governmental agency or legislative body to enjoin, restrain or prohibit, or to
obtain damages in respect of, or which is related to or arises out of this
Agreement or the consummation of the transactions contemplated hereby.
9.5 Material Adverse Effect.
Since June 30, 2002, there has not been any material adverse
change in Borrowers' business, assets, condition (financial or otherwise),
operations, income or
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prospects and no event or condition exists which would be reasonably likely to
result in any Material Adverse Effect.
9.6 Fees.
The fees payable on the Closing Date pursuant to the Fee
Letter shall have been paid.
9.7 Collateral.
Administrative Agent shall be reasonably satisfied that, upon
the filing of appropriate financing statements showing Administrative Agent (for
the benefit of itself, Canadian Agent, UK Agent, Bank and each Lender) as
secured party with the appropriate governmental authorities, Administrative
Agent (for the benefit of itself, Canadian Agent, UK Agent, Bank and each
Lender) will hold a first priority perfected Lien in the collateral described
therein subject only to Permitted Liens. Canadian Agent shall be reasonably
satisfied that, upon the filing of appropriate financing statements showing
Canadian Agent (for the benefit of itself, Canadian Lender, Canadian
Participating Lenders, UK Agent, UK Lender and UK Participating Lenders) as
secured party with the appropriate governmental authorities, Canadian Agent (for
the benefit of itself, Canadian Lender, Canadian Participating Lenders, UK
Agent, UK Lender and UK Participating Lenders) will hold a first priority
perfected Lien in the collateral described therein subject only to Permitted
Liens. UK Agent shall be reasonably satisfied that, upon the filing of
appropriate financing statements showing UK Agent (for the benefit of itself, UK
Lender, UK Participating Lenders, Canadian Agent, Canadian Lender and Canadian
Participating Lenders) as secured party with the appropriate governmental
authorities, UK Agent (for the benefit of itself, UK Lender, UK Participating
Lenders, Canadian Agent, Canadian Lender and Canadian Participating Lenders)
will hold a first priority perfected Lien in the collateral described therein
subject only to Permitted Liens.
9.8 Diligence.
Administrative Agent, Canadian Agent and UK Agent shall have
completed and received all audits, inspections, legal due diligence and research
(including, without limitation, with respect to state sales tax issues),
appraisals (including, without limitation, final mold appraisals with respect to
molds owned by the Domestic Borrower and UK Borrowers) and examinations as
deemed necessary in the Administrative Agent's, Canadian Agent's and UK Agent's
reasonable opinion with respect to the Collateral (including inventory, fixed
assets and real (or immovable) Property), the books and records of Borrowers and
their Subsidiaries, the financial and business condition and operations of
Borrowers and their Subsidiaries, environmental assessment studies and
remediation plans, and the transactions contemplated hereby.
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9.9 Corporate Matters.
Administrative Agent shall be satisfied with the corporate and
legal structure and capitalization of Borrowers and each of their Subsidiaries,
including the charter and bylaws of Borrowers and each such Subsidiary and each
agreement or instrument relating thereto.
9.10 Environmental Matters.
Administrative Agent shall be satisfied as to the existing and
potential liability of Borrowers and their Subsidiaries with respect to any
environmental matters, and as to the compliance by Borrowers and their
Subsidiaries with all Environmental Laws.
9.11 Insurance.
Administrative Agent, Canadian Agent and UK Agent shall be
satisfied that Borrowers have obtained the insurance policies and the loss
payable and additional insured endorsements relating thereto required by Section
6.1.2.
9.12 Legal Opinions.
Administrative Agent, Canadian Agent and UK Agent shall have
received satisfactory written opinions of counsel for Borrowers and their
Subsidiaries as to the transactions contemplated hereby (including, without
limitation, the tax aspects thereof and compliance with all applicable
securities laws), the status of Borrowers and their Subsidiaries, and the legal,
binding and enforceable effect of the Loan Documents.
9.13 Reference Checks.
Administrative Agent shall have completed satisfactory
reference checks of the customers and vendors of Borrowers and their
Subsidiaries.
9.14 Financial Statements.
Administrative Agent shall have been satisfied with its review
of Borrowers' financial statements for the fiscal year ending December 31, 2001,
and all interim financial statements of Borrowers delivered to Administrative
Agent (including, without limitation, as of August 31, 2002) prior to the
Closing Date.
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9.15 Updated Audit.
Administrative Agent, Canadian Agent and UK Agent shall have
completed a satisfactory pre-closing updated audit of the books and records of
Borrowers and their Subsidiaries.
9.16 Costs and Expenses.
The reasonable costs and expenses of the Administrative Agent,
Canadian Agent and UK Agent in connection with the preparation of the Loan
Documents payable pursuant to Section 2.9 and invoiced to Borrowers prior to the
Closing Date, shall have been paid.
9.17 Representations and Warranties.
The representations and warranties of Borrowers contained in
Section 7 shall be true and correct in all material respects.
9.18 Availability.
Administrative Agent shall have determined that immediately
after Lenders have made the initial Loans and after Administrative Agent and UK
Agent have procured the initial Letters of Credit and LC Guaranties contemplated
hereby, and Borrowers have paid (or, if accrued, treated as paid) all closing
costs incurred in connection with the transactions contemplated hereby and have
reserved an amount sufficient to pay all trade payables greater than 60 days
past due, Aggregate Availability shall not be less than $2,500,000.
9.19 Cash Management.
Administrative Agent shall have received, in form and
substance satisfactory to Administrative Agent and its counsel, duly executed
copies of a blocked account agreement with respect to the BofA Account. Canadian
Agent shall have received, in form and substance satisfactory to Canadian Agent
and its counsel, duly executed copies of a blocked account agreement with
respect to the RBC Account.
SECTION 10. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT
10.1 Events of Default.
The occurrence of one or more of the following events shall
constitute an "Event of Default":
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10.1.1 Payment of Obligations. Borrowers shall fail to pay any of
the Obligations hereunder or under any Note on the due date thereof (whether due
at stated maturity, on demand, upon acceleration or otherwise), or, in the case
of any payment required because of an Overadvance (as defined below), within
three Business Days of the due date thereof (whether due at stated maturity, on
demand, upon acceleration or otherwise). As used in this Section 10.1.1, the
term "Overadvance" means the occurrence of any of the following: (a) the
Domestic Revolving Credit Exposure of all the Domestic Lenders exceeds (i) the
Domestic Borrowing Base then in effect (minus the outstanding principal amount
of the Domestic Term Loan minus Reserves, if any) or (ii) the Revolving Credit
Maximum Amount (minus the outstanding principal amount of the Domestic Term Loan
minus the Dollar Equivalent of the aggregate principal amount of the outstanding
Canadian Revolving Credit Loans minus the Dollar Equivalent of the aggregate
principal amount of the outstanding UK Revolving Credit Loans minus the Dollar
Equivalent of the outstanding principal amount of the UK Term Loans minus
Reserves, if any), (b) the aggregate amount of the Canadian Revolving Credit
Exposure of the Canadian Lender exceeds (including, without limitation, solely
as a result of fluctuation in exchange rates) the Canadian Borrowing Base then
in effect (minus Reserves applicable to Canadian Revolving Credit Loans, if
any), or (c) the aggregate amount of the UK Revolving Credit Exposure of the UK
Lender exceeds (including, without limitation, solely as a result of fluctuation
in exchange rates) the UK Borrowing Base then in effect (minus Reserves
applicable to UK Revolving Credit Loans, if any).
10.1.2 Misrepresentations. Any representation, warranty or other
statement made or furnished to Administrative Agent, Canadian Agent, UK Agent or
any Lender by or on behalf of any Borrower, any Subsidiary of any Borrower or
any Guarantor in this Agreement, any of the other Loan Documents or any
instrument, certificate or financial statement furnished in compliance with or
in reference thereto proves to have been false or misleading in any material
respect when made, furnished or remade pursuant to Section 7.2 hereof, unless
(a) any breach described in this Section 10.1.2 was not intentional on the part
of Borrowers and their Subsidiaries, (b) such breach is capable of being cured
as reasonably determined by Administrative Agent, and (c) such breach is in fact
so cured to Administrative Agent's satisfaction within fifteen days after the
sooner to occur of Borrower Representative's receipt of notice of such breach
from Administrative Agent or the date on which such breach first becomes known
to any officer of any Borrower.
10.1.3 Breach of Specific Covenants. Any Borrower shall breach
any covenant contained in Sections 6.1.2, 8.1.1 (other than, if no Event of
Default shall have occurred and be continuing, the last sentence thereof),
8.1.2, 8.1.4, 8.2 (provided that if at such time there are no outstanding Loans,
a breach of the covenants contained in Sections 8.2.3(g) and 8.2.8 shall not
constitute a Default or an Event of Default hereunder but Lenders may cease
funding hereunder) or 8.3 (provided that if at such
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time there are no outstanding Loans, a breach of such covenant shall not
constitute a Default or an Event of Default hereunder but Lenders may cease
funding hereunder) hereof on the date that Borrowers are required to perform,
keep or observe such covenant or shall fail to perform, keep or observe any
covenant contained in Section 8.1.3 or in the last sentence of Section 8.1.1
hereof within 5 days following the date on which Borrowers are required to
perform, keep or observe such covenant.
10.1.4 Breach of Other Covenants. Any Borrower shall fail or
neglect to perform, keep or observe any covenant contained in this Agreement
(other than a covenant which is dealt with specifically elsewhere in Section
10.1 hereof) and the breach of such other covenant is not cured to
Administrative Agent's satisfaction within 30 days after the sooner to occur of
Borrower Representative's receipt of notice of such breach from Administrative
Agent or the date on which such failure or neglect first becomes known to any
officer of any Borrower.
10.1.5 Default Under Security Documents or Other Agreements. Any
event of default shall occur under, or any Borrower, any of its Subsidiaries or
any Guarantor shall default in the performance or observance of any term,
covenant, condition or agreement contained in, any of the Security Documents or
the Other Agreements and such default shall continue beyond any applicable grace
or cure period.
10.1.6 Other Defaults. There shall occur any default or event of
default on the part of any Borrower, any Subsidiary of any Borrower or any
Guarantor under any agreement, document or instrument to which such Borrower,
such Subsidiary of any Borrower or such Guarantor is a party or by which such
Borrower, such Subsidiary of any Borrower or such Guarantor or any of its
Property is bound, evidencing or relating to any Indebtedness for Money Borrowed
(other than the Obligations) with an outstanding principal balance in excess of
$250,000, if the payment or maturity of such Indebtedness is accelerated in
consequence of such event of default or demand for payment of such Indebtedness
is made or could be made in accordance with the terms thereof.
10.1.7 Uninsured Losses. There shall occur any material loss,
theft, damage or destruction of any portion of the Collateral and the portion of
such Collateral that is not fully covered by insurance exceeds $200,000, in the
aggregate (subject to such deductibles and self-insurance retentions as
Administrative Agent, Canadian Agent or UK Agent, as the case may be, shall have
permitted).
10.1.8 Insolvency and Related Proceedings. Any Borrower, any
Subsidiary of any Borrower which is a Loan Party or any Guarantor (that is not a
Subsidiary of Domestic Borrower) shall cease to be Solvent or shall suffer the
appointment of a receiver, administrator, administrative receiver, trustee,
interim receiver, sheriff, monitor, sequestrator, custodian or similar
fiduciary, or shall pass or
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convene any meeting for the purpose of considering any resolution for winding up
or administration, or shall make an assignment, composition or arrangement for
the benefit of creditors, or any petition for an order for relief (or similar
proceedings, including, without limitation, an application for a stay order or
filing of a proposal or notice of intention to make a proposal) shall be filed
by or against any Borrower, any Subsidiary of any Borrower (which is a Loan
Party) or any Guarantor (that is not a Subsidiary of Domestic Borrower) under
the United States federal bankruptcy laws, the Insolvency Laws of Canada,
England's Insolvency Act of 1986 or any other insolvency laws in the United
Kingdom (if against any Borrower, any Subsidiary of any Borrower (which is a
Loan Party) or any Guarantor (that is not a Subsidiary of Domestic Borrower) the
continuation of such proceeding for more than 30 days or, with respect to any
proceeding in the United Kingdom, 14 days), or any Borrower, any Subsidiary of
any Borrower (which is a Loan Party) or any Guarantor (that is not a Subsidiary
of Domestic Borrower) shall make any offer of settlement, extension or
composition to their respective unsecured creditors generally. With respect to
UK Borrowers or any other Subsidiary of Domestic Borrower (which is a Loan
Party) organized under the laws of the United Kingdom, a petition has been
presented or a meeting convened or application made for the purpose of
appointing an administrator or receiver or other similar officer of, or for the
making of an administration order in respect of, UK Borrowers or any such
Subsidiary and (other than in the case of a petition to appoint an administrator
or receiver to which a grace period shall not apply), such petition or
application is not stayed or discharged within 14 days or in any event before it
is heard.
10.1.9 Business Disruption; Condemnation. There shall occur a
cessation of a substantial part of the business of any Borrower or any
Subsidiary of any Borrower for a period which materially adversely affects
Borrowers' and their Subsidiaries', taken as a whole, capacity to continue their
business on a profitable basis; or any Borrower or any Subsidiary of any
Borrower shall suffer the loss or revocation of any material license or permit
now held or hereafter acquired by such Borrower or such Subsidiary which is
necessary to the continued or lawful operation of its business and any such loss
or revocation would reasonably be expected to have a Material Adverse Effect; or
any Borrower or any Subsidiary of any Borrower shall be enjoined, restrained or
in any way prevented by court, governmental or administrative order from
conducting all or any material part of its business affairs and any such action
would reasonably be expected to have a Material Adverse Effect; or any material
lease or agreement pursuant to which any Borrower or any Subsidiary of any
Borrower leases, uses or occupies any Property shall be canceled or terminated
prior to the expiration of its stated term, except any such lease or agreement
the cancellation or termination of which would not reasonably be expected to
have a Material Adverse Effect; or any material portion of the Collateral shall
be taken through condemnation or the value of such Property shall be impaired
through condemnation.
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10.1.10 Change of Ownership. Any Borrower shall cease to own and
control, beneficially and of record (directly or indirectly), 100% (except for
directors' qualifying Securities) of the issued and outstanding Securities and
Voting Stock of each of its Subsidiaries which are Loan Parties.
10.1.11 Reportable Event. A Reportable Event shall occur which,
in Administrative Agent's determination, constitutes grounds for the termination
by the PBGC of any Plan or for the appointment by the appropriate United States
district court of a trustee for any Plan, or if any Plan shall be terminated or
any such trustee shall be requested or appointed, or if any Borrower, any
Subsidiary of any Borrower or any Guarantor is in "default" (as defined in
Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan
resulting from such Borrower's, such Subsidiary's or such Guarantor's complete
or partial withdrawal from such Plan and any such event specified in this
Section 10.1.11 would reasonably be expected to have a Material Adverse Effect.
10.1.12 Challenge to Agreement. Any Borrower, any Subsidiary of
any Borrower or any Guarantor, or any Designated Affiliate of any of them, shall
challenge or contest in any action, suit or proceeding the validity or
enforceability of this Agreement or any of the other Loan Documents, the
legality or enforceability of any of the Obligations or the perfection or
priority of any Lien granted to Administrative Agent, Canadian Agent or UK
Agent. Any holder of Subordinated Debt asserts in writing that such Subordinated
Debt is not subordinated to the Obligations in accordance with its terms and
Borrowers do not promptly deny in writing such assertion and contest any attempt
by such holder to take action based on such assertion.
10.1.13 Repudiation of or Default Under Guaranty Agreement. Any
Guarantor shall revoke or attempt to revoke the Guaranty Agreement signed by
such Guarantor, or shall repudiate such Guarantor's liability thereunder or
shall be in default under the terms thereof (including any grace or cure
period).
10.1.14 Criminal Forfeiture. Any Borrower, any Subsidiary of any
Borrower or any Guarantor shall be criminally indicted or convicted under any
law that could lead to a forfeiture of any material Property of any Borrower,
any Subsidiary of any Borrower or any Guarantor.
10.1.15 Judgments. Any money judgments, writ of attachment or
similar processes (collectively, "Judgments") are issued or rendered against any
Borrower, any Subsidiary of any Borrower or any Guarantor, or any of their
respective Property (i) in the case of money judgments, in an amount of $150,000
or more for any single judgment, attachment or process or $300,000 or more for
all such judgments, attachments or processes in the aggregate, in each case in
excess of any applicable insurance with respect to which the insurer has
admitted liability, and
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(ii) in the case of non-monetary Judgments, such Judgment or Judgments (in the
aggregate) would reasonably be expected to have a Material Adverse Effect, in
each case which Judgment is not stayed, appealed, released or discharged within
30 days.
10.1.16 Canadian Pension Plans. Any of the following events or
conditions has occurred which could reasonably be expected to have a Material
Adverse Effect: (a) the withdrawal of Canadian Borrower or any of its
Subsidiaries from a Canadian Pension Plan; (b) the obligation to provide
affected parties with written notice of the intention to terminate or wind-up a
Canadian Pension Plan in whole or in part, whether voluntarily or by order of
any applicable pension regulatory authority; (c) the institution by any
applicable pension regulatory authority of any action to terminate, in whole or
in part, any Canadian Pension Plan; (d) any event or condition which would
require the appointment of a trustee or similar Person to administer a Canadian
Pension Plan; or (e) any event that would give rise to any liability or offense
under Canadian pension laws or that could jeopardize the registration of any
Canadian Pension Plan.
10.2 Acceleration of the Obligations.
Upon or at any time after the occurrence and during the continuance of
an Event of Default, (a) the Domestic Revolving Credit Commitments, the Canadian
Revolving Credit Sub-Limit, the UK Revolving Credit Sub-Limit and UK Lender's
commitment to fund the UK Term Loans shall, at the option of Administrative
Agent or Majority Lenders be terminated and/or (b) Administrative Agent or
Majority Lenders may declare all or any portion of the Obligations at once due
and payable without presentment, demand, protest or further notice by
Administrative Agent, Canadian Agent, UK Agent or any Lender, and Domestic
Borrower shall forthwith pay to Administrative Agent, and Canadian Borrower
shall forthwith pay to Canadian Agent, and UK Borrowers shall forthwith pay to
UK Agent, the full amount of such Obligations, provided, that upon the
occurrence of an Event of Default specified in Section 10.1.8 hereof, the
Domestic Revolving Credit Commitments (together with the Canadian Revolving
Credit Sub-Limit and the UK Revolving Credit Sub-Limit and UK Lender's
commitment to fund the UK Term Loans) shall automatically be terminated and all
of the Obligations shall become automatically due and payable without
declaration, notice or demand by Administrative Agent, Canadian Agent, UK Agent
or any Lender.
10.3 Other Remedies.
Upon the occurrence and during the continuance of an Event of Default,
Administrative Agent, Canadian Agent and UK Agent shall have and may exercise
from time to time the following rights and remedies:
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10.3.1 All of the rights and remedies of a secured party under
the UCC or the PPSA or under other applicable law, such additional rights as may
be afforded under the Loan Documents, and all other legal and equitable rights
to which Administrative Agent, Canadian Agent, UK Agent or Lenders may be
entitled, all of which rights and remedies shall be cumulative and shall be in
addition to any other rights or remedies contained in this Agreement or any of
the other Loan Documents, and none of which shall be exclusive.
10.3.2 The right to take immediate possession of the Collateral,
and to (a) require Borrowers and each of their Subsidiaries to assemble the
Collateral, at Borrowers' expense, and make it available to Administrative
Agent, Canadian Agent and/or UK Agent at a place designated by Administrative
Agent, Canadian Agent and/or UK Agent which is reasonably convenient to both
parties, and (b) enter any premises where any of the Collateral shall be located
and to keep and store the Collateral on said premises until sold (and if said
premises be the Property of any Borrower or any Subsidiary of any Borrower, such
Borrower agrees not to charge, or permit any of its Subsidiaries to charge,
Administrative Agent, Canadian Agent or UK Agent for storage thereof).
10.3.3 The right to sell or otherwise dispose of all or any
Collateral in its then condition, or after any further manufacturing or
processing thereof, at public or private sale or sales, with such notice as may
be required by law, in lots or in bulk, for cash or on credit, all as
Administrative Agent, Canadian Agent or UK Agent, as applicable, in its sole
discretion, may deem advisable. Administrative Agent, Canadian Agent and/or UK
Agent, as applicable, may, at Administrative Agent's, Canadian Agent's and/or UK
Agent's, as applicable, option, disclaim any and all warranties regarding the
Collateral in connection with any such sale. Each Borrower agrees that 10 days'
written notice to Borrower Representative of any public or private sale or other
disposition of Collateral shall be reasonable notice thereof, and such sale
shall be at such locations as Administrative Agent, Canadian Agent and/or UK
Agent may designate in said notice. Administrative Agent, Canadian Agent and/or
UK Agent, as applicable, shall have the right to conduct such sales on
Borrowers' or any of their Subsidiaries' premises, without charge therefor, and
such sales may be adjourned from time to time in accordance with applicable law.
Administrative Agent, Canadian Agent and/or UK Agent shall have the right to
sell, lease or otherwise dispose of the Collateral, or any part thereof, for
cash, credit or any combination thereof, and Administrative Agent, on behalf of
itself, Canadian Agent, UK Agent, Bank and Lenders, and Canadian Agent, on
behalf of itself, Canadian Lender, Canadian Participating Lenders, UK Agent, UK
Lender and UK Participating Lenders, and UK Agent, on behalf of itself, UK
Lender, UK Participating Lenders, Canadian Agent, Canadian Lender and Canadian
Participating Lenders, may purchase all or any part of the Collateral at public
or, if permitted by law, private sale and, in lieu of actual payment of such
purchase price, may set off the amount of such price
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against the Obligations. The proceeds realized from the sale of any Collateral
may be applied, after allowing one (1) Business Day for collection, first to the
costs, expenses and legal fees incurred by Administrative Agent, Canadian Agent
and/or UK Agent, as applicable, in collecting the Obligations, in enforcing the
rights of Administrative Agent, Canadian Agent, UK Agent, Bank and Lenders under
the Loan Documents and in collecting, retaking, completing, protecting,
removing, storing, advertising for sale, selling and delivering any Collateral,
second to the interest due upon any of the Obligations; and third, to the
principal of the Obligations. If any deficiency shall arise with respect to the
Domestic Obligations, Domestic Borrower and each Guarantor of the Domestic
Obligations shall remain jointly and severally liable to Agents, Bank and
Lenders therefor. If any deficiency shall arise with respect to the Canadian
Obligations each Guarantor of the Canadian Obligations shall remain jointly and
severally liable, and Canadian Borrower shall remain liable, to Canadian Agent,
Canadian Lender, Canadian Participating Lenders, UK Agent, UK Lender and UK
Participating Lenders therefor. If any deficiency shall arise with respect to
the UK Obligations each Guarantor of the UK Obligations shall remain jointly and
severally liable, and UK Borrowers shall remain jointly and severally liable, to
UK Agent, UK Lender, UK Participating Lenders, Canadian Agent, Canadian Lender
and Canadian Participating Lenders therefor.
10.3.4 Administrative Agent, with respect to the Domestic
Collateral, Canadian Agent, with respect to the Canadian Collateral, and UK
Agent, with respect to the UK Collateral, is hereby granted a license or other
right to use, without charge, Borrowers' and each of their Subsidiary's labels,
patents, copyrights, licenses, rights of use of any name, trade secrets,
tradenames, trademarks and advertising matter, or any Property of a similar
nature, as it pertains to the applicable Collateral, in completing, advertising
for sale and selling any applicable Collateral and Borrowers' and each of their
Subsidiary's rights under all licenses and all franchise agreements shall inure
to Administrative Agent's, Canadian Agent's and UK Agent's, as applicable,
benefit.
10.3.5 Administrative Agent may, at its option, require Domestic
Borrower to deposit with Administrative Agent funds equal to one hundred and
five percent (105%) of the Domestic LC Amount and, if Domestic Borrower fails to
promptly make such deposit, Administrative Agent may advance such amount as a
Domestic Revolving Credit Loan (provided that such Domestic Revolving Credit
Loan and the Domestic LC Amount shall only be counted once in determining
Domestic Availability). Each such Domestic Revolving Credit Loan shall be
secured by all of the Domestic Collateral and shall bear interest and be payable
at the same rate and in the same manner as the Domestic Base Rate Loans. Any
such deposit or advance shall be held by Administrative Agent as a reserve to
fund future payments on such Domestic LC Guaranties and future drawings against
such Domestic Letters of Credit and fees payable in connection with such
Domestic Letters of Credit. At such time as
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all Domestic LC Guaranties have been paid or terminated and all Domestic Letters
of Credit have been drawn upon or expired, any amounts remaining in such reserve
shall be applied against any outstanding Domestic Obligations, or, if all
Domestic Obligations have been indefeasibly paid in full, returned to Domestic
Borrower.
10.3.6 UK Agent may, at its option, require UK Borrowers to
deposit with UK Agent funds equal to one hundred and five percent (105%) of the
UK LC Amount and, if UK Borrowers fail to promptly make such deposit, UK Agent
may advance such amount as a UK Revolving Credit Loan (provided that such UK
Revolving Credit Loan and the UK LC Amount shall only be counted once in
determining UK Availability). Each such UK Revolving Credit Loan shall be
secured by all of the UK Collateral and shall bear interest and be payable at
the same rate and in the same manner as the UK Base Rate Loans. Any such deposit
or advance shall be held by UK Agent as a reserve to fund future payments on
such UK LC Guaranties and future drawings against such UK Letters of Credit and
fees payable in connection with such UK Letters of Credit. At such time as all
UK LC Guaranties have been paid or terminated and all UK Letters of Credit have
been drawn upon or expired, any amounts remaining in such reserve shall be
applied against any outstanding UK Obligations, or, if all UK Obligations have
been indefeasibly paid in full, returned to UK Borrowers.
10.4 Set Off and Sharing of Payments.
10.4.1 In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, during the
continuance of any Event of Default, each Domestic Lender is hereby authorized
by Domestic Borrower at any time or from time to time, with prior written
consent of Administrative Agent and with reasonably prompt subsequent notice to
Borrower Representative (any prior or contemporaneous notice to Borrowers being
hereby expressly waived) to set off and to appropriate and to apply any and all
(a) balances held by such Domestic Lender at any of its offices for the account
of Domestic Borrower or any of its Subsidiaries (other than Canadian Borrower
and UK Borrowers)(regardless of whether such balances are then due to such
Borrower or its Subsidiaries), and (b) other property at any time held or owing
by such Domestic Lender to or for the credit or for the account of Domestic
Borrower or any of its Subsidiaries (other than Canadian Borrower and UK
Borrowers), against and on account of any of the Domestic Obligations. Any
Domestic Lender exercising a right to set off shall, to the extent the amount of
any such set off exceeds its pro rata share of the amount set off, purchase for
cash (and the other Domestic Lenders shall sell) interests in each such other
Domestic Lender's pro rata share of the Domestic Obligations as would be
necessary to cause such Domestic Lender to share such excess with each other
Domestic Lender in accordance with their respective pro rata shares. Domestic
Borrower agrees, to the fullest extent permitted by law, that any
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Domestic Lender may exercise its right to set off with respect to amounts in
excess of its pro rata share of the Domestic Obligations and upon doing so shall
deliver such excess to Administrative Agent for the benefit of all Domestic
Lenders, in accordance with the Domestic Revolving Loan Percentages and the
outstanding principal amount of the Domestic Term Loan, as applicable, to be
applied to the Domestic Obligations in the manner set forth in the second
sentence of Section 3.3.1 with respect to the application of proceeds of
Domestic Collateral.
10.4.2 In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, during the
continuance of any Event of Default, Canadian Lender and each Canadian
Participating Lender is hereby authorized by Canadian Borrower at any time or
from time to time, with prior written consent of Canadian Agent and with
reasonably prompt subsequent notice to Borrower Representative (any prior or
contemporaneous notice to Borrowers being hereby expressly waived) to set off
and to appropriate and to apply any and all (a) balances held by Canadian Lender
or such Canadian Participating Lender at any of its offices for the account of
Canadian Borrower (regardless of whether such balances are then due to Canadian
Borrower), and (b) other property at any time held or owing by Canadian Lender
or such Canadian Participating Lender to or for the credit or for the account of
Canadian Borrower, against and on account of any of the Canadian Obligations.
Canadian Lender, or any Canadian Participating Lender, exercising a right to set
off shall, to the extent the amount of any such set off exceeds its Canadian
Percentage of the amount set off, purchase for cash (and Canadian Lender and the
Canadian Participating Lenders shall sell) interests in each such Lender's
Canadian Percentage of the Canadian Obligations as would be necessary to cause
Canadian Lender or such Canadian Participating Lender, as applicable, to share
such excess with Canadian Lender and each Canadian Participating Lender in
accordance with their respective Canadian Percentages of the Canadian
Obligations. Canadian Borrower agrees, to the fullest extent permitted by law,
that Canadian Lender and any Canadian Participating Lender may exercise its
right to set off with respect to amounts in excess of its Canadian Percentage of
the Canadian Obligations and upon doing so shall deliver such excess to Canadian
Agent for the benefit of Canadian Lender and all Canadian Participating Lenders,
in accordance with the Canadian Percentages, to be applied to the Canadian
Obligations in the manner set forth in the second sentence of Section 3.3.1 with
respect to the application of proceeds of Canadian Collateral.
10.4.3 In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, during the
continuance of any Event of Default, UK Lender and each UK Participating Lender
is hereby authorized by UK Borrowers at any time or from time to time, with
prior written consent of UK Agent and with reasonably prompt subsequent notice
to Borrower Representative (any prior or contemporaneous notice to Borrowers
being hereby expressly waived) to set off and to appropriate and to apply any
and all (a) balances
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held by UK Lender or such UK Participating Lender at any of its offices for the
account of UK Borrowers (regardless of whether such balances are then due to UK
Borrowers), and (b) other property at any time held or owing by UK Lender or
such UK Participating Lender to or for the credit or for the account of UK
Borrowers, against and on account of any of the UK Obligations. UK Lender, or
any UK Participating Lender, exercising a right to set off shall, to the extent
the amount of any such set off exceeds its UK Percentage of the amount set off,
purchase for cash (and UK Lender and the UK Participating Lenders shall sell)
interests in each such Lender's UK Percentage of the UK Obligations as would be
necessary to cause UK Lender or such UK Participating Lender, as applicable, to
share such excess with UK Lender and each UK Participating Lender in accordance
with their respective UK Percentages. Each UK Borrower agrees, to the fullest
extent permitted by law, that UK Lender and any UK Participating Lender may
exercise its right to set off with respect to amounts in excess of its UK
Percentage of the UK Obligations and upon doing so shall deliver such excess to
UK Agent for the benefit of UK Lender and all UK Participating Lenders, in
accordance with the UK Percentages, to be applied to the UK Obligations in the
manner set forth in the second sentence of Section 3.3.1 with respect to the
application of proceeds of UK Collateral.
10.5 Remedies Cumulative; No Waiver.
All covenants, conditions, provisions, warranties, guaranties,
indemnities, and other undertakings of Borrowers contained in this Agreement and
the other Loan Documents, or in any document referred to herein or contained in
any agreement supplementary hereto or in any schedule or in any Guaranty
Agreement given to Administrative Agent, Canadian Agent, UK Agent, Bank or any
Lender or contained in any other agreement between Bank, any Lender and any
Borrower or between Administrative Agent, Canadian Agent, UK Agent and any
Borrower heretofore, concurrently, or hereafter entered into, shall be deemed
cumulative to and not in derogation or substitution of any of the terms,
covenants, conditions, or agreements of Borrowers herein contained. The failure
or delay of Administrative Agent, Canadian Agent, UK Agent, Bank or any Lender
to require strict performance by Borrowers of any provision of this Agreement or
to exercise or enforce any rights, Liens, powers, or remedies hereunder or under
any of the aforesaid agreements or other documents or security or Collateral
shall not operate as a waiver of such performance, Liens, rights, powers and
remedies, but all such requirements, Liens, rights, powers, and remedies shall
continue in full force and effect until all Loans and other Obligations owing or
to become owing from Borrowers to Administrative Agent, Canadian Agent, UK
Agent, Bank and each Lender have been fully satisfied. None of the undertakings,
agreements, warranties, covenants and representations of Borrowers and their
Subsidiaries contained in this Agreement or any of the other Loan Documents and
no Default or Event of Default by Borrowers or any of their Subsidiaries under
this Agreement or any other Loan Document shall be deemed to
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have been suspended or waived by Lenders or Bank, unless such suspension or
waiver is by an instrument in writing specifying such suspension or waiver and
is signed by a duly authorized representative of Administrative Agent, Canadian
Agent, UK Agent or Bank, as applicable, and directed to Borrowers.
SECTION 11. THE ADMINISTRATIVE AGENT, THE CANADIAN AGENT AND THE UK AGENT
11.1 Authorization and Action.
11.1.1 Each Lender hereby appoints and authorizes Administrative
Agent, Canadian Agent and UK Agent to take such action on its behalf and to
exercise such powers under this Agreement and the other Loan Documents as are
delegated to Administrative Agent, Canadian Agent and UK Agent, as applicable,
by the terms hereof and thereof, together with such powers as are reasonably
incidental thereto. Each Lender hereby acknowledges that neither Administrative
Agent, Canadian Agent nor UK Agent has by reason of this Agreement assumed a
fiduciary relationship in respect of any Lender. In performing its functions and
duties under this Agreement, Administrative Agent, Canadian Agent and UK Agent
shall act solely as agent of Lenders and shall not assume, or be deemed to have
assumed, any obligation toward, or relationship of agency or trust with or for,
any Borrower or any of its Subsidiaries. As to any matters not expressly
provided for by this Agreement and the other Loan Documents (including without
limitation enforcement and collection of the Notes), Administrative Agent,
Canadian Agent and UK Agent may, but shall not be required to, exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Majority Lenders, whenever such instruction shall
be requested by Administrative Agent, Canadian Agent or UK Agent or required
hereunder, or a greater or lesser number of Lenders if so required hereunder,
and such instructions shall be binding upon all Lenders; provided, that
Administrative Agent, Canadian Agent and UK Agent shall be fully justified in
failing or refusing to take any action which exposes Administrative Agent,
Canadian Agent and/or UK Agent to any liability or which is contrary to this
Agreement, the other Loan Documents or applicable law, unless Administrative
Agent, Canadian Agent and/or UK Agent is indemnified to its satisfaction by the
other Lenders against any and all liability and expense which it may incur by
reason of taking or continuing to take any such action. If Administrative Agent,
Canadian Agent and/or UK Agent seeks the consent or approval of the Majority
Lenders (or a greater or lesser number of Lenders as required in this
Agreement), with respect to any action hereunder, Administrative Agent, Canadian
Agent and/or UK Agent shall send notice thereof to each Lender and shall notify
each Lender at any time that the Majority Lenders (or such greater or lesser
number of Lenders) have instructed Administrative Agent, Canadian Agent and/or
UK Agent to act or refrain from acting pursuant hereto.
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11.1.2 Each Lender hereby authorizes Administrative Agent to
delegate to Canadian Agent and UK Agent any and all of its obligations under
this Agreement and the other Loan Documents with respect to all actions required
to be taken in Canada and the United Kingdom, respectively, of any kind
whatsoever. Canadian Agent and UK Agent, when acting pursuant to the authority
granted hereunder, shall have all the protections, indemnities, rights and
powers granted to Administrative Agent under this Agreement and any other Loan
Document.
11.2 Administrative Agent's, Canadian Agent's and UK Agent's
Reliance, Etc.
Neither Administrative Agent, Canadian Agent, UK Agent, any Affiliate
of Administrative Agent, Canadian Agent or UK Agent, nor any of their respective
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with this Agreement or
the other Loan Documents, except for its or their own gross negligence or
willful misconduct. Without limitation of the generality of the foregoing,
Administrative Agent, Canadian Agent and UK Agent: (a) may treat each Lender
party hereto as the holder of Obligations until Administrative Agent receives
written notice of the assignment or transfer of such Lender's portion of the
Obligations signed by such Lender and in form reasonably satisfactory to
Administrative Agent; (b) may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts, (c) makes no warranties or
representations to any Lender and shall not be responsible to any Lender for any
recitals, statements, warranties or representations made in or in connection
with this Agreement or any other Loan Documents; (d) shall not have any duty
beyond Administrative Agent's, Canadian Agent's or UK Agent's customary
practices in respect of loans in which Administrative Agent, Canadian Agent or
UK Agent is the only lender, to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of this Agreement or the
other Loan Documents on the part of any Borrower or any of their Subsidiaries,
to inspect the property (including the books and records) of any Borrower or any
of their Subsidiaries, to monitor the financial condition of any Borrower or any
of their Subsidiaries or to ascertain the existence or possible existence or
continuation of any Default or Event of Default; (e) shall not be responsible to
any Lender for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or the other Loan Documents
or any other instrument or document furnished pursuant hereto or thereto; (f)
shall not be liable to any Lender for any action taken, or inaction, by
Administrative Agent, Canadian Agent or UK Agent upon the instructions of
Majority Lenders pursuant to Section 11.1 hereof or refraining to take any
action pending such instructions; (g) shall not be liable for any apportionment
or distributions of payments made by it in good faith pursuant to Section 3
hereof; (h) shall incur no liability under
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or in respect of this Agreement or the other Loan Documents by acting upon any
notice, consent, certificate, message or other instrument or writing (which may
be by telephone, facsimile, telegram, cable or telex) believed in good faith by
it to be genuine and signed or sent by the proper party or parties; and (i) may
assume that no Event of Default has occurred and is continuing, unless
Administrative Agent, Canadian Agent or UK Agent, as applicable, has actual
knowledge of the Event of Default, has received notice from Borrowers or
Borrowers' independent certified public accountants stating the nature of the
Event of Default, or has received notice from a Lender stating the nature of the
Event of Default and that such Lender considers the Event of Default to have
occurred and to be continuing. In the event any apportionment or distribution
described in clause (g) above is determined to have been made in error, the sole
recourse of any Person to whom payment was due but not made shall be to recover
from the recipients of such payments any payment in excess of the amount to
which they are determined to have been entitled.
11.3 Fleet, Fleet Canada, Fleet UK and Affiliates.
With respect to its commitment hereunder to make Loans, Fleet, Fleet
Canada and Fleet UK shall have the same rights and powers under this Agreement
and the other Loan Documents as any other Lender and may exercise the same as
though it were not Administrative Agent, Canadian Agent and UK Agent,
respectively; and the terms "Lender," "Lenders" or "Majority Lenders" shall,
unless otherwise expressly indicated, include Fleet, Fleet Canada and Fleet UK
in its individual capacity as a Lender. Fleet, Fleet Canada, Fleet UK and its
Affiliates may lend money to, and generally engage in any kind of business with,
Borrowers, Borrowers' Subsidiaries, and any Person who may do business with or
own Securities of Borrowers all as if Fleet, Fleet Canada and Fleet UK were not
Administrative Agent, Canadian Agent and UK Agent, respectively, and without any
duty to account therefor to any other Lender.
11.4 Lender Credit Decision.
Each Lender acknowledges that it has, independently and without
reliance upon Administrative Agent, Canadian Agent or UK Agent or any other
Lender and based on the financial statements referred to herein and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon
Administrative Agent, Canadian Agent or UK Agent 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. Neither Administrative Agent, Canadian Agent nor UK Agent shall
have any duty or responsibility, either initially or on an ongoing basis, to
provide any Lender with any credit or other similar information regarding
Borrowers or any of their Subsidiaries.
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11.5 Indemnification.
Lenders agree to indemnify Administrative Agent, Canadian Agent and UK
Agent (to the extent not reimbursed by Borrowers), in accordance with their
respective Aggregate Percentages, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against Administrative Agent, Canadian Agent and/or
UK Agent in any way relating to or arising out of this Agreement or any other
Loan Document or any action taken or omitted by Administrative Agent, Canadian
Agent and/or UK Agent under this Agreement; provided that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from Administrative Agent's, Canadian Agent's or UK Agent's gross negligence or
willful misconduct. Without limitation of the foregoing, each Lender agrees to
reimburse Administrative Agent, Canadian Agent and UK Agent promptly upon demand
for its ratable share, as set forth above, of any out-of-pocket expenses
(including legal fees) and allocated costs of audits and appraisals incurred by
Administrative Agent, Canadian Agent and/or UK Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiation, legal proceedings or otherwise) of, or
legal advice in respect of rights or responsibilities under, this Agreement and
each other Loan Document, to the extent that Administrative Agent, Canadian
Agent and/or UK Agent is not reimbursed for such expenses by Borrowers. The
obligations of Lenders under this Section 11.5 shall survive the payment in full
of all Obligations and the termination of this Agreement. If after payment and
distribution of any amount by Administrative Agent, Canadian Agent and/or UK
Agent to Lenders, any Lender or any other Person, including any Borrower, any
Subsidiary of any Borrower, any creditor of any Borrower or any of its
Subsidiaries, a liquidator, administrator or trustee in bankruptcy, recovers
from Administrative Agent, Canadian Agent and/or UK Agent any amount found to
have been wrongfully paid to Administrative Agent, Canadian Agent and/or UK
Agent or disbursed by Administrative Agent, Canadian Agent and/or UK Agent to
Lenders, then Lenders, in accordance with their respective Aggregate
Percentages, shall reimburse Administrative Agent, Canadian Agent and/or UK
Agent for all such amounts.
11.6 Rights and Remedies to be Exercised by Administrative Agent,
Canadian Agent and UK Agent Only.
Each Lender agrees that, except as set forth in Section 10.4, no
Lender shall have any right individually (a) to realize upon the security
created by this Agreement or any other Loan Document, (b) to enforce any
provision of this Agreement or any other Loan Document, or (c) to make demand
under this Agreement or any other Loan Document.
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11.7 Agency Provisions Relating to Collateral.
Each Lender authorizes and ratifies Administrative Agent's, Canadian
Agent's and UK Agent's entry into this Agreement and the Security Documents for
the benefit of Lenders. Each Lender agrees that any action taken by
Administrative Agent, Canadian Agent and/or UK Agent with respect to the
Collateral in accordance with the provisions of this Agreement or the Security
Documents, and the exercise by Administrative Agent, Canadian Agent and/or UK
Agent of the powers set forth herein or therein, together with such other powers
as are reasonably incidental thereto, shall be authorized and binding upon all
Lenders. Administrative Agent, Canadian Agent and/or UK Agent, as the case may
be, are hereby authorized on behalf of all Lenders, without the necessity of any
notice to or further consent from any Lender, from time to time prior to an
Event of Default, to take any action with respect to any Collateral or the Loan
Documents which may be necessary to perfect and maintain perfected
Administrative Agent's Liens upon the Domestic Collateral, for its and Canadian
Agent's, UK Agent's, Bank's and the Lenders' benefit, and Canadian Agent's Liens
upon the Canadian Collateral, for its, Canadian Lender's, Canadian Participating
Lenders', UK Agent's, UK Lender's and UK Participating Lenders' benefit, and UK
Agent's Liens upon the UK Collateral, for its, UK Lender's, UK Participating
Lenders', Canadian Agent's, Canadian Lender's and Canadian Participating
Lenders' benefit. Lenders hereby irrevocably authorize Administrative Agent,
Canadian Agent and UK Agent, as the case may be, at its option and in its
discretion, to release any Lien granted to or held by Administrative Agent,
Canadian Agent or UK Agent upon any Collateral (a) upon termination of this
Agreement and payment and satisfaction of all Obligations; or (b) constituting
property being sold or disposed of if the Borrower Representative certifies to
Administrative Agent, Canadian Agent and UK Agent, as the case may be, that the
sale or disposition is made in compliance with Section 8.2.10 hereof (and
Administrative Agent, Canadian Agent and UK Agent may rely conclusively on any
such certificate, without further inquiry); or (c) constituting property in
which the applicable Borrower or Subsidiary of a Borrower owned no interest at
the time the Lien was granted or at any time thereafter; or (d) in connection
with any foreclosure sale or other disposition of Collateral after the
occurrence and during the continuation of an Event of Default or (e) if
approved, authorized or ratified in writing by Administrative Agent at the
direction of all Lenders in the case of Domestic Collateral, and by Canadian
Agent at the direction of Canadian Lender, Canadian Participating Lenders, UK
Lender and UK Participating Lenders in the case of Canadian Collateral, and by
UK Agent at the direction of UK Lender, UK Participating Lenders, Canadian
Lender and Canadian Participating Lenders in the case of UK Collateral. Upon
request by Administrative Agent, Canadian Agent or UK Agent, as the case may be,
at any time, Lenders will confirm in writing Administrative Agent's, Canadian
Agent's or UK Agent's, as the case may be, authority to release particular types
or items of Collateral pursuant hereto. Neither Administrative Agent, Canadian
Agent nor UK Agent shall have any obligation whatsoever to any Lender or
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to any other Person to assure that the Collateral exists or is owned by the
applicable Borrowers or Subsidiaries of Borrowers or is cared for, protected or
insured or has been encumbered or that the Liens granted to Administrative
Agent, Canadian Agent or UK Agent, as the case may be, herein or pursuant to the
Security Documents 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 its rights,
authorities and powers granted or available to Administrative Agent, Canadian
Agent or UK Agent, as the case may be, in this Section 11.7 or in any of the
Loan Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission or event related thereto, Administrative Agent,
Canadian Agent or UK Agent, as the case may be, may act in any manner it may
deem appropriate, in its sole discretion, but consistent with the provisions of
this Agreement, including given Administrative Agent's, Canadian Agent's or UK
Agent's own interest in the Collateral as a Lender and that neither
Administrative Agent, Canadian Agent nor UK Agent shall have any duty or
liability whatsoever to any Lender.
11.8 Administrative Agent's, Canadian Agent's and UK Agent's Right to
Purchase Commitments.
Administrative Agent, Canadian Agent and UK Agent shall have the
right, but shall not be obligated, at any time upon written notice to any Lender
and with the consent of such Lender, which may be granted or withheld in such
Lender's sole discretion, to purchase for Administrative Agent's, Canadian
Agent's or UK Agent's, as the case may be, own account all of such Lender's
interests in this Agreement, the other Loan Documents and the Obligations, for
the face amount of the outstanding Obligations owed to such Lender, including
without limitation all accrued and unpaid interest and fees.
11.9 Right of Sale, Assignment, Participations.
Each Borrower hereby consents to any Lender's participation, sale,
assignment, transfer or other disposition, at any time or times hereafter, of
this Agreement and any of the other Loan Documents, or of any portion hereof or
thereof, including, without limitation, such Lender's rights, title, interests,
remedies, powers, and duties hereunder or thereunder subject to the terms and
conditions set forth below:
11.9.1 Sales, Assignments. Each Lender hereby agrees that, with
respect to any sale or assignment (other than pursuant to Section 3.2.6 or
3.2.7) (a) no such sale or assignment shall be for an amount of less than
$5,000,000 (or the aggregate principal amount of Loans owing to such Lender, if
less), (b) each such sale or assignment shall be made on terms and conditions
which are customary in the industry at the time of the transaction, (c)
Administrative Agent and, in the absence of a Default or Event of Default,
Borrowers, must consent, such consent not to be
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unreasonably withheld, to each such assignment to a Person that is not an
original signatory to this Agreement, and (d) the assignee Lender shall pay to
the Administrative Agent a processing and recordation fee of $3,500 and any
out-of-pocket legal fees and expenses incurred by the Administrative Agent in
connection with any such sale or assignment. After such sale or assignment has
been consummated (i) the assignee Lender thereupon shall become a "Lender" for
all purposes of this Agreement and (ii) the assigning Lender shall have no
further liability for funding Loans under this Agreement to the extent such
liability was assumed by such other Lender.
11.9.2 Participations. Any Lender may grant participations in its
extensions of credit hereunder to any other Lender or other lending institution
(a "Participant"), provided that (a) no such participation shall be for an
amount of less than $5,000,000 (or the aggregate principal amount of Loans owing
to such Lender, if less), (b) no Participant shall thereby acquire any direct
rights under this Agreement, (c) no Participant shall be granted any right to
consent to any amendment, except to the extent any of the same pertain to (i)
reducing the aggregate principal amount of, or interest rate on, or fees
applicable to, any Loan in which such Participant has an interest, or (ii)
extending the final stated maturity of any Loan in which such Participant has an
interest or the stated maturity of any portion of any payment of principal of,
or interest or fees applicable to, any of the Loans; provided, that the rights
described in this subclause (ii) shall not be deemed to include the right to
consent to any amendment with respect to or which has the effect of requiring
any mandatory prepayment of any portion of any Loan or any amendment or waiver
of any Default or Event of Default, (d) no sale of a participation in extensions
of credit shall in any manner relieve the originating Lender of its obligations
hereunder, (e) the originating Lender shall remain solely responsible for the
performance of such obligations, (f) Borrowers and the Administrative Agent
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, (g) in no event shall any financial
institution purchasing the participation grant a participation in its
participation interest in the Loans without the prior written consent of
Administrative Agent, and, in the absence of a Default or an Event of Default,
Borrowers, which consents shall not unreasonably be withheld and (h) all amounts
payable by Borrowers hereunder shall be determined as if the originating Lender
had not sold any such participation. For greater certainty, the provisions of
this Section 11.9.2 do not apply to the Canadian Participating Lenders or UK
Participating Lenders in their capacities as such.
11.9.3 Certain Agreements of Borrowers. Each Borrower agrees that
(a) it will use its reasonable efforts to assist and cooperate with each Lender
in any manner reasonably requested by such Lender to effect the sale of
participations in or assignments of any of the Loan Documents or any portion
thereof or interest therein,
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including, without limitation, assisting in the preparation of appropriate
disclosure documents and making members of management available at reasonable
times to meet with and answer questions of potential assignees and Participants;
and (b) subject to the provisions of Section 12.14 hereof, such Lender may
disclose credit information regarding such Borrower and its Subsidiaries to any
potential Participant or assignee.
11.10 Amendment.
No amendment or waiver of any provision of this Agreement or any other
Loan Document (including without limitation any Note), nor consent to any
departure by Borrowers or any of their Subsidiaries therefrom, shall in any
event be effective unless the same shall be in writing and signed by the
Majority Lenders and Borrower Representative and/or such Subsidiaries of
Borrowers, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided, that
no amendment, waiver or consent shall be effective, unless (a) in writing and
signed by each Lender, to do any of the following: (i) increase or decrease the
aggregate Domestic Revolving Credit Commitments, the Canadian Revolving Credit
Sub-Limit, the UK Revolving Credit Sub-Limit, the amount which may be borrowed
as the CCEL Term Loan or the CLU Term Loan, or any Lender's Domestic Revolving
Credit Commitment, or its Canadian Percentage, or its UK Percentage, (ii) reduce
the principal of, or interest on, any amount payable hereunder or under any
Note, other than those payable only to Fleet in its capacity as Administrative
Agent, which may be reduced by Fleet unilaterally, and other than those payable
only to Fleet Canada in its capacity as Canadian Agent, which may be reduced by
Fleet Canada unilaterally, and other than those payable only to Fleet UK in its
capacity as UK Agent, which may be reduced by Fleet UK unilaterally, (iii)
postpone any date fixed for any payment of principal of, or interest on, any
amounts payable hereunder or under any Note, other than those payable only to
Fleet in its capacity as Administrative Agent, which may be postponed by Fleet
unilaterally and other than those payable only to Fleet Canada in its capacity
as Canadian Agent, which may be postponed by Fleet Canada unilaterally, and
other than those payable only to Fleet UK in its capacity as UK Agent, which may
be postponed by Fleet UK unilaterally, (iv) reduce the number of Lenders that
shall be required for Lenders or any of them to take any action hereunder, (v)
release or discharge any Person liable for the performance of any obligations of
Borrowers hereunder or under any of the Loan Documents, (vi) amend any provision
of this Agreement that requires the consent of all Lenders or consent to or
waive any breach thereof, (vii) amend the definition of the term "Majority
Lenders", (viii) amend this Section 11.10 or (ix) release any substantial
portion of the Collateral, unless otherwise permitted pursuant to Section 11.7
hereof or the other terms of this Agreement; or (b) in writing and signed by
Administrative Agent, Canadian Agent or UK Agent, as the case may be, in
addition to the Lenders required above to take such action, to affect the rights
or duties of Administrative
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Agent, Canadian Agent or UK Agent, as the case may be, under this Agreement, any
Note or any other Loan Document.
11.11 Resignation of Administrative Agent, Canadian Agent or UK Agent;
Appointment of Successor.
The Administrative Agent, Canadian Agent or UK Agent may resign as
Administrative Agent, Canadian Agent or UK Agent, as the case may be, by giving
not less than thirty (30) days' prior written notice to the Lenders and Borrower
Representative. If the Administrative Agent, Canadian Agent or UK Agent shall
resign under this Agreement, then, (a) subject to the consent of Borrower
Representative (which consent shall not be unreasonably withheld and which
consent shall not be required during any period in which a Default or an Event
of Default exists), the Majority Lenders shall appoint from among the Lenders a
successor Administrative Agent, Canadian Agent or UK Agent for the Lenders or
(b) if a successor Administrative Agent, Canadian Agent or UK Agent shall not be
so appointed and approved within the thirty (30) day period following the
Administrative Agent's, Canadian Agent's or UK Agent's notice to the Lenders and
Borrower Representative of its resignation, then the Administrative Agent,
Canadian Agent or UK Agent, as the case may be, shall appoint a successor
Administrative Agent, Canadian Agent or UK Agent, as the case may be, who shall
serve as Administrative Agent, Canadian Agent or UK Agent, as the case may be,
until such time as the Majority Lenders appoint a successor Administrative
Agent, Canadian Agent or UK Agent, as the case may be, subject to Borrower
Representative's consent as set forth above. Upon its appointment, such
successor Administrative Agent, Canadian Agent or UK Agent, as the case may be,
shall succeed to the rights, powers and duties of the Administrative Agent,
Canadian Agent or UK Agent, as the case may be, and the term "Administrative
Agent", "Canadian Agent" or "UK Agent", as the case may be, shall mean such
successor effective upon its appointment, and the former Administrative Agent's,
Canadian Agent's or UK Agent's rights, powers and duties as Administrative
Agent, Canadian Agent or UK Agent, as the case may be, shall be terminated
without any other or further act or deed on the part of such former
Administrative Agent, Canadian Agent or UK Agent, as the case may be, or any of
the parties to this Agreement. After the resignation of any Administrative
Agent, Canadian Agent or UK Agent hereunder, the provisions of this Section 11
shall inure to the benefit of such former Administrative Agent, Canadian Agent
or UK Agent, as the case may be, and such former Administrative Agent, Canadian
Agent or UK Agent, as the case may be, shall not by reason of such resignation
be deemed to be released from liability for any actions taken or not taken by it
while it was an Administrative Agent, Canadian Agent or UK Agent, as the case
may be, under this Agreement. Notwithstanding the foregoing, without the consent
of Lenders or the Borrowers, an Affiliate of Fleet Canada or Fleet may be
appointed by Fleet Canada to replace Fleet Canada as
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Canadian Agent hereunder; provided, that, such replacement Canadian Agent shall
provide prior notice to Borrowers of such replacement.
SECTION 12. MISCELLANEOUS
12.1 Power of Attorney.
Domestic Borrower hereby irrevocably designates, makes, constitutes
and appoints Administrative Agent (and all Persons designated by Administrative
Agent) as Domestic Borrower's true and lawful attorney (and agent-in-fact),
solely with respect to the matters set forth in this Section 12.1, and
Administrative Agent, or Administrative Agent's agent, may, without notice to
Domestic Borrower and in Domestic Borrower's or Administrative Agent's name, but
at the cost and expense of Domestic Borrower, do the following, and Canadian
Borrower hereby irrevocably designates, makes, constitutes and appoints Canadian
Agent (and all Persons designated by Canadian Agent) as Canadian Borrower's true
and lawful attorney (and agent-in-fact), solely with respect to the matters set
forth in this Section 12.1, and Canadian Agent, or Canadian Agent's agent, may,
without notice to Canadian Borrower and in Canadian Borrower's or Canadian
Agent's name, but at the cost and expense of Canadian Borrower, do the
following, and each UK Borrower hereby irrevocably designates, makes,
constitutes and appoints UK Agent (and all Persons designated by UK Agent) as
such UK Borrower's true and lawful attorney (and agent-in-fact), solely with
respect to the matters set forth in this Section 12.1, and UK Agent may, or UK
Agent's agent, may, without notice to UK Borrowers and in either UK Borrower's
or UK Agent's name, but at the cost and expense of UK Borrowers, do the
following:
12.1.1 At such time or times as Administrative Agent, Canadian
Agent or UK Agent, as the case may be, or said agent, in its sole discretion,
may determine, endorse such Borrower's name on any checks, notes, acceptances,
drafts, money orders or any other evidence of payment or proceeds of the
Collateral which come into the possession of Administrative Agent, Canadian
Agent or UK Agent, as the case may be, or under Administrative Agent's, Canadian
Agent's or UK Agent's, as the case may be, control.
12.1.2 At such time or times upon or after the occurrence and
during the continuance of an Event of Default (provided that the occurrence of
an Event of Default shall not be required with respect to clauses (d) and (f)
below), as Administrative Agent, Canadian Agent or UK Agent, as the case may be,
or its agent in its sole discretion may determine: (a) demand payment of the
Accounts from the Account Debtors, enforce payment of the Accounts by legal
proceedings or otherwise, and generally exercise all of such Borrower's rights
and remedies with respect to the
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collection of the Accounts; (b) settle, adjust, compromise, discharge or release
any of the Accounts or other Collateral or any legal proceedings brought to
collect any of the Accounts or other Collateral; (c) sell or assign any of the
Accounts and other Collateral upon such terms, for such amounts and at such time
or times as Administrative Agent, Canadian Agent or UK Agent, as the case may
be, deems advisable; (d) take control, in any manner, of any item of payment or
proceeds relating to any Collateral; (e) prepare, file and sign such Borrower's
name to a proof of claim in bankruptcy or similar document against any Account
Debtor or to any notice of lien, assignment or satisfaction of lien or similar
document in connection with any of the Collateral; (f) receive, open and dispose
of all mail addressed to such Borrower; (g) notify postal authorities to change
the address for delivery thereof to such address as Administrative Agent,
Canadian Agent or UK Agent, as applicable, may designate; (h) endorse the name
of such Borrower upon any of the items of payment or proceeds relating to any
Collateral and deposit the same to the account of Administrative Agent, Canadian
Agent or UK Agent, as the case may be, on account of the Obligations; (i)
endorse the name of such Borrower upon any chattel paper, document, instrument,
invoice, freight xxxx, xxxx of lading or similar document or agreement relating
to the Accounts, Inventory and any other Collateral; (j) use such Borrower's
stationery and sign the name of such Borrower to verifications of the Accounts
and notices thereof to Account Debtors; (k) use the information recorded on or
contained in any data processing equipment and computer hardware and software
relating to the Accounts, Inventory, Equipment and any other Collateral; (l)
make and adjust claims under policies of insurance; and (m) do all other acts
and things necessary, in Administrative Agent's, Canadian Agent's or UK Agent's,
as the case may be, determination, to fulfill such Borrower's obligations under
this Agreement.
The power of attorney granted hereby shall constitute a power coupled
with an interest and shall be irrevocable.
12.2 Indemnity.
Each Borrower hereby agrees to indemnify Administrative Agent,
Canadian Agent, UK Agent, Bank and each Lender (and each of their Affiliates,
officers, directors, employees, agents and advisors (each an "Indemnitee")) and
hold each Indemnitee harmless from and against any liability, expense, loss,
damage, suit, action or proceeding ever suffered or incurred by any Indemnitee
(including reasonable legal fees and expenses) as the result of (a) Borrowers'
or their Subsidiaries' failure to observe, perform or discharge Borrowers' or
their Subsidiaries' duties hereunder or under the other Loan Documents, or (b)
any suit, action, proceeding or investigation arising out of or related to the
Loan Documents and the transactions contemplated thereby (except any
liabilities, expenses, losses, damages, suits, actions or proceedings identified
above which (i) are determined by a final, nonappealable judgment by a court of
competent jurisdiction to have resulted from the gross
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negligence or intentional misconduct of any such Indemnitee or (ii) relate to a
dispute between any Borrower or its Subsidiaries and any Indemnitee with respect
to the Loan Documents and which dispute is determined adversely to such
Indemnitee (and is not the subject of any settlement (unless the settlement
provides for a similar exclusion from Borrowers' indemnification obligations
hereunder)) by a final, nonappealable judgment by a court of competent
jurisdiction). In addition, each Borrower shall defend the Indemnitees against
and save them harmless from all claims of any Person with respect to the
Collateral (except those determined by a final, nonappealable judgment by a
court of competent jurisdiction to have resulted from the gross negligence or
intentional misconduct of any such Indemnitee). Without limiting the generality
of the foregoing, these indemnities shall extend to any claims asserted against
any Indemnitee by any Person under any Environmental Laws with respect to the
Owned Properties by reason of any Borrower's or any other Person's failure to
comply with laws applicable to solid or hazardous waste materials or other toxic
substances. Notwithstanding any contrary provision in this Agreement, the
obligations of Borrowers under this Section 12.2 shall survive the payment in
full of the Obligations and the termination of this Agreement.
12.3 Sale of Interest.
No Borrower may sell, assign or transfer any interest in this
Agreement, any of the other Loan Documents, or any of the Obligations, or any
portion thereof, including, without limitation, such Borrower's rights, title,
interests, remedies, powers, and duties hereunder or thereunder.
12.4 Severability.
Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
12.5 Successors and Assigns.
This Agreement, the Other Agreements and the Security Documents shall
be binding upon and inure to the benefit of the successors and assigns of each
Borrower, Administrative Agent, Canadian Agent, UK Agent, Bank and each Lender
permitted under Section 11.9 or Section 11.11 hereof.
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12.6 Cumulative Effect; Conflict of Terms.
The provisions of the Other Agreements and the Security Documents are
hereby made cumulative with the provisions of this Agreement. Except as
otherwise provided in any of the other Loan Documents by specific reference to
the applicable provision of this Agreement, if any provision contained in this
Agreement is in direct conflict with, or inconsistent with, any provision in any
of the other Loan Documents, the provision contained in this Agreement shall
govern and control.
12.7 Execution in Counterparts.
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which
counterparts taken together shall constitute but one and the same instrument.
12.8 Notices.
Except as otherwise provided herein, all notices, requests and demands
to or upon a party hereto, to be effective, shall be in writing and shall be
sent by certified or registered mail, return receipt requested, by personal
delivery against receipt, by overnight courier or by facsimile and, unless
otherwise expressly provided herein, shall be deemed to have been validly
served, given, delivered or received immediately when delivered against receipt,
one Business Day after deposit with an overnight courier or, in the case of
facsimile notice, when sent, addressed in the case of each Lender to such Lender
at such Lender's address set forth on the signature page to this Agreement (or
set forth in the applicable assignment agreement by which such Lender became a
Lender under this Agreement), and with respect to the following Persons, as
follows:
If to Administrative Agent: Fleet Capital Corporation
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Portfolio Manager
Facsimile No.: (000) 000-0000
With a copy to: Sheppard, Mullin, Xxxxxxx & Hampton LLP
000 Xxxxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Facsimile No.: (000) 000-0000
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If to Canadian Agent: Fleet Capital Canada Corporation
000 Xxx Xxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx
X0X 0X0 Xxxxxx
Attention: General Manager
Facsimile No.: (000) 000-0000
With a copy to: Fleet Capital Corporation
000 Xxxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Account Administration Manager
Facsimile No.: (000) 000-0000
And with a copy to: Fleet Capital Corporation
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Portfolio Manager
Facsimile No.: (000) 000-0000
If to UK Agent: Fleet National Bank, London U.K. branch
00 Xxxxxxxx Xxxxxx
Xxxxxx
XX0X XXX
Xxxxxx Xxxxxxx
Attention: Manager
Facsimile No.: 02072225649
With a copy to: Fleet Capital Corporation
000 Xxxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Account Administration Manager
Facsimile No.: (000) 000-0000
And with a copy to: Fleet Capital Corporation
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Portfolio Manager
Facsimile No.: (000) 000-0000
If to Borrowers or Borrower c/x Xxxxxxxx Commercial Corporation
Representative: 00000 Xxxx Xxxx
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Representative: Xxxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxx Xxxxxxx
Facsimile No.: (000) 000-0000
With a copy to: Irell & Xxxxxxx LLP
1800 Avenue of the Stars, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx
Facsimile No.: (000) 000-0000
or to such other address as each party may designate for itself by notice given
in accordance with this Section 12.8; provided, however, that any notice,
request or demand to or upon Administrative Agent, Canadian Agent, UK Agent or a
Lender pursuant to Section 3.1.1 or 4.2.2 hereof shall not be effective until
received by Administrative Agent, Canadian Agent, UK Agent or such Lender.
12.9 Consent.
Whenever Administrative Agent's, Canadian Agent's, UK Agent's or
Majority Lenders' consent is required to be obtained under this Agreement, any
of the Other Agreements or any of the Security Documents as a condition to any
action, inaction, condition or event, except as otherwise specifically provided
herein, Administrative Agent, Canadian Agent, UK Agent or Majority Lenders, as
applicable, shall be authorized to give or withhold such consent in their sole
and absolute discretion.
12.10 Credit Inquiries.
Subject to the confidentiality provisions of Section 12.14 hereof,
each Borrower hereby authorizes and permits Administrative Agent, Canadian
Agent, UK Agent and each Lender to respond to usual and customary credit
inquiries from third parties concerning such Borrower or any of its
Subsidiaries.
12.11 Time of Essence.
Time is of the essence of this Agreement, the Other Agreements and the
Security Documents.
12.12 Entire Agreement.
This Agreement and the other Loan Documents, together with all other
instruments, agreements and certificates executed by the parties in connection
therewith or with reference thereto, embody the entire understanding and
agreement
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between the parties hereto and thereto with respect to the subject matter hereof
and thereof and supersede all prior agreements, understandings and inducements,
whether express or implied, oral or written.
12.13 Interpretation.
No provision of this Agreement or any of the other Loan Documents
shall be construed against or interpreted to the disadvantage of any party
hereto by any court or other governmental or judicial authority by reason of
such party having or being deemed to have structured or dictated such provision.
12.14 Confidentiality.
Administrative Agent, Canadian Agent, UK Agent and each Lender (and
each of their officers, directors and employees) shall hold all nonpublic
information obtained pursuant to the requirements of this Agreement and the
other Loan Documents in confidence in accordance with Administrative Agent's,
Canadian Agent's, UK Agent's and such Lender's customary procedures for handling
confidential information of this nature and in accordance with safe and sound
banking practices, shall use such information solely for the purposes
contemplated by this Agreement and in any event may make disclosure reasonably
required by a prospective participant or assignee in connection with the
contemplated participation or assignment or as required by any governmental
authority or representative thereof (provided that, if possible, Administrative
Agent shall provide reasonable prior notice of any such disclosure) or as
compelled by legal process (provided that, if possible, Administrative Agent
shall provide reasonable prior notice of any such disclosure) and shall require
any such participant or assignee to agree to comply with this Section 12.14.
12.15 Judgment.
If, for the purposes of obtaining judgment in any court, it is
necessary to convert a sum due hereunder or under any other Loan Document in one
currency into another currency, the rate of exchange used shall be that at which
in accordance with normal banking procedures the Administrative Agent could
purchase the first currency with such other currency on the Business Day
preceding that on which final judgment is given. The obligation of each Borrower
in respect of any such sum due from it to the Administrative Agent, Canadian
Agent, UK Agent or any Lender hereunder or under the other Loan Documents shall,
notwithstanding any judgment in a currency (the "Judgment Currency") other than
that in which such sum is denominated in accordance with the applicable
provisions of this Agreement (the "Agreement Currency"), be discharged only to
the extent that on the Business Day following receipt by the Administrative
Agent, Canadian Agent, UK Agent or such Lender of any sum adjudged to be so due
in the Judgment Currency, the Administrative Agent, Canadian Agent, UK Agent or
such Lender may in accordance with normal banking
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procedures purchase the Agreement Currency with the Judgment Currency. If the
amount of the Agreement Currency so purchased is less than the sum originally
due to the Administrative Agent, Canadian Agent, UK Agent or such Lender in the
Agreement Currency, each Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Administrative Agent,
Canadian Agent, UK Agent or such Lender or the Person to whom such obligation
was owing against such loss. If the amount of the Agreement Currency so
purchased is greater than the sum originally due to the Administrative Agent,
Canadian Agent, UK Agent or such Lender in such currency, the Administrative
Agent, Canadian Agent, UK Agent or such Lender agrees to return the amount of
any excess to the applicable Borrower (or to any other Person who may be
entitled thereto under applicable law).
12.16 GOVERNING LAW; CONSENT TO FORUM.
THIS AGREEMENT HAS BEEN NEGOTIATED AND DELIVERED IN AND SHALL BE
DEEMED TO HAVE BEEN MADE IN LOS ANGELES, CALIFORNIA. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CALIFORNIA; PROVIDED, HOWEVER, THAT IF ANY OF THE COLLATERAL SHALL BE LOCATED IN
ANY JURISDICTION OTHER THAN CALIFORNIA, THE LAWS OF SUCH JURISDICTION SHALL
GOVERN THE METHOD, MANNER AND PROCEDURE FOR FORECLOSURE OF, OR REALIZATION
UNDER, ADMINISTRATIVE AGENT'S, CANADIAN AGENT'S OR UK AGENT'S LIEN UPON SUCH
COLLATERAL AND THE ENFORCEMENT OF ADMINISTRATIVE AGENT'S, CANADIAN AGENT'S OR UK
AGENT'S OTHER REMEDIES IN RESPECT OF SUCH COLLATERAL TO THE EXTENT THAT THE LAWS
OF SUCH JURISDICTION ARE DIFFERENT FROM OR INCONSISTENT WITH THE LAWS OF
CALIFORNIA. AS PART OF THE CONSIDERATION FOR NEW VALUE RECEIVED, AND REGARDLESS
OF ANY PRESENT OR FUTURE DOMICILE OR PRINCIPAL PLACE OF BUSINESS OF ANY
BORROWER, ADMINISTRATIVE AGENT, CANADIAN AGENT, UK AGENT OR ANY LENDER, EACH
BORROWER HEREBY CONSENTS AND AGREES THAT THE SUPERIOR COURT OF LOS ANGELES
COUNTY, CALIFORNIA, OR, AT ADMINISTRATIVE AGENT'S, CANADIAN AGENT'S OR UK
AGENT'S OPTION, THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF
CALIFORNIA, SHALL HAVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES
BETWEEN ANY BORROWER ON THE ONE HAND AND ADMINISTRATIVE AGENT, CANADIAN AGENT,
UK AGENT OR ANY LENDER ON THE OTHER HAND PERTAINING TO THIS AGREEMENT OR TO ANY
MATTER ARISING OUT OF OR RELATED TO THIS AGREEMENT; PROVIDED THAT ADMINISTRATIVE
AGENT, CANADIAN AGENT, UK AGENT AND/OR ANY LENDER MAY INITIATE LEGAL OR
EQUITABLE PROCEEDINGS IN ANY OTHER COURT
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WHICH HAS SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY. EACH
BORROWER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY
ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH BORROWER HEREBY WAIVES ANY
OBJECTION WHICH SUCH BORROWER MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION,
IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF
SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH
BORROWER HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER
PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH
SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO THE BORROWER REPRESENTATIVE AT THE ADDRESS SET FORTH IN THIS
AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF
THE BORROWER REPRESENTATIVE'S ACTUAL RECEIPT THEREOF OR 3 DAYS AFTER DEPOSIT IN
THE U.S. MAILS, PROPER POSTAGE PREPAID. NOTHING IN THIS AGREEMENT SHALL BE
DEEMED OR OPERATE TO AFFECT THE RIGHT OF ADMINISTRATIVE AGENT, CANADIAN AGENT,
UK AGENT OR ANY LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW, OR TO PRECLUDE THE ENFORCEMENT BY ADMINISTRATIVE AGENT, CANADIAN AGENT, UK
AGENT OR ANY LENDER OF ANY JUDGMENT OR ORDER OBTAINED IN SUCH FORUM OR THE
TAKING OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE SAME IN ANY OTHER
APPROPRIATE FORUM OR JURISDICTION.
12.17 WAIVERS BY BORROWERS.
EACH BORROWER WAIVES (a) THE RIGHT TO TRIAL BY JURY (WHICH
ADMINISTRATIVE AGENT, CANADIAN AGENT, UK AGENT AND EACH LENDER HEREBY ALSO
WAIVES) IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT
OF OR RELATED TO ANY OF THE LOAN DOCUMENTS, THE OBLIGATIONS OR THE COLLATERAL;
(b) PRESENTMENT, DEMAND AND PROTEST AND NOTICE OF PRESENTMENT, PROTEST, DEFAULT,
NON PAYMENT, MATURITY, RELEASE, COMPROMISE, SETTLEMENT, EXTENSION OR RENEWAL OF
ANY OR ALL COMMERCIAL PAPER, ACCOUNTS, CONTRACT RIGHTS, DOCUMENTS, INSTRUMENTS ,
CHATTEL PAPER AND GUARANTIES AT ANY TIME HELD BY ADMINISTRATIVE AGENT, CANADIAN
AGENT, UK AGENT OR ANY LENDER ON WHICH ANY BORROWER MAY IN ANY WAY BE LIABLE AND
HEREBY RATIFIES AND CONFIRMS WHATEVER ADMINISTRATIVE AGENT, CANADIAN AGENT, UK
AGENT OR ANY LENDER MAY DO IN THIS REGARD; (c) NOTICE PRIOR TO
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ADMINISTRATIVE AGENT'S OR CANADIAN AGENT'S OR UK AGENT'S TAKING POSSESSION OR
CONTROL OF THE COLLATERAL OR ANY BOND OR SECURITY WHICH MIGHT BE REQUIRED BY ANY
COURT PRIOR TO ALLOWING ADMINISTRATIVE AGENT OR CANADIAN AGENT OR UK AGENT TO
EXERCISE ANY OF ADMINISTRATIVE AGENT'S OR CANADIAN AGENT'S OR UK AGENT'S
REMEDIES; (d) THE BENEFIT OF ALL VALUATION, APPRAISEMENT AND EXEMPTION LAWS; AND
(e) NOTICE OF ACCEPTANCE HEREOF. EACH BORROWER ACKNOWLEDGES THAT THE FOREGOING
WAIVERS ARE A MATERIAL INDUCEMENT TO ADMINISTRATIVE AGENT'S, CANADIAN AGENT'S,
UK AGENT'S AND EACH LENDER'S ENTERING INTO THIS AGREEMENT AND THAT
ADMINISTRATIVE AGENT, CANADIAN AGENT, UK AGENT AND EACH LENDER IS RELYING UPON
THE FOREGOING WAIVERS IN ITS FUTURE DEALINGS WITH BORROWERS. EACH BORROWER
WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THE FOREGOING WAIVERS WITH ITS
LEGAL COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
12.18 Joint and Several. Without limitation on the provisions of any
guaranty of any of the Obligations which any of the UK Borrowers have entered
into which is a Loan Document, each UK Borrower shall be obligated for all of
the UK Obligations on a joint and several basis, notwithstanding which of the UK
Borrowers may have directly received the proceeds of any particular Loan. Each
UK Borrower acknowledges and agrees that, for purposes of the Loan Documents,
the UK Borrowers constitute a single integrated financial enterprise and that
each receives a benefit from the availability of credit under this Agreement to
all UK Borrowers. Each UK Borrower waives all defenses arising under the laws of
suretyship, to the extent such laws are applicable, in connection with its joint
and several obligations under this Agreement. Without limiting the foregoing,
each UK Borrower agrees to the Joint Borrower Provisions set forth in Exhibit
12.18, incorporated by this reference.
12.19 Further Assurances.
Without limiting in any manner any other obligation, requirement or
agreement hereunder or under any of the other Loan Documents or otherwise,
Borrowers shall, at their expense and without expense to the Lenders,
Administrative Agent, Canadian Agent or UK Agent, do, execute and deliver such
further acts and documents as the Majority Lenders, the Administrative Agent,
the Canadian Agent or UK Agent from time to time require for the assuring and
confirming unto the Lenders, the Administrative Agent, the Canadian Agent or UK
Agent of the rights hereby
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created or intended now or hereafter so to be, or for carrying out the intention
or facilitating the performance of the terms of any Loan Document.
12.20 Interest Act (Canada).
For the purpose of complying with the Interest Act (Canada), it is
expressly stated that:
12.20.1 where interest is calculated pursuant hereto at a rate
based upon a 360-day period (for the purposes of this Section 12.20.1, the
"first rate"), the yearly rate or percentage of interest to which the first rate
is equivalent is the first rate multiplied by the actual number of days in the
calendar year in which the same is to be ascertained and divided by 360; and
12.20.2 the parties hereto acknowledge that there is a material
distinction between the nominal and effective rates of interest and that they
are capable of making the calculations necessary to compare such rates and that
the calculations herein are to be made using the nominal rate method and not on
any basis that gives effect to the principle of deemed reinvestment of interest.
12.21 Australia Indebtedness. In the event that Xxxxxxxx Australia
obtains a financing commitment for debt financing to Xxxxxxxx Australia, or a
letter of intent concerning such financing, Agents and Lenders agree not to
unreasonably withhold their consent (subject to actual funding of such
Indebtedness on substantially the terms provided in such financing commitment or
letter of intent) to (i) the incurrence of such Indebtedness by Xxxxxxxx
Australia, (ii) the granting by Xxxxxxxx Australia of Liens on all of its assets
to secure such Indebtedness, and (iii) if the Australia Guaranty (as defined in
Exhibit A attached to the UK Side Letter) and the CLU Pledge (as defined in
Exhibit A to the UK Side Letter) have been executed and delivered to Agents and
Lenders and are in effect, the release of the Australia Guaranty and the release
of the CLU Pledge in order to facilitate the incurrence of such Indebtedness.
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IN WITNESS WHEREOF, this Agreement has been duly executed on the day
and year specified at the beginning of this Agreement.
XXXXXXXX COMMERCIAL CORPORATION,
a Delaware corporation
By: /s/ Xxx Xxxxxxx
----------------------------------------------
Name: Xxx Xxxxxxx
Title: Chief Financial Officer
XXXXXXXX COMMERCIAL CANADA INC., an Ontario
corporation
By: /s/ Xxxxxxx X. Xxxxxxxx, Xx.
----------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx, Xx.
Title: President and Chief Operating Officer
FLEET CAPITAL CORPORATION, a Rhode Island
corporation, as Administrative Agent and as a
Domestic Lender
By: /s/ Xxxxxxx X. Xxx Xxxxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxx Xxxxxxxxxx
Title: Senior Vice President
FLEET CAPITAL CANADA CORPORATION, a Canadian
corporation, as Canadian Agent and Canadian Lender
By: /s/ Xxxx Xxxxxx
----------------------------------------------
Name: Xxxx Xxxxxx
Title: Credit Manager
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APPENDIX A
GENERAL DEFINITIONS
When used in the Loan and Security Agreement dated as of September 25,
2002, by and among Fleet Capital Corporation, individually and as Administrative
Agent, the other financial institutions which are or become parties thereto,
Fleet Capital Canada Corporation, individually and as Canadian Agent, Fleet
National Bank, London U.K. branch, trading as FleetBoston Financial,
individually and as UK Agent, Xxxxxxxx Commercial Corporation, a Delaware
corporation, Xxxxxxxx Commercial Canada Inc., an Ontario corporation, and the UK
Borrowers party thereto, (a) the terms Certificated Security, Chattel Paper,
Commercial Tort Claims, Deposit Account, Document, Electronic Chattel Paper,
Equipment, Financial Asset, Fixture, General Intangibles, Goods, Instruments,
Inventory, Investment Property, Letter-of-Credit Rights, Security, Payment
Intangibles, Proceeds, Security Entitlement, Software, Supporting Obligations,
Tangible Chattel Paper and Uncertificated Security, have the respective meanings
assigned thereto under the UCC (as defined below) or the PPSA (as defined
below), as applicable; (b) all terms indicating Collateral having the meanings
assigned thereto under the UCC or the PPSA, as applicable shall be deemed to
mean such Property, whether now owned or hereafter created or acquired by
Borrowers and their applicable Subsidiaries or in which Borrowers and their
applicable Subsidiaries now have or hereafter acquire any interest; (c) to the
extent that any term reflecting Collateral has different meanings under the PPSA
and the UCC, such term shall be defined in the alternative so as to include both
meanings; (d) capitalized terms which are not otherwise defined have the
respective meanings assigned thereto in said Loan and Security Agreement; and
(e) the following terms shall have the following meanings (terms defined in the
singular to have the same meaning when used in the plural and vice versa):
"Account" - has the meaning assigned thereto under the UCC and, in
addition thereto, shall include all "accounts receivable" and "accounts," as
such terms are defined in the PPSA and shall include as to UK Borrowers the
amounts now or subsequently standing to the credit of any account which each UK
Borrower has, or has an interest in, with any person and the debts represented
thereby and all book and other debts and monetary claims now or subsequently due
or owing to each UK Borrower, the proceeds of the same and the benefit of all
securities or investments, Liens and guarantees or other rights of any nature
now or subsequently enjoyed or held by it in relation thereto (other than
Accounts).
"Account Creditor" - collectively, Domestic Borrower, Canadian
Borrower, UK Borrowers and any other Subsidiary of Domestic Borrower, if any,
approved by the Administrative Agent and Majority Lenders in writing from time
to time for inclusion as an "Account Creditor" for purposes of the Loan
Documents. As
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of the Closing Date, the sole Account Creditors shall be Domestic Borrower and
Canadian Borrower.
"Account Debtor" - any Person who is or may become obligated on or
under or on account of any Account, Contract Right, Chattel Paper or General
Intangible.
"Adjustment Date" - as defined in the definition of "Applicable
Margin".
"Administrative Agent" - Fleet Capital Corporation in its capacity as
administrative agent for the Lenders under the Agreement and any successor in
that capacity appointed pursuant to Section 11.11 of the Agreement.
"Affiliate" - a Person: (a) which directly or indirectly through one
or more intermediaries controls, or is controlled by, or is under common control
with, a Person; (b) which beneficially owns or holds 5% or more of any class of
the Voting Stock of a Person; or (c) 5% or more of the Voting Stock (or in the
case of a Person which is not a corporation, 5% or more of the equity interest)
of which is beneficially owned or held by a Person or a Subsidiary of a Person.
"Agents" - collectively, Administrative Agent, Canadian Agent and UK
Agent.
"Aggregate Availability" - the sum of the Domestic Availability, the
Canadian Availability and the UK Availability.
"Aggregate Percentage" - with respect to each Lender, the percentage
equal to the quotient of (a) such Lender's Domestic Revolving Credit Commitment
divided by (b) the aggregate of all Domestic Revolving Credit Commitments.
"Agreement" - the Loan and Security Agreement referred to in the first
sentence of this Appendix A, all Exhibits and Schedules thereto and this
Appendix A, in each case either as originally executed or as the same may from
time to time be supplemented, modified, amended, restated, extended or
supplanted.
"Agreement Currency" - as defined in Section 12.15 of the Agreement.
"Annualized EBITDA" - as of the last day of:
(a) the fiscal quarter of Domestic Borrower ending March 31,
2003, Consolidated EBITDA of Borrowers for the six-month period ending on
such date multiplied by 2;
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(b) the fiscal quarter of Domestic Borrower ending June 30,
2003, Consolidated EBITDA of Borrowers for the nine-month period ending on
such date multiplied by 1.33; and
(c) the fiscal quarter of Domestic Borrower ending September
30, 2003 and each fiscal quarter of Domestic Borrower thereafter,
Consolidated EBITDA of Borrowers for the twelve-month period ending on such
date.
"Applicable Margin" - from the Closing Date to, but not including, the
first Adjustment Date (as hereinafter defined) the percentages set forth below
with respect to Domestic Base Rate Loans, UK Base Rate Loans, Domestic LIBOR
Loans, UK LIBOR Loans and Canadian Revolving Credit Loans:
Domestic Base Rate Loans (Revolving) 0.25%
Domestic Base Rate Loans (Term) 0.25%
Domestic LIBOR Loans (Revolving) 2.25%
Domestic LIBOR Loans (Term) 2.25%
Canadian Revolving Credit Loans 2.25%
UK Base Rate Loans (Revolving) 2.25%
UK Base Rate Loans (Term) 2.25%
UK LIBOR Loans (Revolving) 2.25%
UK LIBOR Loans (Term) 2.25%
The percentages set forth above will be adjusted quarterly on the
first day of each month after Administrative Agent's receipt of the monthly
financial statements delivered by Borrowers to Administrative Agent pursuant to
Section 8.1.3(c) of the Agreement with respect to each month (beginning with
March 2003) which is a final month in a fiscal quarter of Domestic Borrower
(each such date an "Adjustment Date"), effective prospectively, by reference to
the Leverage Ratio as of the last day of each such month, determined on the
basis of such monthly financial statements, in accordance with the following:
Leverage Ratio Domestic Base Rate Domestic LIBOR Loans
-------------- ------------------- ---------------------
Loans (Revolving (Revolving and Term), Canadian
---------------- ------------------------------
and Term) Revolving Credit Loans, UK
--------- --------------------------
Base Rate Loans (Revolving and
------------------------------
Term), UK LIBOR Loans
---------------------
Revolving and Term)
-------------------
**2.50 1.00% 2.75%
**1.00 and ***2.50 0.25% 2.25%
***1.00 0.00% 1.75%
** [Greater than]
*** [Less than or equal to]
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provided that, (a) if Domestic Borrower's audited financial statements for any
fiscal year delivered pursuant to Section 8.1.3(a) of the Agreement reflect a
Leverage Ratio that yields a different Applicable Margin than that yielded by
the monthly financial statements previously delivered pursuant to Section
8.1.3(c) of the Agreement for the last month of such fiscal year, the Applicable
Margin shall be readjusted retroactive to the preceding Adjustment Date and (b)
if Borrowers fail to deliver the financial statements required to be delivered
pursuant to Section 8.1.3(a) or Section 8.1.3(c) of the Agreement on or before
the due date thereof, the interest rate shall automatically adjust to the
highest interest rate set forth above, effective prospectively from such due
date until the next Adjustment Date.
"Applicable Measurement Period" - with respect to the last day of each
fiscal quarter of Domestic Borrower (each, a "Test Date") ending after the
Closing Date, (a) if the Test Date occurs prior to the date which is the last
day of the fourth full fiscal quarter of Domestic Borrower ending after the
Closing Date, "Applicable Measurement Period" shall mean the period from the
Closing Date through the Test Date, and (b) if the Test Date occurs on or
subsequent to the date which is the last day of the fourth full fiscal quarter
of Domestic Borrower ending after the Closing Date, "Applicable Measurement
Period" shall mean the four fiscal quarters of Domestic Borrower ending on the
Test Date.
"Bank" - Fleet National Bank, or its successor.
"Bankruptcy Event" - with respect to any Person, such Person shall
suffer the appointment of a receiver, trustee, administrator, administrative
receiver, interim receiver, sheriff, monitor, sequestrator, custodian or similar
fiduciary, or shall pass or convene any meeting for the purpose of considering
any resolution for winding up or administration, or shall make an assignment,
composition or arrangement for the benefit of creditors, or any petition for an
order for relief (or similar proceedings, including, without limitation, an
application for a stay order or filing of a proposal or notice of intention to
make a proposal) shall be filed by or against such Person under the United
States federal bankruptcy laws, the Insolvency Laws of Canada, England's
Insolvency Act of 1986 or any other insolvency laws in the United Kingdom (and
the continuation of such proceeding for more than 30 days or, with respect to
any proceeding in the United Kingdom, 14 days), or such Person shall make any
offer of settlement, extension or composition to their respective unsecured
creditors generally. With respect to any Person organized under the laws of the
United Kingdom, a petition has been presented or a meeting convened or
application made for the purpose of appointing an administrator or receiver or
other similar officer of, or for the making of an administration order in
respect of such Person and (other than in the case of a
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petition to appoint an administrator or receiver to which a grace period shall
not apply), such petition or application is not stayed or discharged within 14
days or in any event before it is heard.
"BA Treasury Account" - the brokerage account of Domestic Borrower
held by Banc of America Investment Services, Inc., Account No. W78-607916, that
holds solely treasury stock of Domestic Borrower purchased from time to time.
"Bermuda Account" - Xxxxxxxx Bermuda's account number 000-0-000000 at
XX Xxxxxx Chase Bank.
"BofA Account" - Domestic Borrower's account number 00000-00000 at
Bank of America, N.A.
"BofA Letter of Credit" - the letter of credit number 3049513 dated
June 24, 2002 issued by Bank of America, N.A. for the account of Domestic
Borrower in favor of United States Fire Insurance Company in the amount of
$550,000.
"Borrowers" - as defined in the preamble to the Agreement.
"Borrower Representative" - Domestic Borrower.
"Borrowing Base Certificate" - a certificate by a responsible officer
of Borrower Representative, substantially in the form of Exhibit 8.1.4 (or
another form acceptable to Administrative Agent) setting forth the calculation
of the Domestic Borrowing Base, the Canadian Borrowing Base and the UK Borrowing
Base, including a calculation of each component thereof, all in such detail as
shall be satisfactory to Administrative Agent. All calculations of the Domestic
Borrowing Base, Canadian Borrowing Base and UK Borrowing Base in connection with
the preparation of any Borrowing Base Certificate shall originally be made by
Borrower Representative and certified to Administrative Agent; provided, that
each of Administrative Agent, Canadian Agent and UK Agent, as applicable, shall
have the right to review and adjust, in the exercise of its reasonable credit
judgment, any such calculation after giving notice thereof to Borrower
Representative, (a) to reflect its reasonable estimate of declines in value of
any of the Collateral described therein, and (b) to the extent that such
calculation is not in accordance with this Agreement.
"Business Day" - (a) any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the State of California or is a day
on which banking institutions located in the State of California are closed, (b)
with respect to any disbursements and payments in and calculations pertaining to
any Canadian Revolving Credit Loan, any day which is a Business Day in clause
(a) above and which is also not a day on which commercial banks in Toronto,
Canada, Atlanta, Georgia and New York, New York are authorized or required by
law to close, (c) with
A-5
respect to any disbursements and payments in and calculations pertaining to any
UK Revolving Credit Loan or the UK Term Loans, any day which is a Business Day
in clause (a) above and which is also not a day on which commercial banks in the
City of London, England are authorized or required by law to close, and (d) with
respect to the making, continuing, prepaying or repaying of any Domestic LIBOR
Loan or UK LIBOR Loan, any day which is a Business Day described in clauses (a),
(b) and (c) above and which is also a day on which dealings in U.S. Dollars are
carried on in the London interbank eurodollar market.
"Canadian Agent" - Fleet Canada in its capacity as Canadian Agent for
the Canadian Lender and the Canadian Participating Lenders under the Agreement
and any successor in that capacity appointed pursuant to Section 11.11 of the
Agreement.
"Canadian Availability" - the amount of additional money which
Canadian Borrower is entitled to borrow from time to time as Canadian Revolving
Credit Loans, such amount being the lesser of (i) the Canadian Revolving Credit
Sub-Limit minus the Dollar Equivalent of the Canadian Revolving Credit Loans
outstanding, and (ii) the difference derived when the sum of the Dollar
Equivalent of the principal amount of Canadian Revolving Credit Loans to
Canadian Borrower then outstanding (including any amounts which Administrative
Agent, Canadian Agent or Canadian Lender may have paid for the account of
Canadian Borrower pursuant to any of the Loan Documents and which have not been
reimbursed by Canadian Borrower), and the Dollar Equivalent of any Reserves is
subtracted from the Dollar Equivalent of the Canadian Borrowing Base, subject in
each case to the other limitations in Section 1.1.2 of the Agreement. If the
amount outstanding is equal to or greater than the Canadian Revolving Credit
Sub-Limit or the Canadian Borrowing Base, Canadian Availability is $0.
"Canadian Base Rate" - the Canadian Prime.
"Canadian Benefit Plans" - all material employee benefit plans,
programs or arrangements of any nature or kind whatsoever that are not Canadian
Pension Plans and are maintained or contributed to by, or to which there is or
may be an obligation to contribute by, Canadian Borrower or its Subsidiaries in
respect to their employees or former employees in Canada.
"Canadian Borrower" - as defined in the preamble to the Agreement.
"Canadian Borrower Guaranty" - the continuing guaranty agreement
executed by the Canadian Borrower, in form and substance satisfactory to
Administrative Agent.
"Canadian Borrowing Base" - as at any date of determination thereof,
the Dollar Equivalent of an amount equal to the lesser of the following:
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(a) the Canadian Revolving Credit Sub-Limit; and
(b) an amount equal to 85% of the net amount of Eligible Accounts of
Canadian Borrower outstanding at such date.
The advance rate set forth above may be adjusted downward by Canadian
Agent as Canadian Agent shall deem necessary or appropriate in its reasonable
credit judgment, including, without limitation, adjustments with respect to
Prior Claims or inventory subject to rights of suppliers under Section 81.1 of
Bankruptcy and Insolvency Act (Canada). For purposes hereof, the net amount of
Eligible Accounts at any time shall be the face amount of such Eligible Accounts
less any and all returns, rebates, discounts (which may, at Canadian Agent's
option, be calculated on shortest terms), credits, allowances or excise taxes of
any nature at any time issued, owing, claimed by Account Debtors, granted,
outstanding or payable in connection with such Accounts at such time.
"Canadian Collateral" - all of the Property and interests in Property
of Canadian Borrower described in Section 5 of the Agreement, and all other
Property and interests in Property of Canadian Borrower that now or hereafter
secures the payment and performance of any of the Canadian Obligations, and all
other Property and interest in Property of any Person that is identified in a
Loan Document as "Canadian Collateral".
"Canadian Dollar Equivalent" - at any time, as to any amount
denominated in U.S. Dollars, the equivalent amount in Canadian Dollars
determined by the Administrative Agent at such time on the basis of the spot
rate for the purchase by Canadian Agent of such U.S. Dollars with Canadian
Dollars through a foreign exchange trading office selected by Canadian Agent or
such other rate which Administrative Agent may select based on reasonable
commercial practices.
"Canadian Dollar Refunding Amount" - as defined in Section 3.2.6 of
the Agreement.
"Canadian Dollars and cdn$" - each, lawful currency of Canada.
"Canadian Fronting Fee" - as defined in Section 2.6(a) of the
Agreement.
"Canadian Lender" - Fleet Canada, in its capacity as provider of
Canadian Revolving Credit Loans.
"Canadian Loan Account" - as defined in Section 3.6 of the Agreement.
"Canadian Non-Excluded Taxes" - as defined in Section 2.13.9 of the
Agreement.
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"Canadian Obligations" - all Loans made by the Canadian Lender and all
other advances, debts, liabilities, obligations, covenants and duties, together
with all interest (including, without limitation, whether accruing prior to or
subsequent to the commencement of a bankruptcy or similar proceeding with
Canadian Borrower as a debtor thereof and whether or not such interest is an
allowed claim in any such proceeding), fees and other charges thereon, owing,
arising, due or payable from Canadian Borrower to Canadian Agent, for its own
benefit, or from Canadian Borrower to Canadian Agent for the benefit of Canadian
Lender or Canadian Participating Lenders, or from Canadian Borrower to UK Agent,
UK Lender or any UK Participating Lender, of any kind or nature, present or
future, whether or not evidenced by any note, guaranty or other instrument,
whether arising under the Agreement or any of the other Loan Documents or
otherwise, whether direct or indirect (including those acquired by assignment),
absolute or contingent, primary or secondary, due or to become due, now existing
or hereafter arising and however acquired, including without limitation any
Derivative Obligations owing by Canadian Borrower to Canadian Agent, Canadian
Lender or any Canadian Participating Lender.
"Canadian Participating Lender" - each Lender (other than Canadian
Lender) that has a Canadian Percentage as identified on Schedule 1.1; it being
understood and agreed that each Canadian Affiliate of a Domestic Lender (other
than Fleet) which is not a non-resident of Canada for purposes of Part XIII of
the Income Tax Act (Canada) or any successor provision thereto shall be a
Canadian Participating Lender.
"Canadian Participation Fee" - as defined in Section 2.6 of the
Agreement.
"Canadian Pension Plan" - means each plan, program or arrangement
which is considered to be a pension plan under any applicable pension benefits
standard or tax statute and/or regulation in Canada established, maintained or
contributed to by, or to which there is or may be an obligation to contribute
by, Canadian Borrower or its Subsidiaries in respect of its employees or former
employees.
"Canadian Percentage" - relative to the Canadian Lender and any
Canadian Participating Lender, the applicable percentage relating to such
Person's obligation to fund Canadian Revolving Credit Loans pursuant to Section
3.2.6 of the Agreement as set forth opposite its name on Schedule 1.1 to the
Agreement, as such percentage may be adjusted from time to time pursuant to
assignment agreements executed by such Lender and delivered pursuant to Section
11.9 of the Agreement. A Lender shall not have any Canadian Percentage if its
percentage under the Canadian Percentage column is zero or is blank.
A-8
"Canadian Prime" - the annual rate of interest announced by the
Canadian Agent as its "reference rate" for commercial loans made by it in Canada
in Canadian Dollars. The "reference rate" is a rate set by the Canadian Agent
based upon various factors including its cost and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced rate.
Any change in the reference rate announced by the Canadian Agent shall take
effect at the opening of business on the day specified in the public
announcement of such change.
"Canadian Revolving Credit Exposure" - at any date, the amount equal
to the Dollar Equivalent of the aggregate principal amount of all Canadian
Revolving Credit Loans.
"Canadian Revolving Credit Loan" - as defined in Section 1.1.2 of the
Agreement.
"Canadian Revolving Credit Sub-Limit" - $1,500,000, as such amount may
be reduced from time to time in accordance with the provisions of the Agreement.
"Capital Expenditures" - expenditures made or liabilities incurred for
the acquisition of any fixed assets or improvements, replacements, substitutions
or additions thereto which have a useful life of more than one year, including
the total principal portion of Capitalized Lease Obligations; provided that
"Capital Expenditures" shall exclude (i) an amount up to $250,000 during each
consecutive twelve-month period corresponding to the net proceeds of
dispositions of Equipment and Fixed Assets made in accordance with Section
6.4.2(a), (ii) replacements of Equipment or fixed assets made in accordance with
Section 6.4.2(b), and (iii) any capital expenditures made by Borrowers or their
Subsidiaries using the proceeds from the sale of the UK Real Estate (to the
extent permitted by Section 5.5) to which Borrowers and their Subsidiaries are
entitled pursuant to Section 5.5.
"Capitalized Lease Obligation" - any Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP.
"CCEL" - as defined in Section 1.4 of the Agreement.
"CCEL Term Loan" - as defined in Section 1.3.2 of the Agreement.
"CERCLA" - as defined in the definition of "Environmental Laws".
"Change of Control" - (A) a transfer (by lease, management or
operation agreement, assignment, sale or otherwise), in any single transaction
or series of related transactions, of all or substantially all of the properties
and assets of FleetBoston Financial ("FBF") to another Person or group of
affiliated Persons (other than to any
A-9
Person or group of affiliated Persons which is a Subsidiary of FBF); or (B) the
acquisition by any Person or group of affiliated Persons (other than by any
Person or group of affiliated Persons which is a Subsidiary of FBF)(whether by
way of merger, consolidation, amalgamation, other corporate transaction,
purchase or in any other manner) of beneficial ownership (within the meaning of
Rule 13(d)(3) under the Securities Exchange Act of 1934, as amended) of
securities of FBF (or other securities convertible into such securities)
representing fifty-one percent (51%) or more of the combined voting power of all
outstanding securities of FBF entitled to vote in the election of directors.
"Xxxxxxxx Australia" - Xxxxxxxx Pty Ltd., a corporation organized
under the laws of Australia.
"Xxxxxxxx Bermuda" - Xxxxxxxx (Bermuda) Limited, a company
incorporated in the islands of Bermuda.
"Closing Date" - the date on which all of the conditions precedent in
Section 9 of the Agreement are satisfied or waived by the Agents and the Lenders
and the initial Loans are made or the initial Letters of Credit or LC Guaranties
are issued under the Agreement.
"Closing Date Lenders" - Fleet, Fleet Canada and Fleet UK.
"CLU" - as defined in Section 1.4 of the Agreement.
"CLU Term Loan" - as defined in Section 1.3.2 of the Agreement.
"Code" - the Internal Revenue Code of 1986, as amended, and
regulations promulgated thereunder.
"Collateral" - collectively, the Canadian Collateral, the Domestic
Collateral and the UK Collateral.
"Commitment Termination" - collectively, the termination of the
Domestic Revolving Credit Commitments, the termination of the obligation of
Canadian Lender to fund Canadian Revolving Credit Loans to Canadian Borrower
under Section 1.1.2 of the Agreement, the termination of the obligation of UK
Lender to fund UK Revolving Credit Loans to UK Borrowers under Section 1.1.3 of
the Agreement, and the termination of the obligation of UK Lender to fund the UK
Term Loans to UK Borrowers under Section 1.3.2 of the Agreement.
"Computer Hardware and Software" - all of Borrowers' rights (including
rights as licensee and lessee) with respect to (a) computer and other electronic
data processing hardware, including all integrated computer systems, central
processing units, memory units, display terminals, printers, computer elements,
card readers, tape
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drives, hard and soft disk drives, cables, electrical supply hardware,
generators, power equalizers, accessories, peripheral devices and other related
computer hardware; (b) all Software and all software programs designed for use
on the computers and electronic data processing hardware described in clause (a)
above, including all operating system software, utilities and application
programs in any form (source code and object code in magnetic tape, disk or hard
copy format or any other listings whatsoever); (c) any firmware associated with
any of the foregoing; and (d) any documentation for hardware, Software and
firmware described in clauses (a), (b) and (c) above, including flow charts,
logic diagrams, manuals, specifications, training materials, charts and pseudo
codes.
"Consolidated" - the consolidation in accordance with GAAP of the
accounts or other items as to which such term applies.
"Contract Right" - any right of Borrowers to payment under a contract
for the sale or lease of goods or the rendering of services, which right is at
the time not yet earned by performance.
"Current Assets" - at any date means the amount at which all of the
current assets of a Person would be properly classified as current assets shown
on a balance sheet at such date in accordance with GAAP.
"Dated Account" - those Accounts of Domestic Borrower with respect to
which Domestic Borrower has granted seasonal or promotional terms up to 90 days
from normal terms.
"Default" - an event or condition the occurrence of which would, with
the lapse of time or the giving of notice, or both, become an Event of Default.
"Default Rate" - as defined in Section 2.1.2 of the Agreement.
"Derivative Obligations" - every obligation of a Person under any
forward contract, futures contract, swap, option or other financing agreement or
arrangement (including, without limitation, caps, floors, collars and similar
agreements), the value of which is dependent upon interest rates, currency
exchange rates, commodities or other indices.
"Designated Affiliate" - a Person: (a) which is not an officer of any
Borrower or any Subsidiary of Domestic Borrower, or an immediate family member
of the family of Xxxxxxx X. Xxxxxxxx, Xx.; (b) which directly or indirectly
through one or more intermediaries controls, or is controlled by, or is under
common control with, a Person; (c) which beneficially owns or holds 10% or more
of any class of the Voting Stock of a Person; or (d) 10% or more of the Voting
Stock (or in the case of a Person
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which is not a corporation, 10% or more of the equity interest) of which is
beneficially owned or held by a Person or a Subsidiary of a Person.
"Distribution" - in respect of any Person means and includes: (a) the
payment of any dividends or other distributions on Securities (except
distributions in such Securities) and (b) the redemption or acquisition of
Securities of such Person, as the case may be, unless made contemporaneously
from the net proceeds of the sale of Securities.
"Dollars", "dollar", "U.S. Dollar", "U.S. dollar" and "$" - each,
lawful currency of the United States.
"Dollar Equivalent" - at any time (a) as to any amount denominated in
U.S. Dollars, the amount thereof at such time, (b) as to any amount denominated
in Canadian Dollars, the equivalent amount in U.S. Dollars determined by the
Administrative Agent at such time on the basis of the spot rate for the purchase
by Canadian Agent of such Canadian Dollars with U.S. Dollars through a foreign
exchange trading office selected by Canadian Agent or such other rate which
Administrative Agent may select based on reasonable commercial practices, and
(c) as to any amount denominated in Sterling, the equivalent amount in U.S.
Dollars determined by the Administrative Agent at such time on the basis of the
spot rate for the purchase by UK Agent of such Sterling with U.S. Dollars
through a foreign exchange trading office selected by UK Agent or such other
rate which Administrative Agent may select based on reasonable commercial
practices.
"Domestic Availability" - the amount of additional money which
Domestic Borrower is entitled to borrow from time to time as Domestic Revolving
Credit Loans, such amount being the lesser of (i) the aggregate Domestic
Revolving Credit Commitments minus the principal amount of Domestic Revolving
Credit Loans outstanding and the outstanding principal amount of the Domestic
Term Loan and the Domestic LC Amount and the outstanding Domestic LC
Obligations, and (ii) the difference derived when the sum of the principal
amount of Domestic Revolving Credit Loans to Domestic Borrower then outstanding
(including any amounts which Administrative Agent or any Lender may have paid
for the account of Domestic Borrower pursuant to any of the Loan Documents and
which have not been reimbursed by Domestic Borrower), and the amount of any
Reserves and the outstanding principal amount of the Domestic Term Loan and the
Domestic LC Amount and the outstanding Domestic LC Obligations are subtracted
from the Domestic Borrowing Base, subject in each case to the other limitations
in Section 1.1.1 of the Agreement. If the amount outstanding is equal to or
greater than the aggregate Domestic Revolving Credit Commitments or the Domestic
Borrowing Base, Domestic Availability is $0.
"Domestic Base Rate" - the rate of interest announced or quoted by
Bank from time to time as its prime rate for commercial loans, whether or not
such rate is
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the lowest rate charged by Bank to its most preferred borrowers; and, if such
prime rate for commercial loans is discontinued by Bank as a standard, a
comparable reference rate designated by Bank as a substitute therefor shall be
the Domestic Base Rate.
"Domestic Base Rate Loan" - any Loan hereunder bearing interest
computed by reference to the Domestic Base Rate, including, without limitation,
that portion of the outstanding principal amount of the Domestic Term Loan
bearing interest with reference to the Domestic Base Rate.
"Domestic Borrower" - as defined in the preamble to the Agreement.
"Domestic Borrower Guaranties" - the continuing guaranty agreements
executed by the Domestic Borrower, in form and substance satisfactory to Agents.
"Domestic Borrowing Base" - as at any date of determination thereof,
an amount equal to (without duplication) the sum of (a) 85% of the net amount of
Eligible Accounts of the Domestic Borrower plus (b) the Inventory Component. The
advance rate set forth above may be adjusted downward by Administrative Agent as
Administrative Agent shall deem necessary or appropriate in its reasonable
credit judgment. For purposes hereof, the net amount of Eligible Accounts at any
time shall be the face amount of such Eligible Accounts less any and all
returns, rebates, discounts (which may, at Administrative Agent's option, be
calculated on shortest terms), credits, allowances or excise taxes of any nature
at any time issued, owing, claimed by Account Debtors, granted, outstanding or
payable in connection with such Accounts at such time.
"Domestic Collateral" - all of the Property and interests in Property
of Domestic Borrower described in Section 5 of the Agreement, and all other
Property and interests in Property of Domestic Borrower or any Subsidiary of
Domestic Borrower (other than Canadian Borrower and UK Borrowers) that now or
hereafter secures the payment and performance of any of the Domestic
Obligations, and all other Property and interest in Property of any Person that
is identified in a Loan Document as "Domestic Collateral".
"Domestic LC Amount" - at any time, the aggregate undrawn available
amount of all Domestic Letters of Credit and Domestic LC Guaranties then
outstanding.
"Domestic LC Guaranty" - any guaranty pursuant to which Administrative
Agent or any Affiliate of Administrative Agent shall guaranty the payment or
performance by Domestic Borrower of its reimbursement obligation under any
Domestic Letter of Credit.
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"Domestic LC Margin" - the Applicable Margin then in effect for
Domestic LIBOR Loans which are Domestic Revolving Credit Loans per annum.
"Domestic LC Obligations" - Any Obligations that arise from any draw
against any Domestic Letter of Credit or against any Domestic Letter of Credit
supported by a Domestic LC Guaranty.
"Domestic Lender" - as defined in Section 1.1.1 of the Agreement.
"Domestic Letter of Credit" - any standby or commercial letter of
credit issued by Administrative Agent, Bank or any Affiliate of Administrative
Agent or Bank for the account of Domestic Borrower.
"Domestic LIBOR Loan" - any Loan made hereunder to Domestic Borrower
bearing interest computed by reference to the LIBOR, including, without
limitation, that portion of the outstanding principal amount of the Domestic
Term Loan bearing interest with reference to the LIBOR.
"Domestic Loan Account" - as defined in Section 3.6 of the Agreement.
"Domestic Non-Excluded Taxes" - as defined in Section 2.13.1 of the
Agreement.
"Domestic Obligations" - all Loans made by any Domestic Lender, all
Domestic LC Obligations and all other advances, debts, liabilities, obligations,
covenants and duties, together with all interest (including, without limitation,
whether accruing prior to or subsequent to the commencement of a bankruptcy or
similar proceeding with Domestic Borrower as a debtor thereof and whether or not
such interest is an allowed claim in any such proceeding), fees and other
charges thereon, owing, arising, due or payable from Domestic Borrower to
Administrative Agent, Canadian Agent or UK Agent, for its own benefit and the
benefit of the Lenders, or from Domestic Borrower to Bank or to any other
affiliate of Fleet, of any kind or nature, present or future, whether or not
evidenced by any note, guaranty or other instrument, whether arising under the
Agreement or any of the other Loan Documents or otherwise, whether direct or
indirect (including those acquired by assignment), absolute or contingent,
primary or secondary, due or to become due, now existing or hereafter arising
and however acquired, including without limitation any Derivative Obligations
owing by Domestic Borrower to Administrative Agent, Canadian Agent, UK Agent any
Lender or Bank.
"Domestic Revolving Credit Commitment" - as to any Lender, the
obligation of such Lender to make Domestic Revolving Credit Loans and a portion
of the Domestic Term Loan to the Domestic Borrower hereunder and to participate
in Domestic Letters of Credit issued for the account of Domestic Borrower,
subject in
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each case to the limitations provided herein and the other terms hereof, in an
aggregate principal amount at any one time outstanding not to exceed the amount
set forth below such Lender's name on Schedule 1.1 hereto under the heading
"Domestic Revolving Credit Commitment", as such amount may be reduced from time
to time in accordance with the provisions of this Agreement. The Domestic
Revolving Credit Commitments of all the Lenders shall not exceed $25,000,000, as
such amount may be reduced from time to time in accordance with the provisions
of this Agreement.
"Domestic Revolving Credit Exposure" - at any date, (a) as to all
Domestic Lenders, the amount equal to the sum of the aggregate outstanding
principal amount of all Domestic Revolving Credit Loans, the Domestic LC Amount
and all Domestic LC Obligations then outstanding, and (b) as to any Domestic
Lender, the amount equal to the sum of (i) the aggregate principal amount of all
then outstanding Domestic Revolving Credit Loans made by such Domestic Lender,
and (ii) such Domestic Lender's Domestic Revolving Loan Percentage of the
Domestic LC Amount and the then outstanding Domestic LC Obligations.
"Domestic Revolving Credit Loan" - as defined in Section 1.1.1 of the
Agreement.
"Domestic Revolving Loan Percentage" - with respect to each Domestic
Lender, the percentage equal to the quotient of such Domestic Lender's Domestic
Revolving Credit Commitment divided by the aggregate of all Domestic Revolving
Credit Commitments.
"Domestic Subsidiary" - a Subsidiary of a Borrower that is not a
Foreign Subsidiary or a Borrower.
"Domestic Term Loan" - as defined in Section 1.3.1 of the Agreement.
"Domestic Term Loan Commitment" - with respect to any Domestic Lender,
the amount of such Domestic Lender's commitment under the Domestic Term Loan
subfacility of the Domestic Revolving Credit Loan facility to make a term loan
to Domestic Borrower pursuant to Section 1.3.1 of the Agreement, as set forth
below such Domestic Lender's name on Schedule 1.1 hereto under the heading
"Domestic Term Loan Commitment".
"Domestic Term Loan Percentage" - with respect to each Domestic
Lender, the percentage equal to the quotient of the outstanding principal amount
of the Domestic Term Loan owing to such Domestic Lender divided by the aggregate
outstanding principal amount of the Domestic Term Loan.
"Dominion Account" - a special bank account or accounts of
Administrative Agent, Canadian Agent or UK Agent, as the case may be,
established
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by Borrowers and their Subsidiaries pursuant to Section 6.2.4 of the Agreement
at a bank or banks selected by Borrowers (provided that UK Borrowers shall
select Fleet UK) and their Subsidiaries, but acceptable to Administrative Agent,
Canadian Agent or UK Agent, as the case may be, in its reasonable discretion,
and over which Administrative Agent, Canadian Agent and UK Agent, as the case
may be, shall have access and control for withdrawal purposes in accordance with
the terms of the applicable blocked account arrangements approved by the
applicable Agents.
"EBITDA" - for any period, without duplication, the Consolidated net
income (or loss) of Borrowers, plus (a) Borrowers' Consolidated interest expense
for that period (including fees paid in cash associated with this Agreement),
including without limitation any rent payable with respect to Capitalized Lease
Obligations which should, in accordance with GAAP, be treated as interest
expense, to the extent paid during that period in cash, plus (b) the aggregate
amount of federal, state and provincial income taxes on or measured by such
Consolidated net income of Borrowers to the extent paid or accrued for that
period, plus (c) the Consolidated depreciation and amortization expense of
Borrowers for that period, plus (d) the Consolidated non-cash expenses of
Borrowers for that period, minus (e) any Consolidated non-cash income of
Borrowers for that period, in each case determined in accordance with GAAP,
consistently applied.
"Egerton" - X.X. Xxxxxxx (Holdings) Limited (Company No. 00818919), a
company incorporated under the laws of England and Wales.
"Eligible Account" - an Account of an Account Creditor arising in the
ordinary course of the business of the applicable Account Creditor from the sale
of goods or rendition of services which Administrative Agent, in its reasonable
credit judgment, deems to be an Eligible Account. Without limiting the
generality of the foregoing, no Account shall be an Eligible Account if:
(a) it arises out of a sale made or services rendered by the
applicable Account Creditor to a Subsidiary of any Borrower or an Affiliate of
any Borrower (excluding, with respect to Accounts arising out of sale, such
portion of such Accounts which arises out of services rendered in connection
with such sales); or
(b) it remains unpaid more than 90 days after the original
invoice date unless (i) such Account is a Dated Account, or (ii) the sale
pertaining to such Account is on letter of credit, guaranty or acceptance terms,
or is insured by credit insurance, in each case acceptable to Administrative
Agent in its reasonable credit judgment; or
(c) it is owed by an Account Debtor with respect to which the
total unpaid Accounts of such Account Debtor exceed 20% of the net amount of all
Eligible Accounts, but only to the extent of such excess; or
A-16
(d) any material covenant, representation or warranty contained
in the Agreement with respect to such Account has been breached; or
(e) it is a "contra" account; or
(f) the Account Debtor is also a creditor or supplier of the
applicable Account Creditor or any Subsidiary of the applicable Account
Creditor, or the Account Debtor has disputed liability with respect to such
Account, or the Account Debtor has made any claim with respect to any other
Account due from such Account Debtor to the applicable Account Creditor or any
Subsidiary of the applicable Account Creditor, or the Account otherwise is or
may become subject to right of setoff by the Account Debtor, provided, that any
such Account shall be eligible to the extent such amount thereof exceeds such
contract, dispute, claim, setoff or similar right; or
(g) the Account Debtor has commenced a voluntary case under the
United States federal bankruptcy laws, the Insolvency Laws of Canada or
England's Insolvency Act of 1986 (or any other applicable insolvency laws) as
now constituted or hereafter amended, or made an assignment for the benefit of
creditors, or a decree or order for relief has been entered by a court having
jurisdiction in the premises in respect of the Account Debtor in an involuntary
case under the United States federal bankruptcy laws, the Insolvency Laws of
Canada or England's Insolvency Act of 1986 (or any other applicable insolvency
laws), as now constituted or hereafter amended, or any other petition or other
application for relief under the United States federal bankruptcy laws, the
Insolvency Laws of Canada or England's Insolvency Act of 1986 (or any other
applicable insolvency laws), as now constituted or hereafter amended, has been
filed against the Account Debtor, or if the Account Debtor has failed, suspended
business, ceased to be Solvent, or consented to or suffered a receiver, trustee,
liquidator or custodian to be appointed for it or for all or a significant
portion of its assets or affairs, unless in any such case the sale pertaining to
such Account is on letter of credit, guaranty or acceptance terms, or is insured
by credit insurance, in each case acceptable to Administrative Agent in its
reasonable credit judgment; or
(h) (i) in the case of Domestic Borrower, it arises from a sale
made or services rendered to an Account Debtor headquartered outside the United
States of America, unless the sale is either (A) to an Account Debtor
headquartered in Ontario or any other province of Canada in which the PPSA has
been adopted in substantially the same form or with the same effect as currently
in effect in Ontario, or (B) on letter of credit, guaranty or acceptance terms,
in each case acceptable to Administrative Agent in its reasonable credit
judgment (or insured by credit insurance acceptable to Administrative Agent in
its sole discretion), and (ii) in the case of Canadian Borrower, it arises from
a sale made or services rendered to an Account Debtor headquartered outside
Canada, unless the sale is either (A) to an Account Debtor headquartered in the
United States of America, or (B) on letter of credit,
A-17
guaranty or acceptance terms, in each case acceptable to the Administrative
Agent and the Canadian Agent in their reasonable credit judgment (or insured by
credit insurance acceptable to Canadian Agent in its sole discretion), and (iii)
in the case of UK Borrowers, it arises from a sale made or services rendered to
an Account Debtor headquartered outside of the United Kingdom, the United States
of America or Canada unless the sale is on letter of credit, guaranty or
acceptance terms, in each case acceptable to Administrative Agent and UK Agent
in their reasonable credit judgment; or
(i) (i) in the case of Domestic Borrower, it arises from a sale
made or services rendered to an Account Debtor not organized under the laws of
the United States of America, unless the sale is either (A) to an Account Debtor
organized under the laws of Ontario or any other province of Canada in which the
PPSA has been adopted in substantially the same form or with the same effect as
currently in effect in Ontario, or (B) on letter of credit, guaranty or
acceptance terms, in each case acceptable to Administrative Agent in its
reasonable credit judgment (or insured by credit insurance acceptable to
Administrative Agent in its sole discretion), and (ii) in the case of Canadian
Borrower, it arises from a sale made or services rendered to an Account Debtor
not organized under the laws of Canada, unless the sale is either (A) to an
Account Debtor organized under the laws of the United States of America, or (B)
on letter of credit, guaranty or acceptance terms, in each case acceptable to
the Administrative Agent and the Canadian Agent in their reasonable credit
judgment (or insured by credit insurance acceptable to Canadian Agent in its
sole discretion), and (iii) in the case of UK Borrowers, it arises from a sale
made or services rendered to an Account Debtor not organized under the laws of
the United Kingdom, the United States of America or Canada unless the sale is on
letter of credit, guaranty or acceptance terms, in each case acceptable to
Administrative Agent and UK Agent in their reasonable credit judgment; or
(j) (a) it arises from a sale to the Account Debtor on a
xxxx-and-hold or consignment basis; or (b) it is subject to a reserve
established by the applicable Account Creditor or any of its Subsidiaries for
potential returns or refunds, to the extent of such reserve; or
(k) the Account Debtor is the United States of America, the
United Kingdom (or any country therein), or Her Majesty the Queen in right of
Canada or any department, agency or instrumentality thereof, unless the
applicable Account Creditor assigns its right to payment of such Account to
Administrative Agent, in a manner satisfactory to Administrative Agent, in its
reasonable credit judgment, so as to comply with the Assignment of Claims Act of
1940 (31 U.S.C. (S)203 et seq., as amended) or the Financial Administration Act
(Canada) as applicable; or
A-18
(l) it is not at all times subject to Administrative Agent's,
Canadian Agent's or UK Agent's, as the case may be, duly perfected, first
priority security interest and to no other Lien that is not a Permitted Lien; or
(m) the goods giving rise to such Account have not been shipped
to the Account Debtor or the services giving rise to such Account have not been
performed by the applicable Account Creditor and accepted by the Account Debtor
or the Account otherwise does not represent a final sale; or
(n) the Account is evidenced by chattel paper or an instrument
of any kind, or has been reduced to judgment; or
(o) if such Account is a Dated Account, such account remains
unpaid more than 120 days after the original invoice date; or
(p) the applicable Account Creditor or a Subsidiary of the
applicable Account Creditor has made any agreement with the Account Debtor for
any deduction therefrom (but only to the extent of such deduction), except for
discounts or allowances which are made in the ordinary course of business for
prompt payment or otherwise and which discounts or allowances are reflected in
the calculation of the face value of each invoice related to such Account; or
(q) more than 25% of the Accounts owing from the Account Debtor
are not Eligible Accounts hereunder, or, with respect to Accounts owing to
Canadian Borrower from Xxxxxx Cable TV and for periods of determination from the
Closing Date through and including December 31, 2002, more than 50% of the
Accounts owing from such Account Debtor are not Eligible Accounts hereunder; or
(r) it is not otherwise acceptable to Administrative Agent in
its reasonable credit judgment.
"Eligible Inventory" - Inventory of Domestic Borrower (other than
packaging materials and supplies, tooling, samples and literature) which
Administrative Agent, in its reasonable credit judgment, deems to be Eligible
Inventory. Without limiting the generality of the foregoing, no Inventory shall
be Eligible Inventory if:
(a) it is not raw materials or finished goods; or
(b) it is not in good, new and saleable condition; or
(c) it is slow-moving, obsolete or unmerchantable; or
(d) it does not meet all standards imposed by any governmental
agency or authority; or
A-19
(e) it does not conform in all material respect to any
covenants, warranties and representations set forth in the Agreement; or
(f) it is not at all times subject to Administrative Agent's
duly perfected, first priority security interest and no other Lien except a
Permitted Lien; or
(g) it is not situated at a location in compliance with the
Agreement or is in transit, provided that Inventory situated at a location not
owned by Domestic Borrower will be Eligible Inventory only if Administrative
Agent has received a satisfactory landlord's agreement or bailee letter, as
applicable, with respect to such location; or
(h) it is not otherwise acceptable to Administrative Agent in
its reasonable credit judgment.
"Environmental Claim" - any written accusation, allegation, notice of
violation, claim, demand, order, directive, cost recovery action or other cause
of action by, or on behalf of, any governmental authority or any Person for
damages, injunctive or equitable relief, personal injury (including sickness,
disease or death), remedial action costs, tangible or intangible property
damage, natural resource damages, nuisance relating to Hazardous Material,
pollution, any adverse effect on the environment caused by any Hazardous
Material, or fines, penalties or restrictions, resulting from or based upon: (a)
the existence, or the continuation of the existence, of a Release (including
sudden or non-sudden, accidental or non-accidental Releases); (b) exposure to
any Hazardous Material; (c) the presence, use, handling, transportation,
storage, treatment or disposal of any Hazardous Material; or (d) the violation
or alleged violation of any Environmental Law or Environmental Permit.
"Environmental Laws" - all applicable federal, provincial, state,
municipal or local (whether in the United States of America, Canada or United
Kingdom) laws, statutes, common law duties, rules, regulations, ordinances and
codes, together with all administrative orders, directed duties, requests,
licenses, authorizations and permits of, and agreements with, any governmental
authorities, in each case relating to environmental, health, safety and land use
matters, including without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"), the Clean Air Act, the
Federal Water Pollution Control Act of 1972, the Solid Waste Disposal Act, the
Federal Resource Conservation and Recovery Act, the Toxic Substances Control
Act, and, to the extent legally enforceable, the Emergency Planning and
Community Right-to-Know Act, the Environmental Protection Act (Ontario) or any
other act, rule, guideline or policy of Canada or any jurisdiction thereof
having the force of law relating to environmental, health, safety and land use
matters.
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"Environmental Permit" - any applicable permit, approval,
authorization, certificate, license, variance, filing or permission required by
or from any governmental authority pursuant to any Environmental Law.
"ERISA" - the Employee Retirement Income Security Act of 1974, as
amended, and all rules and regulations from time to time promulgated thereunder.
"ERISA Affiliate" - any trade or business (whether or not
incorporated) that, together with Domestic Borrower, is treated as a single
employer under Section 414(b) or (c) of the Code, or, solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
"Event of Default" - as defined in Section 10.1 of the Agreement.
"Fee Letter" - as defined in Section 2.3 of the Agreement.
"Fixed Charge Coverage Ratio" - as of the last day of any fiscal
quarter of Domestic Borrower, and for the Applicable Measurement Period, the
ratio of (a) (i) EBITDA for the Applicable Measurement Period, minus (ii)
Consolidated payments made in cash with respect to tax expense of Borrowers for
the Applicable Measurement Period, minus (iii) Consolidated unfinanced (i.e.,
not financed by third-party financing) Capital Expenditures of Borrowers for the
Applicable Measurement Period to (b) Consolidated Fixed Charges of Borrowers for
the Applicable Measurement Period.
"Fixed Charges" - for any period, with respect to any Borrower or any
of their Subsidiaries, the sum of cash interest expense, scheduled principal
payments and scheduled payments with respect to Capitalized Lease Obligations,
in each case made during such period.
"Fleet" - as defined in the preamble to the Agreement, or its
successor.
"Fleet Canada" - as defined in the preamble to the Agreement, or its
successor.
"Fleet UK" - as defined in the preamble to the Agreement, or its
successor.
"Foreign Subsidiary" - a Subsidiary of a Borrower that (a) is
organized under the laws of a country (or political subdivision thereof) other
than the United States of America and (b) holds all or substantially all of its
assets outside the United States of America.
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"Further Taxes" - any and all present or future taxes, levies,
assessments, imposts, duties, deductions, fees, withholdings or similar charges
(including net income taxes and franchise taxes), and all liabilities with
respect thereto, imposed by any jurisdiction on account of amounts payable or
paid pursuant to Section 2.13 of the Agreement.
"GAAP" - generally accepted accounting principles in the United States
of America in effect from time to time.
"Guarantors" - each Borrower, and each Subsidiary of Domestic Borrower
which is neither a Borrower nor a Restricted Subsidiary, and each other Person
who now or hereafter guarantees payment or performance of the whole or any part
of the Obligations.
"Guaranty Agreements" - the Domestic Borrower Guaranties, the Canadian
Borrower Guaranty, the UK Borrower Guaranty and the continuing guaranty
agreements executed by the Subsidiaries of Domestic Borrower which are neither
Borrowers nor Restricted Subsidiaries, in form and substance satisfactory to
Administrative Agent, together with each other guaranty hereafter executed by
any Guarantor.
"Guaranty Security Agreements" - the security agreements executed by
the Subsidiaries of Domestic Borrower which are neither Borrowers nor Restricted
Subsidiaries, in form and substance satisfactory to Administrative Agent, as
collateral security for the payment and performance of the obligations of the
Guarantors under the applicable Guaranty Agreements.
"Hazardous Materials" - all explosive or radioactive substances or
wastes, hazardous or toxic substances or wastes, pollutants, solid, liquid or
gaseous wastes, including petroleum or petroleum distillates, friable asbestos
or asbestos-containing materials, polychlorinated biphenyls ("PCBs") or
PCB-containing materials or equipment, radon gas, infectious or medical wastes
regulated pursuant to any Environmental Law and all other substances or wastes
of any nature regulated pursuant to any Environmental Law.
"Indebtedness" - as applied to a Person means, without duplication:
(a) all items which in accordance with GAAP would be included in
determining total liabilities as shown on the liability side of a balance sheet
of such Person as at the date as of which Indebtedness is to be determined,
including, without limitation, Capitalized Lease Obligations;
(b) all obligations of other Persons which such Person has
guaranteed;
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(c) all reimbursement obligations in connection with letters of
credit or letter of credit guaranties issued for the account of such Person;
(d) Derivative Obligations; and
(e) in the case of Borrowers (without duplication), the
applicable Obligations.
"Indemnitee" - as defined in Section 12.2 of the Agreement.
"Insolvency Laws of Canada" - each of the Bankruptcy and Insolvency
Act (Canada) and the Companies Creditors' Arrangement Act (Canada), each as now
and hereafter in effect, any successors to such statutes and any other
applicable insolvency or other similar law of any Canadian jurisdiction
including, without limitation, any law of any Canadian jurisdiction permitting a
debtor to obtain a stay or a compromise of the claims of its creditors against
it.
"Intellectual Property" - all past, present and future: trade secrets,
know-how and other proprietary information; trademarks, internet domain names,
service marks, trade dress, trade names, business names, designs, logos, slogans
(and all translations, adaptations, derivations and combinations of the
foregoing) indicia and other source and/or business identifiers, and the
goodwill of the business relating thereto and all registrations or applications
for registrations which have heretofore been or may hereafter be issued thereon
throughout the world; copyrights (including copyrights for computer programs)
and copyright registrations or applications for registrations which have
heretofore been or may hereafter be issued throughout the world and all tangible
property embodying the copyrights; unpatented inventions (whether or not
patentable); patent applications and patents; industrial design applications and
registered industrial designs; license agreements related to any of the
foregoing and income therefrom; books, records, writings, computer tapes or
disks, flow diagrams, specification sheets, computer software, source codes,
object codes, executable code, data, databases and other physical
manifestations, embodiments or incorporations of any of the foregoing; the right
to xxx for all past, present and future infringements of any of the foregoing;
all other intellectual property; and all common law and other rights throughout
the world in and to all of the foregoing.
"Interest Payment Date" - as to any Domestic Base Rate Loan, Domestic
LIBOR Loan, UK Base Rate Loan or Canadian Revolving Credit Loan, the first
calendar day of each month (for the immediately preceding month), computed
through the last calendar day of the preceding month, and as to any UK LIBOR
Loan, the last day of the applicable Interest Period, provided, however, that if
any Interest Period for a UK LIBOR Loan exceeds three months, the date which is
three months after the beginning of such Interest Period, and each date which is
three months thereafter prior to the end of such Interest Period, are also
Interest Payment Dates.
A-23
"Interest Period" - as applicable to any Domestic LIBOR Loan or UK
LIBOR Loan, a period commencing on the date such Domestic LIBOR Loan or UK LIBOR
Loan is made, continued or converted, and ending on the date which is one (1)
month, two (2) months, three (3) months, or six (6) months later, as may then be
requested by Borrower Representative (or a UK Borrower, as provided in the
Agreement); provided that (a) any Interest Period which would otherwise end on a
day which is not a Business Day shall end on the next preceding or succeeding
Business Day as is Administrative Agent's or UK Agent's custom in the market to
which such Domestic LIBOR Loan or UK LIBOR Loan relates; (b) there remains a
minimum of one (1) month, two (2) months, three (3) months or six (6) months
(depending upon which Interest Period Borrower Representative (or a UK Borrower,
as provided in the Agreement, selects) in the Term; and (c) all Interest Periods
of the same duration which commence on the same date shall end on the same date.
"Inventory Component" - as at any date of determination, the lesser of
(a) $8,000,000 and (b) the sum of (i) 47% of the value of Eligible Inventory
consisting of raw materials, plus (ii) 70% of the value of Eligible Inventory
consisting of finished goods. As used herein, "value" shall be determined on a
first-in, first-out, lower of cost or market basis in accordance with GAAP.
"Judgment Currency" - as defined in Section 12.15 of the Agreement.
"Judgments" - as defined in Section 10.1.15 of the Agreement.
"LC Guaranties" - the Domestic LC Guaranties and the UK LC Guaranties,
in the aggregate.
"Legal Requirement" - any requirement imposed upon Administrative
Agent, Canadian Agent, UK Agent or any Lender by any law of the United States of
America or Canada or the United Kingdom or by any regulation, order,
interpretation, ruling or official directive (whether or not having the force of
law) of the Federal Reserve Board, the Bank of Canada, the Bank of England or
any other board, central bank or governmental or administrative agency,
institution or authority of the United States of America, Canada, the United
Kingdom or any political subdivision of either thereof.
"Lender" -as defined in the preamble to the Agreement.
"Letters of Credit" - the Domestic Letters of Credit and the UK
Letters of Credit, in the aggregate.
"Leverage Ratio" - as of the last day of any fiscal quarter of
Domestic Borrower, the ratio of (a) Consolidated Indebtedness for Money Borrowed
of Borrowers as of such date, to (b) Annualized EBITDA as of such date.
A-24
"LIBOR" -
(a) as applicable to any Domestic LIBOR Loan, the rate per annum
(rounded upward, if necessary, to the nearest 1/32nd of one percent) as
determined on the basis of the offered rates for deposits in U.S. dollars for a
period of time comparable to such Domestic LIBOR Loan which appears on the
Telerate page 3750 as of 11:00 a.m. (London Time) on the date that is two (2)
London Banking Days preceding the first day of such LIBOR Loan; provided,
however, if the rate described above does not appear on the Telerate System on
any applicable interest determination date, the LIBOR rate shall be the rate
(rounded upwards as described above, if necessary) for deposits in U.S. dollars
for a period substantially equal to the interest period on the Reuters Page
"LIBO" (or such other page as may replace the LIBO Page on that service for the
purpose of displaying such rates), as of 11:00 a.m. (London Time), on the day
that is two (2) London Banking Days prior to the beginning of such interest
period. If both the Telerate and Reuters systems are unavailable, then the rate
for that date will be determined on the basis of the offered rates for deposits
in U.S. dollars for a period of time comparable to such LIBOR Loan which are
offered by four (4) major banks in the London interbank market at approximately
11:00 a.m. (London time), on the day that is two (2) London Banking Days
preceding the first day of such Domestic LIBOR Loan as selected by
Administrative Agent. The principal London office of each of the major London
banks so selected will be requested to provide a quotation of its U.S. dollar
deposit offered rate. If at least two (2) such quotations are provided, the rate
for that date will be the arithmetic mean of the quotations. If fewer than two
quotations are provided as requested, the rate for that date will be determined
on the basis of the rates quoted for loans in U.S. dollars to leading European
banks for a period of time comparable to such Domestic LIBOR Loan offered by
major banks in New York City at approximately 11:00 a.m. (New York City time),
on the date that is two (2) London Banking Days preceding the first day of such
Domestic LIBOR Loan. In the event that Administrative Agent is unable to obtain
any such quotation as provided above, it will be determined that LIBOR pursuant
to such Domestic LIBOR Loan cannot be determined. In the event that the Board of
Governors of the Federal Reserve System shall impose a Reserve Percentage with
respect to LIBOR deposits of Bank then, for any period during which such Reserve
Percentage shall apply, LIBOR shall be equal to the amount determined above
divided by an amount equal to 1 minus the Reserve Percentage.
(b) as applicable to any UK LIBOR Loan (all of which shall be in
Sterling), (i) the rate for the applicable Interest Period appearing on page
3750 of the Telerate screen which displays British Bankers Association Interest
Settlement Rates for deposits in Sterling (or such other page or service as may
replace such page on such system or service for the purpose of displaying such
rates) at or about 11:00 a.m. on the quotation date for the Interest Period; or
(ii) if no such display rate is then available for deposits in Sterling or for
the Interest Period relating to such UK LIBOR
A-25
Loan by prime banks in the London interbank market at or about 11:00 a.m. on the
quotation date for the Interest Period, the arithmetic mean (rounded upwards to
four decimal places) of the rates, as supplied to Fleet UK at its request,
quoted by the Reference Banks to leading banks in the London interbank market.
"LIBOR Loan" - either a Domestic LIBOR Loan or a UK LIBOR Loan, as the
context may require.
"Lien" - any interest in Property securing an obligation owed to, or a
claim by, a Person other than the owner of the Property, whether such interest
is based on common law, statute or contract. The term "Lien" shall also include
hypothecs, rights of sellers under conditional sales contracts or title
retention agreements, reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases and other title
exceptions and encumbrances affecting Property. For the purpose of the
Agreement, Borrowers (and their applicable Subsidiaries) shall be deemed to be
the owner of any Property which they have acquired or hold subject to a
conditional sale agreement or other arrangement pursuant to which title to the
Property has been retained by or vested in some other Person for security
purposes.
"Loan Account" - as defined in Section 3.6 of the Agreement.
"Loan Documents" - the Agreement, the Other Agreements and the
Security Documents.
"Loan Party" - collectively, Borrowers, each Subsidiary of a Borrower
which has either guarantied any of the Obligations or provided a security
interest in any of its assets to secure any of the Obligations, each Guarantor,
and any other Person which has provided a security interest in any of its assets
to secure any of the Obligations. As of the Closing Date, none of the UK
Borrowers, Channell Australia nor Egerton are Loan Parties.
"Loans" - all loans and advances of any kind made by Administrative
Agent, Canadian Agent, UK Agent or any Lender (or by any affiliate of Fleet)
pursuant to the Agreement.
"London Banking Day" - any date on which commercial banks are open for
business in London, England.
"Majority Lenders" - as of any date, Domestic Lenders holding 51% of
the sum of the aggregate Domestic Revolving Credit Commitments plus the
aggregate outstanding principal amount of the Domestic Term Loan and following
the termination of the Domestic Revolving Credit Commitments, Lenders holding
51% or more of the outstanding Loans (including affiliates of such Domestic
Lenders which
A-26
are Canadian Participating Lenders and UK Participating Lenders, whether or not
a refunding has occurred), Domestic LC Amounts, Domestic LC Obligations not yet
reimbursed by Domestic Borrower or funded with a Domestic Revolving Credit Loan,
UK LC Amounts and UK LC Obligations not yet reimbursed by UK Borrowers or funded
with a UK Revolving Credit Loan, provided, that (a) in each case, if there are 2
or more Lenders with outstanding Loans, a portion of the Domestic LC Amount or
UK LC Amount, unfunded and unreimbursed Domestic LC Obligations or UK LC
Obligations or Domestic Revolving Credit Commitments, at least 2 Lenders shall
be required to constitute Majority Lenders; and (b) prior to termination of the
Domestic Revolving Credit Commitments, if any Domestic Lender breaches its
obligation to fund any requested Domestic Revolving Credit Loan, for so long as
such breach exists, its voting rights hereunder shall be calculated with
reference to its outstanding Loans, portion of the Domestic LC Amount and
unfunded and unreimbursed Domestic LC Obligations, rather than its Domestic
Revolving Credit Commitment.
"Mandatory Costs" - with respect to a Loan, the cost of complying with
certain regulatory requirements expressed as a percentage per annum calculated
by Administrative Agent in accordance with Schedule A.
"Material Adverse Effect" - (a) a material adverse effect on the
business, condition (financial or otherwise), operation, performance or
properties of Borrowers and their Subsidiaries taken as a whole, (b) a material
adverse effect on the rights and remedies of Administrative Agent, Canadian
Agent, UK Agent or Lenders under the Loan Documents, or (c) the material
impairment of the ability of Borrowers or any of their Subsidiaries to perform
their obligations hereunder or under any other Loan Document.
"Maximum Rate" - as defined in Section 2.1.3(a) of the Agreement.
"Money Borrowed" - means, without duplication, (a) Indebtedness
arising from the lending of money by any Person to any Borrower or any of its
Subsidiaries; (b) Indebtedness, whether or not in any such case arising from the
lending by any Person of money to any Borrower or any of its Subsidiaries, (i)
which is represented by notes payable or drafts accepted that evidence
extensions of credit, (ii) which constitutes obligations evidenced by bonds,
debentures, notes or similar instruments, or (iii) upon which interest charges
are customarily paid (other than accounts payable) or that was issued or assumed
as full or partial payment for Property; (c) Indebtedness that constitutes a
Capitalized Lease Obligation; (d) reimbursement obligations with respect to
letters of credit or guaranties of letters of credit and (e) Indebtedness of any
Borrower or any of its Subsidiaries under any guaranty of obligations that would
constitute Indebtedness for Money Borrowed under clauses (a) through (c) hereof,
if owed directly by such Borrower or any of its Subsidiaries. Money Borrowed
shall not include trade payables or accrued expenses.
A-27
"Mortgages" - All mortgages, deeds of trust and comparable documents
now or at any time hereafter securing the whole or any part of the Obligations.
"Multiemployer Plan" - has the meaning set forth in Section 4001(a)(3)
of ERISA.
"Notes" - the Revolving Notes and the Term Notes.
"Notice of Canadian Revolving Loan Refunding" - as defined in Section
3.2.6 of the Agreement.
"Notice of UK Revolving Loan Refunding" - as defined in Section 3.2.7
of the Agreement.
"Notice of UK Term Loan Refunding" - as defined in Section 3.2.7 of
the Agreement.
"Obligations" - the Canadian Obligations, the Domestic Obligations and
the UK Obligations, collectively.
"Organizational I.D. Number" - with respect to any Borrower or any
Subsidiary of any Borrower, the organizational identification number assigned to
such Borrower or such Subsidiary by the applicable governmental unit or agency
of the jurisdiction of organization of such Borrower or such Subsidiary.
"Other Agreements" - any and all agreements, instruments and documents
(other than the Agreement and the Security Documents), heretofore, now or
hereafter executed by any Borrower, any Subsidiary of any Borrower or any other
third party and delivered to Administrative Agent, Canadian Agent, UK Agent or
any Lender in respect of the transactions contemplated by the Agreement, in each
case either as originally executed or as the same may from time to time be
supplemented, modified, amended, restated, extended or supplanted.
"Owned Properties" - as defined in Section 7.1.26(a) of the Agreement.
"Participant" - as defined in Section 11.9.2 of the Agreement.
"PAYE Reserve" - a reserve of funds maintained for the purpose of
meeting any claims in respect of preferential debts of UK Borrowers as such
debts are defined pursuant to or in accordance with the provisions of Section
386 and Schedule 6 of the Insolvency Act of 1986.
"PBGC" - the Pension Benefit Guaranty Corporation referred to and
defined in ERISA.
A-28
"PCBs" - as defined in the definition of "Hazardous Materials".
"Permitted Intercompany Loans" - collectively, (a) any intercompany
loans in existence on the Closing Date and identified on Schedule 8.2.3(b), and
(b) intercompany loans and advances made by any Borrower to another Borrower or
any Subsidiary of any Borrower or by any Subsidiary to any Borrower, provided
that (i) each Borrower and each Subsidiary shall record all such intercompany
transactions on its books and records in a manner reasonably satisfactory to
Agents, (ii) the obligations of any recipient of any such intercompany loans or
advances which is a Borrower or Subsidiary which has guarantied any of the
Obligations shall be subordinated to the applicable Obligations of such Borrower
or such guarantied Obligations in a manner reasonably satisfactory to Agents,
(iii) at the time any such intercompany loan or advance is made and after giving
effect thereto, the applicable Borrower making the loan or advance shall be
Solvent and the applicable recipient of the proceeds of the intercompany loan or
advance shall not have suffered a Bankruptcy Event, (iv) no Default or Event of
Default would occur and be continuing after giving effect to any such proposed
intercompany loan or advance, (v) all such intercompany loans or advances shall
at all times be unsecured, (vi) Administrative Agent shall not have reasonably
determined that any such intercompany loan could result in any material adverse
legal consequences to any Agent, Bank or any Lender or could have any material
adverse effect whatsoever on the enforceability of any of the Loan Documents,
(vii) no such intercompany loan or advance shall be illegal or otherwise violate
any law applicable to Borrowers and their Subsidiaries, (viii) the aggregate
principal amount of all such outstanding loans and advances described in this
clause (b) which are made by Canadian Borrower to Domestic Borrower shall not
exceed $1,500,000 at any time, and (ix) the aggregate principal amount of all
such outstanding loans and advances described in this clause (b) (other than
clause (b)(viii)) shall not exceed at any time the sum of (A) $250,000 plus (B)
any additional amounts to be funded by any Borrower to Channell Australia
approved in advance by Administrative Agent in its reasonable credit judgment.
"Permitted Liens" - any Lien of a kind specified in Section 8.2.5 of
the Agreement.
"Permitted Purchase Money Indebtedness" - Purchase Money Indebtedness
of Borrowers permitted pursuant to Section 8.2.3(g) hereof.
"Person" - an individual, partnership, corporation, limited liability
company, joint stock company, land trust, business trust, or unincorporated
organization, or a government or agency or political subdivision thereof.
"Plan" - in the case of Domestic Borrower or a Domestic Subsidiary, an
employee benefit plan (as defined in Section 3(3) of ERISA) subject to ERISA
which any Borrower or any ERISA Affiliate sponsors or maintains or to which any
Borrower
A-29
or any ERISA Affiliate makes, is making, or is obligated to make contributions
or otherwise has any liability.
"PPSA" - the Personal Property Security Act (Ontario) as in effect
from time to time; provided that in the event that, by reason of mandatory
provisions of law, the validity, perfection and effect of perfection or
non-perfection of a security interest or other applicable Lien is governed by
other personal property security laws, the term "PPSA" means such other personal
property security laws, including, without limitation, the Civil Code of Quebec.
"Preferential Creditors" - as to UK Borrowers, holders of
"preferential debts" as interpreted in Section 386 of the Insolvency Act 1986 of
England and Wales and listed in Schedule 6 of that Act.
"Prior Claims" - all Liens created by applicable law (in contrast with
Liens voluntarily granted) which rank or are capable of ranking prior or pari
passu with Canadian Agent's or UK Agent's, as applicable, Lien (or the
applicable equivalent of such Liens) against all or part of the Canadian
Collateral or the UK Collateral, as applicable, including for amounts owing for
vacation pay, employee deductions and contributions, goods and services taxes,
sales taxes, realty taxes, business taxes, workers' compensation, pension plan
or fund obligations and overdue rents (to the extent, in the case of rents, that
such rents are not already the subject of a reserve).
"Projections" - Borrowers' forecasted Consolidated and consolidating
(a) balance sheets, (b) profit and loss statements, (c) cash flow statements and
(d) capitalization statements, all prepared on a consistent basis with the
historical financial statements of Borrowers and their Subsidiaries, together
with appropriate supporting details and a statement of underlying assumptions.
"Property" - any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"Purchase Money Indebtedness" - means and includes (a) Indebtedness
(other than the Obligations) for the payment of all or any part of the purchase
price of any fixed assets, (b) any Indebtedness (other than the Obligations)
incurred at the time of or within 10 days prior to or after the acquisition of
any fixed assets for the purpose of financing all or any part of the purchase
price thereof, and (c) any renewals, extensions or refinancings thereof, but not
any increases in the principal amounts thereof outstanding at the time.
"Purchase Money Lien" - a Lien upon fixed assets which secures
Purchase Money Indebtedness, but only if such Lien shall at all times be
confined solely to the fixed assets the purchase price of which was financed
through the incurrence of the Purchase Money Indebtedness secured by such Lien.
A-30
"RBC Account" - the account maintained at The Royal Bank of Canada of
Canadian Borrower, Account Number 1068840, Account Transit Number 00002.
"Reference Banks" - with respect to LIBOR, the principal London
offices of Barclays Bank PLC, The Royal Bank of Scotland and HSBC or such other
banks as may be appointed by Fleet UK (acting on the instructions of the
Majority Lenders) in consultation with the Borrower Representative.
"Release" - any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injection, escaping, leaching, dumping, disposing, or
depositing, or threat thereof, of any Hazardous Material in, into, onto or
through the environment.
"Reportable Event" - any of the events set forth in Section 4043(b) of
ERISA.
"Reserve Percentage" - the maximum aggregate reserve requirement
(including all basic, supplemental, marginal and other reserves) which is
imposed on member banks of the Federal Reserve System against "Eurocurrency
Liabilities" as defined in Regulation D.
"Reserves" - as defined in Section 1.1.5 of the Agreement.
"Restricted Investment" - any investment made in cash or by delivery
of Property to any Person, whether by acquisition of stock, Indebtedness for
Money Borrowed or other obligation or Security, or by loan, advance or capital
contribution, or otherwise, or in any Property except the following:
(a) Permitted Intercompany Loans and any other investments by any
Borrower, to the extent existing on the Closing Date, in one or more
Subsidiaries of any Borrower;
(b) Property to be used in the ordinary course of business;
(c) Current Assets arising from the sale of goods and services in
the ordinary course of business of Borrowers or any of their Subsidiaries;
(d) investments in direct obligations of the United States of
America, or any agency thereof or obligations guaranteed by the United States of
America, provided that such obligations mature within one year from the date of
acquisition thereof;
(e) investments in certificates of deposit maturing within one
year from the date of acquisition and fully insured by the Federal Deposit
Insurance Corporation;
A-31
(f) investments in commercial paper given the highest rating by a
national credit rating agency and maturing not more than 270 days from the date
of creation thereof;
(g) investments in money market, mutual or similar funds having
assets in excess of $100,000,000 and the investments of which are limited to
investment grade securities;
(h) investments existing on the date hereof and listed on
Schedule 8.2.13 hereto;
(i) written agreements between any Borrower and one or more
financial institutions providing for "swap", "cap", "collar" or other interest
rate protection with respect to Indebtedness for Money Borrowed; and
(j) investments otherwise expressly permitted pursuant to the
Agreement.
"Restricted Subsidiary" - as of any date of determination, a
Subsidiary of Domestic Borrower which (a) possesses less than 2.5% of
Consolidated assets of Domestic Borrower, determined in accordance with GAAP and
does not own any material Intellectual Property, or (b) a Foreign Subsidiary
which the Majority Lenders have agreed, in writing, prior to such date, to
classify as a "Restricted Subsidiary" because of "deemed dividend" concerns with
respect to such Foreign Subsidiary under United States tax laws; provided,
however, that the term "Restricted Subsidiary" shall not include Canadian
Borrower or UK Borrowers. As of the Closing Date, the Subsidiaries listed on
Schedule 7.1.4B hereto are the sole Restricted Subsidiaries, and as of the UK
Closing Date, Egerton and Channell Australia shall cease to be a Restricted
Subsidiary (provided that the requirements of the UK Side Letter, and not
Section 8.1.8 of the Agreement, shall govern the security interest and guaranty
requirements with respect to those Subsidiaries to the extent not in place on
the Closing Date).
"Revolving Credit Loans" - collectively, the Domestic Revolving Credit
Loans, Canadian Revolving Credit Loans and UK Revolving Credit Loans made by any
Lender pursuant to Section 1.1 of the Agreement.
"Revolving Credit Maximum Amount" - $25,000,000, as such amount may be
reduced from time to time pursuant to the terms of the Agreement.
"Revolving Notes" - the secured promissory notes to be executed by
Borrowers in favor of each Lender to evidence the Revolving Credit Loans, which
shall be in the form of Exhibit 1.2 to the Agreement, together with any
replacement or successor notes therefor.
A-32
"Security" - all shares of stock, partnership interests, membership
interests, membership units or other ownership interests in any other Person and
all warrants, options or other rights to acquire the same.
"Security Documents" - the Guaranty Agreements, the Guaranty Security
Agreements, the Mortgages and all other instruments and agreements now or at any
time hereafter securing the whole or any part of the Obligations, in each case
either as originally executed or as the same may from time to time be
supplemented, modified, amended, restated, extended or supplanted.
"Solvent" - as to any Person, such Person (a) organized under the laws
of any state of the United States of America, (i) owns Property whose fair
saleable value is greater than the amount required to pay all of such Person's
Indebtedness (including contingent debts discounted based on the likelihood of
their having to be paid), (ii) is able to pay all of its Indebtedness as such
Indebtedness matures and (iii) has capital sufficient to carry on its business
and transactions and all business and transactions in which it is about to
engage, (b) organized under the laws of the United Kingdom, that at the time of
determination such Person is not unable to pay its debts as they fall due within
the meaning of Section 123 of the Insolvency Act of 1986, and (c) with respect
to any Person on a particular date, (i) the property of such Person is
sufficient, if disposed of at a fairly conducted sale under legal process, to
enable payment of all its obligations, due and accruing due, (ii) the property
of such Person is, at a fair valuation, greater than the total amount of
liabilities, including contingent liabilities, of such Person, and (iii) such
Person has not ceased paying its current obligations in the ordinary course of
business as they generally become due.
"Sterling" - the lawful currency of Great Britain.
"Sterling Equivalent" - at any time, as to any amount denominated in
U.S. Dollars, the equivalent amount in Sterling determined by the Administrative
Agent at such time on the basis of the spot rate for the purchase by UK Agent of
such U.S. Dollars, as applicable, with Sterling through a foreign exchange
trading office selected by UK Agent or such other rate which Administrative
Agent may select based on reasonable commercial practices.
"Subordinated Debt" - Indebtedness of any Borrower or any Subsidiary
of any Borrower that is subordinated to the Obligations in a manner satisfactory
to Agents, and contains terms, including without limitation, payment terms,
satisfactory to Agents.
"Subsidiary" - any Person of which another Person owns, directly or
indirectly through one or more intermediaries, more than 50% of the Voting Stock
at the time of determination.
A-33
"Term" - as defined in Section 4.1 of the Agreement.
"Term Loans" - the UK Term Loans and the Domestic Term Loan,
collectively.
"Term Notes" - the secured promissory notes to be executed by
Borrowers in favor of each applicable Lender to evidence the Term Loans, which
shall be in the form of Exhibit 1.3 to the Agreement, together with any
replacement or successor notes therefor.
"Transferee" - as defined in Section 2.13.1 of the Agreement.
"Type of Organization" - with respect to any Borrower or any
Subsidiary of any Borrower, the kind or type of entity by which such Borrower or
such Subsidiary is organized, such as a corporation or limited liability
company.
"UCC" - the Uniform Commercial Code as in effect in the State of
California on the date of this Agreement, as the UCC may be amended or otherwise
modified.
"UK Availability" - the amount of additional money which UK Borrowers
are entitled to borrow from time to time as UK Revolving Credit Loans, such
amount being the lesser of (i) the UK Revolving Credit Sub-Limit minus the
Dollar Equivalent of the UK Revolving Credit Loans outstanding and the Dollar
Equivalent of the outstanding principal amount of the UK Term Loans and the
Dollar Equivalent of the UK LC Amount and the Dollar Equivalent of the UK LC
Obligations, and (ii) the difference derived when the sum of the Dollar
Equivalent of the principal amount of UK Revolving Credit Loans to UK Borrowers
then outstanding (including any amounts which Administrative Agent, UK Agent or
UK Lender may have paid for the account of UK Borrowers pursuant to any of the
Loan Documents and which have not been reimbursed by UK Borrowers), and the
Dollar Equivalent of any Reserves and the Dollar Equivalent of the outstanding
principal amount of the UK Term Loans and the Dollar Equivalent of the UK LC
Amount and the Dollar Equivalent of the UK LC Obligations is subtracted from the
Dollar Equivalent of the UK Borrowing Base, subject in each case to the other
limitations in Section 1.1.3 of the Agreement. If the amount outstanding is
equal to or greater than the UK Revolving Credit Sub-Limit or the UK Borrowing
Base, UK Availability is $0.
"UK Base Rate" - the rate of interest announced or quoted by Fleet UK
as its U.K. Base Rate for Sterling, whether or not such rate is the lowest rate
charged by Fleet UK to its most preferred borrowers; and, if such UK Base Rate
is discontinued by Fleet UK as a standard, a comparable reference rate
designated by Fleet UK as a substitute therefor shall be the UK Base Rate.
A-34
"UK Base Rate Loan" - any Loan hereunder bearing interest computed by
reference to the UK Base Rate, including, without limitation, that portion of
the outstanding principal amount of the UK Term Loans bearing interest with
reference to the UK Base Rate.
"UK Borrower Guaranty" - the continuing guaranty agreement executed by
the UK Borrowers, in form and substance satisfactory to Administrative Agent.
"UK Borrowers" - as defined in Section 1.4 of the Agreement.
"UK Borrowing Base" - as at any date of determination thereof, the
Dollar Equivalent of an amount equal to the lesser of the following:
(a) the UK Revolving Credit Sub-Limit; and
(b) an amount equal to 75% of the net amount of Eligible Accounts
of UK Borrowers outstanding at such date.
The advance rate set forth above may be adjusted downward by UK Agent
as UK Agent shall deem necessary or appropriate in its reasonable credit
judgment, including, without limitation, adjustments with respect to Prior
Claims. For purposes hereof, the net amount of Eligible Accounts at any time
shall be the face amount of such Eligible Accounts less any and all returns,
rebates, discounts (which may, at UK Agent's option, be calculated on shortest
terms), credits, allowances or excise taxes of any nature at any time issued,
owing, claimed by Account Debtors, granted, outstanding or payable in connection
with such Accounts at such time.
"UK Closing Date" - the date on which all of the conditions precedent
in the UK Side Letter are satisfied or waived by the Agents and the Lenders and
the initial UK Revolving Credit Loans are made and the UK Term Loans are made or
the initial UK Letters of Credit or UK LC Guaranties are issued under the
Agreement.
"UK Collateral" - all of the Property and interests in Property of UK
Borrowers described in Section 5 of the Agreement, and all other Property and
interests in Property of either UK Borrower that now or hereafter secures the
payment and performance of any of the UK Obligations, and all other Property and
interest in Property of any Person that is identified in a Loan Document as "UK
Collateral".
"UK Fronting Fee" - as defined in Section 2.6(b) of the Agreement.
"UK Lender" - Fleet UK, in its capacity as provider of UK Revolving
Credit Loans and the UK Term Loans and issuer of UK Letters of Credit and UK LC
Guaranties.
A-35
"UK Letter of Credit" - any standby or commercial letter of credit,
bank guarantee or similar instrument issued by Fleet UK or any Affiliate of
Fleet UK for the account of a UK Borrower.
"UK LC Amount" - at any time, the Dollar Equivalent of the aggregate
undrawn available amount of all UK Letters of Credit and UK LC Guaranties then
outstanding.
"UK LC Guaranty" - any guaranty pursuant to which Fleet UK or any
Affiliate of Fleet UK shall guaranty the payment or performance by any UK
Borrower of its reimbursement obligation under any UK Letter of Credit.
"UK LC Margin" - the Applicable Margin then in effect for UK LIBOR
Loans which are UK Revolving Credit Loans per annum.
"UK LC Obligations" - Any Obligations that arise from any draw against
any UK Letter of Credit or against any UK Letter of Credit supported by a UK LC
Guaranty.
"UK LIBOR Loan" - any Loan made hereunder to a UK Borrower bearing
interest computed by reference to the LIBOR, including, without limitation, that
portion of the outstanding principal amount of the UK Term Loans bearing
interest with reference to the LIBOR.
"UK Loan Account" - as defined in Section 3.6 of the Agreement.
"UK Loss" - for any period, without duplication, the difference
between (a)(i) net income (or loss) of UK Borrowers, plus (ii) UK Borrowers'
interest expense for that period, including without limitation any rent payable
with respect to Capitalized Lease Obligations which should, in accordance with
GAAP, be treated as interest expense, to the extent paid during that period in
cash, plus (iii) the aggregate amount of federal, state and provincial income
taxes on or measured by such net income to the extent paid or accrued for that
period, plus (iv) the depreciation and amortization expense of UK Borrowers for
that period, plus (v) the non-cash expenses of UK Borrowers for that period,
minus (vi) any non-cash income for that period, in each case determined in
accordance with GAAP, consistently applied minus (b) Capital Expenditures of UK
Borrowers for that period.
"UK Non-Excluded Taxes" - as defined in Section 2.13.10 of the
Agreement.
"UK Obligations" - all Loans made by the UK Lender, all UK LC
Obligations and all other advances, debts, liabilities, obligations, covenants
and duties, together with all interest (including, without limitation, whether
accruing prior to or subsequent to the commencement of a bankruptcy or similar
proceeding with either
A-36
UK Borrower as a debtor thereof and whether or not such interest is an allowed
claim in any such proceeding), fees and other charges thereon, owing, arising,
due or payable from either UK Borrower to UK Agent, for its own benefit, or from
either UK Borrower to UK Agent for the benefit of UK Lender or UK Participating
Lenders, or from either UK Borrower to Canadian Agent, Canadian Lender or
Canadian Participating Lenders, or from either UK Borrower to Fleet UK or any
Affiliate of Fleet UK, of any kind or nature, present or future, whether or not
evidenced by any note, guaranty or other instrument, whether arising under the
Agreement or any of the other Loan Documents or otherwise, whether direct or
indirect (including those acquired by assignment), absolute or contingent,
primary or secondary, due or to become due, now existing or hereafter arising
and however acquired, including without limitation any Derivative Obligations
owing by either UK Borrower to UK Agent, UK Lender, or any UK Participating
Lender.
"UK Participating Lender" - each Lender (other than UK Lender) that
has a UK Percentage as identified on Schedule 1.1; it being understood and
agreed that each of the following shall be a UK Participating Lender: each
United Kingdom Affiliate of a Domestic Lender (other than Fleet) which is: (i)
in respect of a Loan made to a UK Borrower by a person that was a bank (as
defined for the purposes of Section 349 of the Income and Corporation Taxes Act
1988 (as amended, the "Taxes Act") currently in Section 840A of the Taxes Act)
at the time that the Loan was made, which Lender is beneficially entitled to and
within the charge to United Kingdom corporation tax as respects any payment of
interest made in respect of that Loan; or (ii) which is beneficially entitled to
interest payable to it in respect of a Loan to the UK Borrower and is: (A) a
company resident in the United Kingdom for United Kingdom tax purposes, or (B) a
partnership, each member of which is a company resident in the United Kingdom
for United Kingdom tax purposes, or (C) a company not resident in the United
Kingdom for United Kingdom tax purposes which carries on a trade in the United
Kingdom through a branch or agency and which brings into account interest
payable in respect of that Loan in computing its chargeable profits (within the
meaning given by Section 11(2) of the Taxes Act).
"UK Participation Fee" - as defined in Section 2.6 of the Agreement.
"UK Percentage" - relative to the UK Lender and any UK Participating
Lender, the applicable percentage relating to such Person's obligation to
participate in UK Letters of Credit issued for the account of UK Borrowers and
its obligation to fund UK Revolving Credit Loans and a portion of the UK Term
Loans pursuant to Section 3.2.7 of the Agreement as set forth opposite its name
on Schedule 1.1 to the Agreement, as such percentage may be adjusted from time
to time pursuant to assignment agreements executed by such Lender and delivered
pursuant to Section 11.9 of the Agreement. A Lender shall not have any UK
Percentage if its percentage under the UK Percentage column is zero or is blank.
A-37
"UK Real Estate" - the real (or immovable) Property owned in fee by
Egerton consisting of land and buildings located on the north side of Murray
Road, Leesons Hill, Orpington, Kent, United Kingdom and registered at Her
Majesty's Land Registry with freehold title no. SGL519467.
"UK Refunding Amount" - as defined in Section 3.2.7 of the Agreement.
"UK Revolving Credit Exposure" - at any date, the amount equal to the
Dollar Equivalent of the aggregate principal amount of all UK Revolving Credit
Loans, the UK LC Amount and all UK LC Obligations then outstanding.
"UK Revolving Credit Loan" - as defined in Section 1.1.3(a) of the
Agreement.
"UK Revolving Credit Sub-Limit" - the lesser of (a) $400,000 (as such
amount may be reduced from time to time in accordance with the provisions of the
Agreement), and (b) (i) $1,000,000 (as such amount may be reduced from time to
time in accordance with the provisions of the Agreement) minus (ii) the
aggregate principal amount of the UK Term Loans.
"UK Side Letter" - the letter agreement dated as of the Closing Date
between Administrative Agent and Domestic Borrower concerning the circumstances
under which the UK Borrowers shall become Borrowers under this Agreement.
"UK Term Loan Funding Date" - the date upon which UK Lender funds the
UK Term Loans to UK Borrowers as requested by UK Borrowers, provided that (i)
such date must occur prior to the last day of the Term and (ii) no Default or
Event of Default shall then have occurred and be continuing.
"UK Term Loans" - as defined in Section 1.3.2 of the Agreement.
"Unused Line Fee" - as defined in Section 2.5 of the Agreement.
"Voting Stock" - Securities of any class or classes of a corporation,
limited partnership or limited liability company or any other entity the holders
of which are ordinarily, in the absence of contingencies, entitled to vote with
respect to the election of corporate directors (or Persons performing similar
functions if the entity is not a corporation).
"Withdrawal Liability" - the liability to a Multiemployer Plan, as
defined in Section 4201 of ERISA.
"yield maintenance fee" - as defined in Section 3.2.5 of the
Agreement.
A-38
Other Terms. All other terms contained in the Agreement shall have,
when the context so indicates, the meanings provided for by the UCC to the
extent the same are used or defined therein.
Certain Matters of Construction. The terms "herein", "hereof" and
"hereunder" and other words of similar import refer to the Agreement as a whole
and not to any particular section, paragraph or subdivision. Any pronoun used
shall be deemed to cover all genders. The section titles, table of contents and
list of exhibits appear as a matter of convenience only and shall not affect the
interpretation of the Agreement. All references to statutes and related
regulations shall include any amendments of same and any successor statutes and
regulations. All references to any of the Loan Documents shall include any and
all modifications thereto and any and all extensions or renewals thereof. Any
reference herein to "Borrowers and their Subsidiaries" or the like shall refer
solely to Borrowers during such times, if any, as Borrowers do not have any
Subsidiaries.
A-39
EXHIBIT 1.2
SECURED PROMISSORY NOTE
(REVOLVING NOTE)
$__________ September __, 2002
Los Angeles, California
FOR VALUE RECEIVED, the undersigned ("Borrower"), hereby promises to
pay to the order of ________________________, _______________ ___________
(hereinafter "Lender"), at its offices located at ________________________
__________________________________________________________, in such coin or
currency of the United States which shall be legal tender in payment of all
debts and dues, public and private, at the time of payment, the principal sum of
$____________ or such lesser aggregate amount of Loans as may be made pursuant
to the Lender's pro rata share of the Domestic Revolving Credit Commitment under
the Loan Agreement referred to below, together with any accrued and unpaid
interest thereon from and after the date hereof (i) on the unpaid principal
balance outstanding consisting of Domestic Base Rate Loans at a fluctuating rate
per annum equal to the Domestic Base Rate plus the Applicable Margin and (ii) if
Borrower has properly exercised the option to obtain Domestic LIBOR Loans as
provided in Section 3.1.7 of the Loan Agreement (as defined below), on the
unpaid principal balance outstanding consisting of Domestic LIBOR Loans at a
fixed rate per annum equal to the LIBOR plus the Applicable Margin for the
corresponding Interest Period.
This Note is one of the Revolving Notes referred to in, and is issued
pursuant to, that certain Loan and Security Agreement dated as of September __,
2002, by and among Channell Commercial Corporation, a Delaware corporation,
Channell Commercial Canada Inc., an Ontario corporation, the UK Borrowers party
thereto, if any, the lenders from time to time a party thereto, Fleet Capital
Corporation, as Administrative Agent, Fleet Capital Canada Corporation, as
Canadian Agent, and Fleet National Bank, London U.K. Branch, trading as
FleetBoston Financial, as UK Agent (as amended, extended, renewed, supplemented,
or otherwise modified from time to time, the "Loan Agreement"). This Note is
entitled to all of the benefits and security of the Loan Agreement and is
subject to all of the terms, covenants and conditions of the Loan Agreement. All
capitalized terms used herein, unless otherwise specifically defined in this
Note, shall have the meanings ascribed to them in the Loan Agreement.
The rate of interest in effect hereunder with respect to Domestic Base
Rate Loans shall increase or decrease by an amount equal to any increase or
decrease in the Domestic Base Rate, effective as of the opening of business on
the date that any such change in the Domestic Base Rate occurs. Interest shall
be computed in the manner provided in the Loan Agreement.
-1-
For so long as no Event of Default shall have occurred, the principal
amount of, and accrued interest on, this Note shall be due and payable on the
dates and in the manner hereinafter set forth:
(a) Interest on each Domestic Base Rate Loan evidenced hereby
shall be due and payable monthly on the first calendar day of each month
(for the immediately preceding month), computed through the last calendar
day of the preceding month, commencing on the first calendar day of the
first month after the funding of such Domestic Base Rate Loan, and
continuing until such time as the full principal balance of such Domestic
Base Rate Loan shall have been paid in full;
(b) Interest on each Domestic LIBOR Loan evidenced hereby
shall be due and payable on the first calendar day of each month (for the
immediately preceding month) during and immediately following the
applicable Interest Period, computed through the last calendar day of the
preceding month, commencing on the first calendar day of the first month
after the funding of such Domestic LIBOR Loan, and continuing until such
time as the full principal balance of such Domestic LIBOR Loan shall have
been paid in full or converted into a Domestic Base Rate Loan as provided
in Section 3.1.9 of the Loan Agreement; and
(c) Principal shall be payable on the dates and in the manner
set forth in the Loan Agreement.
Notwithstanding any provisions in the Loan Agreement, the entire
unpaid principal balance and accrued interest on this Note shall be due and
payable immediately upon any termination of the Loan Agreement pursuant to
Section 4.2 thereof.
This Note shall be subject to mandatory prepayment in accordance with
the provisions of Section 3.3 of the Loan Agreement. Borrower may also terminate
the Loan Agreement and, in connection with such termination, prepay this Note in
the manner provided in Section 4.2.2 of the Loan Agreement.
Upon the occurrence of an Event of Default, Lender shall have all of
the rights and remedies set forth in Section 10 of the Loan Agreement.
Time is of the essence of this Note. To the fullest extent permitted
by applicable law, Borrower, for itself and its legal representatives,
successors and assigns, expressly waives presentment, demand, protest, notice of
dishonor, notice of non-payment, notice of maturity, notice of protest,
presentment for the purpose of accelerating maturity and diligence in
collection.
Wherever possible, each provision of this Note shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Note shall be prohibited or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or remaining provisions of
this Note. No delay or failure on the part of Lender in the exercise of any
right or remedy hereunder shall operate as a waiver thereof, nor as an
acquiescence in any default, nor shall any single or partial exercise by Lender
of any right or remedy preclude
-2-
any other right or remedy. Lender, at its option, may enforce its rights against
any collateral securing this Note without enforcing its rights against Borrower,
any guarantor of the indebtedness evidenced hereby or any other property or
indebtedness due or to become due to Borrower. Borrower agrees that, without
releasing or impairing Borrower's liability hereunder, Lender may at any time
release, surrender, substitute or exchange any collateral securing this Note and
may at any time release any party primarily or secondarily liable for the
indebtedness evidenced by this Note.
This Note shall be governed by, and construed and enforced in
accordance with, the laws of the State of California.
IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed
and delivered in Los Angeles, California on the date first above written.
CHANNELL COMMERCIAL
CORPORATION,
a Delaware corporation
By: ___________________________
Name: _________________________
Title: ________________________
-3-
EXHIBIT 1.3
SECURED PROMISSORY NOTE
(TERM NOTE)
$______________ September ___, 2002
Los Angeles, California
FOR VALUE RECEIVED, the undersigned ("Borrower"), hereby promises to
pay to the order of _____________________ _______________________________
(hereinafter "Lender"), at its offices located at
___________________________________________________________________, in such
coin or currency of the United States which shall be legal tender in payment of
all debts and dues, public and private, at the time of payment, the principal
sum of $______________ together with any accrued and unpaid interest thereon
from and after the date hereof (i) on the unpaid principal balance outstanding
consisting of Domestic Base Rate Loans made by Lender to Borrower at a
fluctuating rate per annum equal to the Domestic Base Rate plus the Applicable
Margin and (ii) if Borrower has properly exercised the option to obtain Domestic
LIBOR Loans as provided in Section 3.1.7(a) of the Loan Agreement (as defined
below), on the unpaid principal balance outstanding consisting of Domestic LIBOR
Loans made by Lender to Borrower, at a fixed rate per annum equal to the
Applicable Margin plus the LIBOR for the corresponding Interest Period.
This Note is one of the Term Notes referred to in, and is issued
pursuant to, that certain Loan and Security Agreement dated as of September __,
2002, by and among Channell Commercial Corporation, a Delaware corporation,
Channell Commercial Canada Inc., an Ontario corporation, the UK Borrowers party
thereto, if any, the lenders from time to time a party thereto, Fleet Capital
Corporation, as Administrative Agent, Fleet Capital Canada Corporation, as
Canadian Agent, and Fleet National Bank, London U.K. Branch, trading as
FleetBoston Financial, as UK Agent (as amended, extended, renewed, supplemented,
or otherwise modified from time to time, the "Loan Agreement"). This Note is
entitled to all of the benefits and security of the Loan Agreement and is
subject to all of the terms, covenants and conditions of the Loan Agreement. All
capitalized terms used herein, unless otherwise specifically defined in this
Note, shall have the meanings ascribed to them in the Loan Agreement.
The rate of interest in effect hereunder with respect to Domestic Base
Rate Loans shall increase or decrease by an amount equal to any increase or
decrease in the Domestic Base Rate effective as of the opening of business on
the date that any such change in the Domestic Base Rate occurs. Interest shall
be computed in the manner provided in the Loan Agreement.
-1-
For so long as no Event of Default shall have occurred, the principal
amount of, and accrued interest on, this Note shall be due and payable on the
dates and in the manner hereinafter set forth:
(a) Interest on each Domestic Base Rate Loan made by Lender to
Borrower shall be due and payable monthly on the first calendar day of each
month (for the immediately preceding month), computed through the last
calendar day of the preceding month, commencing on the first calendar day
of the first month after the funding of such Domestic Base Rate Loan, and
continuing until such time as the full principal balance of such Domestic
Base Rate Loan shall have been paid in full;
(b) Interest on each Domestic LIBOR Loan made by Lender to
Borrower shall be due and payable on the first calendar day of each month
(for the immediately preceding month) during and immediately following the
applicable Interest Period, computed through the last calendar day of the
preceding month, commencing on the first calendar day of the first month
after the funding of such Domestic LIBOR Loan, and continuing until such
time as the full principal balance of such Domestic LIBOR Loan shall have
been paid in full or converted into a Domestic Base Rate Loan as provided
in Section 3.1.9 of the Loan Agreement;
(c) Principal shall be payable in eleven (11) quarterly
installments of $____________ each, commencing on January 1, 2003 and
continuing on the first day of each quarter thereafter, through and
including July 1, 2005; and
(d) The entire remaining principal amount then outstanding,
together with any and all other amounts due hereunder, shall be due and
payable on September 30, 2005.
Notwithstanding the foregoing, the entire unpaid principal balance and
accrued interest on this Note shall be due and payable immediately upon any
termination of the Loan Agreement pursuant to Section 4.2 thereof.
This Note shall be subject to mandatory prepayment in accordance with
the provisions of Section 3.3 of the Loan Agreement. Borrower may also terminate
the Loan Agreement and, in connection with such termination, prepay this Note in
the manner provided in Section 4.2.2 of the Loan Agreement.
Upon the occurrence of an Event of Default, Lender shall have all of
the rights and remedies set forth in Section 10 of the Loan Agreement.
Time is of the essence of this Note. To the fullest extent permitted
by applicable law, Borrower, for itself and its legal representatives,
successors and assigns, expressly waives presentment, demand, protest, notice of
dishonor, notice of non-payment, notice of maturity, notice of protest,
presentment for the purpose of accelerating maturity, and diligence in
collection, except for notices expressly provided for in the Loan Agreement.
Wherever possible, each provision of this Note shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Note
-2-
shall be prohibited or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity without invalidating
the remainder of such provision or remaining provisions of this Note. No delay
or failure on the part of Lender in the exercise of any right or remedy
hereunder shall operate as a waiver thereof, nor as an acquiescence in any
default, nor shall any single or partial exercise by Lender of any right or
remedy preclude any other right or remedy. Lender, at its option, may enforce
its rights against any collateral securing this Note without enforcing its
rights against Borrower, any guarantor of the indebtedness evidenced hereby or
any other property or indebtedness due or to become due to Lender. Borrower
agrees that, without releasing or impairing Borrower's liability hereunder,
Lender may at any time release, surrender, substitute or exchange any collateral
securing this Note and may at any time release any party primarily or
secondarily liable for the indebtedness evidenced by this Note.
This Note shall be governed by, and construed and enforced in
accordance with, the laws of the State of California.
IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed
and delivered to Lender (or Agent on behalf of Lender) on the date first above
written.
CHANNELL COMMERCIAL
CORPORATION,
a Delaware corporation
By:_________________________________
Name:_______________________________
Title:______________________________
-3-
EXHIBIT 1.4
JOINDER AGREEMENT
THIS JOINDER AGREEMENT ("Joinder Agreement") is executed as of ___________,
200_, by Channell Limited, a limited liability company incorporated under the
laws of England and Wales ("CL") and Channell Commercial Europe Limited, a
limited liability company incorporated under the laws of England and Wales
("CCEL" and, together with CL, "Joining Borrowers"), and delivered to Fleet
Capital Corporation, as Administrative Agent, pursuant to Section 1.4 of the
Loan and Security Agreement dated as of September __, 2002, by and among
Channell Commercial Corporation, a Delaware corporation ("Domestic Borrower"),
Channell Commercial Canada Inc., an Ontario corporation ("Canadian Borrower",
collectively with Domestic Borrower, "Borrowers"), the lenders from time to time
a party thereto (collectively, the "Lenders"), Fleet Capital Corporation, as
Administrative Agent, and Fleet Capital Canada Corporation, as Canadian Agent
(as amended, extended, renewed, supplemented, or otherwise modified from time to
time, the "Loan Agreement"). Terms used but not defined in this Joinder
Agreement shall have the respective meanings specified in the Loan Agreement.
RECITALS
A. Pursuant to Section 1.4 of the Loan Agreement, in order become UK
Borrowers under the Loan Agreement, this Joinder Agreement must be executed by
Joining Borrowers and accepted by Administrative Agent.
B. Joining Borrowers wish to join the Loan Agreement as UK
Borrowers, and Fleet National Bank, London U.K. Branch, trading as FleetBoston
Financial ("Fleet UK") wishes to join the Loan Agreement as UK Agent and UK
Lender.
NOW, THEREFORE, the Joining Borrowers agree as follows:
AGREEMENT
1. Joinder. By this Joinder Agreement, each Joining Borrower shall become
a "UK Borrower" under the Loan Agreement. Each Joining Borrower agrees that such
Joining Borrower will be bound by all covenants, terms, conditions, and duties
applicable to a UK Borrower under the Loan Agreement.
2. Joinder of Fleet UK. By this Joinder Agreement, Fleet UK hereby
becomes the "UK Agent" and "UK Lender" under the Loan Agreement with respect to
all of the obligations of the UK Agent and UK Lender under the Loan Agreement.
Fleet agrees that it will be bound by all provisions applicable to the UK Agent
and UK Lender in the Loan Agreement.
3. Representations and Warranties of Joining Borrowers. Each Joining
Borrower represents and warrants to the Lenders that it is a company duly
incorporated and validly existing under the laws of England and Wales. Each
Joining Borrower further represents and warrants to the Lenders that, as of the
Effective Date, except as disclosed by such Joining
-1-
Borrower (which disclosures shall be deemed to amend the Schedules and other
disclosures delivered as contemplated in Article 7 of the Loan Agreement) the
representations and warranties contained in Article 7 of the Loan Agreement are
true and correct as applied to such Joining Borrower as a UK Borrower on and as
of the Effective Date as though made on that date.
4. Solvency of UK Borrowers. Joining Borrowers represent and warrant that
the table attached hereto as Annex 1 indicates the manner in which UK Borrowers
have been made Solvent subsequent to the Closing Date.
5. Further Assurances. Joining Borrowers agree to execute and deliver
such other instruments, financing statements and documents and take such other
action as the Administrative Agent may reasonably request in connection with the
transactions contemplated by this Joinder Agreement.
6. GOVERNING LAW ; JURISDICTION AND VENUE. THIS JOINDER AGREEMENT HAS
BEEN NEGOTIATED AND DELIVERED IN AND SHALL BE DEEMED TO HAVE BEEN MADE IN LOS
ANGELES, CALIFORNIA. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA; PROVIDED, HOWEVER, THAT IF
ANY OF THE COLLATERAL SHALL BE LOCATED IN ANY JURISDICTION OTHER THAN
CALIFORNIA, THE LAWS OF SUCH JURISDICTION SHALL GOVERN THE METHOD, MANNER AND
PROCEDURE FOR FORECLOSURE OF, OR REALIZATION UNDER, ADMINISTRATIVE AGENT'S,
CANADIAN AGENT'S OR UK AGENT'S LIEN UPON SUCH COLLATERAL AND THE ENFORCEMENT OF
ADMINISTRATIVE AGENT'S, CANADIAN AGENT'S OR UK AGENT'S OTHER REMEDIES IN RESPECT
OF SUCH COLLATERAL TO THE EXTENT THAT THE LAWS OF SUCH JURISDICTION ARE
DIFFERENT FROM OR INCONSISTENT WITH THE LAWS OF CALIFORNIA. AS PART OF THE
CONSIDERATION FOR NEW VALUE RECEIVED, AND REGARDLESS OF ANY PRESENT OR FUTURE
DOMICILE OR PRINCIPAL PLACE OF BUSINESS OF ANY BORROWER, ADMINISTRATIVE AGENT,
CANADIAN AGENT, UK AGENT OR ANY LENDER, EACH JOINING BORROWER HEREBY CONSENTS
AND AGREES THAT THE SUPERIOR COURT OF LOS ANGELES COUNTY, CALIFORNIA, OR, AT
ADMINISTRATIVE AGENT'S, CANADIAN AGENT'S OR UK AGENT'S OPTION, THE UNITED STATES
DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA, SHALL HAVE JURISDICTION
TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN ANY JOINING BORROWER ON THE
ONE HAND AND ADMINISTRATIVE AGENT, CANADIAN AGENT, UK AGENT OR ANY LENDER ON THE
OTHER HAND PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR
RELATED TO THIS AGREEMENT; PROVIDED THAT ADMINISTRATIVE AGENT, CANADIAN AGENT,
UK AGENT AND/OR ANY LENDER MAY INITIATE LEGAL OR EQUITABLE PROCEEDINGS IN ANY
OTHER COURT WHICH HAS SUBJECT MATTER JURISDICTION OVER THE MATTER IN
CONTROVERSY. EACH JOINING BORROWER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO
SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH
JOINING BORROWER HEREBY WAIVES ANY OBJECTION WHICH SUCH BORROWER
-2-
MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON
CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF
AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH JOINING BORROWER HEREBY WAIVES
PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH
ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER
PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO THE JOINING
BORROWER REPRESENTATIVE AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND THAT
SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF THE JOINING
BORROWER REPRESENTATIVE'S ACTUAL RECEIPT THEREOF OR 3 DAYS AFTER DEPOSIT IN THE
U.S. MAILS, PROPER POSTAGE PREPAID. NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR
OPERATE TO AFFECT THE RIGHT OF ADMINISTRATIVE AGENT, CANADIAN AGENT, UK AGENT OR
ANY LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW, OR TO
PRECLUDE THE ENFORCEMENT BY ADMINISTRATIVE AGENT, CANADIAN AGENT, UK AGENT OR
ANY LENDER OF ANY JUDGMENT OR ORDER OBTAINED IN SUCH FORUM OR THE TAKING OF ANY
ACTION UNDER THIS AGREEMENT TO ENFORCE SAME IN ANY OTHER APPROPRIATE FORUM OR
JURISDICTION.
7. The effective date (the "Effective Date") of this Joinder Agreement is
_________, 200_.
[signature page follows]
-3-
IN WITNESS WHEREOF, each Joining Borrower, and Fleet UK, has executed
this Joinder Agreement by its duly authorized officer as of the date first
written above.
"Joining Borrowers"
CHANNELL LIMITED, a limited liability
company incorporated under the laws of
England and Wales
By: __________________________________
Its: _________________________________
[Printed Name and Title]
CHANNELL COMMERCIAL EUROPE LIMITED, a
limited liability company incorporated
under the laws of England and Wales
By: __________________________________
Its: _________________________________
[Printed Name and Title]
FLEET NATIONAL BANK, LONDON U.K.
BRANCH, trading as FleetBoston
Financial, as UK Agent and UK Lender
By:___________________________________
Its: _________________________________
[Printed Name and Title]
-4-
ACKNOWLEDGED AND APPROVED:
FLEET CAPITAL CORPORATION,
as Administrative Agent
By:___________________________________
Its: _________________________________
[Printed Name and Title]
FLEET CAPITAL CANADA CORPORATION,
as Canadian Agent and Canadian Lender
By:___________________________________
Its: _________________________________
[Printed Name and Title]
-5-
EXHIBIT 8.1.3
COMPLIANCE CERTIFICATE
[________________________]
__________________, ___
Fleet Capital Corporation, as Administrative Agent
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
The undersigned, the chief financial officer of Xxxxxxxx Commercial
Corporation, a Delaware corporation ("Domestic Borrower"), gives this
certificate to Fleet Capital Corporation, in its capacity as Administrative
Agent ("Administrative Agent") in accordance with the requirements of Section
8.1.3 of that certain Loan and Security Agreement dated as of September ____,
2002 among Xxxxxxxx Commercial Corporation, a Delaware corporation ("Domestic
Borrower"), Xxxxxxxx Commercial Canada Inc., an Ontario corporation ("Canadian
Borrower"), the UK Borrowers party thereto, if any (together with Domestic
Borrower and Canadian Borrower, "Borrowers"), Administrative Agent, Fleet
Capital Canada Corporation, in its capacity as Canadian Agent, Fleet National
Bank, London U.K. branch, trading as FleetBoston Financial, in its capacity as
UK Agent, and the Lenders party thereto (as amended or otherwise modified, the
"Loan Agreement"). Capitalized terms used in this Certificate, unless otherwise
defined herein, shall have the meanings ascribed to them in the Loan Agreement.
Based upon my review of the balance sheets and statements of income of
Domestic Borrower and its Subsidiaries for the [monthly period] [fiscal year]
ending _______________, ____ (the "Determination Date"), copies of which are
attached hereto, I hereby certify that:
1. Section 8.2.3(h). As of the Determination Date, the aggregate
principal amount of intercompany loans and advances not identified on Schedule
8.2.3(b) as in effect on the Closing Date is $_____________.
2. Section 8.2.3(g). The aggregate unpaid principal amount of
Purchase Money Indebtedness and Capitalized Lease Obligations as of the
Determination Date was $______________.
Exhibit 8.1.3-Page 1
3. Section 8.2.3(i). As of the Determination Date, the amount of
the guarantied obligations under guaranties of the nature described in Section
8.2.3(i) by Subsidiaries of Domestic Borrowers was $__________.
4. Section 8.2.3(k). As of the Determination Date, outstanding
Indebtedness of Borrowers and their Subsidiaries not included in paragraphs (a)
through (j) of Section 8.2.3 of the Agreement was $_____________.
5. Section 8.2.7(c). The aggregate amount of Distributions by
Domestic Borrower consisting of the repurchase of the common stock of Domestic
Borrower in the open market made during each fiscal year (or, for monthly
reports, during the fiscal-year-to-date through the end of such month) of
Domestic Borrower was $_____________, and each such Distribution was made in
compliance with the limitations set forth in Section 8.2.7(c).
6. Section 8.2.8. The aggregate amount of Capital Expenditures
made by Borrowers and their Subsidiaries during the fiscal year (or, for monthly
reports, during the fiscal-year-to-date through the end of such month) of
Domestic Borrower ending on the Determination Date was $_________. The amount
excluded from the foregoing determination as permitted by the proviso in the
definition of "Capital Expenditures" for such period was $_________.
7. Section 8.2.9. The aggregate obligations to make cash payments
of Borrowers and their Subsidiaries under operating leases in the fiscal year
(or, for monthly reports, during the fiscal-year-to-date through the end of such
month) of Domestic Borrower ending on the Determination Date in excess of the
amount set forth in Schedule 8.2.9 as of the Closing Date was $___________.
8. Section 8.2.18. Aggregate Availability is not to be less than
$1,500,000 at any time.
9. Section 8.2.19. As of the Determination Date, UK Loss for the
calendar month ending on the Determination Date was $_________. Aggregate UK
Loss since the Closing Date was $_________.
10. Section 8.2.20. As of the Determination Date, the amount on
deposit in the Bermuda Account was $________.
11. Section 8.3. As of the Determination Date (if the
Determination Date is the last day of a fiscal quarter of Domestic Borrower),
the Fixed Charge Coverage Ratio was ____ to 1.00.
12. As of the Determination Date (if the Determination Date is
the last day of a fiscal quarter of Domestic Borrower), the Leverage Ratio (for
purposes of determining the Applicable Margin) was _____ to 1.00.
Exhibit 8.1.3-Page 2
13. As of the Determination Date, the Subsidiaries of Domestic
Borrower which possess less than 2.5% of Consolidated assets of Domestic
Borrower, determined in accordance with GAAP and do not own any material
Intellectual Property are the following: ___________________________.
No Default exists on the date hereof, other than: _____________
________________________________________________ [if none, so state]; and
No Event of Default exists on the date hereof, other than _______
____________________________________________________ [if none, so state].
Very truly yours,
--------------------------------------
Chief Financial Officer
Exhibit 8.1.3-Page 3
EXHIBIT 8.1.3(g)
STATUTORY PAYABLE CERTIFICATE
-----------------------------
STATUTORY PAYABLES
------------------
AS AT:
------------
COMPANY NAME:
-------------
--------------------------------------------------------------------------------------------------
TOTAL OWED DATE PAID AMOUNT IN
ARREARS
--------------------------------------------------------------------------------------------------
Employee Income Tax Withholdings
--------------------------------------------------------------------------------------------------
Unemployment Insurance (UIC) -
Employees' Portion
--------------------------------------------------------------------------------------------------
Canada Pension Plan (CPP) -
Employee's Portion
--------------------------------------------------------------------------------------------------
Employer's Share of Payroll taxes
--------------------------------------------------------------------------------------------------
Corporate Income Tax
--------------------------------------------------------------------------------------------------
Goods & Services Tax (GST)
--------------------------------------------------------------------------------------------------
Provincial Sales Tax (PST)
--------------------------------------------------------------------------------------------------
Municipal Taxes
--------------------------------------------------------------------------------------------------
Workplace Safety and Insurance
--------------------------------------------------------------------------------------------------
Pension Plan
--------------------------------------------------------------------------------------------------
Vacation Pay
--------------------------------------------------------------------------------------------------
TOTAL
--------------------------------------------------------------------------------------------------
The foregoing information is certified correct.
Officer:______________________
Exhibit 8.2.12-Page 1
Exhibit 8.1.4
Fleet Capital Corporation
Borrowing Certificate
================================================================================
Client: Borrowers (a) Report Date:
--------------------------------------------------------------------------------
Assignment Number:
================================================================================
================================================================================
A/R Loan Number: Inventory Loan Number:
--------------------------------------------------------------------------------
Dates Covered - A/R: Dates Covered - Inventory:
================================================================================
================================================================================
ACCOUNTS RECEIVABLE INVENTORY
--------------------------------------------------------------------------------
Collateral Collateral
--------------------------------------------------------------------------------
Beginning Balance Beginning Balance
--------------------------------------------------------------------------------
2. Sales (+) 2. Inventory Additions (+)
--------------------------------------------------------------------------------
3. Credit Memos (-)
--------------------------------------------------------------------------------
4. Adjustment (+) 4. Adjustment (+)
--------------------------------------------------------------------------------
5. Adjustment (-) 5. Adjustment (-)
--------------------------------------------------------------------------------
6. Net Collections (-) 6. Inventory Removal (-)
--------------------------------------------------------------------------------
7. Discounts (-)
--------------------------------------------------------------------------------
8. Overpayments (+)
--------------------------------------------------------------------------------
9. Unapplied Cash
--------------------------------------------------------------------------------
Current Balance Current Balance
--------------------------------------------------------------------------------
Unapplied Cash Balance Unapplied Cash Balance
--------------------------------------------------------------------------------
Ineligible Ineligible
--------------------------------------------------------------------------------
Eligible Collateral Eligible Collateral
--------------------------------------------------------------------------------
Less Reserves: Less Reserves:
--------------------------------------------------------------------------------
Statutory Accounts Rent Reserves
--------------------------------------------------------------------------------
Statutory Accounts Other
--------------------------------------------------------------------------------
Dilution Reserve
--------------------------------------------------------------------------------
Other
--------------------------------------------------------------------------------
Qualified Collateral Qualified Collateral
--------------------------------------------------------------------------------
Loan Loan
--------------------------------------------------------------------------------
Beginning Balance Beginning Balance
--------------------------------------------------------------------------------
10. Cash (Checks/ACH) (-)
--------------------------------------------------------------------------------
11. Cash (Wire) (-)
--------------------------------------------------------------------------------
12. Adjustment (+/-) 12. Adjustment (+/-)
--------------------------------------------------------------------------------
13. Advance (+)
--------------------------------------------------------------------------------
Current Balance Current Balance
--------------------------------------------------------------------------------
Remaining Availability Remaining Availability
================================================================================
(a) Borrowing Base Certificates to be submitted for Xxxxxxxx Commerical
Corporation, Xxxxxxxx Commercial Canada Inc., Xxxxxxxx Commercial Europe
Limited, and Xxxxxxxx Limited UK
The foregoing information is delivered to Fleet Capital Corporation in
accordance with a Loan and Security Agreement between Fleet Capital and
______________________, dated __________ . I hereby certify that the information
contained herein is true and correct as of the dates shown herein. Nothing
contained herein shall constitute a waiver, modification, or limitation of any
of the terms or conditions set forth in the referenced Loan and Security
Agreement.
================================================================================
Approved by: Prepared by:
--------------------------------------------------------------------------------
Title: Title:
--------------------------------------------------------------------------------
Date: Date:
================================================================================
EXHIBIT 8.3
FINANCIAL COVENANTS
Minimum Fixed Charge Coverage Ratio. Borrowers shall not permit, as of the last
day of any fiscal quarter of Domestic Borrower (beginning with the fiscal
quarter ending December 31, 2002), the Fixed Charge Coverage Ratio to be less
than 1.15 to 1.00.
Exhibit 8.3-Page 1
EXHIBIT 12.18
JOINT BORROWER PROVISIONS
UK Borrowers acknowledge and agree that UK Borrowers shall be
jointly and severally liable for all UK Obligations arising under the Loan
Documents. In furtherance thereof, UK Borrowers acknowledge and agree as
follows:
1. For the purpose of implementing the joint borrower provisions of the
Loan Documents, UK Borrowers hereby irrevocably appoint each other as their
agent and attorney-in-fact for all purposes of the Loan Documents, including the
giving and receiving of notices and other communications.
2. It is understood and agreed that the handling of this credit facility on
a joint borrowing basis as set forth in this Agreement is solely as an
accommodation to UK Borrowers and at their request, and that neither the
Administrative Agent nor the Lenders shall incur any liability to UK Borrowers
as a result thereof. To induce the Lenders to do so, and in consideration
thereof, UK Borrowers hereby agree to indemnify Administrative Agent and the
Lenders and hold Administrative Agent and the Lenders harmless from and against
any and all liabilities, expenses, losses, damages and/or claims of damage or
injury asserted against Administrative Agent or the Lenders by UK Borrowers or
by any other person or entity arising from or incurred by reason of
Administrative Agent's or the Lenders' handling of the financing arrangement of
UK Borrowers as herein provided, reliance by Administrative Agent or the Lenders
on any requests or instructions from UK Borrowers or any other action taken by
Administrative Agent or the Lenders; other than liabilities, expenses, losses,
damages and/or claims of damage or injury arising out of the gross negligence or
willful misconduct of the Lenders or any of them or the Administrative Agent.
3. Each UK Borrower acknowledges that the liens created or granted by the
Loan Documents will or may secure UK Obligations of persons other than such UK
Borrower and, in full recognition of that fact, UK Borrowers consent and agree
that the Lenders may, at any time and from time to time, without notice or
demand (except to the extent required pursuant to this Agreement), and without
affecting the enforceability or security hereof or of any other Loan Document:
(a) supplement, modify, amend, extend, renew, accelerate, or
otherwise change the time for payment or the terms of the UK Obligations or
any part thereof, including any increase or decrease of the rate(s) of
interest thereon, in each case in accordance with the terms of the
applicable Loan Documents;
(b) supplement, modify, amend or waive, or enter into or give
any agreement, approval or consent with respect to, the UK Obligations or
any part thereof or any of the Loan Documents or any additional security or
guaranties, or any condition, covenant, default, remedy, right,
representation or term thereof or thereunder in accordance with the terms
of the applicable Loan Documents;
-1-
(c) accept new or additional instruments, documents or
agreements in exchange for or relative to any of the Loan Documents or the
UK Obligations or any part thereof;
(d) accept partial payments on the UK Obligations;
(e) receive and hold additional security or guaranties for the
UK Obligations or any part thereof;
(f) release, reconvey, terminate, waive, abandon, fail to
perfect, subordinate, exchange, substitute, transfer, enforce any security
or guaranties, and apply any security and direct the order or manner of
sale thereof as the Lenders in their sole and absolute discretion may
determine in accordance with the terms of the applicable Loan Documents;
(g) release any person from any personal liability with respect
to the UK Obligations or any part thereof;
(h) settle, release on terms satisfactory to the Lenders or by
operation of applicable laws or otherwise liquidate or enforce any UK
Obligations and any security or guaranty in any manner, consent to the
transfer of any security and bid and purchase at any sale in accordance
with the terms of the applicable Loan Documents; and/or
(i) consent to the merger, change or any other restructuring or
termination of the corporate or other existence of UK Borrowers or any
other person, and correspondingly restructure the UK Obligations, and any
such merger, change, restructuring or termination shall not affect the
liability of UK Borrowers or the continuing existence of any lien
hereunder, under any other Loan Document to which any UK Borrower is a
party or the enforceability hereof or thereof with respect to all or any
part of the UK Obligations.
Upon the occurrence of and during the continuance of any Event of
Default, the Lenders may enforce this Agreement and the other Loan Documents
independently as to each UK Borrower and independently of any other remedy or
security the Lenders at any time may have or hold in connection with the UK
Obligations, and it shall not be necessary for the Lenders to marshal assets in
favor of any UK Borrower or any other person or to proceed upon or against
and/or exhaust any other security or remedy before proceeding to enforce this
Agreement and the other Loan Documents. Each UK Borrower expressly waives any
right to require the Lenders to marshal assets in favor of any UK Borrower or
any other person or to proceed against any other person or any Collateral
provided by any other person, and agrees that the Lenders may proceed against
any persons and/or Collateral in such order as they shall determine in their
sole and absolute discretion. The Lenders may file a separate action or actions
against either UK Borrower, whether action is brought or prosecuted with respect
to any other security or against any other person, or whether any other person
is joined in any such action or actions. Each UK Borrower agrees that the
Lenders and each UK Borrower and any affiliate of UK Borrowers may deal with
each other in connection with the UK
-2-
Obligations or otherwise, or alter any contracts or agreements now or hereafter
existing between any of them, in any manner whatsoever, all without in any way
altering or affecting the security of this Agreement or the other Loan
Documents. Each UK Borrower expressly waives the benefit of any statute(s) of
limitations affecting its liability hereunder or the enforcement of the UK
Obligations or any liens created or granted herein or by any other Loan
Document. The rights of the Lenders hereunder and under the other Loan Documents
shall be reinstated and revived, and the enforceability of this Agreement and
the other Loan Documents shall continue, with respect to any amount at any time
paid on account of the UK Obligations which thereafter shall be required to be
restored or returned by the Lenders upon bankruptcy, insolvency or
reorganization of any UK Borrower or otherwise, all as though such amount had
not been paid. The enforceability of this Agreement and the other Loan Documents
at all times shall remain effective, as to each UK Borrower, even though the UK
Obligations, including any part thereof or any other security or guaranty
therefor, may be or hereafter may become invalid or otherwise unenforceable as
against the other UK Borrowers or any other party and whether or not the other
UK Borrowers or any other party shall have any personal liability with respect
thereto. Each UK Borrower expressly waives any and all defenses now or hereafter
arising or asserted by reason of (a) any disability or other defense of the
other UK Borrowers or any other person with respect to the UK Obligations, (b)
the unenforceability or invalidity of any security or guaranty for the UK
Obligations or the lack of perfection or continuing perfection or failure of
priority of any security for the UK Obligations (other than any security or
guaranty given by such UK Borrower), (c) the cessation for any cause whatsoever
of the liability of the other UK Borrowers or any other person (other than by
reason of the full payment and performance of all UK Obligations), (d) any
failure of the Lenders to marshal assets in favor of any UK Borrower or any
other person, (e) any failure of the Lenders to give notice of sale or other
disposition of Collateral to the other UK Borrowers or any other person or any
defect in any notice that may be given in connection with any sale or
disposition of Collateral, (f) any act or omission of the Lenders or others that
directly or indirectly results in or aids the discharge or release of any UK
Borrower or any other person or the UK Obligations or any other security or
guaranty therefor by operation of law or otherwise, other than through the gross
negligence or willful misconduct of the Lenders or any of them or the
Administrative Agent, (g) any law which provides that the obligation of a surety
or guarantor must neither be larger in amount nor in other respects more
burdensome than that of the principal or which reduces a surety's or guarantor's
obligation in proportion to the principal obligation, (h) any failure of the
Lenders to file or enforce a claim in any bankruptcy or other proceeding with
respect to any person, (i) the election by the Lenders, in any bankruptcy
proceeding of any person, of the application or non-application of Section
1111(b)(2) of the United States Bankruptcy Code, (j) any extension of credit or
the grant of any lien under Section 364 of the United States Bankruptcy Code,
(k) any use of cash collateral under Section 363 of the United States Bankruptcy
Code, (l) any agreement or stipulation with respect to the provision of adequate
protection in any bankruptcy proceeding of any person, (m) the avoidance of any
lien in favor of the Lenders for any reason (other than, as to each UK Borrower,
the avoidance of any lien in favor of the Lenders granted by such UK Borrower),
(n) any bankruptcy, insolvency, reorganization, arrangement, readjustment of
debt, liquidation or dissolution proceeding commenced by or against any person,
including any discharge of, or bar or stay against collecting, all or any of the
UK Obligations (or any interest thereon) in or as a result of any such
proceeding, (o) to the
-3-
extent permitted, the benefits of any form of one-action rule under any
applicable law or (p) any action taken by the Lenders that is authorized by any
provision of any Loan Document and otherwise enforceable under applicable law.
Each UK Borrower waives all rights and defenses arising out of an election of
remedies by Lender, even though that election of remedies, such as a nonjudicial
foreclosure with respect to security for the obligations of UK Borrowers has
destroyed such UK Borrower's rights of subrogation and reimbursement against the
principal by the operation of Section 580d of the California Code of Civil
Procedure or otherwise. Except as provided herein, each UK Borrower expressly
waives all setoffs and counterclaims and all presentments, demands for payment
or performance, notices of nonpayment or nonperformance, protests, notices of
protest, notices of dishonor and all other notices or demands of any kind or
nature whatsoever with respect to the UK Obligations, and all notices of
acceptance of this Agreement or of the existence, creation or incurring of new
or additional UK Obligations.
4. Each UK Borrower represents and warrants to the Lenders that such UK
Borrower has established adequate means of obtaining from the other UK Borrower,
on a continuing basis, financial and other information pertaining to the
businesses, operations and condition (financial and otherwise) of the other UK
Borrower and its respective properties, and each UK Borrower now is and
hereafter will be completely familiar with the businesses, operations and
condition (financial and otherwise) of the other UK Borrower and its respective
properties. Each UK Borrower hereby expressly waives and relinquishes any duty
on the part of the Lenders or Administrative Agent (should any such duty exist)
to disclose to such UK Borrower any matter, fact or thing related to the
businesses, operations or condition (financial or otherwise) of the other UK
Borrower or the other UK Borrower's properties, whether now known or hereafter
known by the Lenders or Administrative Agent during the life of this Agreement.
With respect to any of the UK Obligations, the Lenders need not inquire into the
powers of any UK Borrower or the officers or employees acting or purporting to
act on their behalf.
5. In the event that all or any part of the obligations of UK Borrowers at
any time are secured by any one or more deeds of trust or mortgages creating or
granting liens on any interests in real property, each UK Borrower authorizes
the Lenders, upon the occurrence of and during the continuance of any Event of
Default, at the Lenders' sole option, without notice or demand and without
affecting any obligations of UK Borrowers, the enforceability of this Agreement,
or the validity or enforceability of any liens or security interests of the
Lenders on any Collateral, to foreclose any or all of such deeds of trust or
mortgages by judicial or nonjudicial sale. Each UK Borrower expressly waives any
defenses to the enforcement of this Agreement or the other Loan Documents or any
liens or security interests created or granted hereby or by the other Loan
Documents or to the recovery by the Lenders against the other UK Borrowers or
any other person or entity liable therefor of any deficiency after a judicial or
nonjudicial foreclosure or sale, even though such a foreclosure or sale may
impair the subrogation rights of such UK Borrower and may preclude any of them
from obtaining reimbursement or contribution from any other person. Each UK
Borrower expressly waives any defenses or benefits that may be derived from
California Code of Civil Procedure xx.xx. 580a, 580b, 580d or 726, or comparable
provisions of the laws of any other jurisdiction, and all other suretyship
defenses it otherwise might or would have under California law or other
applicable law.
-4-
6. Until no part of any commitment to lend under this Agreement remains
outstanding and all of the UK Obligations have been paid and performed in full,
notwithstanding anything to the contrary elsewhere contained herein or in any
other Loan Document to which any UK Borrower is a party, each UK Borrower hereby
waives with respect to the other UK Borrower and its respective successors and
assigns (including any surety) and any other person any and all rights at law or
in equity to subrogation, to reimbursement, to exoneration, to contribution, to
indemnity, to setoff or to any other rights that could accrue to a surety
against a principal, to a guarantor against a maker or obligor, to an
accommodation party against the party accommodated, or to a holder or transferee
against a maker and which any UK Borrower may have or hereafter acquire against
the other UK Borrower or any other party in connection with or as a result of
any UK Borrower's execution, delivery and/or performance of the Loan Agreement
or any other Loan Document to which such UK Borrower is a party. Each UK
Borrower agrees that it shall not have or assert any such rights against the
other UK Borrower or the other UK Borrower's successors and assigns or any other
person (including any surety), either directly or as an attempted setoff to any
action commenced against such UK Borrower by the other such UK Borrower (as
borrower or in any other capacity) or any other person. Each UK Borrower hereby
acknowledges and agrees that this waiver is intended to benefit the Lenders and
shall not limit or otherwise affect any UK Borrower's liability hereunder, under
any other Loan Document to which such UK Borrower is a party, or the
enforceability hereof or thereof. Until such time, if any, as all of the UK
Obligations have been paid and performed in full and no portion of any
commitment to lend under this Agreement remains in effect, each UK Borrower
expressly waives any right to enforce any remedy that the Lenders now have or
hereafter may have against the other UK Borrower and waives the benefit of, or
any right to participate in, any Collateral now or hereafter held by the
Lenders.
7. Without limiting the generality of the foregoing, each UK Borrower
hereby waives discharge, to the fullest extent permitted under applicable law,
by waiving all defenses based on suretyship or impairment of collateral.
8. Each UK Borrower warrants and agrees that each of the waivers and
consents set forth herein is made after consultation with legal counsel and with
full knowledge of their significance and consequences, with the understanding
that events giving rise to any defense or right waived may diminish, destroy or
otherwise adversely affect rights which each UK Borrower otherwise may have
against the other UK Borrowers, the Lenders, or others, or against any
Collateral, and that, under the circumstances, the waivers and consents herein
given are reasonable. If any of the waivers or consents herein are determined to
be contrary to any applicable law or public policy, such waivers and consents
shall be effective to the maximum extent permitted by law.
9. For purposes of this Agreement, the provisions of Sections 5 and 6 of
this Exhibit 12.18 shall apply and be effective only to the extent that any
court, tribunal or other governmental agency shall have deemed UK Borrowers to
be sureties of one another rather than co-borrowers.
10. For purposes of clarification, Agents, Lenders and Borrowers
acknowledge and agree that this Agreement does not, and shall not be construed
to,
-5-
constitute a guaranty by either UK Borrower of any of the Domestic Obligations
under the Loan Agreement or any obligation comparable to such a guaranty of the
Domestic Obligations, and each such UK Borrower, Agents, and Lenders
specifically disclaim the existence of any such guaranty under this Agreement.
-6-
SCHEDULE A
Mandatory Costs Formulae applicable to Lenders lending from the U.K.
NB. may not be appropriate if only UK Base Rate Loans are made
1. The Mandatory Cost is an addition to the interest rate to compensate Lenders
for the cost of compliance with (a) the requirements of the Bank of England
and/or the Financial Services Authority (or, in either case, any other authority
which replaces all or any of its functions) or (b) the requirements of the
European Central Bank.
2. On the first day of each Interest Period (or as soon as possible thereafter)
UK Agent shall calculate, as a percentage rate, a rate (the "Associated Costs
Rate") for UK Lender and each UK Participating Lender (together with the UK
Lender, the "Subject Lenders"), in accordance with the paragraphs set out below.
The Mandatory Cost will be calculated by the UK Agent for the purposes of this
Schedule A (the "Agent") as a weighted average of the Subject Lenders'
Associated Costs Rates (weighted in proportion to the percentage participation
of each Subject Lender in the relevant Loan) and will be expressed as a
percentage rate per annum.
3. The Associated Costs Rate for any Subject Lender lending from a facility
office in a Participating Member State (as defined below) will be the percentage
notified by that Subject Lender to Agent. This percentage will be certified by
that Subject Lender in its notice to Agent to be its reasonable determination of
the cost (expressed as a percentage of that Subject Lender's participation in
all advances made from that facility office) of complying with the minimum
reserve requirements of the European Central Bank in respect of loans made from
that facility office.
4. The Associated Costs Rate for any Subject Lender lending from a facility
office in the United Kingdom will be calculated by Agent as follows:
AB + C(B--D) + E x 0.01 per cent. per annum
-------------------------------------------
100 - (A+C)
where:
A. is the percentage of Eligible Liabilities (assuming these to be in
excess of any stated minimum) which that Subject Lender is from time to time
required to maintain as an interest free cash ratio deposit with the Bank of
England to comply with cash ratio requirements;
B. is the percentage rate of interest (excluding the Applicable Margin
and the Mandatory Cost and, if the Loan is an unpaid sum, the additional rate of
interest specified in subsection 2.1.2 of the Agreement) payable for the
relevant Interest Period on the Loan;
SCHEDULE A
C. is the percentage (if any) of Eligible Liabilities which
that Subject Lender is required from time to time to maintain as interest
bearing Special Deposits with the Bank of England;
D. is the percentage rate per annum payable by the Bank of
England to Agent on interest bearing Special Deposits; and
E. is designed to compensate Subject Lenders for amounts
payable under the Fees Rules and is calculated by Agent as being the average of
the most recent rates of charge supplied by the Reference Banks to Agent
pursuant to paragraph 7 below and expressed in pounds per (Pounds)1,000,000.
5. For the purposes of this Schedule:
(a) "Eligible Liabilities" and "Special Deposits" have the
meanings given to them from time to time under or pursuant to the Bank of
England Act 1998 or (as may be appropriate) by the Bank of England;
(b) "Fees Rules" means the rules on periodic fees contained in
the FSA Supervision Manual or such other law or regulation as may be in force
from time to time in respect of the payment of fees for the acceptance of
deposits;
(c) "Fee Tariffs" means the fee tariffs specified in the Fees
Rules under the activity group A.1 Deposit acceptors (ignoring any minimum fee
or zero rated fee required pursuant to the Fees Rules but taking into account
any applicable discount rate); and
(d) "Tariff Base" has the meaning given to it in, and will be
calculated in accordance with, the Fees Rules.
6. In application of the above formulae, A, B, C and D will be included in
the formulae as percentages (i.e., 5 per cent. will be included in the formula
as 5 and not as 0.05). A negative result obtained by subtracting D from B shall
be taken as zero. The resulting figures shall be rounded up to four decimal
places.
7. If requested by Agent, each Reference Bank shall, as soon as
practicable after publication by the Financial Services Authority, supply to
Agent, the rate of charge payable by that Reference Bank to the Financial
Services Authority pursuant to the Fees Rules in respect of the relevant
financial year of the Financial Services Authority (calculated for this purpose
by that Reference Bank as being the average of the Fee Tariffs applicable to
that Reference Bank for that financial year) and expressed in pounds per
(Pounds)1,000,000 of the Tariff Base of that Reference Bank.
8. Each Subject Lender shall supply any information required by Agent for
the purpose of calculating its Associated Costs Rate. In particular, but without
limitation,
SCHEDULE A
each Subject Lender shall supply the following information in writing on or
prior to the date on which it becomes a Subject Lender:
(a) its jurisdiction of incorporation and jurisdiction of its
facility office; and
(b) any other information that Agent may reasonably require
for such purpose.
Each Subject Lender shall promptly notify Agent in writing of any change to the
information provided by it pursuant to this paragraph.
9. The percentages of each Subject Lender for the purpose of A and C above and
the rates of charge of each Reference Bank for the purpose of E above shall be
determined by Agent based upon the information supplied to it pursuant to
paragraphs 7 and 8 above and on the assumption that, unless a Subject Lender
notifies Agent to the contrary, each Subject Lender's obligations in relation to
cash ratio deposits and Special Deposits are the same as those of a typical bank
from its jurisdiction of incorporation with a facility office in the same
jurisdiction as its facility office.
10. Agent shall have no liability to any person if such determination results
in an Associated Costs Rate which over or under compensates any Subject Lender
and shall be entitled to assume that the information provided by any Subject
Lender or Reference Bank pursuant to paragraphs 3, 7 and 8 above is true and
correct in all respects.
11. Agent shall distribute the additional amounts received as a result of the
Mandatory Costs to the Subject Lenders on the basis of the Associated Costs Rate
for each Subject Lender based on the information provided by each Subject Lender
and each Reference Bank pursuant to paragraphs 3, 7 and 8 above.
12. Any determination by Agent pursuant to this Schedule in relation to a
formula, the Mandatory Cost, an Associated Costs Rate or any amount payable to a
Subject Lender shall, in the absence of manifest error, be conclusive and
binding on all parties to this Agreement.
13. Agent may from time to time, after consultation (but without their consent)
with the Borrower Representative and the Subject Lenders, determine and notify
to all parties to this Agreement any amendments which are required to be made to
this Schedule in order to comply with any change in law, regulation or any
requirements from time to time imposed by the Bank of England, the Financial
Services Authority or the European Central Bank (or, in any case, any other
authority which replaces all or any of its functions). Any such determination
shall, in the absence of manifest error, be conclusive and binding on all such
parties.
SCHEDULE A
14. For the purposes of this Schedule:
(a) "Participating Member State" means any member state of the
European Communities that adopts or has adopted the Euro as its lawful currency
in accordance with legislation of the European Community relating to Economic
and Monetary Union.
(b) "Reference Banks" means, with respect to LIBOR, the
principal London offices of Barclays Bank PLC, The Royal Bank of Scotland and
HSBC or such other banks as may be appointed by Fleet UK (acting on the
instructions of the Majority Lenders) in consultation with the Borrower
Representative.
SCHEDULE A
