1
EXHIBIT 4.1
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT is
entered into as of July 10, 2000, among each of the entities identified as a
Borrower on Schedule 1 (each a "Borrower," and collectively the "Borrowers"),
each of the financial institutions identified as a Lender on Schedule 2
(together with each of their respective direct and indirect successors and
assigns, each, a "Lender," and collectively, the "Lenders"), and TRANSAMERICA
BUSINESS CREDIT CORPORATION, a Delaware corporation ("TBCC") having its
principal office at 0000 Xxxx Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxx 00000
and having an office at 000 Xxxxxxxx Xxxxx Xxxxxx, Xxx, Xxx Xxxx 00000, as agent
for the U.S. Lenders as defined below (the "Agent"), and Transamerica Commercial
Finance Corporation, Canada, a Canadian corporation ("TCFC") having its
principal office at 000 Xxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxxx, Xxxxxxx,
Xxxxxx X0X 0X0, as agent for the Cdn. Lenders as defined below (the "Cdn.
Agent").
W I T N E S S E T H :
-------------------
WHEREAS, the Borrowers, TCFC, as a lender, and TBCC, as a
lender and as agent, entered into a Loan and Security Agreement dated as of
April 14, 2000 (as heretofore amended, supplemented or otherwise modified, the
"Original Loan Agreement");
WHEREAS, the Borrowers, TCFC and TBCC have agreed to amend and
restate the terms and conditions of the Original Loan Agreement to, among other
things, (i) include The Chase Manhattan Bank, Bank of America, N.A. and Fleet
Capital Corporation as U.S. Lenders and (ii) increase the maximum amount of
loans and other extensions of credit available to the Borrowers thereunder; and
WHEREAS, upon the terms and subject to the conditions set
forth herein, the Lenders are willing to make loans and other extensions of
credit to the Borrowers.
NOW, THEREFORE, the Borrowers, the Lenders and the Agent
hereby agree as follows:
2
ARTICLE I.
DEFINITIONS
SECTION I.1. General Definitions. As used herein, the
following terms shall have the meanings herein specified (to be equally
applicable to both the singular and plural forms of the terms defined):
"Acquisition" means the acquisition of a majority of the stock
or partnership or other equity interests of a Person or of all or substantially
all of the assets of a Person or any division, business or line of business of a
Person.
"Adjusted Earnings" means, for any period, with respect to GPI
and its Subsidiaries on a consolidated basis (i) net income (as that term is
determined in accordance with GAAP) for such period, plus (ii) the amount of
depreciation and amortization of fixed and intangible assets deducted in
determining such net income for such period, plus (iii) all interest and fees
for the use of money or the availability of money, including commitment,
facility and like fees and charges upon Indebtedness (including Indebtedness to
the Lenders) paid or payable during such period, plus (iv) all tax liabilities
paid or accrued during such period, less (v) the amount of all gains (or plus
the amount of all losses) realized during such period upon the sale or other
disposition of property or assets that are sold or otherwise disposed of outside
the ordinary course of business that are included in the calculation of net
income for such period, plus (vi) any losses (or less any gains) relating to the
write-off or restructuring of the Borrowers' and their Subsidiaries' Investments
in, and manufacturing arrangement with, OCTL during such period, plus (vii) any
non-recurring unusual or extraordinary losses (as classified in accordance with
GAAP) (or less any such gains) included in the calculation of net income for
such period, plus (viii) any non-cash compensation expense included in the
calculation of net income for such period, plus (ix) all cash dividends and
other distributions received from Voest-Alpine during such period on account of
its Capital Stock.
"Administrative Borrower" means Grant Prideco, LP or any other
Borrower agreed to in writing by the Borrowers and the Agent from time to time,
acting in its capacity as agent for the Borrowers under Section 11.11.
"Advance" means a Base Rate Advance, a Prime Rate Advance or a
LIBOR Rate Advance.
"Affiliate" means, as to any Person, any other Person
-2-
3
who directly or indirectly controls, is under common control with, is controlled
by or is a director or officer of such Person. As used in this definition,
"control" (including its correlative meanings, "controlled by" and "under common
control with") means possession, directly or indirectly, of the power to direct
or cause the direction of management or policies (whether through ownership of
voting securities or partnership or other ownership interests, by contract or
otherwise), provided that, in any event, any Person who owns directly or
indirectly twenty percent (20%) or more of the securities having ordinary voting
power for the election of the members of the board of directors or other
governing body of a corporation or twenty percent (20%) or more of the
partnership or other ownership interests of any other Person (other than as a
limited partner of such other Person) will be deemed to control such
corporation, partnership or other Person. Notwithstanding the foregoing, (i)
Xxxxxxxxxxx International, Inc. and its Subsidiaries shall not be deemed to be
Affiliates of the Borrowers or their Subsidiaries and (ii) any corporation,
partnership or other entity (excluding the Borrowers, the Guarantors and their
Subsidiaries) upon which members of GPI's Board of Directors serve as officers
or directors shall not be deemed to be an Affiliate of the Borrowers or their
Subsidiaries solely as a result thereof.
"Agent" has the meaning specified in the introductory
paragraph.
"Agent Loan" has the meaning specified in Section 2.2(i).
"Agent's Cdn. Payment Account" means the account of TCFC at
Bank of Montreal in Xxxxxxx, Xxxxxxx, Xxxxxx, account number 1365-850 or such
other account of the Agent or any of its Affiliates in Canada as the Agent may
from time to time designate to the Administrative Borrower and the Lenders.
"Agent's U.S. Payment Account" means the account of the Agent
at Bank One, N.A. in Chicago, Illinois, account number 52-97184 or such other
account of the Agent or one of its Affiliates in the United States as the Agent
may from time to time designate in writing to the Administrative Borrower and
the Lenders.
"Agents" means the Agent and the Cdn. Agent.
"Agreement" means this Amended and Restated Loan and Security
Agreement, as amended, supplemented or otherwise modified from time to time.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and its assignee, and accepted by the Agent and in
substantially the form of Exhibit D.
-3-
4
"Auditors" means a nationally recognized firm of independent
public accountants selected by the Administrative Borrower and reasonably
satisfactory to the Agent.
"Average Life" means, as of the date of determination, with
reference to any Indebtedness, the quotient obtained by dividing (i) the sum of
the products of the number of years from the date of determination to the dates
of each successive scheduled principal payment of such Indebtedness multiplied
by the amount of such principal payment by (ii) the sum of all such principal
payments.
"Bankruptcy Code" means (i) Title 11 of the United States Code
entitled "Bankruptcy," or (ii) the Bankruptcy and Insolvency Act of Canada, as
either may be amended from time to time, or any successor statute.
"Base Rate" means the higher of (i) the prime, base or
equivalent rate of interest publicly announced from time to time by Citibank,
N.A. (which may not be the lowest rate of interest charged by Citibank, N.A.)
and (ii) the published annualized rate for 90-day dealer commercial paper that
appears in the "Money Rates" section of The Wall Street Journal.
"Base Rate Advance" means an Advance made to the U.S.
Borrowers that bears interest as provided in Section 4.1(a).
"Blocked Account" has the meaning specified in Section 2.6(a).
"Blocked Account Agreement" means an agreement entered into by
the Cdn. Borrower, the Cdn. Agent and the Blocked Account Bank in substantially
the form of Exhibit J, as amended, supplemented or otherwise modified from time
to time.
"Blocked Account Bank" means The Bank of Nova Scotia or any
successor or other bank acceptable to the Agent to act as such.
"Borrowers" has the meaning specified in the introductory
paragraph.
"Borrowing" means any single Borrowing of Loans (i) from the
U.S. Lenders or the Cdn. Lenders under Section 2.2(g), (ii) from TBCC or TCFC
under Section 2.2(h) or (iii) from the Agent or the Cdn. Agent under Section
2.2(i).
"Borrowing Base Certificate" has the meaning specified in
Section 7.1(k)(v).
"Borrowing Date" means the date on which a Borrowing is
-4-
5
obtained.
"Business Day" means any day other than a Saturday, a Sunday
or any other day on which commercial banks in New York, New York or Chicago,
Illinois are required or permitted by law to close. When used in connection with
any (i) LIBOR Rate Advance, a Business Day shall also exclude any day on which
commercial banks are not open for dealings in Dollar deposits in the London
interbank market or (ii) Prime Rate Advance, a Business Day shall also exclude
any day on which Canadian chartered banks in Toronto, Ontario, and Edmonton,
Alberta, Canada are required or permitted by law to close.
"Business Plan" means a business plan of GPI and its
Subsidiaries, consisting of consolidated and consolidating projected balance
sheets, related cash flow statements and related profit and loss statements, and
availability forecasts, together with appropriate supporting details and a
statement of the underlying assumptions, which covers a one-year period and
which presents amounts on a monthly basis.
"Capital Expenditures" means expenditures (but excluding
acquisitions of businesses (whether through the acquisition of all or
substantially all of the assets or all or substantially all of the Capital
Stock) of third parties) for any fixed assets or improvements, replacements,
substitutions or additions thereto which have a useful life of more than one
year, (but excluding purchases of up to US$1,000,000 in any calendar year of
computer hardware with a useful life of less than two years) and shall include
all commitments and payments in respect of Capitalized Lease Obligations and
leasehold improvements.
"Capitalized Lease Obligations" means any rental obligation
which, under GAAP, is or will be required to be capitalized on the books of the
lessee, taken at the amount thereof accounted for as indebtedness (net of
interest expense) in accordance with GAAP.
"Capital Stock" means, with respect to any Person, any and all
shares, interests, rights to purchase, warrants, options, participations or
other equivalents (however designated) of such Person's equity, including all
common stock and preferred stock, any limited or general partnership interest
and any limited liability company membership interest.
"Cash Equivalents" means (i) securities issued, guaranteed or
insured by the United States or, with respect to Investments by the Cdn.
Borrower, Canada or any of its agencies with maturities of not more than one
year from the date acquired; (ii) certificates of deposit with maturities of not
more than one year from the date acquired, issued by (A) the Agent or its
Affiliates; (B) any U.S. federal or state chartered commercial
-5-
6
bank of recognized standing which has capital and unimpaired surplus in excess
of US$500,000,000; (C) any bank or its holding company that has a short-term
commercial paper rating of at least A-1 or the equivalent by Standard & Poor's
Ratings Services or at least P-1 or the equivalent by Xxxxx'x Investors Service,
Inc.; or (D) with respect to Investments by a Foreign Subsidiary or a Cdn.
Subsidiary, a bank or trust company organized under the laws of any jurisdiction
other than the United States or any state thereof whose commercial paper is
rated at least A-1 or the equivalent by Standard & Poor's Rating Group or at
least P-1 or the equivalent by Xxxxx'x Investors Service, Inc.; (iii) repurchase
agreements and reverse repurchase agreements with terms of not more than seven
days from the date acquired, for securities of the type described in clause (i)
above and entered into only with commercial banks having the qualifications
described in clause (ii) above or such other financial institutions with a
short-term commercial paper rating of at least A-1 or the equivalent by Standard
& Poor's Ratings Services or at least P-1 or the equivalent by Xxxxx'x Investors
Service, Inc.; (iv) commercial paper, other than commercial paper issued by a
Borrower or any of its Affiliates, issued by any Person incorporated under the
laws of the United States or any state thereof and rated at least A-1 or the
equivalent thereof by Standard & Poor's Ratings Services or at least P-1 or the
equivalent thereof by Xxxxx'x Investors Service, Inc., in each case with
maturities of not more than one year from the date acquired; (v) investments in
money market funds registered under the Investment Company Act of 1940, which
have net assets of at least US$500,000,000 and at least eighty-five percent
(85%) of whose assets consist of securities and other obligations of the type
described in clauses (i) through (iv) above; (vi) Investments by Foreign
Subsidiaries or Cdn. Subsidiaries in short-term investments, in connection with
the cash management programs of GPI and its Subsidiaries; (vii) deposit accounts
(A) in a bank or trust company organized under the laws of the United States or
any state thereof having capital surplus and undivided profits aggregating at
least US$500,000,000 and whose commercial paper (or that of the holding company
with which such bank or trust company is affiliated) is rated A-1 or better by
Standard & Poor's Rating Group or P-1 or better by Xxxxx'x Investors Service,
Inc., (B) with respect to a Foreign Subsidiary or Cdn. Subsidiary, in a bank
organized under laws other than those of the United States or any state thereof,
in currencies other than U.S. Dollars, which bank provides working capital,
operating accounts or similar services to such Foreign Subsidiary or Cdn.
Subsidiary at such Bank, and (C) in a bank organized under the laws of the
United States or any state thereof not included in the descriptions in clauses
(A) or (B) above, so long as the aggregate amount on deposit in all such banks
by the Borrowers and their Subsidiaries does not exceed US$2,500,000 in the
aggregate; (viii) Investments in eurodollars not in excess of US$10,000,000 in
the aggregate at any one time outstanding,
-6-
7
issued by any bank or trust company having capital surplus and undivided profits
aggregating at least US$500,000,000 and whose long term certificates of deposit
are, at the time of acquisition thereof by any Borrower or its Subsidiary, rated
A-1 or better by Standard & Poor's Ratings Group or P-1 or better by Moody's
Invest or Service, Inc.; (ix) other instruments, commercial paper or investments
acceptable to the Agent in its sole discretion; and (x) Canadian bankers
acceptances.
"Cdn. Agent" has the meaning specified in the introductory
paragraph.
"Cdn. Agent Loan" has the meaning specified in Section 2.2(i).
"Cdn. Borrower" means Grant Prideco Canada Ltd., an Alberta
corporation.
"Cdn. Borrower's Account" means, collectively, the accounts
maintained by the Cdn. Borrower at The Bank of Nova Scotia in Edmonton, Alberta,
Canada, account number 00000 00000 11 for Cdn. Dollar deposits and account
number 90019 86403 19 for U.S. Dollar deposits, or such other account which the
Cdn. Borrower may designate to the Agent from time to time.
"Cdn. Borrowing Base" has the meaning specified in Section
2.1(b).
"Cdn. Dollars" and "Cdn.$" means lawful currency of Canada.
"Cdn. Lenders" means the Cdn. Agent, TCFC and the other
Lenders specified as such in Schedule 2 to this Agreement, together with each
other Person which from time to time becomes a Lender to the Cdn. Borrower under
this Agreement.
"Cdn. Letter of Credit" means a Letter of Credit issued for
the account of the Cdn. Borrower.
"Cdn. Loans" means all revolving credit loans made by the Cdn.
Lenders to the Cdn. Borrower under Article II.
"Cdn. Note" has the meaning specified in Section 2.1(e).
"Cdn. Subsidiary" means the Cdn. Borrower and each other
Subsidiary of GPI formed under the laws of Canada or any province thereof.
"CDOR" means, for any day the rate that appears on the Reuters
Screen CDOR page as of at 10:00 A.M. (Toronto time) on such day (or, if such day
is not a Business Day, as of 10:00 A.M.
-7-
8
(Toronto time) on the next preceding Business Day).
"Closing Date" means the date of execution and delivery of
this Agreement.
"Code" has the meaning specified in Section 1.3.
"Collateral" means all Receivables, Inventory and Equipment of
the Borrowers and all other collateral specified in this Agreement, the Security
Agreement and the other Security Documents.
"Collateral Access Agreements" means landlord waivers,
mortgagee waivers, bailee letters or similar acknowledgments of any lessor,
warehouseman or processor in possession of any Collateral or on whose property
any Collateral is located, substantially in the form of Exhibit L-1 or Exhibit
L-2.
"Collateralization" and "Collateralize" each means, with
respect to any Letter of Credit, the deposit by the Borrowers in a cash
collateral account established and controlled by or on behalf of the Agent of an
amount equal to 105% of the undrawn amount of such Letter of Credit.
"Collections" means all cash, funds, checks, notes,
instruments, any other form of remittance tendered by account debtors in respect
of payment of Receivables of the Borrowers and any other payments received by
the Loan Parties with respect to any Collateral.
"Commitment" means, with respect to any Lender, its commitment
to make U.S. Loans or Cdn. Loans, as the case may be, and to participate in U.S.
Letters of Credit or Cdn. Letters of Credit, as the case may be, up to the
amount set forth opposite its name on Schedule 2.
"Compliance Certificate" has the meaning specified in Section
7.1(k)(iii).
"Contingent Obligation" means any direct, indirect, contingent
or non-contingent guaranty or obligation for the Indebtedness of another Person,
except endorsements in the ordinary course of business.
"Continuation" has the meaning specified in Section 2.2(b).
"Contribution Agreement" means the contribution, subrogation
and indemnity agreement among the Guarantors, substantially in the form of
Exhibit G, as amended, supplemented or otherwise modified from time to time.
-8-
9
"Convert," "Conversion" and "Converted" each refers to
conversion of Advances of one Type into Advances of another Type pursuant to
Section 2.2(c).
"Default" means any of the events specified in Section 9.1,
whether or not any of the requirements for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
"Defaulting Lender" has the meaning specified in Section
2.9(a).
"Designated Affiliate" means (i) GPI, (ii) each Guarantor and
(iii) each other Subsidiary of GPI that has or had a net worth as determined in
accordance with GAAP of more than US$1,000,000 or annual revenues in excess of
US$5,000,000 in each case in or for the fiscal year of determination (including
on an annualized basis for the current year in the case of revenues) or in or
for any of the immediately three preceding fiscal years.
"Disqualified Stock" means any Capital Stock of Subsidiaries
that, by its terms (or by the terms of any security into which it is convertible
or for which it is exercisable, redeemable or exchangeable), or upon the
happening of any event or with the passage of time, matures, or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof, in whole or in part, in each case on, or
prior to, the Expiration Date, or is convertible into or is exchangeable for
debt securities of GPI or any of its Subsidiaries.
"Effective Date" means the date on which all of the conditions
specified in Section 5.1 shall have been satisfied.
"Eligible Assignee" means (i) a Lender or any Affiliate
thereof; (ii) a commercial bank organized or licensed under the laws of the
United States or a state thereof in the case of an assignment by a U.S. Lender,
or under the laws of Canada or a province thereof in the case of an assignment
by a Cdn. Lender, in each case having total assets in excess of
US$1,000,000,000; (iii) a finance company, insurance company or other financial
institution or fund, which is regularly engaged in making, purchasing or
investing in loans and having total assets in excess of US$1,000,000,000; or
(iv) a savings and loan association or savings bank organized under the laws of
the United States or a state thereof in the case of an assignment by a U.S.
Lender, or under the laws of Canada or a province thereof in the case of an
assignment by a Cdn. Lender, in each case which has a net worth, determined in
accordance with GAAP, in excess of US$500,000,000; provided, however, that (A)
neither a Loan Party nor an Affiliate of a Loan Party shall qualify as an
Eligible Assignee, (B) each Eligible Assignee under clauses (ii) through
-9-
10
(iv) hereof shall be reasonably acceptable to and subject to the consent of the
Agent and, so long as no Default or Event of Default has occurred and is
continuing, the Administrative Borrower, which consent of the Administrative
Borrower, if required, shall not be unreasonably withheld or delayed, (C) each
of the financial institutions specified in Schedule 4 and its Affiliates shall
be deemed an Eligible Assignee, (D) nothing herein shall restrict or require the
consent of any Person to the pledge by any U.S. Lender of all or any portion of
its rights and interests under this Agreement, its U.S. Note or any other Loan
Document to any Federal Reserve Bank in accordance with Regulation A of the
Board of Governors of the Federal Reserve System or U.S. Treasury Regulation 31
CFR 203.14, and such Federal Reserve Bank may enforce such pledge in any manner
permitted by applicable law and (E) no Person that would be subject to interest
withholding obligations on account of any payment by any Borrower of interest on
the Obligations under the income tax laws of the United States, with respect to
any assignment by a U.S. Lender, or under the tax laws of Canada, with respect
to an assignment by a Cdn. Lender, shall constitute an Eligible Assignee.
"Eligible Inventory" means only such Inventory of a Borrower
located in the United States, or, in the case of the Cdn. Borrower, Canada
consisting of raw materials, work in process the marketability of which is
satisfactory to the Agent, or finished goods, which is free from any claim of
title or Lien in favor of any Person (other than Liens in favor of the Agent or
Permitted Liens) and with respect to which no event has occurred and no
condition exists which could be reasonably expected to impair substantially such
Borrower's ability to use or sell such Inventory in the ordinary course of its
business and which the Agent, in its reasonable discretion, shall deem eligible
to serve as collateral for Advances, based on such considerations as the Agent
may deem appropriate from time to time and less any such reserves as the Agent,
in its reasonable discretion, may require, including, without limitation,
reserves for special order goods for a specific customer that the Agent
determines cannot reasonably be expected to be marketed and sold in the ordinary
course of the Borrowers' business. No Inventory of a Borrower shall be Eligible
Inventory unless the Agent (or the Cdn. Agent, as the case may be) has a
perfected first priority Lien thereon. The value of Eligible Inventory shall be
computed at the lower of cost (computed on a "first in, first out" basis) or
market. Any Inventory of a Borrower that is not in the control or possession of
such Borrower and is covered by a warehouse receipt, a xxxx of lading or other
document of title shall in no event be Eligible Inventory unless such warehouse
receipt, xxxx of lading or document of title is in the name of or held by the
Agent (or the Cdn. Agent, as the case may be). No Inventory of a Borrower shall
be Eligible Inventory unless (i) it is located on property owned by such
Borrower; or (ii) (A) it is either located
-10-
11
on property leased by such Borrower or in a contract warehouse or on the
premises of a third party processor which is subject to a Collateral Access
Agreement executed by the mortgagee, lessor, contract warehouseman or processor,
as the case may be, and segregated or otherwise separately identifiable from
goods of others, if any, stored on the premises, provided that, in the case that
Inventory is located on the premises of such a third party processor which is
not the subject of a Collateral Access Agreement, the Agent may, in its sole
discretion, allow the inclusion of such Inventory in the calculation of Eligible
Inventory, provided that such Inventory is the subject of an adequate reserve
(which will reduce the amount of Inventory available for such calculation) to be
determined in the Agent's sole discretion, or (B) in the case of lease or
warehouse premises, it is the subject of an Inventory Availability Reserve, the
amount of which is subtracted from the value of Eligible Inventory so as to
account for Inventory located on such lease or warehouse premises for which
there is no Collateral Access Agreement. No Inventory of a Borrower shall be
Eligible Inventory if it is in transit or it is consigned to or from such
Borrower. In addition, and without limitation of the foregoing, unless the
Supermajority Lenders shall otherwise agree in writing, Inventory shall be
ineligible if:
(a) it is not owned solely by a Borrower or a Borrower does
not have sole and good, valid and marketable title thereto; or
(b) it is packing or shipping materials or maintenance
supplies; or
(c) it is goods returned or rejected by a Borrower's customer
for any reason that the Agent reasonably determines makes such goods
non-saleable in the ordinary course of such Borrower's business; or
(d) it (i) is excess (as so reserved by a Borrower from time
to time or as otherwise reasonably determined by the Agent) or (ii) is obsolete,
defective, damaged, slow moving or unmerchantable, or (iii) is samples or
Inventory on hand which is used for promotional and other sales activities, or
(iv) does not otherwise conform to the representations and warranties contained
in the Loan Documents in any material respect; or
(e) it is repossessed, attached, seized, made subject to a
writ or distress warrant, levied upon or brought within the possession of any
receiver, trustee, custodian or assignee for the benefit of creditors; or
(f) it is goods acquired by a Borrower in or as part of a
"bulk" transfer or sale of assets and such acquisition is not consummated in the
ordinary course of business unless such
-11-
12
Borrower has complied with all applicable bulk sales or bulk transfer laws in
connection with such acquisition.
"Eligible Receivables" means and includes only those unpaid
Receivables of a Borrower, without duplication, which (i) arise out of a bona
fide sale of goods of the kind ordinarily sold by such Borrower in the ordinary
course of its business, (ii) are made to a Person competent to contract therefor
who is not an Affiliate of such Borrower and is not controlled by an Affiliate
of such Borrower, (iii) are not subject to renegotiation or redating and (iv)
are free and clear of any Lien in favor of any Person other than Liens in favor
of the Agent or the Cdn. Agent and Liens permitted under Section 7.2(i). No
Receivable of a Borrower shall be an Eligible Receivable unless the Agent (or
the Cdn. Agent, as the case may be) has a perfected first priority Lien thereon.
No Receivable of a Borrower shall be an Eligible Receivable if it is more than
120 days past the date of the original invoice therefor or more than sixty days
past the due date. No Receivable of a Borrower shall be an Eligible Receivable
unless the delivery of the goods giving rise to such Receivable has been
completed (it being understood that delivery is deemed completed once such goods
are delivered to the place of delivery where title passes). Unless the
Supermajority Lenders shall otherwise agree in writing, a Receivable shall be
ineligible if:
(a) any warranty contained in this Agreement or in any other
Loan Document with respect to such Receivable or in any assignment or statement
of warranties or representations relating to such Receivable delivered by a
Borrower to the Agent has been breached or is untrue in any material respect; or
(b) the account debtor or any Affiliate of the account debtor
has disputed liability, has or has asserted a right of setoff or has made any
claim with respect to any other Receivable due from such account debtor or
Affiliate to a Borrower, in each case to the extent of the amount of such
dispute or claim or the amount of such actual or asserted right of setoff, as
the case may be; or
(c) the account debtor or any of its assets or any Material
Affiliate of the account debtor is the subject of an Insolvency Event or, in the
reasonable discretion of the Agent, is likely to become the subject of an
Insolvency Event; or
(d) the account debtor or any Material Affiliate of the
account debtor has called a meeting of its creditors to obtain any general
financial accommodation; or
(e) the account debtor is also a supplier to or creditor of a
Borrower, to the extent of the aggregate amount owed by such Borrower to the
account debtor; or
-12-
13
(f) the sale is to an account debtor outside the United
States, or, in the case of an account debtor of the Cdn. Borrower, outside of
Canada and the United States unless it is on letter of credit, acceptance or
other terms acceptable to the Agent or the account debtor is specified in
Schedule 5 or has a credit rating acceptable to the Agent; or
(g) 50% or more of the aggregate Receivables owed to the
Borrowers by the account debtor and the Affiliates of such account debtor whose
Receivables are not rendered ineligible under clause (f) hereof are unpaid more
than 120 days past the date of the original invoices therefor; or
(h) the account debtor is the United States or any department,
agency or instrumentality thereof, unless the applicable Borrower assigns its
right to payment under such account to the Agent as collateral hereunder in full
compliance with (including, without limitation, the filing of a written notice
of the assignment and a copy of the assignment with, and receipt of
acknowledgment thereof by, the appropriate contracting and disbursing offices
pursuant to) the Assignment of Claims Act of 1940, as amended (31 U.S.C. xx.xx.
203, 3727; 41 U.S.C. ss. 15); or
(i) the Agent believes, in its reasonable discretion, that
collection of such Receivable is insecure or that such Receivable may not be
paid by reason of the account debtor's inability or unwillingness to pay.
"Environmental Laws" means all federal, state, provincial and
local statutes, laws, rulings, regulations or final and enforceable
governmental, administrative or judicial policies, directives, orders or
interpretations applicable to the business or property of a Person relating to
prevention of pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water, ground water, land
surface or subsurface strata) including, without limitation, laws and
regulations relating to emissions, discharges, releases or threatened releases
of Hazardous Materials, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of any
Hazardous Materials.
"Equipment" means all machinery, equipment, furniture,
fixtures, leasehold improvements, conveyors, tools, materials, storage and
handling equipment, hydraulic presses, cutting equipment, computer equipment and
hardware, including central processing units, terminals, drives, memory units,
printers, keyboards, screens, peripherals and input or output devices, molds,
dies, stamps, and other equipment of every kind and nature and wherever situated
now or hereafter owned by a Person or in which a Person may have any interest as
lessee or otherwise (to
-13-
14
the extent of such interest), together with all additions and accessions
thereto, all replacements and all accessories and parts therefor, all manuals,
blueprints, know-how, warranties and records in connection therewith and all
rights against suppliers, warrantors, manufacturers, and sellers or others in
connection therewith, together with all substitutes for any of the foregoing.
"Equipment Sales Reserve" means the amount, if positive, of
(i) the aggregate amount of proceeds received by the Borrowers and paid to the
Agent for application to the Obligations or for deposit in a cash collateral
account established by or on behalf of the Agent which shall be under the sole
dominion and control of the Agent upon the sale or other disposition of
Equipment under Section 7.2(e)(vii), less (ii) the amount of proceeds of Loans
used by the Borrowers to purchase replacement equipment of equal or greater
value within ninety days of the date of sale or other disposition of the
Equipment replaced thereby in which replacement equipment the Agent has been
granted a perfected first priority security interest for the benefit of the
Lenders, less (iii) US$5,000,000.
"Equivalent Amount" means, with respect to any two currencies,
the amount obtained in one such currency when an amount in the other currency is
translated into the first currency using the spot wholesale transactions buying
rate of the Bank of Canada for the purchase of the applicable amount of the
first currency with the other currency in effect as of 12:00 Noon in the place
where such translation occurs on the Business Day with respect to which such
computation is required for the purpose of this Agreement or, in the absence of
such a buying rate on such date, using such other rate as the Agent may
reasonably select.
"ERISA" means the Employee Retirement Income Security Act of
1974, 29 X.X.X.xx.xx. 1000 et seq., amendments thereto, successor statutes, and
regulations or guidelines promulgated thereunder.
"ERISA Affiliate" means any entity required to be aggregated
with a Borrower under Section 414(b), (c), (m) or (o) of the Internal Revenue
Code.
"Event of Default" means the occurrence of any of the events
specified in Section 9.1.
"Excess Cash Flow" means, for any period, with respect to GPI
and its Subsidiaries on a consolidated basis (i) Adjusted Earnings, less (ii)
all Capital Expenditures paid during such period other than with proceeds of
Indebtedness (other than proceeds of the Loans) or Net Cash Proceeds, less (iii)
all principal amounts of Indebtedness paid during such period other
-14-
15
than payments on account of Indebtedness owed to the Lenders and payments made
using Net Cash Proceeds or proceeds of Permitted Refinancing Indebtedness, less
(iv) all interest and fees for the use of money or availability of money,
including commitment, facility and like fees and charges upon Indebtedness
(including Indebtedness to the Lenders) paid during such period, less (v) all
Restricted Payments (to the extent permitted under this Agreement) made during
such period other than Restricted Payments that were made during such period (A)
using Qualified Capital Stock, (B) using proceeds of Permitted Subordinated
Indebtedness and (C) as purchases of Capital Stock of GPI relating to Grant
Prideco, Inc. Executive Deferred Compensation Plans or employee benefit plans
for tax withholding or pursuant to the cashless exercise of stock options or
warrants in connection with customary employee compensation programs.
"Exchange Act" means the Securities Exchange Act of 1934, any
amendments thereto, any successor statute and any rules and regulations
promulgated thereunder.
"Expiration Date" means the earliest of (i) April 14, 2003, as
such date may be extended from time to time under Section 2.7, (ii) the date on
which all or any part of the principal amount of the Subordinated Note becomes
due and payable and (iii) the date of termination of the Commitments.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal, for each day during such period, to the weighted
average of the rates on overnight Federal Funds transactions with members of the
Federal Reserve System arranged by Federal Funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day that is a Business Day, the average of the quotations for such day
on such transactions received by the Agent from three Federal Funds brokers of
recognized standing selected by it.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System or any Person succeeding to the functions thereof.
"Financial Covenants" means the covenants set forth in Article
VIII.
"Financial Statements" means, with respect to GPI and its
Subsidiaries on a consolidated and consolidating (by operating division and,
with respect to all periods ending more than six months after the Closing Date,
by legal entity) basis, the balance sheets, profit and loss statements and
statements of cash flow for the period specified, prepared in accordance with
GAAP and consistent with prior practices.
-15-
16
"Fixed Charge Coverage Ratio" means (without duplication),
with respect to GPI and its Subsidiaries for each consecutive twelve-month
period (or, until the first anniversary of the Closing Date, the applicable six
or nine-month period) ending with the last month of the then most recent fiscal
quarter for which Financial Statements are required to be delivered to the Agent
under Section 7.1(k)(iii) as of the date of determination thereof (after giving
effect on a pro forma basis to any Acquisition consummated during or after the
end of such most recent fiscal quarter in accordance with GAAP), the ratio of
(i) (A) Adjusted Earnings for such period, plus (B) 50% of all Net Cash Proceeds
received during such period, less (C) all Capital Expenditures paid or payable
during such period other than with the proceeds of Indebtedness (other than
proceeds of the Loans) or Net Cash Proceeds (to the extent such Net Cash
Proceeds are not included in clause(i)(B) above), less (D) all tax liabilities
paid during such period to (ii) (A) all principal amounts of Indebtedness
scheduled or required to be repaid by GPI or any of its Subsidiaries during such
period (other than repayments made with Net Cash Proceeds (to the extent such
Net Cash Proceeds are not included in clause(i)(B) or (C) above) and with
proceeds of Permitted Refinancing Indebtedness or Permitted Subordinated
Indebtedness), plus (B) all interest and fees (other than a one-time charge in
an aggregate total amount not to exceed US$5,000,000 for costs and expenses
incurred by the Borrowers with respect to the refinancing of the Subordinated
Note) for the use of money or the availability of money, including commitment,
facility and like fees and charges upon Indebtedness (including Indebtedness to
the Lenders) paid or payable during such period, plus (C) Restricted Payments
made or required to be made during such period (but excluding (I) Restricted
Payments using Qualified Capital Stock, (II) Restricted Payments effected by
purchases of Capital Stock of GPI relating to Grant Prideco, Inc. Executive
Deferred Compensation Plans, (III) Restricted Payments effected by purchases of
Capital Stock of GPI pursuant to employee benefit plans for tax withholding and
(IV) Restricted Payments made pursuant to the cashless exercise of stock options
or warrants in connection with customary employee compensation programs)
provided that nothing in this clause (C) shall be deemed to limit the
restrictions of Section 7.2(j).
"Foreign Subsidiary" means a Subsidiary of GPI formed under
the laws of any jurisdiction other than the United States or Canada or any state
or province thereof.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board that are applicable
to the circumstances as of the date of determination or, in the case of
-16-
17
the Cdn. Borrower, the accounting principles recognized as being generally
accepted in Canada as set out in the handbook published by the Canadian
Institute of Chartered Accountants as in effect on the date of determination.
"Governing Documents" means, with respect to any Person, the
certificate of incorporation and bylaws or similar organizational documents of
such Person.
"Governmental Authority" means any nation or government, any
state, province or other political subdivision thereof or any entity exercising
executive, legislative, judicial, regulatory or administrative functions thereof
or pertaining thereto.
"GPI" means Grant Prideco, Inc., a Delaware corporation.
"Guarantors" means each of the guarantors identified as
Guarantors on Schedule 3.
"Guaranty" means the guaranty by the Guarantors in favor of
the Agent, substantially in the form of Exhibit F, as amended, supplemented or
otherwise modified from time to time.
"Hazardous Materials" means any and all pollutants,
contaminants and toxic, caustic, radioactive and hazardous materials, substances
and wastes that are regulated under any Environmental Laws.
"Hedging Agreement" means any interest rate protection
agreement, foreign currency exchange agreement, commodity price protection
agreement or other interest or currency exchange rate or commodity price hedging
agreement.
"Hostile Acquisition" means either of the following actions,
but only if done without the prior approval of the board of directors of the
Person (or an "associate" of any Person within the meaning of the Exchange Act)
subject to such action:
(a) the taking by any Person of, directly or indirectly, any
action to seek control of or to participate actively in the management or
business or affairs of any other Person whose equity securities are registered
under Section 12 of the Exchange Act, by any means including, without
limitation, by soliciting proxies with respect to any matter or proposal for
which votes or consents of holders of any equity securities of the Person (or
associate (as defined in the Exchange Act) thereof) that is subject to such
action; or
(b) the commencement by a Person of any tender offer for any
class of equity securities of any other Person (or of an
-17-
18
associate of any other Person).
"Indebtedness" means, with respect to any Person, as of the
date of determination thereof (without duplication), (i) all obligations of such
Person for borrowed money of any kind or nature, including funded and unfunded
debt, and any Hedging Agreement or arrangements therefor, regardless of whether
the same is evidenced by any note, debenture, bond or other instrument, (ii) all
obligations of such Person to pay the deferred purchase price of property or
services (other than current trade accounts required to be paid in less than one
year and which arise in the ordinary course of business), (iii) all obligations
of such Person to acquire or for the acquisition or use of any fixed asset,
including Capitalized Lease Obligations (other than, in any such case, any
portion thereof representing interest or deemed interest or payments in respect
of taxes, insurance, maintenance or service), or improvements in each case which
are payable over a period longer than one year, regardless of the term thereof
or the Person or Persons to whom the same are payable, (iv) the then outstanding
amount of withdrawal or termination liability incurred under ERISA, (v) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right to be secured) a Lien on any asset of such Person whether
or not the Indebtedness is assumed by such Person, provided that for the purpose
of determining the amount of Indebtedness of the type described in this clause
(v), if recourse with respect to such Indebtedness is limited to the assets of
such Person, then the amount of Indebtedness shall be limited to the fair market
value of such assets, (vi) all Indebtedness of others to the extent guaranteed
by such Person and (vii) all obligations of such Person in respect of letters of
credit, bankers acceptances or similar instruments issued or accepted by banks
or other financial institutions for the account of such Person.
"Insolvency Event" means, with respect to any Person, the
occurrence of any of the following: (a) such Person shall be adjudicated
insolvent or bankrupt, or shall generally fail to pay or admit in writing its
inability to pay its debts as they become due, (b) such Person shall seek
dissolution or reorganization or the appointment of a receiver, trustee,
custodian or liquidator for it or a substantial portion of its property, assets
or business or to effect a plan or other arrangement with its creditors, (c)
such Person shall make a general assignment for the benefit of its creditors, or
consent to or acquiesce in the appointment of a receiver, trustee, custodian or
liquidator for a substantial portion of its property, assets or business, (d)
such Person shall file a voluntary petition under any bankruptcy, insolvency or
similar law or take any corporate or similar act in furtherance thereof, or (e)
such Person, or a substantial portion of its property, assets or business shall
become the subject of (i) an involuntary proceeding or petition for its
dissolution or
-18-
19
reorganization, and such proceeding is not dismissed or stayed within sixty
days, or (ii) the appointment of a receiver, trustee, custodian or liquidator,
and such receiver, trustee, custodian or liquidator is not dismissed within
sixty days; provided, however, that during the pendency of any sixty-day period
described in clauses (i) and (ii), the Lenders shall have no obligation to make
any Advance and the Agent shall have no obligation to cause to be issued any
Letter of Credit.
"Interest Period" means the period commencing on the date of a
LIBOR Rate Advance and ending on the corresponding date of the month one, two or
three months thereafter; provided, however, that (i) the Administrative Borrower
may not select any Interest Period that ends after the Expiration Date, (ii)
whenever the last day of an Interest Period would otherwise occur on a day other
than a Business Day, the last day of such Interest Period shall be extended to
occur on the next succeeding Business Day, except that if such extension would
cause the last day of such Interest Period to occur in the next following
calendar month, then the last day of such Interest Period shall occur on the
next preceding Business Day and (iii) if there is no corresponding date in the
month in which an Interest Period ends, then the last day of such Interest
Period shall be the last Business Day of such month.
"Internal Revenue Code" means the Internal Revenue Code of
1986, any amendments thereto, any successor statute and any regulations and
guidelines promulgated thereunder.
"Internal Revenue Service" or "IRS" means the United States
Internal Revenue Service and any successor agency.
"Inventory" means all present and future goods intended for
sale, lease or other disposition including, without limitation, all raw
materials, work in process, finished goods and other retail inventory, goods in
the possession of outside processors or other third parties, consigned goods (to
the extent of the consignee's interest therein), materials and supplies of any
kind, nature or description which are or might be used in connection with the
manufacture, packing, shipping, advertising, selling or finishing of any such
goods, all documents of title or documents representing the same and all
records, files and writings with respect thereto.
"Inventory Availability Reserve" means the sum of (i) three
months' rental or storage payments on all leased premises and warehouse
locations (where Collateral is stored from time to time) of the Borrowers for
which the Borrowers have not delivered to the Agent a Collateral Access
Agreement, provided that such sum shall be adjusted from time to time hereafter
upon (A) delivery to the Agent of any such Collateral Access Agreement, (B) the
addition of a lease or warehouse location or
-19-
20
the removal of all Collateral therefrom or (C) any change in rental payments or
storage charges for any such location, and (ii) an amount equal to any and all
past-due rent and storage charges with respect to all lease or warehouse
locations at which Collateral may be located, provided that the Borrowers shall
promptly advise the Agent of all such amounts and, upon request by the Agent,
provide a report to the Agent with respect thereto.
"Investment" in any Person means, as of the date of
determination thereof, (i) any payment or contribution, or commitment to make a
payment or contribution, by a Person including, without limitation, property
contributed or committed to be contributed by such Person for or in connection
with its acquisition of any stock, bonds, notes, debentures, partnership or
other ownership interest or any other security of the Person in whom such
Investment is made or (ii) any loan, advance or other extension of credit (other
than trade credit for the sale of goods or services in the ordinary course of
business) or guaranty of or other surety obligation for any Indebtedness of such
Person in whom the Investment is made. In determining the aggregate amount of
Investments outstanding at any particular time, (i) a guaranty (or other surety
obligation) shall be valued at not less than the principal amount outstanding of
the primary obligation; (ii) returns of capital (but only by repurchase,
redemption, retirement, repayment, dividend or other distribution) shall be
deducted; (iii) earnings not distributed in cash shall not be deducted; and (iv)
decreases in the market value shall not be deducted unless such decreases are
computed in accordance with GAAP.
"Lenders" has the meaning specified in the introductory
paragraph hereof and shall include the Agent or the Cdn. Agent to the extent of
any Agent Loan or Cdn. Agent Loan outstanding and TBCC or TCFC to the extent of
any TBCC Loan or TCFC Loan outstanding.
"Letter of Credit Agreement" means the collective reference to
any and all agreements from time to time entered into by the Agent and a bank or
financial institution (each, an "issuing bank") pursuant to which the Agent
causes such issuing bank to issue Letters of Credit for the account or benefit
of a Borrower in accordance with the terms of this Agreement.
"Letters of Credit" means all letters of credit issued for the
account or benefit of the Borrowers under Section 2.10 hereof or under the
Original Loan Agreement, and all amendments, renewals, extensions or
replacements thereof.
"Leverage Ratio" means, for any period, with respect to GPI
and its Subsidiaries on a consolidated basis as of the date of determination
thereof, the ratio of (i) all Indebtedness of GPI and its Subsidiaries to (ii)
Adjusted Earnings for the
-20-
21
consecutive twelve-month period then most recently ended.
"Liabilities" of a Person as of the date of determination
thereof means the liabilities of such Person on such date as determined in
accordance with GAAP. Liabilities to Affiliates of such Person shall be treated
as Liabilities except where eliminated by consolidation in financial statements
prepared in accordance with GAAP or as otherwise provided herein.
"LIBOR Rate" means, with respect to each Interest Period for
each LIBOR Rate Advance, the reserve adjusted rate per annum equal to the rate
per annum at which deposits in United States dollars are offered by the
principal office of Citibank, N.A. in London, England to prime banks in the
London interbank market at 11:00 A.M. (London time) two Business Days before the
first day of such Interest Period in an amount substantially equal to such LIBOR
Rate Advance and for a period equal to such Interest Period; provided, however,
that if such rate is not available on any day, there shall be substituted for
such rate the London Interbank Offered Rate for such amount and period which
appears on the Reuters Screen ISDA Page for the London Interbank Offered Rate.
"LIBOR Rate Advance" means an Advance that bears interest as
provided in Section 4.1(c).
"Lien" means any lien, claim, charge, pledge, security
interest, assignment, hypothecation, deed of trust, mortgage, lease, conditional
sale, retention of title or other preferential arrangement having substantially
the same economic effect as any of the foregoing, whether voluntary or imposed
by law.
"Loan Account" has the meaning specified in Section 2.5.
"Loan Documents" means this Agreement and all documents and
instruments delivered or to be delivered by the Borrowers or any of their
Affiliates or any other Loan Party under or in connection with this Agreement or
the Original Loan Agreement, as each of the same may be amended, supplemented or
otherwise modified from time to time, including, without limitation, the Notes,
the Guaranty, the Security Agreement, the Contribution Agreement, the Pledge
Agreement, the Lockbox Agreements, the Blocked Account Agreement, the
Subordination Agreement and the Letter of Credit Agreement.
"Loan Party" means each Borrower and each Guarantor.
"Loans" means the U.S. Loans, the Cdn. Loans, the Agent Loans,
the Cdn. Agent Loans, the TBCC Loans, the TCFC Loans and all other financial
accommodations made by the Agent or the Lenders hereunder or under the Letter of
Credit Agreement.
-21-
22
"Lockbox Agreement" means an agreement entered into by a U.S.
Borrower, the Agent and the Lockbox Bank in substantially the form of Exhibit H,
as amended, supplemented or otherwise modified from time to time.
"Lockbox Bank" means Chase Bank of Texas, National Association
or any of its affiliates or any successor or any other bank acceptable to the
Agent to act as such.
"Material Adverse Effect" means (i) a material adverse effect
on the business, prospects, operations, results of operations, assets,
liabilities or condition (financial or otherwise) of GPI and the Borrowers taken
as a whole, or (ii) the material impairment of (A) a Loan Party's ability to
perform its obligations under the Loan Documents to which it is a party or (B)
the ability of the Agent, the Cdn. Agent or the Lenders to enforce the
Obligations or realize upon the Collateral.
"Material Affiliate" means an Affiliate of a Person that has a
net worth, as determined in accordance with GAAP, of more than US$1,000,000 or
annual revenues in excess of US$5,000,000.
"Material Contract" means any contract or other arrangement
that requires the purchase of materials or supplies, or that requires the sale
of goods or services, by a Borrower or any Designated Affiliate and which
involves an amount in excess of US$5,000,000 in any year or any other contract
or arrangement the termination of which would require public disclosure under
any federal or state securities law, rule or regulation.
"Material Indebtedness" means Indebtedness (other than the
Loans), or obligations in respect of one or more Hedging Agreements, of a
Borrower or any Designated Affiliate in an aggregate principal amount exceeding
US$10,000,000. For purposes of this definition, the "principal amount" of the
obligations of any Person in respect of any Hedging Agreement at any time shall
be the maximum aggregate amount (giving effect to any netting agreements) that
such Person would be required to pay if such Hedging Agreement were terminated
at such time.
"Multiemployer Plan" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which a Borrower or any ERISA Affiliate has
contributed within the past six years or with respect to which a Borrower or any
ERISA Affiliate may incur any liability.
"Net Cash Proceeds" means the net cash proceeds received by
GPI from the issuance of Qualified Stock of GPI, including any net cash proceeds
received by GPI upon exercise of any rights, options or warrants, other than in
connection with
-22-
23
the conversion or exchange of any Indebtedness or Disqualified Stock of GPI.
"Notes" means the U.S. Notes and the Cdn. Notes.
"Obligations" means and includes all loans (including the
Loans), advances (including the Advances), debts, liabilities, obligations,
covenants and duties owing by the Loan Parties to the Agent, the Cdn. Agent or
the Lenders of any kind or nature, present or future, whether or not evidenced
by any note, guaranty or other instrument, which may arise under, out of, or in
connection with, this Agreement, the Notes, the other Loan Documents or any
other agreement executed in connection herewith or therewith, whether or not for
the payment of money, whether arising by reason of an extension of credit,
opening, guaranteeing or confirming of a letter of credit (including, without
limitation, the Letters of Credit), loan, guaranty, indemnification or in any
other manner, whether direct or indirect (including those acquired by
assignment, purchase, discount or otherwise), whether absolute or contingent,
due or to become due, and however acquired. The term includes, without
limitation, all interest (including interest accruing on or after an Insolvency
Event, whether or not such interest constitutes an allowed claim), charges,
expenses, commitment, facility, closing and collateral management fees, letter
of credit fees, attorneys' fees, and any other sum properly chargeable to the
Borrowers under this Agreement, the Notes, the other Loan Documents or any other
agreement executed in connection herewith or therewith.
"OCTL" means Oil Country Tubular Limited, a company organized
under the Companies Act of India.
"Original Loan Agreement" has the meaning specified in the
first recital.
"PBGC" means the Pension Benefit Guaranty Corporation and any
Person succeeding to the functions thereof.
"Pension Plan" means a pension plan (as defined in Section
3(2) of ERISA) subject to Title IV of ERISA (other than a Multiemployer Plan)
which a Borrower or any ERISA Affiliate sponsors or maintains, or to which it
makes, is making, or is obligated to make contributions, or in the case of a
multiple employer plan (as described in Section 4064(a) of ERISA) has made
contributions at any time during the immediately preceding five plan years.
"Permitted Acquisition" means an Acquisition:
(i) that (A) is not a Hostile Acquisition and (B)
does not violate or, after giving effect to such Acquisition
on a pro forma consolidated basis
-23-
24
determined in accordance with GAAP, would not violate any
provision of this Agreement including, without limitation, the
Financial Covenants;
(ii) in the case of an Acquisition with respect to
which the consideration consists entirely of Capital Stock of
GPI or any of its Subsidiaries (other than fractional share
payments), (A) the ratio of (I) any Person's Indebtedness
being purchased or assumed by GPI or any of its Subsidiaries
in connection with such Acquisition to (II) the sum of such
Person's Indebtedness being purchased or assumed and the
market value of such Capital Stock on the date on which the
agreement to make such Acquisition becomes binding on the
parties thereto, does not exceed .50:1.00, or (B) (I) the
amount of any Person's Indebtedness being purchased or assumed
by GPI or any of its Subsidiaries in connection with such
Acquisition, plus (II) all other Indebtedness so purchased or
assumed in the current fiscal year of the Borrowers in
connection with all completed Acquisitions (other than
Acquisitions permitted under clause (A) hereof) with respect
to which the consideration consists entirely of Capital Stock
of GPI or any of its Subsidiaries (other than fractional share
payments), less (III) all Indebtedness so purchased or assumed
in connection with all such Acquisitions in such fiscal year
to the extent such Indebtedness does not exceed fifty percent
(50%) of the sum described in clause (A)(II) hereof with
respect to all such Acquisitions in such fiscal year, does not
exceed US$40,000,000 in the aggregate in such fiscal year;
(iii) in the case of an Acquisition with respect to
which the consideration consists of cash in whole or in part
(excluding cash payments for fractional shares totalling less
than US$50,000 in connection with such Acquisition), the sum
of such cash consideration and all Indebtedness purchased or
assumed by GPI or any of its Subsidiaries in connection with
such Acquisition does not exceed US$45,000,000 in the
aggregate, when taken together with the sum of the cash
portion of the consideration paid for, and all Indebtedness
purchased or assumed by GPI and its Subsidiaries in connection
with, all other Acquisitions completed during any fiscal year
of the Borrowers; and
(iv) that involves an Investment by or through GPI
or a Borrower;
provided that, if the Capital Stock of a Person is issued or otherwise acquired
by GPI or a Borrower in connection with such
-24-
25
Acquisition, (i) such Person (if such Person's jurisdiction of formation is the
United States or any state thereof) shall simultaneously become (A) a Guarantor
or Borrower pursuant to a supplement to the Guaranty in the form of Annex I
thereto or pursuant to an amendment to this Agreement in form and substance
satisfactory to the Agent, and (B) in the case such Person becomes a Guarantor
or a Borrower, a party to the Contribution Agreement by executing a supplement
thereto in the form of Annex 1 thereto, (ii) such Capital Stock shall
simultaneously be pledged to the Agent pursuant to a supplement to the Pledge
Agreement in the form of Annex III thereto (provided that, if such Person's
jurisdiction of formation is not the United States or any state thereof, only
65% of such Person's Capital Stock shall be pledged) and (iii) GPI or such
Borrower shall take, and shall cause such Person to take, all such further
actions and execute all such further documents and instruments as the Agent
reasonably determines to be necessary or desirable to cause the execution,
delivery and performance of such documentation to be duly authorized and to
perfect, protect or enforce the Liens (and the first priority status thereof)
granted to the Agent.
"Permitted Business" means the drill pipe and tubular
business, tubular steel xxxxx, drilling tools and any businesses, services or
activities reasonably incident or related thereto.
"Permitted Business Investments" means (i) loans and other
extensions of credit to officers, directors and employees of any Loan Party or
any of its Subsidiaries for travel, entertainment and moving and other
relocation expenses made in direct furtherance and in the ordinary course of the
business of any such Loan Party or any of its Subsidiaries, provided that the
aggregate principal amount of loans and other extensions of credit made pursuant
to this clause (i) does not exceed US$1,000,000 at any time outstanding; and
(ii) payments to any employee, officer or director of any Loan Party or any of
its Subsidiaries pursuant to employee benefit plans or compensation arrangements
entered into in the ordinary course of business and approved by the Board of
Directors of the applicable Loan Party or such Subsidiary or payments,
contributions or transactions relating to such plans.
"Permitted Financial Investments" means (i) currency price
Hedging Agreements, using customary ISDA swap documentation or comparable
documentation, entered into for the purpose of hedging actual exposure on the
currency or commodity price risks of its Permitted Business and not for
speculation; and (ii) the acquisition or ownership of Capital Stock or
obligations or other securities received in settlement of debts owing to any
Loan Party (other than Eligible Receivables) created and settled in the ordinary
course of business, which Capital Stock, obligations or other securities have
been pledged to the Agent (or the Cdn. Agent, as the case may be) under
documentation satisfactory to
-25-
26
the Agreement.
"Permitted Indebtedness" means, without duplication, (i)
Permitted Intercompany Debt; (ii) Indebtedness of any Person existing or any
Indebtedness assumed, at the time such Person or any of its assets is acquired
by any Loan Party or any Subsidiary thereof in connection with a Permitted
Acquisition, provided that (A) such Indebtedness is not created, incurred or
assumed in contemplation of such Permitted Acquisition of such Person or assets
and (B) any Indebtedness discharged at the closing of such Permitted Acquisition
shall not be deemed to be or to constitute assumed Indebtedness; (iii)
Indebtedness arising from the honoring by a bank or other financial institution
of a check, draft or similar instrument drawn against insufficient funds in the
ordinary course of business, provided that such Indebtedness is discharged
within two Business Days; (iv) Indebtedness arising from agreements providing
for indemnification, adjustment of purchase price or similar obligations, or
from guarantees, letters of credit, surety bonds or performance bonds securing
any obligation of any Loan Party, or any Subsidiary thereof, incurred or assumed
in connection with a Permitted Acquisition or the disposition of any business,
assets or Capital Stock other than, in the case of an acquisition, guaranties by
any Loan Party or any Subsidiary thereof of Indebtedness incurred by any Person
acquiring all or a portion of such business, asset or Capital Stock for the
purpose of financing such Permitted Acquisition, provided that, in the case of a
disposition, the maximum aggregate liability with respect to all such
Indebtedness and the amount of Indebtedness subject to such guaranties, in each
case with respect to a particular transaction, shall at no time exceed the gross
proceeds actually received from the disposition of such business, asset or
Capital Stock; (v) Indebtedness constituting the net obligations of a Person as
of the date of a required calculation under currency or commodity Hedging
Agreements entered into in the ordinary course of business and not for the
purposes of speculation (A) none of which is secured by any of the Collateral
and (B) to the extent such Indebtedness is secured by any other assets of the
Borrowers, such Indebtedness does not exceed US$35,000,000 in the aggregate at
any time; (vi) Permitted Refinancing Indebtedness; (vii) Indebtedness of a
Subsidiary of any Loan Party incurred in connection with a transaction permitted
under Section 7.1(c) or 7.2(k); (viii) Indebtedness of a Loan Party to the Agent
or the Lenders arising under this Agreement or any of the other Loan Documents;
(ix) Indebtedness evidenced by the Subordinated Note and any other Permitted
Subordinated Indebtedness, and any Permitted Refinancing Indebtedness with
respect thereto; and (x) Indebtedness consisting of current trade accounts
required to be paid in less than eighteen months to the extent such Indebtedness
does not exceed US$1,000,000 in the aggregate at any time.
"Permitted Intercompany Debt" means loans, advances,
-26-
27
intercompany accounts, transfers of goods, services, or intellectual property,
and Investments (including, but not limited to, loans made pursuant to GPI's
cash management system for collections of accounts receivable or disbursements
to trade creditors) by any Loan Party in, with or to any other Loan Party,
provided that (i) each such lender and borrower Loan Party is Solvent after
giving effect thereto, and (ii) each such Loan Party has received reasonably
equivalent value and fair consideration in exchange for the transfers made and
obligations incurred by it in connection therewith.
"Permitted Joint Ventures" means an equity Investment by a
Loan Party or any Subsidiary thereof in a Person for which there is no recourse
liability beyond the amount of the investment made other than an Investment in a
Person (i) that is engaged in a Permitted Business; and (ii) with respect to
which no debt or equity interest (other than directors' qualifying shares with
respect to corporations formed under the laws of any country other than the
United States) in such Person (other than any Loan Party or any Subsidiary
thereof) is or will be held by an officer or director of such Loan Party or
Subsidiary, or any spouse or immediate family member of, or other relative
having the same principal residence as, any such officer or director, or any
trust the beneficiary of which is any of the foregoing parties or any other
Affiliate of such Loan Party or Subsidiary.
"Permitted Liens" means (i) Liens for taxes, assessments and
other governmental charges or levies for Liens of local, state or provincial
authorities (excluding federal income tax liens) for franchise or other like
taxes (and interest and penalties thereon), provided that the aggregate amounts
of such taxes relating to such Liens shall not exceed US$2,000,000 in the
aggregate at any time and with respect to which no enforcement, collection,
execution, levy or foreclosure proceeding shall have been commenced and be
continuing (unless such enforcement, collection, levy or foreclosure is being
contested by the applicable Loan Party in good faith by appropriate proceedings
diligently conducted and for which adequate reserves are being maintained in
accordance with GAAP); (ii) Liens, claims or demands of landlords, carriers,
warehousemen, mechanics, laborers, materialmen and other like Persons arising by
operation of law in the ordinary course of business for sums which are not yet
due and payable (or which are being contested in good faith by appropriate
proceedings or other appropriate actions which are sufficient to prevent
imminent foreclosure of such Liens); (iii) deposits or pledges (other than Liens
on Receivables of a Borrower) including, without limitation, security deposits
for leases, surety bonds and appeal bonds to secure the payment of workmen's
compensation, unemployment insurance or other social security benefits or
obligations, public or statutory obligations, surety or appeal bonds, bid or
performance bonds, or other obligations of a like nature incurred in the
ordinary
-27-
28
course of business; (iv) zoning restrictions, easements, encroachments,
licenses, restrictions or covenants on the use of any Property which do not
materially impair either the use of such Property in the operation of the
business of the applicable Loan Party or the value of such Property, immaterial
defects or irregularities in title and other immaterial restrictions, charges or
encumbrances on any Property; (v) inchoate Liens arising under ERISA to secure
current service pension liabilities as they are incurred under the provisions of
employee benefit plans from time to time in effect and inchoate Liens for unpaid
franchise taxes; (vi) rights of general application reserved to or vested in any
Governmental Authority to control or regulate any Property, or to use any
Property in a manner which does not materially impair the use of such Property
for the purposes for which it is held by the applicable Loan Party; (vii)
judgment and attachment liens not giving rise to an Event of Default or Liens
created by or existing from any litigation or legal proceeding that are being
contested in good faith by appropriate proceedings, promptly instituted and
diligently conducted, and for which adequate reserves have been made to the
extent required by GAAP; (viii) Liens created pursuant to this Agreement or any
of the other Loan Documents in favor of the Agent or the Cdn. Agent; (ix) Liens
in favor of collecting or payor banks having a right of setoff, revocation,
refund or chargeback in favor of collecting or payor banks with respect to money
or instruments of any Loan Party on deposit with or in the possession of such
bank that do not constitute proceeds of Collateral; (x) Liens existing on the
date hereof and specified in Schedule 7.2(i) and other Liens expressly permitted
or consented to in writing by the Agent from time to time; (xi) any Lien
renewing, substituted for or replacing any Lien permitted under the preceding
clause (x) with respect to the assets originally subject to such Lien, provided
that (A) the obligation secured is not increased to an amount greater than the
outstanding amount secured by such Lien as of the date of such renewal,
substitution or replacement, (B) the terms of the obligation secured by such
Lien remain substantially the same as the original terms and (C) such obligation
is secured only by the assets that secured such obligation prior to such
renewal, substitution or replacement; (xii) Liens securing Permitted Refinancing
Indebtedness, so long as such Permitted Refinancing Indebtedness is secured only
by Liens on those assets that secured such Indebtedness prior to the renewal,
extension, refinancing, refunding or repurchase thereof or by Liens otherwise
permitted by this definition; and (xiii) Liens securing Indebtedness of the type
specified in clause (ii) or (v) of the definition of "Permitted Indebtedness."
"Permitted Refinancing Indebtedness" means (i) Permitted
Indebtedness of any Loan Party or any of its Subsidiaries existing on the
Closing Date, the terms of which have been amended, modified or supplemented in
a manner such that such Indebtedness does not (A) adversely affect the pari
passu or
-28-
29
subordinated status of such Indebtedness in right of payment in relation to the
Obligations, (B) accelerate the maturity of such Indebtedness, (C) shorten the
Average Life of such Indebtedness or (D) increase the aggregate amount of such
Indebtedness or any scheduled payment thereof and (ii) Indebtedness of any Loan
Party or any of its Subsidiaries, the net proceeds of which are used to renew,
extend, refinance, refund or repurchase outstanding Permitted Indebtedness of
such Loan Party or any of its Subsidiaries, provided that (A) such Indebtedness
is pari passu with or subordinated in right of payment to the Obligations at
least to the same extent as the Indebtedness being renewed, extended,
refinanced, refunded or repurchased, (B) the Average Life of such Indebtedness
is equal to or greater than the remaining Average Life of the Indebtedness being
renewed, extended, refinanced, refunded or repurchased at the time such
Indebtedness is incurred, (C) such Indebtedness is in an aggregate principal
amount (or, if such Indebtedness is issued at a price less than the principal
amount thereof, the aggregate amount of gross proceeds therefrom is) not in
excess of the sum of (I) the aggregate principal amount then outstanding of the
Indebtedness being renewed, extended, refinanced, refunded or repurchased (or if
the Indebtedness being renewed, extended, refinanced, refunded or repurchased
was issued at a price less than the principal amount thereof, then not in excess
of the amount of liability in respect thereof determined in accordance with
GAAP), (II) the amount of accrued and unpaid interest, if any, on the
Indebtedness being renewed, extended, refinanced, refunded or repurchased and
(III) the amount of fees, expenses and costs related to the incurrence of such
Permitted Refinancing Indebtedness, provided that, after giving effect thereto,
the scheduled payments or aggregate outstanding amount of such Indebtedness is
not increased to an amount greater than the outstanding amount thereof as of the
date of such renewal, extension, refinancing, refunding or repurchase, and (D)
the material terms of such Indebtedness shall be substantially identical to the
terms that existed prior to such renewal, extension, refinancing, refunding or
repurchase except as expressly provided above.
"Permitted Subordinated Indebtedness" means Indebtedness of
any Loan Party or any of its Subsidiaries that is subordinated to the repayment
of the Obligations on terms and under documentation satisfactory to the Agent.
"Person" means any individual, sole proprietorship,
partnership, limited liability company, joint venture, trust, unincorporated
organization, joint stock company, association, corporation, institution,
entity, party or government (including any division, agency or department
thereof) or any other legal entity, whether acting in an individual, fiduciary
or other capacity, and, as applicable, the successors, heirs and assigns of
each.
-29-
30
"Plan" means any employee benefit plan, as defined in Section
3(3) of ERISA, maintained or contributed to by a Borrower or any ERISA Affiliate
or with respect to which any of them may incur liability.
"Pledge Agreement" means the pledge agreement by GPI and
certain Subsidiaries of GPI party thereto in favor of the Agent, substantially
in the form of Exhibit E, as amended, supplemented or otherwise modified from
time to time.
"Pledgor" means GPI and each of the other pledgors party to
the Pledge Agreement.
"PPSA" means the Personal Property Security Act of Alberta,
from time to time in effect.
"Pricing Increment" means (i) from the date hereof until
December 31, 2000, (A) .75% per annum for Base Rate Advances or Prime Rate
Advances and (B) 2.50% per annum for LIBOR Rate Advances or Letters of Credit
and (ii) thereafter, a percentage per annum determined by reference to the
Leverage Ratio as set forth below:
Leverage Ratio Base or LIBOR Rate Advances
-------------- Prime Rate Advances or Letters of Credit
------------------- --------------------
less than 2.00:1.00 0% 1.50%
greater than or equal to 2.00:1.00 .50% 2.00%
but less than 3.00:1.00
greater than or equal to 3.00:1.00 .75% 2.50%
Commencing as of December 31, 2000, the Pricing Increment shall be determined as
of December 31, 2000 and each June 30 and December 31 thereafter based on the
most recent Financial Statements delivered by the Administrative Borrower under
Section 7.1(k)(iii) determined for the twelve-month period ending on such June
30 or December 31, provided that (i) each change in the Pricing Increment shall
be effective three Business Days after the date on which the Agent receives the
relevant Financial Statements and a duly executed Compliance Certificate
demonstrating such ratio (including during any Interest Period), (ii) upon
written notice from the Agent, the Pricing Increment shall be determined on the
basis of a Leverage Ratio greater than 3.00:1.00 for so long as the Agent has
not received the information described in clause (i) of this proviso under
Section 7.1(k)(iii) with respect to any month ending June 30 or
-30-
31
December 31 (without prejudice to the Agent's right to charge interest as
provided in Section 4.2) and (iii) the Pricing Increment shall not be reduced
more than .25% with respect to Base Rate Advances and Prime Rate Advances or
.50% with respect to LIBOR Rate Advances, in each case with respect to any such
six-month period.
"Prime Rate" means a fluctuating rate of interest per annum,
expressed on the basis of a year of 365 or 366 days, as applicable, which, in
the case of amounts in respect of which interest is to be calculated under this
Agreement on the basis of the Prime Rate, is equal at all times to the greater
of:
(i) the reference rate of interest (however
designated) of Royal Bank of Canada for determining interest
chargeable by it on Cdn. Dollar commercial loans made in
Canada; and
(ii) 0.75% above CDOR from time to time for
thirty-day Canadian bankers' acceptances.
"Prime Rate Advance" means an Advance made to the Cdn.
Borrower denominated in Cdn. Dollars that bears interest as provided in Section
4.1(b).
"Prohibited Transaction" has the meaning specified in Section
6.1(x)(v).
"Property" means any real property owned, leased or controlled
by a Borrower or any Subsidiary of a Borrower.
"Pro Rata Share" of any amount means, with respect to any U.S.
Lender or Cdn. Lender, a fraction (expressed as a percentage) (i) at any time
before the Expiration Date, the numerator of which is the Commitment of such
Lender and the denominator of which is the aggregate amount of the Commitments
of all the U.S. Lenders or the Cdn. Lenders, as applicable, at such time and
(ii) at any time on and after the Expiration Date, the numerator of which is the
aggregate unpaid principal amount of the Loans made by such Lender and the
denominator of which is the aggregate unpaid principal amount of all U.S. Loans
or Cdn. Loans, as applicable, other than TBCC Loans, TCFC Loans, Agent Loans and
Cdn. Agent Loans, at such time.
"Qualification" or "Qualified" means, with respect to any
report of independent public accountants covering Financial Statements, a
material qualification to such report (i) resulting from a limitation on the
scope of examination of such Financial Statements or the underlying data, (ii)
as to the capability of a Borrower or any other Loan Party to continue
operations as a going concern or (iii) which could be eliminated by changes in
Financial Statements or notes thereto covered by such report
-31-
32
(such as by the creation of or increase in a reserve or a decrease in the
carrying value of assets) and which if so eliminated by the making of any such
change and after giving effect thereto would result in a Default or an Event of
Default.
"Qualified Stock" means, with respect to any Person, any
Capital Stock of such Person that is not Disqualified Stock.
"Receivables" means all present and future accounts, contract
rights, promissory notes, chattel paper, tax refunds, rights to receive tax
refunds, rights of indemnification, contribution and subrogation, causes of
action, choses in action, judgments, claims against third parties of every kind
or nature, instruments, drafts, acceptances, letters of credit, rights to
receive payments under letters of credit, book accounts, each Blocked Account
and all money, balances, credits, deposits or other financial assets therein or
represented thereby, credits and reserves and all forms of obligations
whatsoever owing, and books, ledgers, files, computer tapes, programs, discs and
software, trade secrets, computer service contracts and records with respect to
any collateral or security, together with all right, title, security and
guaranties with respect to any Receivable, including any right of stoppage in
transit.
"Replacement Lender" means a financial institution proposed by
the Administrative Borrower in accordance with Section 2.9(d) that is
satisfactory to the Agent in its sole discretion and which has agreed to acquire
and assume all or a part of a Defaulting Lender's Loans and Commitments under
Section 2.9(d).
"Reportable Event" means any of the events described in
Section 4043 of ERISA and the regulations thereunder, other than a reportable
event for which the thirty-day notice requirement to the PBGC has been waived.
"Required Lenders" means (i) before the Expiration Date, the
Lenders holding more than fifty percent of the aggregate Commitments at such
time and (ii) on and after the Expiration Date, the Lenders holding more than
fifty percent of the aggregate unpaid principal amount of the Loans at such
time.
"Requirement of Law" means (i) any law, treaty, rule,
regulation, order or determination of an arbitrator, court or other Governmental
Authority or (ii) any franchise, license, lease, permit, certificate,
authorization, qualification, easement, right of way, or other right or approval
of any Governmental Authority binding on a Borrower or any Designated Affiliate
or any of their respective property.
"Responsible Officer" means the President, the Chief Executive
Officer, the Chief Financial Officer or the Chief
-32-
33
Operating Officer of a Loan Party.
"Restricted Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of any Loan Party now or hereafter outstanding or any warrants,
options or other rights to acquire such Capital Stock, (ii) any redemption,
retirement, purchase or other acquisition, direct or indirect, of any shares of
any class of Capital Stock of any Loan Party, now or hereafter outstanding, or
of any warrants, rights or options to acquire any such shares, except to the
extent that the consideration therefor consists of shares of Qualified Stock
(including warrants, rights or options relating thereto) of GPI, and (iii) any
Investment by any Loan Party not permitted under Section 7.2(k) or 7.2(l).
"Security Agreement" means the security agreement by the Cdn.
Borrower in favor of the Cdn. Agent, substantially in the form of Exhibit I, as
amended, supplemented or otherwise modified from time to time.
"Security Documents" means the Pledge Agreement, the Lockbox
Agreements, the Security Agreement, the Blocked Account Agreement and any other
agreement delivered in connection herewith which purports to xxxxx x Xxxx in
favor of the Agent or the Cdn. Agent to secure all or any of the Obligations.
"Settlement" has the meaning specified in Section 2.2(i).
"Settlement Date" has the meaning specified in Section 2.2(i).
"Solvent" means, when used with respect to any Person, that as
of the date as to which such Person's solvency is to be measured:
(i) the fair saleable value of its assets is in
excess of the total amount of its liabilities (including
contingent liabilities as valued in accordance with applicable
law) as they become absolute and matured;
(ii) it has sufficient capital to conduct its
business; and
(iii) it is able to meet its debts as they mature.
"Spinoff" means the distribution of all of the outstanding
shares of common stock of GPI by Xxxxxxxxxxx as described in Form 10 filed by
GPI with the Securities Exchange Commission and declared effective by the
Securities and Exchange
-33-
34
Commission on or about March 20, 2000.
"Subordinated Note" means the Subordinated Note dated April
14, 2000 made by GPI in favor of Xxxxxxxxxxx in the original principal amount of
US$100,000,000, as amended, supplemented or otherwise modified, replaced or
extended from time to time.
"Subordination Agreement" means the Subordination Agreement
among GPI, Xxxxxxxxxxx and the Agent, substantially in the form of Exhibit K, as
amended, supplemented or otherwise modified from time to time.
"Subsidiary" means, as to any Person, a corporation or other
entity in which that Person directly or indirectly owns or controls the shares
of stock or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other governing body, or to appoint the
majority of the managers of, such corporation or other entity, it being
understood that Voest-Alpine is not a Subsidiary of GPI, any other Loan Party or
any Subsidiary thereof as of the date hereof.
"Supermajority Lenders" means, with respect to determining the
eligibility of the Inventory and Receivables of the U.S. Borrowers or the Cdn.
Borrower, as the case may be, for purposes of the definitions of "Eligible
Inventory" and "Eligible Receivables" and under the second sentence of Section
2.1(c), the U.S. Lenders or the Cdn. Lenders, respectively, holding sixty-six
and two-thirds percent or more of the aggregate Commitments of the U.S. Lenders
or the Cdn. Lenders, respectively.
"TBCC" has the meaning specified in the introductory
paragraph.
"TBCC Loan" has the meaning specified in Section 2.2(h).
"TCFC" has the meaning specified in the introductory
paragraph.
"TCFC Loan" has the meaning specified in Section 2.2(h).
-34-
35
"Termination Event" means (i) a Reportable Event with respect
to any Pension Plan or Multiemployer Plan; (ii) the withdrawal of a Borrower or
any ERISA Affiliate from a Pension Plan during a plan year in which it was a
"substantial employer" (as defined in Section 4001(a)(2) of ERISA); (iii) the
providing of notice of intent to terminate a Pension Plan in a distress
termination (as described in Section 4041(c) of ERISA); (iv) the institution by
the PBGC of proceedings to terminate a Pension Plan or Multiemployer Plan; (v)
any event or condition (a) which is reasonably likely to constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan, or (b) that is
reasonably likely to result in termination of a Multiemployer Plan pursuant to
Section 4041A of ERISA; or (vi) the partial or complete withdrawal, within the
meaning of Sections 4203 and 4205 of ERISA, of a Borrower or any ERISA Affiliate
from a Multiemployer Plan.
"Termination Notice" has the meaning specified in Section 2.7.
"Type" means a Base Rate Advance, a Prime Rate Advance or a
LIBOR Rate Advance.
"U.S. Borrower" means each Borrower other than the Cdn.
Borrower.
"U.S. Borrowers' Account" means the account maintained by the
U.S. Borrowers at The Chase Manhattan Bank in New York, New York, account number
9102717965, or such other account which the U.S. Borrowers may designate to the
Agent from time to time.
"U.S. Borrowing Base" has the meaning specified in Section
2.1(a).
"U.S. Dollars," "US$" and "$" means lawful currency of the
United States.
"U.S. Lenders" means the Lenders other than the Cdn. Lenders.
"U.S. Letter of Credit" means a Letter of Credit issued for
the account of a U.S. Borrower.
"U.S. Loans" means all revolving credit loans made by the U.S.
Lenders to the U.S. Borrowers under Article II.
"U.S. Notes" has the meaning specified in Section 2.1(d).
-35-
36
"Voest-Alpine" means, collectively, Voest-Alpine Stahlrohr
Kindberg GmbH, an Austrian limited liability company, Voest-Alpine Stahlrohr
Kindberg GmbH & Co. KG, an Austrian limited partnership, Voest-Alpine Middle
East Free Establishment Zone, a United Arab Emirates corporation, and
Voest-Alpine South America, S.A., a Venezuelan corporation.
"Xxxxxxxxxxx" means Xxxxxxxxxxx International, Inc., a
Delaware corporation.
"Year 2000 Compliant" means, with respect to any Person, that
(i) all software in goods produced or sold by, or used by and material to the
business, operations or financial condition of, such Person are able to
interpret and manipulate data on and involving all calendar dates correctly and
without causing any abnormal ending scenario, including dates in and after the
year 2000, and (ii) all equipment containing embedded microchips (including,
without limitation, all systems and equipment supplied by others or with which
such Person's information systems interface) will function properly with respect
to all dates in and after the year 2000.
SECTION I.2. Accounting Terms and Determinations. Unless
otherwise defined or specified herein, all accounting terms used in this
Agreement shall be construed in accordance with GAAP, applied on a basis
consistent in all material respects with the Financial Statements delivered to
the Agent on or before the Closing Date. All accounting determinations for
purposes of determining compliance with Article VIII shall be made in accordance
with GAAP as in effect on the Closing Date and applied on a basis consistent in
all material respects with the audited Financial Statements delivered to the
Agent on or before the Closing Date. The Financial Statements required to be
delivered hereunder from and after the Closing Date, and all financial records,
shall be maintained in accordance with GAAP. If GAAP shall change from the basis
used in preparing the audited Financial Statements delivered to the Agent on or
before the Closing Date, the Compliance Certificates required to be delivered
pursuant to Section 7.1(k)(iii) shall include calculations setting forth the
adjustments necessary to demonstrate how the Borrowers are in compliance with
the Financial Covenants based upon GAAP as in effect on the Closing Date.
-36-
37
SECTION I.3. Other Terms; Headings. Unless otherwise defined
herein, terms used herein that are defined in the Uniform Commercial Code, from
time to time in effect in the State of New York (the "Code") or in the PPSA,
from time to time in effect in the Province of Alberta, shall have the meanings
given in the Code or in the PPSA, as the case may be. An Event of Default shall
"continue" or be "continuing" unless and until such Event of Default has been
waived or cured within any grace period specified therefor under Section 9.1.
The headings and the Table of Contents are for convenience only and shall not
affect the meaning or construction of any provision of this Agreement. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (i) any definition of or reference to any
agreement, instrument or other document herein or in any other Loan document
shall be construed as referring to such agreement, instrument or other document
as from time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein
or in any other Loan Document), (ii) any reference herein to any Person shall be
construed to include such Person's successors and assigns, (iii) the words
"herein", "hereof" and "hereunder", and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (iv) all references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement and (v) the words "asset" and "property" shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.
-37-
38
ARTICLE II.
THE CREDIT FACILITIES
SECTION II.1. Loans.
(a) Each U.S. Lender severally agrees, subject to Section
2.4(a) and the other terms and conditions of this Agreement, to make revolving
credit loans, from time to time from the Closing Date to but excluding the
Expiration Date, at the Administrative Borrower's request to the Agent, in an
aggregate principal amount for all U.S. Lenders at any one time outstanding
which, when combined with the aggregate undrawn amount of all unexpired U.S.
Letters of Credit, does not exceed the sum of (i) 85% of the aggregate Eligible
Receivables of the U.S. Borrowers plus (ii) 50% of the aggregate Eligible
Inventory other than work in process of the U.S. Borrowers plus (iii) 35% of the
aggregate Eligible Inventory consisting of work in process of the U.S. Borrowers
(provided that the sum of the amounts in clauses (ii) and (iii) hereof in
respect of Eligible Inventory shall not exceed 70% of the aggregate amount of
all U.S. Loans and U.S. Letters of Credit outstanding at such time), all of the
foregoing less such reserves as the Agent may establish in its reasonable
discretion including, without limitation, the Equipment Sales Reserve and the
Inventory Availability Reserve (the "U.S. Borrowing Base"); provided, however,
that in no event shall the aggregate amount of the U.S. Loans and the U.S.
Letters of Credit outstanding at any time exceed the aggregate amount of the
Commitments less the aggregate amount of Cdn. Loans and the undrawn amount of
Cdn. Letters of Credit outstanding at such time.
(b) Each Cdn. Lender severally agrees, subject to Section
2.4(a) and the other terms and conditions of this Agreement, to make revolving
credit loans denominated in Cdn. Dollars or U.S. Dollars, from time to time from
the Closing Date to but excluding the Expiration Date, at the Administrative
Borrower's request to the Agent, in an aggregate principal amount for all Cdn.
Lenders at any one time outstanding which, when combined with the aggregate
undrawn amount of all unexpired Cdn. Letters of Credit, does not exceed the sum
of (i) 85% of the Eligible Receivables of the Cdn. Borrower plus (ii) 50% of the
Eligible Inventory other than work in process of the Cdn. Borrower plus (iii)
35% of the Eligible Inventory consisting of work in process of the Cdn. Borrower
(provided that the sum of the amounts in clauses (ii) and (iii) hereof in
respect of Eligible Inventory shall not exceed 70% of the aggregate amount of
all Cdn. Loans and Cdn. Letters of Credit outstanding at such time), all of the
foregoing less such reserves as the Agent may
-38-
39
establish in its reasonable discretion including, without limitation, the
Equipment Sales Reserve and the Inventory Availability Reserve (the "Cdn.
Borrowing Base"); provided, however, that in no event shall the aggregate amount
of the Cdn. Loans and the Cdn. Letters of Credit outstanding at any time exceed
US$7,000,000 in the aggregate.
(c) The Agent, at any time in the exercise of its reasonable
discretion, may (i) establish and increase or decrease reserves against Eligible
Receivables and Eligible Inventory and (ii) reduce the advance rates against
Eligible Receivables and Eligible Inventory. The Supermajority Lenders, at any
time in the exercise of their reasonable discretion, may impose additional
restrictions to (or eliminate the same from) the standards of eligibility set
forth in the definitions of "Eligible Receivables" and "Eligible Inventory." The
Lenders, at any time in the exercise of their reasonable discretion, may
increase the advance rates against Eligible Receivables and Eligible Inventory.
(d) The U.S. Loans made by each U.S. Lender shall be evidenced
by a promissory note payable to the order of such Lender, substantially in the
form of Exhibit A (each as amended, supplemented or otherwise modified from time
to time, a "U.S. Note"), executed by the U.S. Borrowers and delivered to the
Agent on the Closing Date. The U.S. Note of each U.S. Lender shall be in a
stated maximum principal amount equal to such Lender's Commitment.
(e) The Cdn. Loans made by each Cdn. Lender shall be evidenced
by a promissory note payable in Cdn. Dollars, substantially in the form of
Exhibit B, and a promissory note payable in U.S. Dollars, substantially in the
form of Exhibit C, each payable to the order of such Lender (each as amended,
supplemented or otherwise modified from time to time, a "Cdn. Note"), executed
by the Cdn. Borrower and delivered to the Agent on the Closing Date. Each Cdn.
Note of each Cdn. Lender shall be in a stated maximum principal amount equal to
such Lender's Commitment.
(f) The Loans shall be payable in full, with all interest
accrued thereon, on the Expiration Date. The Borrowers may borrow, repay or
prepay (subject to the obligation of the Borrowers to indemnify the Lenders
under Section 2.2(e)(iii) upon any prepayment of a LIBOR Rate Advance) and
reborrow Loans, in whole or in part, in accordance with the terms hereof.
(g) Each Cdn. Loan or Cdn. Letter of Credit shall be
denominated solely in Cdn. Dollars or U.S. Dollars, as the Administrative
Borrower may request. Each U.S. Loan or U.S. Letter of Credit shall be
denominated solely in U.S. Dollars.
-39-
40
SECTION II.2. Procedure for Borrowing; Notices of Borrowing;
Notices of Continuation; Notices of Conversion; TBCC Loans; TCFC Loans;
Settlement.
(a) Each Borrowing shall be made on notice, given not later
than 12:00 Noon (Chicago time) on the third Business Day prior to the proposed
Borrowing Date in the case of a LIBOR Rate Advance, and not later than 11:00
A.M. (Chicago time) on the date of the proposed Borrowing in the case of a Base
Rate Advance or a Prime Rate Advance, by the Administrative Borrower to the
Agent. Each such notice of a Borrowing shall be by telephone, confirmed
immediately in writing (by telecopier or otherwise as permitted hereunder), in
substantially the form of Exhibit Q (a "Notice of Borrowing"), specifying
therein the requested (i) date of such Borrowing, (ii) Type of Advance
comprising such Borrowing and, in the case of a LIBOR Rate Advance, the
requested Interest Period therefor and (iii) aggregate principal amount of such
Borrowing.
(b) With respect to any Borrowing consisting of a LIBOR Rate
Advance, the Borrowers may, subject to the provisions of Section 2.2(d) and so
long as all the conditions set forth in Article V have been fulfilled, elect to
maintain such Borrowing or any portion thereof as a LIBOR Rate Advance by
selecting a new Interest Period for such Borrowing, which new Interest Period
shall commence on the last day of the Interest Period then ending. Each
selection of a new Interest Period (a "Continuation") shall be made by notice
given not later than 12:00 Noon (Chicago time) on the third Business Day prior
to the date of any such Continuation by the Administrative Borrower to the
Agent. Such notice by the Administrative Borrower of a Continuation shall be by
telephone, confirmed immediately in writing (by telecopier or otherwise as
permitted hereunder), in substantially the form of Exhibit R (a "Notice of
Continuation"), specifying the requested (i) date of such Continuation and (ii)
aggregate amount of the Advance subject to such Continuation, which shall comply
with all limitations on Loans hereunder. Upon the Agent's receipt of any Notice
of Continuation, the Agent shall promptly notify each Lender thereof. Unless, on
or before 12:00 Noon (Chicago time) of the third Business Day prior to the
expiration of an Interest Period, the Agent shall have received a Notice of
Continuation from the Administrative Borrower for the entire Borrowing
consisting of the LIBOR Rate Advance outstanding during such Interest Period,
any amount of such Advance comprising such Borrowing remaining outstanding at
the end of such Interest Period (or any unpaid portion of such Advance not
covered by a timely Notice of Continuation) shall, upon the expiration of such
Interest Period, be Converted to a Base Rate Advance or, if such Borrowing is by
the Cdn. Borrower, a Prime Rate Advance.
-40-
41
(c) The Borrowers may on any Business Day upon notice (each
such notice, a "Notice of Conversion") given by the Administrative Borrower to
the Agent, and subject to the provisions of Section 2.2(d), Convert the entire
amount of or a portion of an Advance of one Type into an Advance of another
Type; provided, however, that (i) the Borrowers may not Convert a Base Rate
Advance or a Prime Rate Advance into a LIBOR Rate Advance if an Event of Default
has occurred and is continuing, (ii) any Conversion of a LIBOR Rate Advance into
a Base Rate Advance shall be made on, and only on, the last day of an Interest
Period for such LIBOR Rate Advance, except that the Borrowers may Convert a
LIBOR Rate Advance to a Base Rate Advance or to a Prime Rate Advance before the
end of the applicable Interest Period if the Administrative Borrower has
received notice from the Agent under subsection (d)(i) that it is unlawful for
such Lender to fund or maintain such LIBOR Rate Advance and (iii) only the Cdn.
Borrower may Convert an Advance to a Prime Rate Advance. Each such Notice of
Conversion shall be given not later than 12:00 P.M. (Chicago time) on the
Business Day prior to the date of any proposed Conversion into a Base Rate
Advance or a Prime Rate Advance and on the third Business Day prior to the date
of any proposed Conversion into a LIBOR Rate Advance. Subject to the
restrictions specified above, each Notice of Conversion shall be by telephone,
confirmed immediately in writing (by telecopier or otherwise as permitted
hereunder), in substantially the form of Exhibit S, specifying (i) the requested
date of such Conversion, (ii) the Type of Advance to be Converted, the Type of
Advance into which such Advance is requested to be Converted and, in the case of
an Advance to be Converted to a LIBOR Rate Advance, the requested Interest
Period therefor and (iii) the amount of such Advance to be Converted. Upon the
Agent's receipt of any Notice of Conversion, the Agent shall promptly notify
each Lender thereof. Each Conversion shall be in an aggregate amount not less
than US$1,000,000 or Cdn.$1,000,000, as applicable, or an integral multiple of
US$1,000,000 or Cdn.$1,000,000, as applicable, in excess thereof.
(d) Anything in subsection (b) or (c) above to the
contrary notwithstanding,
(i) if, at least one Business Day before the date
of any requested LIBOR Rate Advance, the introduction of or
any change in or in the interpretation of any law or
regulation makes it unlawful, or any central bank or other
governmental authority asserts that it is unlawful, for any
Lender or any of its Affiliates to perform its obligations
hereunder to make a LIBOR Rate Advance or to fund or maintain
a LIBOR Rate Advance hereunder (including in the case of a
Continuation or a Conversion), such Lender shall promptly give
written notice of such
-41-
42
circumstance to the Agent, and the Agent shall promptly
deliver such notice to the Administrative Borrower, and the
right of the Borrowers to select a LIBOR Rate Advance for such
Borrowing or any subsequent Borrowing (including a
Continuation or a Conversion) shall be suspended until the
circumstances causing such suspension no longer exist, and any
Advance comprising such requested Borrowing shall be a Base
Rate Advance;
(ii) if, at least one Business Day before the
first day of any Interest Period, the Agent is unable to
determine the LIBOR Rate for LIBOR Rate Advances comprising
any requested Borrowing, Continuation or Conversion, the Agent
shall promptly give written notice of such circumstance to the
Administrative Borrower, and the right of the Borrowers to
select or maintain LIBOR Rate Advances for such Borrowing or
any subsequent Borrowing shall be suspended until the Agent
shall notify the Administrative Borrower that the
circumstances causing such suspension no longer exist, and any
Advance comprising such Borrowing shall be a Base Rate Advance
(or, in the case of a Borrowing by the Cdn. Borrower, a Prime
Rate Advance);
(iii) if any Lender shall, at least one Business
Day before the date of any requested Borrowing or Continuation
of, or Conversion into, a LIBOR Rate Advance, notify the
Agent, which notice the Agent shall promptly deliver to the
Administrative Borrower, that the LIBOR Rate for Advances
comprising such Borrowing, Continuation or Conversion will not
adequately reflect the cost to such Lender of making or
funding Advances for such Borrowing, the right of the
Borrowers to select LIBOR Rate Advances shall be suspended
until such Lender shall notify the Administrative Borrower
that the circumstances causing such suspension no longer
exist, and any Advance comprising such Borrowing shall be a
Base Rate Advance (or, in the case of a Borrowing by the Cdn.
Borrower, a Prime Rate Advance);
(iv) there shall not be outstanding at any time
more than ten Borrowings which consist of LIBOR Rate Advances;
(v) each Borrowing which consists of LIBOR Rate
Advances shall be in an amount equal to US$1,000,000 or a
whole multiple of US$1,000,000 in excess thereof; and
(vi) if an Event of Default has occurred and is
continuing, no LIBOR Rate Advances may be borrowed or
continued as such.
-42-
43
(e) Each Notice of Borrowing, Notice of Continuation and
Notice of Conversion shall be irrevocable and binding on the Borrowers. The
Borrowers agree, jointly and severally, to indemnify each Lender against any
loss, cost or expense incurred by such Lender as a result of (i) default by the
Borrowers in making a Borrowing of, Conversion into or Continuation of a LIBOR
Rate Advance after the Administrative Borrower has given notice requesting the
same, (ii) default by the Borrowers in payment when due of the principal amount
of or interest on any LIBOR Rate Advance or (iii) the making of a payment or
prepayment of a LIBOR Rate Advance on a day which is not the last day of an
Interest Period with respect thereto, including, without limitation, any loss
(including loss of anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such
Lender to fund such Advance.
(f) Promptly after receipt of a Notice of Borrowing under
Section 2.2(a), the Agent shall elect, in its discretion, (i) to have the terms
of Section 2.2(g) apply to the requested Borrowing, or (ii) to request TBCC or
TCFC to make a TBCC Loan or a TCFC Loan, respectively, under Section 2.2(h), as
applicable, in the amount of the requested Borrowing; provided, however, that if
either TBCC or TCFC, as the case may be, declines (which it may do in its sole
and absolute discretion) to make a TBCC or TCFC Loan, respectively, the Agent
shall elect to have the terms of Section 2.2(g) apply to such requested
Borrowing.
(g) (i) If the Agent shall elect to have the terms of this
Section 2.2(g) apply to a requested Borrowing as described in Section 2.2(f)(i),
then, promptly after its receipt of a Notice of Borrowing under Section 2.2(a),
the Agent shall notify the Lenders in writing (by telecopier or otherwise as
permitted hereunder) of the requested Borrowing. Each U.S. Lender with respect
to U.S. Loans and each Cdn. Lender with respect to Cdn. Loans shall make the
amount of such Lender's Pro Rata Share of the requested Borrowing available to
the Agent in same day funds, for the account of the applicable Borrower or
Borrowers, (A) in the case of a U.S. Loan, at the Agent's U.S. Payment Account
prior to 2:00 P.M. (Chicago time), or (B) in the case of a Cdn. Loan, at the
Agent's Cdn. Payment Account prior to 2:00 P.M., Toronto time, in each case on
the Borrowing Date requested by the Administrative Borrower, in U.S. Dollars or
Cdn. Dollars, as applicable. The proceeds of such Borrowing will then be made
available to the applicable Borrower or Borrowers by the Agent wire transferring
to the U.S. Borrowers' Account or the applicable Cdn. Borrower's Account, as
applicable, the aggregate of the amounts made available to the Agent by the U.S.
Lenders or the Cdn. Lenders, as applicable, and in like funds as received by the
Agent by 2:00 P.M. (Chicago or Toronto time, as applicable), on the requested
Borrowing Date.
-43-
44
(ii) Unless the Agent receives contrary written
notice prior to the date of any proposed Borrowing, the Agent is entitled to
assume that each applicable Lender will make available its Pro Rata Share of
such Borrowing and, in reliance upon that assumption, but without any obligation
to do so, may advance such Pro Rata Share on behalf of such Lender. If and to
the extent that such Lender shall not have made such amount available to the
Agent, but the Agent has made such amount available to the Administrative
Borrower, such Lender and the applicable Borrower or Borrowers jointly and
severally agree to pay and repay the Agent forthwith on demand such
corresponding amount and to pay interest thereon, for each day from the date
such amount is transferred by the Agent to the U.S. Borrowers' Account or the
applicable Cdn. Borrower's Account, as applicable, until the date such amount is
paid or repaid to the Agent, at (A) in the case of the applicable Borrower or
Borrowers, the interest rate applicable at such time to such Loan and (B) in the
case of each Lender, for the period from the date such amount was wire
transferred to the U.S. Borrowers' Account or the applicable Cdn. Borrower's
Account, as applicable, to (and including) three days after demand therefor by
the Agent to such Lender, at the Federal Funds Rate and, following such third
day, at the interest rate applicable at such time to such Loan together with all
costs and expenses incurred by the Agent in connection therewith. If a Lender
shall pay to the Agent any or all of such amount, such amount so paid shall
constitute a Loan by such Lender to the applicable Borrower or Borrowers for
purposes of this Agreement.
(h) (i) If the Agent shall elect, with the consent of TBCC or
TCFC, as applicable, in its sole and absolute discretion to have the terms of
this Section 2.2(h) apply to a requested Borrowing (as described in Section
2.2(f)), TBCC or TCFC, as the case may be, shall make a Loan in the amount of
such requested Borrowing (any such Loan made solely by TBCC under this Section
2.2(h) being referred to as a "TBCC Loan" and any such Loan made solely by TCFC
under this Section 2.2(h) being referred to as a "TCFC Loan") available to the
U.S. Borrowers or the Cdn. Borrower, respectively, in same day funds by wire
transferring to the U.S. Borrowers' Account or the applicable Cdn. Borrower's
Account, as applicable, the amount of the requested Borrowing by 2:00 P.M.
(Chicago or Toronto time, as applicable) on the requested Borrowing Date. Each
TBCC Loan and TCFC Loan shall be subject to all the terms and conditions
applicable to the other Loans except that all payments thereon shall be payable
to TBCC or TCFC, as applicable, solely for its own account (and for the account
of the holder of any participation interest with respect to such Loan). The
Agent shall not request TBCC to make any TBCC Loan, or TCFC to make any TCFC
Loan, if (A) the Agent shall have received written notice from any Lender, or
otherwise has actual knowledge, that one or more of the conditions precedent
specified in Section 5.2 will not be satisfied on the requested Borrowing Date
for the applicable Borrowing, or (B) the requested Borrowing
-44-
45
would cause the aggregate amount of the U.S. Loans and the U.S. Letters of
Credit or the Cdn. Loans and the Cdn. Letters of Credit, as the case may be, to
exceed the U.S. Borrowing Base or the Cdn. Borrowing Base, respectively, on such
Borrowing Date. Neither TBCC nor TCFC shall otherwise be required to determine
whether the conditions precedent specified in Section 5.2 have been satisfied or
the requested Borrowing would cause the U.S. Borrowing Base or the Cdn.
Borrowing Base, as applicable, to be exceeded on the requested Borrowing Date
prior to making, in its sole discretion, any TBCC Loan or TCFC Loan, as the case
may be.
(ii) The TBCC Loans and the TCFC Loans (A) shall
be repayable on demand to the extent that a U.S. Lender or a Cdn. Lender, as
applicable, fails to make available its Pro Rata Share of such TBCC Loan or TCFC
Loan, as applicable, under Section 2.2(j)(ii), (B) shall be secured by the
Collateral, (C) shall constitute Loans and Obligations hereunder and (D) shall
bear interest at the rate applicable to the Type of Advance requested in the
applicable Notice of Borrowing.
(i) Subject to the limitations set forth in the provisos
contained in this Section 2.2(i), each of the Agent and the Cdn. Agent is
authorized from time to time in its sole discretion (i) after the occurrence of
a Default or an Event of Default, or (ii) at any time that any of the other
conditions precedent specified in Section 5.2 have not been satisfied, to make
Loans to the Borrowers on behalf of the U.S. Lenders or the Cdn. Lenders, as
applicable, which the Agent or the Cdn. Agent, in its reasonable business
judgment, deems necessary or desirable (A) to preserve or protect the
Collateral, or any portion thereof, (B) to enhance the likelihood of, or
maximize the amount of, repayment of the Loans and the other Obligations, or (C)
to pay any other amount chargeable to the Borrowers under this Agreement or any
other Loan Document including, without limitation, costs, fees and expenses as
described in Section 11.4 (any such Loan made to the U.S. Borrowers under this
Section 2.2(i) being referred to as an "Agent Loan" and any such Loan made to
the Cdn. Borrower under this Section 2.2(i) being referred to as a "Cdn. Agent
Loan"), provided that the Required Lenders may at any time revoke the Agent's or
the Cdn. Agent's authorization contained in this Section 2.2(i) to make an Agent
Loan or a Cdn. Agent Loan, any such revocation to be in writing and to become
effective prospectively upon the Agent's receipt thereof, and provided, further,
that the Agent and the Cdn. Agent shall not make Agent Loans or Cdn. Agent Loans
(I) for purposes described in clauses (B) and (C) above which would cause the
aggregate amount of the U.S. Loans and the U.S. Letters of Credit or the Cdn.
Loans and the Cdn. Letters of Credit, as the case may be, to exceed the U.S.
Borrowing Base or the Cdn. Borrowing Base, respectively, (II) which would cause
the aggregate amount of the Loans and the Letters of Credit to exceed the
aggregate amount of the Commitments or (III) which would exceed US$5,000,000 in
the
-45-
46
aggregate. The Agent Loans and the Cdn. Agent Loans shall be repayable on
demand, shall be secured by the Collateral, shall constitute Loans and
Obligations hereunder and shall bear interest at the rate applicable to Base
Rate Advances or Prime Rate Advances, as applicable, in effect from time to
time. The Agent shall notify each Lender in writing of each Agent Loan and each
Cdn. Agent Loan.
(j) Each U.S. Lender's funded portion of any U.S. Loan is
intended to be equal at all times to such Lender's Pro Rata Share of all
outstanding U.S. Loans. Each Cdn. Lender's funded portion of any Cdn. Loan is
intended to be equal at all times to such Lender's Pro Rata Share of all
outstanding Cdn. Loans. Notwithstanding such agreement, the Agent, the Cdn.
Agent, TBCC, TCFC and the other Lenders agree (which agreement shall not be for
the benefit of or enforceable by the Borrowers) that, to facilitate the
administration of this Agreement and the other Loan Documents, settlement among
them as to the U.S. Loans, the Cdn. Loans, the TBCC Loans, the TCFC Loans, the
Agent Loans and the Cdn. Agent Loans shall take place on a periodic basis in
accordance with the following provisions:
(i) The Agent shall request settlement
("Settlement") (A) with the U.S. Lenders on a weekly basis, or
on a more frequent basis if so determined by the Agent, (I) on
behalf of TBCC, with respect to each outstanding TBCC Loan,
(II) for itself, with respect to each outstanding Agent Loan,
and (III) with respect to all payments made by the U.S.
Borrowers on account of the U.S. Loans, in each case by
notifying the U.S. Lenders of such requested Settlement by
telephone, confirmed immediately in writing (by telecopier or
otherwise as permitted hereunder), prior to 12:00 Noon
(Chicago time) on the date of such requested Settlement (any
such date being a "Settlement Date") and (B) with the Cdn.
Lenders on a weekly basis, or on a more frequent basis if so
determined by the Agent, (I) on behalf of TCFC, with respect
to each outstanding TCFC Loan, (II) for the Cdn. Agent, with
respect to each outstanding Cdn. Agent Loan and (III) with
respect to all payments made by the Cdn. Borrower on account
of the Cdn. Loans, in each case by notifying the Cdn. Lenders
of such requested Settlement by telephone, confirmed
immediately in writing (by telecopier or otherwise as
permitted hereunder), prior to 12:00 Noon (Toronto time) on
the Settlement Date applicable thereto.
(ii) Each U.S. Lender (other than TBCC, in the
case of TBCC Loans) shall make the amount of such Lender's Pro
Rata Share of the outstanding principal amount of the TBCC
Loans and the Agent Loans with
-46-
47
respect to which Settlement is requested available to the
Agent in same day funds, for itself or for the account of
TBCC, to the Agent's U.S. Payment Account prior to 2:00 P.M.
(Chicago time), on the Settlement Date applicable thereto,
regardless of whether the conditions precedent specified in
Section 5.2 have then been satisfied. Such amounts made
available to the Agent shall be applied against the amounts of
the applicable TBCC Loan or the Agent Loan and, together with
the portion of such TBCC Loan or Agent Loan representing
TBCC's Pro Rata Share thereof, shall constitute U.S. Loans of
such Lenders. If any such amount is not made available to the
Agent by any U.S. Lender on the Settlement Date applicable
thereto, the Agent shall be entitled to recover such amount on
demand from such U.S. Lender together with interest thereon at
the Federal Funds Rate for the first three days from and after
such Settlement Date and thereafter at the interest rate then
applicable to Base Rate Loans.
(iii) Each Cdn. Lender (other than TCFC, in the
case of TCFC Loans) shall make the amount of such Cdn.
Lender's Pro Rata Share of the outstanding principal amount of
the TCFC Loans and the Cdn. Agent Loans with respect to which
Settlement is requested available to the Agent in same day
funds, for the account of the Cdn. Agent or TCFC, to the
Agent's Cdn. Payment Account prior to 2:00 P.M. (Toronto
time), on the Settlement Date applicable thereto, regardless
of whether the conditions precedent specified in Section 5.2
have then been satisfied. Such amounts made available to the
Agent shall be applied against the amounts of the applicable
TCFC Loan or the Cdn. Agent Loan and, together with the
portion of such TCFC Loan or Cdn. Agent Loan representing
TCFC's Pro Rata Share thereof, shall constitute Cdn. Loans of
such Lenders. If any such amount is not made available to the
Agent by any Cdn. Lender on the Settlement Date applicable
thereto, the Agent shall be entitled to recover such amount on
demand from such Cdn. Lender together with interest thereon at
the Federal Funds Rate for the first three days from and after
such Settlement Date and thereafter at the interest rate then
applicable to Prime Rate Loans.
(iv) Notwithstanding the foregoing, not more than
one Business Day after demand is made by the Agent (whether
before or after the occurrence of a Default or an Event of
Default and regardless of whether the Agent has requested a
Settlement with respect to a TBCC Loan, a TCFC Loan, an Agent
Loan or a Cdn. Agent Loan), each
-47-
48
U.S. Lender (other than TBCC) or Cdn. Lender (other than
TCFC), as applicable, shall irrevocably and unconditionally
purchase and receive from TBCC, TCFC, the Agent or the Cdn.
Agent, as applicable, without recourse or warranty, an
undivided interest and participation in such TBCC Loan, TCFC
Loan, Agent Loan or Cdn. Agent Loan to the extent of such U.S.
Lender's Pro Rata Share or Cdn. Lender's Pro Rata Share
thereof, as applicable, by paying to the Agent, in same day
funds, an amount equal to such Lender's Pro Rata Share of such
TBCC Loan, TCFC Loan, Agent Loan or Cdn. Agent Loan. If such
amount is not made available to the Agent by any U.S. Lender
or Cdn. Lender, as applicable, the Agent shall be entitled to
recover such amount on demand from such Lender together with
interest thereon at the Federal Funds Rate for the first three
days from and after such demand and thereafter at the interest
rate then applicable to (A) Base Rate Loans in the case of
U.S. Loans and (B) Prime Rate Loans in the case of Cdn. Loans.
(v) From and after the date, if any, on which any
Lender purchases an undivided interest and participation in
any TBCC Loan, TCFC Loan, Agent Loan or Cdn. Agent Loan under
clause (iv) above, the Agent shall promptly distribute to such
Lender at such address as such Lender may request in writing,
such Lender's Pro Rata Share of all payments of principal and
interest received by the Agent in respect of such TBCC Loan,
TCFC Loan, Agent Loan or Cdn. Agent Loan.
SECTION II.3. Application of Proceeds. The proceeds of the
Loans shall be used by the Borrowers (i) to refinance the Borrowers' existing
short term indebtedness, (ii) to finance, directly or indirectly, Permitted
Acquisitions by GPI and the Borrowers and (iii) to provide for their general
working capital purposes and for expenses incurred by the Borrowers in
connection herewith.
-48-
49
SECTION II.4. Maximum Amount of the Loans; Mandatory
Prepayments; Early Termination of Agreement; Release of Equipment Collateral.
(a) In no event shall the sum of the aggregate outstanding
principal balance of the U.S. Loans and the aggregate undrawn amount of all
unexpired U.S. Letters of Credit exceed the lesser of (i) the U.S. Borrowing
Base and (ii) US$100,000,000 less the aggregate amount of Cdn. Loans and the
undrawn amount of Cdn. Letters of Credit outstanding. In no event shall the sum
of (A) the aggregate outstanding principal balances of the Cdn. Loans and (B)
the aggregate undrawn amount of all unexpired Cdn. Letters of Credit exceed the
lesser of (I) the Cdn. Borrowing Base and (II) US$7,000,000.
(b) In addition to any prepayment required under Section
7.2(e)(vii) or as a result of an Event of Default hereunder, upon discovery by
or notice to the Administrative Borrower that any of the lending limits set
forth in Section 2.1(a) or (b) or Section 2.4(a) has been exceeded, an amount
sufficient to reduce the outstanding balances (and Collateralize outstanding
Letters of Credit) to the applicable maximum allowed amount shall become
immediately due and payable by the Borrowers without the necessity of a demand
by the Agent or any Lender.
(c) The Borrowers shall have the right to terminate this
Agreement at any time on 45 days' prior written notice by the Administrative
Borrower to the Agent, provided that on the date of such termination all
Obligations, including all amounts required for the Collateralization of Letters
of Credit and interest, fees and expenses (including, without limitation, costs
and expenses of the type specified in Section 2.2(e)(iii)) payable to the date
of such termination, shall be paid in full.
(d) The Administrative Borrower may request, in a notice
delivered to the Agent not more than once in any fiscal quarter of the
Borrowers, that the Agent release its Lien on Equipment of the U.S. Borrowers to
the extent such Lien encumbers Equipment with an Orderly Liquidation Value in
excess of US$50,000,000 (that is located on Property or any other realty unless
(i) such Property or realty is not subject to any lease or mortgage or (ii) any
lessor or mortgagor of such Property or realty has executed and delivered to the
Agent a Collateral Access Agreement) and in which Equipment the Agent has a
perfected, first priority security interest subject to no other Liens other than
Permitted Liens. For purposes hereof, "Orderly Liquidation Value" means the
amount of net proceeds that could be obtained from a sale of the U.S. Borrowers'
Equipment within 180 days, as determined by an independent appraiser of
recognized
-49-
50
standing in an appraisal delivered by the Administrative Borrower to the Agent
with such notice requesting the release of the Agent's lien, which appraisal is
reasonably satisfactory to the Agent and dated not earlier than 180 days before
the date of such delivery to the Agent hereunder. If the Agent shall have
received such a satisfactory appraisal meeting the requirements of this
subsection, it shall, at the Borrowers' expense, release its Lien under release
documentation satisfactory to the Agent and the Administrative Borrower on such
items of Equipment as it shall determine in its discretion from such appraisal
comprise the amount of Orderly Liquidation Value of the U.S. Borrowers'
Equipment (that is located on Property or any other realty unless (i) such
Property or realty is not subject to any lease or mortgage or (ii) any lessor or
mortgagor of such Property or realty has executed and delivered to the Agent a
Collateral Access Agreement) in excess of US$50,000,000 in which Equipment the
Agent has a perfected, first priority security interest subject to no other
Liens other than Permitted Liens.
(e) The entire outstanding principal amount of the Loans,
together with all accrued and unpaid interest thereon and all fees, costs and
expenses payable by the Borrowers hereunder, shall become due and payable on the
Expiration Date.
SECTION II.5. Maintenance of Loan Account; Statements of
Account. The Agent shall maintain accounts on its books in the name of the U.S.
Borrowers jointly and in the name of the Cdn. Borrower, respectively
(collectively, the "Loan Account"), in which the applicable Borrowers will be
charged with all loans and advances made by each Lender to the applicable
Borrowers or for the applicable Borrowers' account, together with all interest,
fees, expenses and any other Obligations chargeable to the Borrowers hereunder,
that are not paid by the Borrowers when due, and each Lender's Pro Rata Share
thereof. All amounts of interest, fees and expenses so charged to the Borrowers'
account shall accrue interest at the rate applicable to LIBOR Rate Advances with
an Interest Period of one month. The Loan Account will be credited with all
amounts received by the Agent from the Borrowers or for the Borrowers' account,
including, as set forth below, all amounts received from the Lockbox Banks or,
in the case of the Cdn. Borrower, the Blocked Account Bank. The Agent shall send
the Administrative Borrower a monthly statement reflecting the activity in the
Loan Account. Each such statement shall be an account stated and shall be final,
conclusive and binding on the Borrowers, absent manifest error.
-50-
51
SECTION II.6. Collection of Receivables.
(a) At all times during the term of this Agreement, (i) each
U.S. Borrower shall maintain, pursuant to a Lockbox Agreement, a lockbox (a
"Lockbox") and (ii) each Borrower shall maintain, pursuant to a Lockbox
Agreement, or, in the case of the Cdn. Borrower, pursuant to the Blocked Account
Agreement, one or more blocked accounts (each, a "Blocked Account"). Each U.S.
Borrower shall instruct its account debtors to remit to a Lockbox, and the Cdn.
Borrower shall instruct its account debtors to remit to a Blocked Account, all
Collections including, without limitation, all checks, drafts and other
documents and instruments evidencing remittances in payment (collectively,
"Items of Payment"), provided that the Cdn. Borrower shall be permitted to take
physical delivery of any Items of Payment so long as no Event of Default has
occurred and is continuing and the Cdn. Borrower remits such Items of Payment to
a Blocked Account within one Business Day following its receipt thereof. Items
of Payment remitted to a Blocked Account will be processed in accordance with
the applicable Lockbox Agreement or, in the case of the Cdn. Borrower, the
Blocked Account Agreement.
(b) So long as no Event of Default has occurred and is
continuing, all Collections deposited in a Blocked Account shall be transferred
to an operating account of the applicable Borrower or otherwise released to such
Borrower. Following the occurrence and during the continuance of an Event of
Default, the Agent may apply all amounts received by it from the Lockbox Banks
or, in the case of the Cdn. Borrower, the Blocked Account Bank, to such of the
Obligations (provided that no Collections from the Receivables of the Cdn.
Borrower shall be deemed to secure or be applied to any of the Obligations owed
by any Loan Party organized under the laws of any state of the United States)
and in such order as it may elect in its sole and absolute discretion. All
Collections and other amounts received by a Borrower from any account debtor, in
addition to all other cash received by such Borrower from any other source,
shall, upon receipt, be deposited into a Blocked Account. The Borrowers will at
all times (i) not commingle any Items of Payment with any of their other funds
or property, but will segregate them from their other assets and will hold them
in trust and for the account and as the property of the Agent and (ii) endorse
any Items of Payment. The Agent will credit all such payments to the Borrowers'
account, conditional upon final collection; credit will be given only for
cleared funds received prior to 2:00 P.M. (Chicago or Toronto time, as
applicable) by the Agent at the Agent's U.S. Payment Account or the Agent's Cdn.
Payment Account, as applicable, or such other account as the Agent may
designate. In all cases, the Borrowers' account will be credited only with the
net amounts actually received in payment of their
-51-
52
Receivables.
SECTION II.7. Term. The term of this Agreement shall be for a
period from the Closing Date to but not including April 14, 2003, provided that
the Expiration Date shall automatically be extended, and this Agreement shall
automatically and continuously renew, for successive additional terms of one
year each, unless (i) (A) any Lender gives the Administrative Borrower, the
Agent and the other Lenders written notice, not less than ninety days prior to
the next Expiration Date, that such Lender elects to terminate this Agreement
effective on the next Expiration Date and (B) no Eligible Assignee or other
Person acceptable to the Agent and the Administrative Borrower has acquired and
assumed the Loans and Commitments of such Lender not less than sixty days prior
to the next Expiration Date or (ii) the Administrative Borrower gives the Agent
and the Lenders written notice, not less than sixty days prior to the next
Expiration Date, that the Administrative Borrower elects to terminate this
Agreement effective on the next Expiration Date, and provided, further, that the
Commitments shall terminate and the Loans shall become immediately due and
payable (i) on any earlier date on which all or any part of the principal amount
of the Subordinated Note becomes due and payable unless such principal amount is
paid from the proceeds of Permitted Refinancing Indebtedness or Net Cash
Proceeds or (ii) as provided in Section 9.2. Notwithstanding the foregoing, the
Borrowers shall have no right to terminate this Agreement at any time that any
principal of or interest on any of the Loans is outstanding, except upon
prepayment of all Obligations, the Collateralization of the amount of all
outstanding Letters of Credit and the satisfaction of all other conditions set
forth in the Loan Documents with respect thereto. On the Expiration Date or on
any earlier termination of this Agreement, the Borrowers shall pay in full all
Obligations and Collateralize all outstanding Letters of Credit, and
notwithstanding any termination of this Agreement, all of the Agent's and the
Cdn. Agent's security interests and all of the Agent's and the Cdn. Agent's
other rights and remedies shall continue in full force and effect until payment
and performance in full of all Obligations.
SECTION II.8. Payment Procedures.
(a) The Borrowers hereby authorize the Agent to charge the
Loan Account with the amount of all interest, fees, expenses and other payments
to be made hereunder and under the other Loan Documents. The Agent may, but
shall not be obligated to, discharge the Borrowers' payment obligations
hereunder by so charging the Loan Account.
(b) Each payment by a Borrower on account of
-52-
53
principal, interest, fees or expenses hereunder shall be made to the Agent for
the benefit of the Agent and the Lenders according to the their respective
rights thereto. All payments to be made by the Borrowers hereunder and under the
Notes, whether on account of principal, interest, fees or otherwise, shall be
made without setoff, deduction or counterclaim and shall be made prior to 2:00
P.M. (Chicago time) on the due date thereof to the Agent, for the account of the
Lenders (except as expressly otherwise provided), at the Agent's U.S. Payment
Account in the case of the U.S. Borrowers' Obligations and at the Agent's Cdn.
Payment Account in the case of the Cdn. Borrower's Obligations and in
immediately available funds. Except for payments which are expressly provided to
be made (i) to the account of the Agent only or (ii) under the settlement
provisions of Section 2.2(j), the Agent shall distribute all payments to the
applicable Lenders on the Business Day following receipt in like funds as
received. Notwithstanding anything to the contrary contained in this Agreement,
if a Lender exercises its right of setoff under Section 11.3 or otherwise, any
amounts so recovered shall promptly be shared by such Lender with the other
Lenders according to their respective Pro Rata Shares.
(c) Whenever any payment to be made hereunder shall be stated
to be due on a day that is not a Business Day, the payment may be made on the
next succeeding Business Day and such extension of time shall be included in the
computation of the amount of interest due hereunder.
SECTION II.9. Defaulting Lenders.
(a) A Lender who fails to pay the Agent its Pro Rata Share of
any Loans made available by the Agent on such Lender's behalf, or who fails to
pay any other amount owing by it to the Agent hereunder, is a defaulting lender
(a "Defaulting Lender"). The Agent may recover all such amounts owing by a
Defaulting Lender on demand.
(b) The failure of any Lender to fund its Pro Rata Share of
any Borrowing shall not relieve any other Lender of its obligation to fund its
Pro Rata Share of such Borrowing. Conversely, no Lender shall be responsible for
the failure of another Lender to fund such other Lender's Pro Rata Share of a
Borrowing.
-53-
54
(c) The Agent shall not be obligated to transfer to a
Defaulting Lender any payments made by the Borrowers to the Agent for the
Defaulting Lender's benefit; nor shall a Defaulting Lender be entitled to the
sharing of any payments hereunder. Amounts payable to a Defaulting Lender shall
instead be paid to or retained by the Agent. The Agent may hold and, in its
discretion, re-lend to the applicable Borrower or Borrowers the amount of all
such payments received or retained by it for the account of such Defaulting
Lender. For purposes of voting or consenting to matters with respect to the Loan
Documents and determining Pro Rata Shares, such Defaulting Lender shall be
deemed not to be a Lender and such Lender's Commitment for such purposes shall
be deemed to be zero. This Section shall remain effective with respect to such
Lender until (i) the Defaulting Lender has paid all amounts required to be paid
to the Agent hereunder or (ii) the Required Lenders, the Agent and the
Administrative Borrower shall have waived such Lender's default in writing. The
operation of this Section shall not be construed to increase or otherwise affect
the Commitment of any Lender, or relieve or excuse the performance by any of the
Borrowers of its duties and obligations hereunder.
-54-
55
(d) The Administrative Borrower may, by notice (a "Replacement
Notice") in writing to the Agent and a Defaulting Lender, (i) request such
Defaulting Lender to cooperate with the Administrative Borrower in obtaining a
Replacement Lender for such Defaulting Lender; (ii) request the non-Defaulting
Lenders to acquire and assume all or a portion of such Defaulting Lender's Loans
and Commitment, but none of such Lenders shall be obligated to do so; or (iii)
propose a Replacement Lender. If a Replacement Lender shall be accepted by the
Agent or one or more of the non-Defaulting Lenders shall agree to acquire and
assume all or part of a Defaulting Lender's Loans and Commitment, then such
Defaulting Lender shall assign, in accordance with Section 11.7, all or part, as
the case may be, of its Loans, Commitment, Note and other rights and obligations
under this Agreement and all other Loan Documents to such Replacement Lender or
non-Defaulting Lenders, as the case may be, in exchange for payment of the
principal amount of the Loans so assigned and all interest and fees accrued on
such amount so assigned; provided, however, that (i) such assignment shall be on
the terms and conditions set forth in Section 11.7, and (ii) prior to any such
assignment, the Borrowers shall have (A) paid to such Defaulting Lender all
amounts properly demanded and theretofore unpaid by the Borrowers under the
second sentence of Section 2.2(e) (less costs and expenses incurred by the
Borrowers directly as a result of the actions of the Defaulting Lender in
violation of this Agreement) and (B) paid to the Agent all amounts properly
demanded and theretofore unpaid by the Borrowers under Article IV. If the
Replacement Lender and the non-Defaulting Lenders shall only be willing to
acquire less than all of a Defaulting Lender's outstanding Loans and Commitment,
the Commitment of such Defaulting Lender shall not terminate, but shall be
reduced proportionately, and such Defaulting Lender shall continue to be a
"Lender" hereunder with a reduced Commitment and Pro Rata Share. Upon the
effective date of such assignment, the Borrowers shall issue replacement Notes
to such Replacement Lender, non-Defaulting Lenders and Defaulting Lender, as the
case may be, in exchange for the Note of such Defaulting Lender theretofore
outstanding, and such Replacement Lender shall, if not already a Lender, become
a "Lender" for all purposes under this Agreement and the other Loan Documents.
-55-
56
SECTION II.10. Letters of Credit.
(a) The Agent, in its discretion, upon the request of the
Administrative Borrower, shall, subject to the other terms and conditions of
this Agreement, use its best efforts to cause a bank or financial institution
acceptable to the Agent to issue for the account of one or more of the Borrowers
Letters of Credit of a tenor and containing terms acceptable to the
Administrative Borrower, the Lenders and the issuer of such Letter of Credit, in
a maximum aggregate face amount outstanding at any time not to exceed (i)
US$18,000,000 in the case of Letters of Credit issued for the account of one or
more of the U.S. Borrowers and (ii) US$2,000,000 in the case of Letters of
Credit issued for the account of the Cdn. Borrower, provided that no Letter of
Credit shall have an expiration date after the Expiration Date. All Letters of
Credit shall be subject to the limitations set forth in Section 2.4(a), and a
sum equal to the aggregate amount of all outstanding U.S. Letters of Credit or
Cdn. Letters of Credit, as applicable, shall be included in calculating
outstanding amounts for purposes of determining compliance with Section 2.4(a).
(b) Immediately upon issuance or amendment of any Letter of
Credit in accordance with the procedures set forth in this Section 2.10, each
U.S. Lender or Cdn. Lender, as applicable, shall be deemed to have irrevocably
and unconditionally purchased and received from the Agent, without recourse or
warranty, an undivided interest and participation, to the extent of such
Lender's Pro Rata Share, of the liability and obligations under and with respect
to such Letter of Credit and the Letter of Credit Agreement (including, without
limitation, all obligations of the applicable Borrower or Borrowers with respect
thereto, other than amounts owing to the Agent pursuant to the first sentence of
Section 4.4(c)) and any security therefor or guaranty pertaining thereto.
(c) Whenever the Administrative Borrower desires the issuance
of a Letter of Credit, the Administrative Borrower shall deliver to the Agent a
written notice no later than 12:00 Noon (Chicago time) at least ten Business
Days (or such shorter period as may be agreed to by the Agent) in advance of the
proposed date of issuance of a letter of credit request in substantially the
form attached as Exhibit T (a "Letter of Credit Request"). The transmittal by
the Administrative Borrower of each Letter of Credit Request shall be deemed to
be a representation and warranty by the Administrative Borrower that the Letter
of Credit may be issued in accordance with and will not violate any of the
requirements of this Section 2.10. Prior to the date of issuance of each Letter
of Credit, the Administrative Borrower shall provide to the Agent a precise
description of the documents and the text of any certificate to be presented by
the beneficiary of
-56-
57
such Letter of Credit which, if presented by such beneficiary on or prior to the
expiration date of such Letter of Credit, would require the issuing bank to make
payment under such Letter of Credit. The Agent, in its reasonable judgment, may
require changes in any such documents and certificates. No Letter of Credit
shall require payment against a conforming draft to be made thereunder prior to
the second Business Day after the date on which such draft is presented.
(d) Upon any request for a drawing under any Letter of Credit
by the beneficiary thereof, (i) the Administrative Borrower shall be deemed to
have timely given a Notice of Borrowing to the Agent for a U.S. Loan or a Cdn.
Loan, as applicable, on the date on which such drawing is honored in an amount
equal to the amount of such drawing and (ii) without regard to satisfaction of
the applicable conditions specified in Section 5.2 and the other terms and
conditions of borrowings contained herein, the applicable Lenders shall, on the
date of such drawing, make Base Rate Advances or Prime Rate Advances, as
applicable depending upon the currency in which such Letter of Credit is
payable, in the amount of such drawing, the proceeds of which shall be applied
directly by the Agent to reimburse the issuing bank for the amount of such
drawing or payment. If for any reason, proceeds of Advances are not received by
the Agent on such date in an amount equal to the amount of such drawing, the
applicable Borrower or Borrowers shall be obligated to and shall reimburse the
Agent, on the Business Day immediately following the date of such drawing, in an
amount in same day funds equal to the excess of the amount of such drawing over
the amount of such Loans, if any, which are so received, plus accrued interest
on such amount at the rate set forth in Section 4.1(a) or 4.2, as applicable.
(e) As among the Borrowers, the Agent and each Lender, the
Borrowers assume all risks of the acts and omissions of the Agent and the
issuing bank (other than for the gross negligence or willful misconduct of the
Agent or such issuing bank) or misuse of the Letters of Credit by the respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation of
the foregoing, neither the Agent nor any of the Lenders shall be responsible (i)
for the accuracy, genuineness or legal effects of any document submitted by any
party in connection with the application for and issuance of or any drawing
honored under such Letters of Credit even if it should in fact prove to be in
any or all respects invalid, inaccurate, fraudulent or forged, (ii) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit, or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason, (iii) for errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex, telecopy or otherwise, whether or not
-57-
58
they be in cipher, (iv) for errors in interpretation of technical terms, (v) for
any loss or delay in the transmission or otherwise of any document required to
make a drawing under any such Letter of Credit, or of the proceeds thereof, (vi)
for the misapplication by the beneficiary of any such Letter of Credit, of the
proceeds of any drawing honored under such Letter of Credit, and (vii) for any
consequences arising from causes beyond the control of the issuing bank, the
Agent or the Lenders, provided that the foregoing shall not release the Agent or
the issuing bank for any liability for its gross negligence or willful
misconduct. None of the above shall affect, impair, or prevent the vesting of
any of the Agent's rights or powers hereunder. Any action taken or omitted to be
taken by the Agent under or in connection with any Letter of Credit, if taken or
omitted in the absence of gross negligence or willful misconduct of the Agent,
shall not create any liability of the Agent to any Borrower or any Lender.
(f) The obligations of the applicable Borrower or Borrowers to
reimburse the Agent for drawings honored under the Letters of Credit and the
obligations of the Lenders under this Section 2.10 shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances including, without limitation, the following
circumstances: (i) any lack of validity or enforceability of this Agreement, any
Letter of Credit, any Letter of Credit Agreement or any other agreement or
instrument relating thereto (the "Letter of Credit Related Documents"); (ii) the
existence of any claim, setoff, defense or other right which any Borrower or any
Affiliate of any Borrower may have at any time against a beneficiary or any
transferee of any Letter of Credit (or any Persons or entities for whom any such
beneficiary or transferee may be acting), the Agent, any Lender or any other
Person, whether in connection with this Agreement, the other Loan Documents, the
transactions contemplated herein or therein or any unrelated transaction; (iii)
any draft, demand, certificate or other documents presented under any Letter of
Credit proving to be forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect; (iv) the surrender
or impairment of any security for the performance or observance of any of the
terms of any of the Loan Documents; (v) failure of any drawing under a Letter of
Credit or any non-application or misapplication by the beneficiary of the
proceeds of any drawing; or (vi) that a Default or Event of Default shall have
occurred and be continuing.
-58-
59
ARTICLE III.
SECURITY
SECTION III.1. General. To secure the prompt and complete
payment and performance when due (whether at stated maturity, by acceleration or
otherwise) of all of the Obligations, each of the U.S. Borrowers hereby
reaffirms, ratifies and grants to the Agent for the ratable benefit of the
Lenders a Lien on and security interest in all of its right, title and interest
in and to all of its Receivables, Inventory and Equipment (other than Equipment
that is subject to a lease which prohibits or creates a default or right of
termination upon the assignment of or the granting of a security interest in or
other Lien on the applicable Borrower's rights thereunder), wherever located,
whether now owned or hereafter acquired, and all proceeds (whether in the form
of cash or other property) and products thereof including, without limitation,
all proceeds of insurance covering the same.
SECTION III.2. Further Security. Each of the U.S. Borrowers
also reaffirms, ratifies and grants to the Agent for the ratable benefit of the
U.S. Lenders, as further security for all of the Obligations, a security
interest in all of its right, title and interest in and to all property of such
U.S. Borrower in the possession of or deposited with or in the custody of the
Agent or any Affiliate of the Agent or any representative, agent or
correspondent of the Agent. For purposes of this Agreement, any property in
which the Agent or any such Affiliate has any security or title retention
interest shall be deemed to be in the custody of the Agent or of such Affiliate.
SECTION III.3. Recourse to Security. Recourse to security
shall not be required for any Obligation hereunder and each Borrower hereby
waives any requirement that the Agent or the Lenders exhaust any right or take
any action against any of the Collateral before proceeding to enforce the
Obligations against such Borrower.
-59-
60
SECTION III.4. Special Provisions Relating to Inventory.
(a) All Inventory. The security interest in the Inventory
granted to the Agent hereunder shall continue through all steps of manufacture
and sale and attach without further act to raw materials, work in process,
finished goods, returned goods, documents of title and warehouse receipts, and
to proceeds resulting from the sale or other disposition of such Inventory.
Until all of the Obligations have been satisfied, all Letters of Credit have
been terminated or Collateralized and the Commitments have been terminated, the
Agent's security interest in such Inventory and in all proceeds thereof shall
continue in full force and effect and the Agent shall have, in its sole and
absolute discretion at any time if an Event of Default has occurred and is
continuing or the Agent believes that fraud has occurred, the right to take
physical possession of such Inventory and to maintain it on the premises of a
Borrower, in a public warehouse, or at such other place as the Agent may deem
appropriate. If the Agent exercises such right to take possession of such
Inventory, the Borrowers will, upon demand, and at the Borrowers' cost and
expense, assemble such Inventory and make it available to the Agent at a place
or places convenient to the Agent.
(b) Further Assurances. Each Borrower will perform any and all
steps that the Agent may request to perfect the Agent's or the Cdn. Agent's
security interests in such Borrower's Inventory including, without limitation,
placing and maintaining signs, executing and filing financing or continuation
statements in form and substance satisfactory to the Agent, maintaining stock
records and conducting lien searches. In each case, each Borrower shall take
such action as promptly as possible after requested by the Agent but in any
event within five Business Days after any such request is made except that each
Borrower shall take such action immediately upon the Agent's request following
the occurrence of an Event of Default. If any Borrower's Inventory is in the
possession or control of any Person other than a purchaser in the ordinary
course of business, a carrier for such Person or a public warehouseman where the
warehouse receipt is in the name of or held by the Agent, such Borrower shall
notify such Person of the Agent's or the Cdn. Agent's security interest therein
and, upon request, instruct such Person or Persons to hold all such Inventory
for the account of the Agent or the Cdn. Agent and subject to the Agent's
instructions. If so requested by the Agent, each Borrower (as promptly as
possible after requested by the Agent but in any event within five Business Days
after any such request is made) will deliver (i) to the Agent or the Cdn. Agent
warehouse receipts covering any of such Borrower's Inventory located in
warehouses showing the Agent or the Cdn. Agent as the beneficiary thereof and
-60-
61
(ii) to the warehouseman such agreements relating to the release of warehouse
Inventory as the Agent may request. A physical verification of all of each
Borrower's Inventory wherever located will be taken by such Borrower at least
every twelve months and, in any case, as often as reasonably requested by the
Agent and a copy of such physical verification shall be promptly thereafter
submitted to the Agent. Each Borrower shall also submit to the Agent a copy of
the annual physical Inventory of such Borrower as observed and tested by its
public accountants in accordance with generally accepted auditing standards and
GAAP. If so requested by the Agent, each Borrower shall execute and deliver to
the Agent or the Cdn. Agent a confirmatory written instrument, in form and
substance satisfactory to the Agent, listing all its Inventory, but any failure
to execute or deliver the same shall not limit or otherwise affect the Agent's
or the Cdn. Agent's security interest in and to such Inventory. Each Borrower
shall deliver a monthly report of its Inventory by location, based upon a
physical count, which shall describe such Inventory by category and by item (in
reasonable detail) and report the value thereof at the lower of cost or market.
(c) Inventory Records. Each Borrower shall maintain full,
accurate and complete records of its Inventory describing the kind, type and
quantity of such Inventory and such Borrower's cost therefor, withdrawals
therefrom and additions thereto, including a perpetual inventory for work in
process and finished goods.
SECTION III.5. Special Provisions Relating to Receivables.
(a) Assignments, Etc. On the Agent's request therefor, each
Borrower shall furnish to the Agent copies of invoices to customers and shipping
and delivery receipts or warehouse receipts thereof. Each Borrower shall deliver
to the Agent the originals of all letters of credit, notes, and instruments in
its favor and such endorsements or assignments as the Agent may reasonably
request.
(b) Records, Collections, Etc. Each Borrower shall provide to
the Agent information relating to its customer credits granted during each month
at the time it provides to the Agent its accounts receivable aging reports for
such month under Section 7.1(k)(vi). No Borrower shall settle or adjust any
dispute or claim, or grant any discount (except ordinary trade discounts),
credit or allowance or accept any return of merchandise, except in the ordinary
course of its business, without the Agent's consent. Upon the occurrence and
during the continuance of an Event of Default or at any time that the Agent
believes that fraud has occurred, at the Agent's request, (i) each Borrower
shall promptly report to the Agent each such
-61-
62
return, repossession or recovery of merchandise, (ii) the Agent or, in the case
of account debtors of the Cdn. Borrower, the Cdn. Agent may settle or adjust
disputes or claims directly with account debtors for amounts and upon terms
which it considers advisable and (iii) the Agent or the Cdn. Agent, as
applicable, may notify account debtors on a Borrower's Receivables that such
Receivables have been assigned to the Agent or the Cdn. Agent, and that payments
in respect thereof shall be made directly to the Agent or the Cdn. Agent. Where
a Borrower receives collateral of any kind or nature by reason of transactions
between itself and its customers or account debtors, such Borrower will hold the
same on the Agent's or the Cdn. Agent's behalf, subject to the Agent's or the
Cdn. Agent's instructions, and as property forming part of such Borrower's
Receivables. Where a Borrower sells goods or services to a customer which also
sells goods or services to it or which may have other claims against it, such
Borrower will so advise the Agent immediately to permit the Agent to establish a
reserve therefor. Each Borrower hereby irrevocably authorizes and appoints the
Agent or the Cdn. Agent, as applicable, or any Person the Agent may designate,
as its attorney-in-fact, at such Borrower's sole cost and expense, to exercise,
if an Event of Default has occurred and is continuing or the Agent believes that
fraud has occurred, all of the following powers, which being coupled with an
interest, shall be irrevocable until all of the Obligations have been
indefeasibly paid and satisfied in full in cash: (A) to receive, take, endorse,
sign, assign and deliver, all in the name of the Agent or the Cdn. Agent, as
applicable or such Borrower, any and all checks, notes, drafts, and other
documents or instruments relating to the Collateral; (B) to receive, open and
dispose of all mail addressed to such Borrower and to notify postal authorities
to change the address for delivery thereof to such address as the Agent or the
Cdn. Agent, as applicable, may designate; and (C) to take or bring, in the name
of the Agent or such Borrower, all steps, actions, suits or proceedings deemed
by the Agent necessary or desirable to enforce or effect collection of such
Borrower's Receivables or file and sign such Borrower's name on a proof of claim
in bankruptcy or similar document against any obligor of such Borrower.
-62-
63
SECTION III.6. Special Provisions Relating to Equipment.
(a) Repair. Each Borrower shall keep all of its Equipment
constituting Collateral in a satisfactory state of repair and satisfactory
operating condition in accordance with industry standards, ordinary wear and
tear excepted, and will, consistent with the exercise of its reasonable business
judgment, make all repairs and replacements when and where necessary and
practical, will not waste or destroy (in any material respect) it or any part
thereof, and will not be negligent (in any material respect) in the care or use
thereof. Each Borrower shall repair and maintain all of its Equipment
constituting Collateral in accordance with industry practices in a manner
sufficient to continue the operation of its business as heretofore conducted.
Each Borrower shall use or cause its Equipment constituting Collateral to be
used (in all material respects) in accordance with law and the manufacturer's
instructions.
(b) Disposal. Where a Borrower is permitted to dispose of any
of its Equipment under this Agreement or by any consent thereto hereafter given
by the Agent, such Borrower shall do so as permitted under Section 7.1(c) or
otherwise at arm's length and in good faith and without materially impairing the
operating integrity or value of its remaining Equipment constituting Collateral.
-63-
64
SECTION III.7. Continuation of Liens, Etc. Each Borrower shall
defend the Collateral against all claims and demands of all Persons at any time
claiming any interest therein, other than claims relating to Liens permitted by
the Loan Documents. Each Borrower agrees to comply with the requirements of all
state, provincial and federal laws to grant to the Agent or the Cdn. Agent, as
applicable, valid and perfected first priority security interests in the
Collateral. The Agent or the Cdn. Agent, as applicable, is hereby authorized by
each Borrower to sign such Borrower's name on any document or instrument as may
be necessary or desirable to establish and maintain the Liens covering the
Collateral and the priority and continued perfection thereof or file any
financing or continuation statements or similar documents or instruments
covering the Collateral whether or not such Borrower's signature appears
thereon. Each Borrower agrees, from time to time, at the Agent's or the Cdn.
Agent's request, to execute and deliver to the Agent or the Cdn. Agent or to
file notices of Liens, financing statements, similar documents or instruments,
and amendments, renewals and continuations thereof, and cooperate with the
Agent's or the Cdn. Agent's representatives, in connection with the continued
perfection (and the priority status thereof) and protection of the Collateral
and the Agent's or the Cdn. Agent's Liens thereon. Each Borrower agrees that the
Agent or the Cdn. Agent may file a carbon, photographic or other reproduction of
this Agreement (or any financing statement related hereto) as a financing
statement.
SECTION III.8. Power of Attorney. In addition to all of the
powers granted to the Agent and the Cdn. Agent in this Article III, each
Borrower hereby appoints and constitutes the Agent or the Cdn. Agent, as
applicable, as such Borrower's attorney-in-fact to sign such Borrower's name on
any of the documents, instruments and other items described in Section 3.7, to
request at any time from customers indebted on its Receivables verification of
information concerning such Receivables and the amount owing thereon (provided
that any verification prior to an Event of Default shall not contain the Agent's
or the Cdn. Agent's name), and, upon the occurrence and during the continuance
of an Event of Default, (i) to convey any item of Collateral to any purchaser
thereof and (ii) to make any payment or take any act necessary or desirable to
protect or preserve any Collateral. The Agent's or the Cdn. Agent's authority
hereunder shall include, without limitation, the authority to execute and give
receipt for any certificate of ownership or any document, to transfer title to
any item of Collateral and to take any other actions arising from or incident to
the powers granted to the Agent or the Cdn. Agent under this Agreement. This
power of attorney is coupled with an interest and is irrevocable.
-64-
65
ARTICLE IV.
INTEREST, FEES AND EXPENSES
SECTION IV.1. Interest. The U.S. Borrowers and the Cdn.
Borrower shall pay to the Agent for the ratable benefit of the U.S. Lenders and
the Cdn. Lenders, respectively, interest on the Advances, payable monthly in
arrears on the first Business Day of each month, commencing with the month
immediately following the Closing Date, and on the Expiration Date, at the
following rates per annum:
(a) Base Rate Advances. If such Advance is a Base Rate
Advance, at a fluctuating rate which is equal to (i) the Base Rate then in
effect plus (ii) the Pricing Increment, each change in such fluctuating rate to
take effect simultaneously with the corresponding change in the Base Rate.
(b) Prime Rate Advances. If such Advance is a Prime Rate
Advance, at a fluctuating rate which is equal to (i) the Prime Rate then in
effect plus (ii) the Pricing Increment, each change in such fluctuating rate to
take effect simultaneously with the corresponding change in the Prime Rate.
(c) LIBOR Rate Advances. If such Advance is a LIBOR Rate
Advance, at a rate which is equal at all times during the Interest Period for
such LIBOR Rate Advance to (i) the LIBOR Rate plus (ii) the Pricing Increment.
SECTION IV.2. Interest and Letter of Credit Fees After Event
of Default. From the date of occurrence of any Event of Default until the
earlier of the date upon which (i) all Obligations shall have been paid and
satisfied in full and all Letters of Credit have expired or been terminated or
(ii) such Event of Default shall have been cured within any grace period
specified therefor in Section 9.1 or waived, interest on the Loans shall be
payable on demand at a rate per annum equal to the rate that would be otherwise
applicable thereto under Section 4.1 plus up to an additional two percent (2%)
and the letter of credit fee pursuant to Section 4.4(c) shall be payable at the
rate that would otherwise apply under Section 4.4(c) plus up to an additional
two percent (2%).
-65-
66
SECTION IV.3. Closing Fee. The U.S. Borrowers and the Cdn.
Borrower, as applicable, shall pay in immediately available funds to the Agent
for the benefit of the Lenders a closing fee in the amount of US$250,000.
SECTION IV.4. Unused Line Fee; Letter of Credit Fees.
(a) The U.S. Borrowers shall pay to the Agent for the ratable
benefit of the U.S. Lenders on the first Business Day of each month, commencing
with the month immediately following the Closing Date, and on the Expiration
Date, in arrears, an unused line fee equal to three-eighths of one percent
(.375%) per annum of the difference, if positive, between (i) US$100,000,000 and
(ii) the average daily outstanding amount of the Loans plus the average daily
aggregate undrawn amount available for drawing under all Letters of Credit
during the immediately preceding month or portion thereof.
(b) The Borrowers shall promptly pay to the Agent for its own
account all fees charged to the Agent by any issuer of a Letter of Credit which
relate directly to the opening, amending or drawing under Letters of Credit. In
addition, the Borrowers shall pay to the Agent for the ratable benefit of the
Lenders on the first Business Day of each month, commencing with the month
immediately following the Closing Date, and on the Expiration Date, in arrears,
a fee in an amount equal to the percentage per annum equal to the then
applicable Pricing Increment multiplied by the daily average of the undrawn
amount of the Letters of Credit outstanding and available for drawing during the
preceding month or during the interim period ending on the Expiration Date, as
the case may be.
SECTION IV.5. Calculations. All calculations of interest and
fees hereunder shall be made by the Agent on the basis of a year of 360 days (or
365 or 366 days, as applicable, in the case of Prime Rate Advances to the Cdn.
Borrower) for the actual number of days elapsed in the period for which such
interest or fees are payable. Each determination by the Agent of an interest
rate, fee or other payment hereunder shall be conclusive and binding for all
purposes, absent manifest error.
-66-
67
SECTION IV.6. Indemnification in Certain Events. If, after the
Closing Date, (i) any change in or in the interpretation of any law or
regulation is introduced including, without limitation, with respect to reserve
requirements, applicable to any Lender or any other banking or financial
institution from which any Lender borrows funds or obtains credit, (ii) any
Lender complies with any future guideline or request from any central bank or
other Governmental Authority or (iii) any Lender determines that the adoption of
any applicable law, rule or regulation regarding capital adequacy, or any change
therein, or any change in the interpretation or administration thereof by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof has or would have the effect described
below, or any Lender complies with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, and in the case of any event set forth in this clause
(iii), such adoption, change or compliance has or would have the direct or
indirect effect of reducing the rate of return on such Lender's capital as a
consequence of its obligations hereunder to a level below that which such Lender
could have achieved but for such adoption, change or compliance (taking into
consideration such Lender's policies as the case may be with respect to capital
adequacy) by an amount deemed by such Lender to be material, and any of the
foregoing events described in clauses (i), (ii) and (iii) increases the cost to
such Lender of funding or maintaining the Loans made or to be made by such
Lender, or reduces the amount receivable in respect thereof by such Lender, then
the applicable Borrower or Borrowers shall, upon demand by the Agent, pay to the
Agent for the benefit of such Lender additional amounts sufficient to indemnify
such Lender against such increase in cost or reduction in amount receivable.
-67-
68
SECTION IV.7.Taxes.
(a) Any and all payments by the Borrowers hereunder or under
the Notes shall be made free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or withholdings
and penalties, interest and all other liabilities with respect thereto imposed
by any Governmental Authority of the United States or Canada, including any
taxes imposed under Section 7701(l) of the Internal Revenue Code, excluding in
the case of the Agent and any Lender, taxes imposed on its net income
(including, without limitation, any taxes imposed on branch profits) and
franchise taxes imposed on the Agent and any Lender by any applicable
jurisdiction and further excluding any taxes, levies, imposts, deductions,
charges, fees, duties, penalties, interest and all other liabilities with
respect to such excluded income and franchise taxes (such non-excluded items
hereinafter referred to as "Taxes"). If the Borrowers shall be required by law
to deduct any Taxes from or in respect of any sum payable hereunder or under any
Loan to or for the benefit of the Agent or any Lender, (A) the sum payable shall
be increased by additional amounts ("Additional Amounts") as may be necessary so
that after making all required deductions of Taxes (including deductions of
Taxes applicable to Additional Amounts payable under this Section 4.7) the Agent
or such Lender receives an amount equal to the sum it would have received had no
such deductions been made, (B) the applicable Borrower or Borrowers shall make
such deductions and (C) the applicable Borrower or Borrowers shall pay the full
amount so deducted to the relevant taxation authority in accordance with
applicable law.
(b) In addition, each Borrower agrees to pay any present or
future stamp, documentary, excise, privilege, intangible or similar taxes or
levies imposed by any Governmental Authority of the United States or Canada that
arise at any time or from time to time (i) from any payment made under any and
all Loan Documents, or (ii) from the execution or delivery by such Borrower of,
or from the filing or recording or maintenance of, or otherwise with respect to
the exercise by the Agent or any Lender of its rights under, any and all Loan
Documents (hereinafter referred to as "Other Taxes").
(c) Each Borrower indemnifies the Agent and each Lender for
the full amount of (i) Taxes imposed on or with respect to amounts payable
hereunder and (ii) Other Taxes.
(d) Within thirty days after the date of any payment of Taxes
or Other Taxes, the Administrative Borrower will, upon request, furnish to the
Agent the original or a certified copy of a receipt or other documentation
reasonably satisfactory to the Agent evidencing payment thereof.
-68-
69
(e) In the event that any Borrower reimburses any Lender or
the Agent for any Taxes or pays any Taxes on any Lender's or the Agent's behalf
pursuant to this Section 4.7 and such Lender or the Agent thereafter receives
any refund or credit of such Taxes, such Lender or the Agent shall promptly pay
to such Borrower the amount of any such refund or credit together with interest
on such amount at the Federal Funds Rate from the date the refund is received or
the credit is applied through the date of payment to such Borrower.
(f) The Agent and each Lender that (i) with respect to the
U.S. Loans and the U.S. Letters of Credit, is organized under the laws of a
jurisdiction outside the United States, and (ii) with respect to the Cdn. Loans
and the Cdn. Letters of Credit, is organized under the laws of a jurisdiction
outside of Canada, shall, on the Closing Date and from time to time thereafter
if requested by the Administrative Borrower, provide the Administrative Borrower
with the forms prescribed by the Internal Revenue Service or the Canada Customs
and Revenue Agency, as the case may be, properly completed and certifying as to
the Agent's and such Lender's status for purposes of determining exemption from
United States and Canadian Taxes with respect to all payments to be made to the
Agent and such Lender hereunder, or other documents satisfactory to the
Administrative Borrower confirming that all payments to be made to the Agent and
such Lender hereunder are not subject to United States Taxes or Canadian Taxes,
as the case may be. Unless the Administrative Borrower shall have received,
within thirty days of a request by the Administrative Borrower therefor, such
properly completed forms or such other documents indicating that payments to the
Agent and such Lender hereunder are not subject to United States Taxes or
Canadian Taxes, as the case may be, the Borrowers shall be entitled to withhold
Taxes from such payments at the applicable statutory rate, and no Additional
Amounts shall be payable with respect to United States Taxes or Canadian Taxes,
as the case may be, under this Agreement.
(g) Without prejudice to the survival of any other agreement
of the Borrowers hereunder, the agreements and obligations of the Borrowers
contained in this Section 4.7 shall survive the indefeasible payment in full of
the Obligations.
-69-
70
ARTICLE V.
CONDITIONS OF LENDING
SECTION V.1. Conditions to Initial Loan or Letter of Credit.
The obligation of the Lenders to make the initial Loan or of the Agent to use
its best efforts to cause to be issued the initial Letter of Credit is subject
to the satisfaction of the following conditions prior to or concurrent with such
initial Loan:
(a) the Agent shall have received the following, each dated
the date of the initial Loan or Letter of Credit or as of an earlier date
acceptable to the Agent, in form and substance satisfactory to the Agent and its
counsel:
(i) the U.S. Notes, each duly executed by each of
the U.S. Borrowers;
(ii) the Cdn. Notes, each duly executed by the
Cdn. Borrower;
(iii) a solvency certificate of the Chief
Financial Officer or the principal financial and accounting
officer of each of the Loan Parties, substantially in the form
of Exhibit M;
(iv) the Pledge Agreement, duly executed by each
of the Pledgors;
(v) the Contribution Agreement, duly executed by
each of the Guarantors and the Borrowers;
(vi) a Consent and Reaffirmation of Guaranty,
substantially in the form of Exhibit U, duly executed by each
of the Guarantors;
(vii) (A) executed Uniform Commercial Code
financing statements (Form UCC-1) naming the Agent as secured
party and each of the U.S. Borrowers and the other Pledgors as
debtors, (B) executed financing statements for registration
under the PPSA naming the Cdn. Agent as secured party and the
Cdn. Borrower as debtor and (C) termination statements, each
in form and substance satisfactory to the Agent, in each case
in proper form for filing in all jurisdictions that the Agent
deems necessary or desirable to perfect and protect the Liens
created hereunder and under the
-70-
71
Security Documents and the priority thereof;
(viii) completed requests for information, dated on
or before the date of the initial Loan, listing all effective
financing statements or registrations filed in the
jurisdictions referred to in clause (vi) above, that name each
of the Borrowers as debtor, together with copies of such
financing statements or verification statements, as the case
may be;
(ix) a completed perfection certificate,
substantially in the form of Exhibit P, signed by the
president or a vice president of each Borrower;
(x) an opinion of counsel for each Loan Party
covering such matters incident to the transactions
contemplated by this Agreement as the Agent may reasonably
require, which such counsel is hereby requested by the Loan
Parties to provide;
(xi) copies of the Governing Documents of each
Loan Party and a copy of the resolutions of the Board of
Directors (or similar evidence of authorization) of each Loan
Party authorizing the execution, delivery and performance of
this Agreement or the other Loan Documents to which such Loan
Party is or is to be a party, and the transactions
contemplated hereby and thereby, attached to which is a
certificate of the Secretary or an Assistant Secretary of such
Loan Party certifying (A) that such copies of the Governing
Documents and resolutions (or similar evidence of
authorization) of such Loan Party are true, complete and
accurate copies thereof, have not been amended or modified
since the date of such certificate and are in full force and
effect and (B) the incumbency, names and true signatures of
the officers of such Loan Party authorized to sign the Loan
Documents to which it is a party;
(xii) a Collateral Access Agreement for each
Property specified on Schedule 5.1(a)(xii) (other than a
Property for which an Inventory Availability Reserve has been
established), duly executed by each Person in possession
thereof or with a Lien thereon or other interest therein; and
(xiii) such other agreements, instruments, documents
and evidence as the Agent deems necessary in its sole and
absolute discretion in connection with the transactions
contemplated hereby.
-71-
72
(b) There shall be no pending or, to the knowledge of each
Borrower after due inquiry, threatened litigation, proceeding, inquiry or other
action (i) seeking an injunction or other restraining order, damages or other
relief with respect to the transactions contemplated by this Agreement or the
other Loan Documents or (ii) which affects or could affect the business,
prospects, operations, assets, liabilities or condition (financial or otherwise)
of any Loan Party, except, in the case of clause (ii), where such litigation,
proceeding, inquiry or other action could not reasonably be expected to have a
Material Adverse Effect.
(c) The Borrowers shall have paid (i) all reasonable fees and
expenses of the Agent in connection with the negotiation, preparation, execution
and delivery of the Loan Documents (including, without limitation, all of the
Agent's examination, audit, appraisal and travel expenses and the fees and
expenses of counsel to the Agent) and (ii) the closing fee payable under Section
4.3 and all other fees referred to in this Agreement that are required to be
paid by the Effective Date.
(d) Except for (i) the filing of the financing and termination
statements under the Code and registrations under the PPSA specified in Section
5.1(a)(vii) and (ii) consents or authorizations which have been obtained and are
specified in Schedule 6.1(f), no consent or authorization of, filing with or
other act by or in respect of any Governmental Authority or any other Person is
required in connection with the execution, delivery, performance, validity or
enforceability of this Agreement, the Notes or the other Loan Documents or the
consummation of the transactions contemplated hereby or thereby or the
continuing operations of each Loan Party following the consummation of such
transactions.
(e) No change, occurrence, event or development or event
involving a prospective change that could reasonably be expected to have a
Material Adverse Effect shall have occurred and be continuing since December 31,
1999.
(f) The Agent and its counsel shall have performed (i) a
review satisfactory to the Agent of all of the Material Contracts and other
assets (including, without limitation, leases of operating facilities) of each
Loan Party, the financial condition of each Loan Party, including all of its
tax, litigation, environmental and other potential contingent liabilities, the
corporate and capital structure of each Loan Party, the cash management system
of each Loan Party and the ability of each Loan Party to be Year 2000 Compliant,
(ii) a pre-closing audit and collateral review and (iii) reviews and
investigations of such other matters as the Agent and its counsel deem
appropriate, in each case with results satisfactory to the Agent both before and
after giving effect to the Spinoff.
-72-
73
(g) The Spinoff shall have been consummated in accordance with
its terms to the satisfaction of the Agent.
(h) The Loan Parties shall be in compliance with all
Requirements of Law, Material Contracts and terms of their Governing Documents,
other than such noncompliance that could not have a Material Adverse Effect.
(i) The Liens in favor of the Agent and the Cdn. Agent shall
have been duly perfected and shall constitute first priority Liens (subject only
to Permitted Liens on Inventory), and the Collateral shall be free and clear of
all Liens other than Liens in favor of the Agent and the Cdn. Agent and
Permitted Liens.
(j) After giving effect to all Loans to be made and all
Letters of Credit to be issued on the Effective Date, the amount of Loans
available to be borrowed and Letters of Credit available to be issued under
Section 2.4(a) shall exceed US$25,000,000.
SECTION V.2. Conditions Precedent to Each Loan and Each Letter
of Credit. The obligation of the Lenders to make any Loan or the Agent to use
its best efforts to cause to be issued any Letter of Credit is subject to the
satisfaction of the following conditions precedent:
(a) all representations and warranties contained in this
Agreement and the other Loan Documents shall be true and correct in all material
respects (and subject to the delivery to the Agent of updated schedules to this
Agreement as provided in Section 6.3) on and as of the date of such Loan or
Letter of Credit as if then made, other than representations and warranties that
expressly relate solely to an earlier date, in which case they shall have been
true and correct as of such earlier date;
(b) no Default or Event of Default shall have occurred and be
continuing or would result from the making of the requested Loan or the issuance
of the requested Letter of Credit as of the date of such request; and
(c) no event or condition shall have occurred that has had a
Material Adverse Effect.
-73-
74
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
SECTION VI.1. Representations and Warranties of the
Borrowers. Each Borrower represents and warrants as follows:
(a) Organization, Good Standing and Qualification. Each
Borrower and each Designated Affiliate (i) is a corporation, limited partnership
or limited liability company duly organized, validly existing and in good
standing under the laws of the state or province of its organization, (ii) has
the corporate, partnership or limited liability company power and authority to
own its properties and assets and to transact the businesses in which it
presently is, or proposes to be, engaged and (iii) is duly qualified, authorized
to do business and in good standing in each jurisdiction where it presently is,
or proposes to be, engaged in business, except to the extent that the failure to
so qualify or be in good standing could not reasonably be expected to have a
Material Adverse Effect. Schedule 6.1(a) specifies all the jurisdictions in
which each Borrower and each Designated Affiliate (other than the Foreign
Subsidiaries) is qualified to do business as a foreign corporation, limited
partnership or limited liability company as of the Closing Date.
(b) Locations of Offices, Records and Collateral. The address
of the principal place of business and chief executive office of such Borrower
is, and the books and records of each Borrower and all of its chattel paper and
records of Receivables are maintained exclusively in the possession of such
Borrower at, the address of such Borrower specified for it in Schedule 6.1(b).
Except for Collateral with an aggregate value for all the Borrowers of up to
US$500,000, each jurisdiction in which a Borrower maintains any Collateral is
specified for it in Schedule 6.1(b).
(c) Authority. Such Borrower and each of the other Loan
Parties has the requisite corporate, partnership or limited liability power and
authority to execute, deliver and perform its obligations under each of the Loan
Documents to which it is a party. All corporate, partnership or limited
liability company action necessary for the execution, delivery and performance
by such Borrower or other Loan Party of the Loan Documents to which it is a
party (including the consent of shareholders, partners or members where
required) has been taken.
(d) Enforceability. This Agreement is and, when executed and
delivered, each other Loan Document to which such Borrower and each of the other
Loan Parties is a party, will be,
-74-
75
the legal, valid and binding obligation of such Borrower or other Loan Party
enforceable in accordance with its terms, except as enforceability may be
limited by (i) bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (ii) general principles of equity.
(e) No Conflict. The execution, delivery and performance by
such Borrower and each of the other Loan Parties of each Loan Document to which
it is a party do not and will not breach or violate (i) any of the Governing
Documents of such Borrower or other Loan Party, (ii) any Requirement of Law or
(iii) any Material Contract and will not result in the imposition of any Liens
upon any of its properties except in favor of the Agent or the Cdn. Agent.
(f) Consents and Filings. No consent, authorization or
approval of, or filing with or other act by, any shareholders, partners or
members of such Borrower or any of the other Loan Parties, any Governmental
Authority or any other Person is required in connection with the execution,
delivery, performance, validity or enforceability of this Agreement or any other
Loan Document, the consummation of the transactions contemplated hereby or
thereby or the continuing operations of a Loan Party following such
consummation, except (i) those that have been obtained or made and are specified
in Schedule 6.1(f) and (ii) the filing of financing and termination statements
under the Code or registrations under the PPSA.
(g) Ownership; Subsidiaries. The Capital Stock of each of GPI
and its Subsidiaries and, to such Borrower's knowledge, other Affiliates of GPI
is owned by the Persons and in the amounts specified in Schedule 6.1(g).
Schedule 6.1(g) sets forth all of the Subsidiaries and other Affiliates of GPI.
(h) Solvency. Such Borrower and each of the other Loan Parties
is Solvent and will be Solvent upon the completion of all transactions
contemplated to occur on or before the Closing Date (including, without
limitation, the Loans to be made and the Letters of Credit to be issued on the
Closing Date).
(i) Financial Data. Such Borrower has provided to the Agent
complete and accurate copies of the annual audited Financial Statements for the
fiscal year ended December 31, 1999. Such Financial Statements have been
prepared in accordance with GAAP consistently applied throughout the periods
involved and fairly present the financial position, results of operations and
cash flows of GPI and its Subsidiaries for each of the periods covered. Except
as specified in Schedule 6.1(i), none of GPI or any of its Subsidiaries has any
Contingent Obligation or liability for taxes, unrealized losses, unusual forward
or long-term commitments which involve liabilities in excess of US$5,000,000,
that is not reflected in such Financial Statements
-75-
76
or the footnotes thereto or in filings made with the Securities and Exchange
Commission and delivered to the Agent. Except as specified in Schedule 6.1(i),
during the period from December 31, 1999 to and including the date hereof, there
has been no sale, transfer or other disposition by GPI or any of its
Subsidiaries of any material part of its business or property and no purchase or
other acquisition of any business or property (including any Capital Stock of
any other Person) material in relation to the financial condition of GPI and its
Subsidiaries at December 31, 1999. Since December 31, 1999, there has been no
change, occurrence, development or event which has had or could reasonably be
expected to have a Material Adverse Effect.
(j) Accuracy and Completeness of Information. All data,
reports and information heretofore, contemporaneously or hereafter furnished by
or on behalf of such Borrower or any other Loan Party in writing to the Agent or
the Auditors for purposes of or in connection with this Agreement or any other
Loan Document, or any transaction contemplated hereby or thereby, are or will be
true and accurate in all material respects on the date as of which such data,
reports and information are dated or certified and not incomplete by omitting to
state any material fact necessary to make such data, reports and information not
misleading at such time. There are no facts now known to any Responsible Officer
of such Borrower which individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect and which have not been specified
herein, in the Financial Statements, or in any certificate, opinion or other
written statement previously furnished by such Borrower to the Agent.
(k) No Joint Ventures or Partnerships. Except for individually
immaterial arrangements incident to the conduct of such Borrower's or any
Designated Affiliate's business, such Borrower or Designated Affiliate is not
engaged in any joint venture or partnership with any other Person, except as
specified in Schedule 6.1(k).
(l) Corporate and Trade Name. Except as specified in Schedule
6.1(l), during the past five years, such Borrower has not been known by or used
in any material transaction any other corporate, partnership, trade or
fictitious name except for its name as set forth on the signature page of this
Agreement.
(m) No Actual or Pending Material Modification of Business.
There exists no actual or, to the best of such Borrower's knowledge, threatened
termination, cancellation or limitation of, or any modification or change in,
the business relationship of such Borrower or any Designated Affiliate with any
customer or group of customers the cancellation of any of whose services could
reasonably be expected to have a Material Adverse Effect.
-76-
77
(n) No Broker's or Finder's Fees. No broker or finder brought
about the obtaining, making or closing of the Loans or financial accommodations
afforded hereunder or in connection herewith by the Agent, any Lender or any of
its Affiliates. No broker's or finder's fees or commissions will be payable by
any Borrower to any Person in connection with the transactions contemplated by
this Agreement.
(o) Investment Company. Such Borrower is not an "investment
company," or an "affiliated person" of, or "promoter" or "principal underwriter"
for, an "investment company," as such terms are defined in the Investment
Company Act of 1940, as amended. Neither the making of any Loans, the issuance
of any Letters of Credit or the application of the proceeds or repayment thereof
by such Borrower or any beneficiary of such Letters of Credit, nor the
consummation of the other transactions contemplated by this Agreement or the
other Loan Documents, will violate any provision of such Act or any rule,
regulation or order of the Securities and Exchange Commission thereunder.
(p) Margin Stock. Such Borrower does not own any "margin
stock" as that term is defined in Regulation U of the Federal Reserve Board, and
the proceeds of Loans will be used only for the purposes contemplated hereunder.
(q) Taxes and Tax Returns.
(i) Such Borrower and each Designated Affiliate
has properly completed and timely filed all income tax returns
it is required to file. The information filed is complete and
accurate in all material respects.
(ii) All taxes, assessments, fees and other
governmental charges for periods beginning prior to the date
hereof have been timely paid (or, if not yet due, adequate
reserves therefor have been established) and neither such
Borrower nor any such Affiliate has any liability for taxes in
excess of the amounts so paid or reserves so established,
except for such taxes that are being contested in good faith
or which involve an amount that could reasonably be expected
to give rise to a Lien that is not permitted to exist under
Section 7.2(i).
(iii) Except as specified in Schedule 6.1(q), no
deficiencies for taxes have been claimed, proposed or assessed
by any taxing or other Governmental Authority against such
Borrower or any Designated Affiliate and, to such Borrower's
knowledge, no tax Liens have been filed against it. Except as
specified in Schedule 6.1(q), there are no pending or
threatened
-77-
78
audits, investigations or claims for or relating to any
liability for taxes and there are no matters under discussion
with any Governmental Authority which could reasonably be
expected to result in a Lien that is not permitted to exist
under Section 7.2(i). No extension of a statute of limitations
relating to taxes, assessments, fees or other governmental
charges is in effect with respect to such Borrower.
(iv) Neither such Borrower nor any Designated
Affiliate is a party to or has any obligations under any
written tax sharing agreement or agreement regarding payments
in lieu of taxes, except as specified in Schedule 6.1(q).
(r) No Judgments or Litigation. Except as specified in
Schedule 6.1(r), no judgments, orders, writs or decrees are outstanding against
such Borrower, nor is there now pending or, to the best knowledge of such
Borrower or any Designated Affiliate after due inquiry, threatened litigation,
contested claim, investigation, arbitration, or governmental proceeding by or
against such Borrower or Affiliate that (i) individually or in the aggregate
could reasonably be expected to have a Material Adverse Effect or (ii) purports
to affect the legality, validity or enforceability of this Agreement, the Notes,
any other Loan Document or the consummation of the transactions contemplated
hereby or thereby.
(s) Title to Property. Except as specified in Schedule 6.1(s),
such Borrower and each Designated Affiliate has (i) good and indefeasible fee
simple title to or valid leasehold interests in all of its Property and (ii)
good title to all of its other property, in each case free and clear of Liens
other than Liens permitted by Section 7.2(i) and other than any exceptions to
such title to property that does not constitute Collateral as could not
reasonably be expected to have a Material Adverse Effect.
(t) No Other Indebtedness. On the Closing Date and after
giving effect to the transactions contemplated hereby, such Borrower and each
Designated Affiliate has no Indebtedness other than Indebtedness permitted under
Section 7.2(a).
(u) Investments; Contracts. Except as specified in Schedule
6.1(u), neither such Borrower nor any Designated Affiliate (i) has committed to
make any Investment other than Investments permitted under Section 7.2(k); (ii)
is a party to any indenture, agreement, contract, instrument or lease, or
subject to any charter, bylaw or other corporate restriction or any injunction,
order, restriction or decree, which could materially and adversely affect its
business, operations, assets or financial condition; (iii) is a party to any
"take or pay"
-78-
79
contract as to which it is the purchaser and which, if such Borrower or
Affiliate were to fail to perform thereunder, could reasonably be expected to
have a Material Adverse Effect; or (iv) has any material contingent or long-term
liability, including any management contract, which could reasonably be expected
to have a Material Adverse Effect.
(v) No Defaults. On the Closing Date, after giving effect to
the transactions contemplated hereby, neither such Borrower nor any Designated
Affiliate is in default under any term of any Material Contract or Requirement
of Law other than any default which, when taken together with all other similar
defaults, could reasonably be expected to have a Material Adverse Effect.
(w) Rights in Collateral; Priority of Liens. All of its
Receivables, Inventory and Equipment are owned by such Borrower, free and clear
of any and all Liens in favor of third parties, other than Liens in favor of the
Agent and the Cdn. Agent and Permitted Liens. Upon the proper filing of the
financing and termination statements and registrations specified in Section
5.1(a)(vii), the Liens reaffirmed, ratified and granted pursuant to this Loan
Agreement constitute valid, enforceable, perfected and, except for Liens
permitted to exist under Section 7.2(i) with respect to Inventory and Equipment,
first priority Liens on the Collateral.
(x) ERISA.
(i) No Borrower or ERISA Affiliate maintains or
contributes to any Plan, other than those specified in
Schedule 6.1(x).
(ii) Each Borrower and ERISA Affiliate have
fulfilled all contribution obligations for each Plan
(including obligations related to the minimum funding
standards of ERISA and the Internal Revenue Code), and no
application for a funding waiver or an extension of any
amortization period pursuant to Sections 303 and 304 of ERISA
or Section 412 of the Internal Revenue Code has been made with
respect to any Plan.
(iii) No Termination Event has occurred nor has any
other event occurred that is likely to result in a Termination
Event. No Borrower or ERISA Affiliate, or any fiduciary of any
Plan, is subject to any direct or indirect liability with
respect to any Plan under any Requirement of Law or agreement,
except for ordinary funding obligations which are not past
due.
(iv) No Borrower or ERISA Affiliate is
-79-
80
required to or reasonably expects to be required to provide
security to any Plan under Section 307 of ERISA or Section
401(a)(29) of the Internal Revenue Code.
(v) Each Borrower and ERISA Affiliate is in
compliance in all material respects with all applicable
provisions of ERISA and the Internal Revenue Code with respect
to all Plans. There has been no prohibited transaction as
defined in Section 406 of ERISA or Section 4975 of the
Internal Revenue Code (a "Prohibited Transaction") with
respect to any Plan or any Multiemployer Plan. Each Borrower
and ERISA Affiliate have made when due any and all payments
required to be made under any agreement relating to a
Multiemployer Plan or any Requirement of Law pertaining
thereto. With respect to each Plan and Multiemployer Plan, no
Borrower or ERISA Affiliate has incurred any liability to the
PBGC or had asserted against it any penalty for failure to
fulfill the minimum funding requirements of ERISA other than
for payments of premiums in the ordinary course of business.
(vi) Each Plan which is intended to qualify under
Section 401(a) of the Internal Revenue Code has received a
favorable determination letter from the IRS or the remedial
amendment period under Section 401(b) of the Code has not
expired with respect to the Plan and no event has occurred
which would cause the loss of such qualification.
(vii) The aggregate actuarial present value of all
benefit liabilities (whether or not vested) under each Pension
Plan, determined on a plan termination basis, as disclosed in,
and as of the date of, the most recent actuarial report for
such Pension Plan, does not exceed the aggregate fair market
value of the assets of such Pension Plan.
(viii) No Borrower or ERISA Affiliate has incurred
or reasonably expects to incur any liability (and no event has
occurred which, with the giving of notice under Section 4219
of ERISA, would result in any such liability) under Section
4201 or 4243 of ERISA with respect to any Multiemployer Plan.
(ix) To the extent that any Plan is funded with
insurance, each Borrower and ERISA Affiliate have paid when
due all premiums required to be paid for all periods through
and including the Closing Date. To the extent that any Plan is
funded other than with insurance, each Borrower and ERISA
Affiliate have made when due all contributions required to be
paid for all
-80-
81
periods through and including the Closing Date.
(y) Intellectual Property. Set forth on Schedule 6.1(y)-A is a
complete and accurate list of all material patents, trademarks, trade names,
service marks and copyrights, and all applications therefor and licenses
thereof, of such Borrower and each Designated Affiliate, showing as of the date
hereof the jurisdiction in which registered, the registration number, the date
of registration and the expiration date. Such Borrower and each Designated
Affiliate owns or licenses all patents, trademarks, service marks, logos,
tradenames, trade secrets, know-how, copyrights, or licenses and other rights
with respect to any of the foregoing, which are necessary or advisable for the
operation of its business as presently conducted or proposed to be conducted.
Except as specified in Schedule 6.1(y)-B, neither such Borrower nor any
Designated Affiliate has infringed any patent, trademark, service xxxx,
tradename, copyright, license or other right owned by any other Person by the
sale or use of any product, process, method, substance, part or other material
presently contemplated to be sold or used, where such sale or use could
reasonably be expected to have a Material Adverse Effect and, except as
specified in Schedule 6.1(y)-B, no claim or litigation is pending, or to the
best of such Borrower's knowledge, threatened against or affecting such Borrower
or any Designated Affiliate that contests its right to sell or use any such
product, process, method, substance, part or other material that could
reasonably be expected to have a Material Adverse Effect.
(z) Labor Matters. Schedule 6.1(z) accurately sets forth all
collective bargaining agreements to which such Borrower or any Designated
Affiliate is a party as of the Closing Date, and their dates of expiration.
There are no existing or threatened strikes, lockouts or other disputes relating
to any collective bargaining or similar agreement to which such Borrower or any
Designated Affiliate is a party which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
(aa) Compliance with Environmental Laws. Except as specified
in Schedule 6.1(aa), (i) Neither such Borrower nor any Designated Affiliate is
the subject of a judicial or administrative proceeding or investigation relating
to the violation of any Environmental Law or asserting potential liability
arising from the release or disposal by any Person of any Hazardous Materials,
(ii) neither such Borrower nor any Designated Affiliate has filed or received
any notice under any Environmental Law concerning the treatment, storage,
disposal, spill or release or threatened release of any Hazardous Materials at,
on, beneath or adjacent to property owned or leased by such Borrower, or the
release or threatened release at any other location of any Hazardous Material
generated, used, stored,
-81-
82
treated, transported or released by or on behalf of such Borrower and (iii) such
Borrower has no knowledge of any contingent liability of itself or any
Designated Affiliate for any release of any Hazardous Materials, in each case
which could reasonably be expected to have a Material Adverse Effect.
(bb) Licenses and Permits. Such Borrower and each Designated
Affiliate has obtained and holds in full force and effect all franchises,
licenses, leases, permits, certificates, authorizations, qualifications,
easements, rights of way and other rights and approvals which are necessary or
advisable for the operation of its business as presently conducted and as
proposed to be conducted, except where the failure to possess any of the
foregoing (individually or in the aggregate) could not have a Material Adverse
Effect.
(cc) Government Regulation. Neither such Borrower nor any
other Loan Party is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate Commerce Act or any
other Requirement of Law that limits its ability to incur Indebtedness or its
ability to consummate the transactions contemplated by this Agreement and the
other Loan Documents.
(dd) Material Contracts. Set forth on Schedule 6.1(ad) is a
complete and accurate list of all Material Contracts of each Borrower and each
Designated Affiliate, showing as of the date hereof the parties, subject matter
and term thereof. Each such contract has been duly authorized, executed and
delivered by such Borrower or Designated Affiliate and each other party thereto.
Except as specified in Schedule 6.1(ad), each such Material Contract is in full
force and effect and, to the best of such Borrower's knowledge, is binding upon
and enforceable against all parties thereto in accordance with its terms, and
there exists no default under such contract by any party thereto.
(ee) Business and Properties. Since December 31, 1999, no
fire, explosion, accident, drought, storm, hail, earthquake, embargo, act of God
or of the public enemy or other casualty has occurred which event is not covered
by insurance and that could reasonably be expected to have a Material Adverse
Effect.
(ff) Business Plan. The Business Plan and the Financial
Statements delivered to the Agent on the Closing Date (as defined in the
Original Loan Agreement) were prepared in good faith on the basis of assumptions
which were fair in the context of the conditions existing at the time of
delivery thereof, and, with respect to the Business Plan, represented, at the
time of delivery, such Borrower's reasonable best estimate of the future
financial performance of GPI and its Subsidiaries.
(gg) Affiliate Transactions. Except as specified in
-82-
83
Schedule 6.1(ag), neither such Borrower nor any Designated Affiliate is a party
to or bound by any agreement or arrangement (whether oral or written) to which
any Affiliate of such Borrower or Designated Affiliate is a party except (i) in
the ordinary course of and pursuant to the reasonable requirements of the
business of such Borrower or Designated Affiliate and (ii) upon fair and
reasonable terms no less favorable to such Borrower or Designated Affiliate than
it could obtain in a comparable arm's-length transaction with an unaffiliated
Person.
(hh) Year 2000 Compliance. (i) Such Borrower and each
Designated Affiliate and their respective products are Year 2000 Compliant, (ii)
to the best of such Borrower's knowledge, all of the material suppliers and
vendors of such Borrower and Affiliates are Year 2000 Compliant and (iii) the
cost to such Borrower and Affiliates of being Year 2000 Compliant as provided in
clause (A), and the testing for the reasonably foreseeable consequences of any
programming errors or systems failures related to the year 2000, could not
reasonably be expected to have a Material Adverse Effect.
SECTION VI.2. Survival of Representations and Warranties. All
representations and warranties made by each Borrower in this Agreement and by
each Borrower and each other Loan Party in, or by incorporation by reference in,
each other Loan Document to which it is a party shall survive the execution and
delivery hereof and thereof and the closing of the transactions contemplated
hereby and thereby.
SECTION VI.3. Updating of Schedules. The Borrowers shall have
the right to deliver to the Agent updated schedules to this Agreement from time
to time, provided that no event or condition that would otherwise constitute a
Default or an Event of Default shall be deemed to be cured solely by virtue of
the delivery of an updated schedule hereunder, and provided, further, that all
representations and warranties that refer to the schedules to this Agreement
shall, as of the date such representations and warranties are made by the
Borrowers hereunder, be deemed to refer to such schedules as updated and
delivered to the Agent as of such date.
-83-
84
ARTICLE VII.
COVENANTS OF THE BORROWERS
SECTION VII.1. Affirmative Covenants. Until termination of
the Commitments, payment and satisfaction of all Obligations in full, and
termination, Collateralization or expiration of all Letters of Credit:
(a) Corporate Existence. Each Borrower shall, and shall cause
each Designated Affiliate to, (i) maintain its corporate existence, (ii)
maintain in full force and effect all material licenses, bonds, franchises,
leases, trademarks, qualifications and authorizations to do business, and all
material patents, contracts and other rights necessary or advisable to the
profitable conduct of its businesses, and (iii) continue in a Permitted
Business; provided, however, that nothing in this Section 7.1(a) shall prohibit
(i) a merger, amalgamation or other business combination of (A) a Borrower with
and into another Borrower, (B) a Guarantor with and into a Borrower, (C) a
Guarantor (other than GPI) with and into another Guarantor, or (D) any
Subsidiary of a Loan Party (other than a Borrower or a Guarantor) with and into
any Loan Party or any of its Subsidiaries, in each case so long as (I) each
party to such merger, amalgamation or other business combination is Solvent both
before and after giving effect thereto and (II) no Default or Event of Default
has occurred and is continuing or would result therefrom; and (ii) the
recapitalization or conversion of a Borrower or a Guarantor or any of its
respective Subsidiaries into a new entity form or jurisdiction of formation, so
long as such new entity form does not adversely affect any Lender's rights under
the Loan Documents and such jurisdiction of formation is in the United States or
any state thereof.
(b) Maintenance of Property. Each Borrower shall, and shall
cause each Designated Affiliate to, keep all property useful and necessary to
its business in good working order and condition (ordinary wear and tear
excepted) in accordance with its past operating practices except as could not
reasonably be expected to have a Material Adverse Effect.
(c) Affiliate Transactions. Each Borrower shall, and shall
cause each Designated Affiliate to, conduct transactions with any of its
Affiliates on an arm's-length basis or other basis no less favorable to such
Borrower or Designated Affiliate than would apply in a transaction with a
non-Affiliate and which are approved by the board of directors of such Borrower
or Designated Affiliate, except that this Section 7.1(c) shall not
-84-
85
limit, restrict or prohibit (i) the payment of reasonable and customary regular
fees to directors of such Borrower or any of its Subsidiaries who are not
employees thereof; (ii) loans and advances to officers, directors and employees
of such Borrower or any of its Subsidiaries for travel, entertainment and moving
and other relocation expenses made in direct furtherance and in the ordinary
course of business of such Borrower or such Subsidiary not to exceed
US$2,000,000 in the aggregate at any time; (iii) any other transaction with any
employee, officer or director of such Borrower or any of its Subsidiaries
pursuant to employee benefit or compensation arrangements entered into in the
ordinary course of business and approved by the Board of Directors of such
Borrower or Subsidiary; (iv) any transaction entered into in the ordinary course
of business with any Subsidiary of GPI including, without limitation,
intercompany charges for administrative services, allocations of overhead,
concentrated cash management systems for collections and disbursements, and
sales of goods and services in connection with the business of GPI or any of its
Subsidiaries in the ordinary course of business of such Subsidiary; (v) licenses
and other transfers of patents, trademarks, trade names, copyrights, trade
secrets, know-how and other intellectual property to or from any Subsidiary of
GPI; (vi) the payment or prepayment of the Subordinated Note to the extent not
prohibited by the Subordination Agreement; (vii) transactions entered into with
Xxxxxxxxxxx or any of its Subsidiaries in connection with a preferred supplier
agreement, a transition services agreement, a tax allocation agreement, or other
agreements and understandings with Xxxxxxxxxxx or such Subsidiary entered into
in connection with or in contemplation of the Spinoff and specified in Schedule
6.1(ag); or (viii) other transactions with Affiliates that are expressly
permitted under other provisions of this Agreement including, without
limitation, the making of any Restricted Payment, the making of any loan,
advance or transfer to the extent it results in Permitted Intercompany Debt or
the making of any Investment otherwise permitted under other provisions of this
Agreement.
(d) Taxes. Each Borrower shall, and shall cause each
Designated Affiliate to, pay, when due, subject to any extension obtained or
timely requested by such Borrower or Affiliate from or with the applicable
taxing authority, (i) all tax assessments, and other governmental charges and
levies imposed against it or any of its property and (ii) all lawful claims
that, if unpaid, might by law become a Lien upon its property; provided,
however, that, unless such tax assessment, charge, levy or claim (excluding
Liens specified in Schedule 7.2(i)) has become a Lien on any of the property of
such Borrower or Affiliate and relates to obligations which, when taken together
with the amount of all such assessments, charges, levies and claims for all the
Borrowers and such Affiliates, exceed US$2,000,000 in the aggregate, it need not
be paid if it is being contested in good
-85-
86
faith, by appropriate proceedings diligently conducted and an adequate reserve
or other appropriate provision shall have been established therefor as required
in accordance with GAAP.
(e) Governing Documents; Requirements of Law. Each Borrower
shall, and shall cause each Designated Affiliate to, comply with all terms of
its respective Governing Documents and with all Requirements of Law applicable
to it, including, without limitation, all applicable federal, state, provincial,
local or foreign laws and regulations, including, without limitation, those
relating to environmental matters, employee matters (including the collection,
payment and deposit of employees' income, unemployment, Social Security and
Medicare hospital insurance taxes) and with respect to pension liabilities,
provided that it shall not be deemed to be a violation hereof if such Borrower's
or Affiliate's failure to comply with any of the foregoing could not be
reasonably expected to have a Material Adverse Effect.
(f) Insurance. Each Borrower shall, and shall cause each
Designated Affiliate to, maintain public liability insurance, business
interruption insurance, third party property damage insurance and replacement
value insurance on its assets (including the Collateral) under such policies of
insurance, with such insurance companies, in such amounts and covering such
risks as are at all times reasonably satisfactory to the Agent, all of which
policies covering the Collateral shall name the Agent or the Cdn. Agent, as
applicable, as an additional insured and the lender loss payee in case of loss,
and contain other provisions as the Agent may require to protect fully the
Agent's and the Cdn. Agent's interest in the Collateral and any payments to be
made under such policies.
(g) Books and Records; Inspections. Each Borrower shall, and
shall cause each Designated Affiliate to, (i) maintain books and records
(including computer records and programs) of account pertaining to the assets,
liabilities and financial transactions of such Borrower and Affiliates in such
detail, form and scope as is consistent with good business practice and (ii)
provide the Agent and its agents and representatives, and one representative of
each of the Lenders, access to the premises of such Borrower and each of such
Affiliates at any time and from time to time, during normal business hours and
upon reasonable notice under the circumstances, and at any time and with any
number of agents and representatives of the Lenders after the occurrence and
during the continuance of a Default or Event of Default, for the purposes of (A)
inspecting and verifying the Collateral, (B) inspecting and copying (at the
Borrowers' expense) any and all records pertaining thereto, and (C) discussing
the affairs, finances and business of such Borrower or Affiliate with any
officer, employee or director thereof or with the Auditors, all of whom are
hereby authorized
-86-
87
to disclose to the Agent and the Lenders all financial statements, work papers,
and other information relating to such affairs, finances or business. The
Borrowers shall reimburse the Agent for the reasonable travel and related
expenses of the Agent's employees or, at the Agent's option, of such outside
accountants or examiners as may be retained by the Agent to verify or inspect
Collateral, records or documents of a Borrower or such Affiliate on a regular
basis or for a special inspection if the Agent deems the same appropriate. If
the Agent's own employees are used, the Borrowers shall also pay such reasonable
per diem allowance as the Agent may from time to time establish, or, if outside
examiners or accountants are used, the Borrowers shall also pay the Agent such
sum as the Agent may be obligated to pay as fees therefor. The Borrowers shall
not be obligated to reimburse the Lenders for any of the foregoing types of
expenses incurred by the Lenders. All such Obligations may be charged to the
Loan Account or any other account of the Borrowers with the Agent or any of its
Affiliates. The Borrowers hereby authorize the Agent, on behalf of the Lenders,
to communicate directly with the Auditors to disclose to the Agent, on behalf of
the Lenders, any and all financial information regarding any of the Loan Parties
including, without limitation, matters relating to any audit and copies of any
letters, memoranda or other correspondence related to the business, financial
condition or other affairs of any of the Borrowers or the Designated Affiliates.
(h) Notification Requirements. The Administrative Borrower
shall timely give the Agent the following notices and other documents:
(i) Notice of Defaults. Within two Business Days
after becoming aware of the occurrence of a Default or Event
of Default that is continuing, a certificate of a Responsible
Officer specifying the nature thereof and the Borrowers'
proposed response thereto, each in reasonable detail.
(ii) Proceedings or Adverse Changes. Within five
Business Days after a Borrower becomes aware of (A) any
proceeding being instituted or threatened to be instituted by
or against it or any Designated Affiliate in any federal,
state, local or foreign court or before any commission or
other regulatory body (federal, state, local or foreign)
involving a sum not otherwise covered by insurance, together
with the sum involved in all other similar proceedings, in
excess of US$5,000,000 in the aggregate with respect to all
the Borrowers and such Affiliates, (B) any order, judgment or
decree involving a sum, together with the sum of all other
orders, judgments or decrees, in excess of US$5,000,000 in the
aggregate being entered against all
-87-
88
the Borrowers and such Affiliates or any of their respective
property or assets which could reasonably be expected to have
a Material Adverse Effect, (C) any notice or correspondence
issued to any Borrower or any Designated Affiliate by a
Governmental Authority warning, threatening or advising of the
commencement of any investigation involving such Borrower or
any Designated Affiliate or any of its respective property or
assets which could reasonably be expected to have a Material
Adverse Effect, (D) any actual or prospective change,
development or event which has had or could reasonably be
expected to have a Material Adverse Effect, (E) a change in
the location of any Collateral from the locations specified in
Schedule 6.1(b) or other locations previously identified to
the Agent where Collateral has been moved as permitted under
Section 7.2(h) or (F) a proposed or actual change of any
Borrower's name, identity or corporate structure, a written
statement describing such proceeding, order, judgment, decree,
change, development or event and any action being taken by the
Borrowers with respect thereto.
(iii) ERISA Notices.
(A) Promptly, and in any event within ten
Business Days after a Termination Event has occurred, a
written statement of a Responsible Officer describing such
Termination Event and any action that is being taken with
respect thereto by any Borrower or ERISA Affiliate, and any
action taken or threatened by the Internal Revenue Service,
the Department of Labor or the PBGC with respect thereto;
(B) promptly, and in any event within three
Business Days after the filing thereof with the Internal
Revenue Service, a copy of each funding waiver request filed
with respect to any Plan subject to the funding requirements
of Section 412 of the Internal Revenue Code and all
communications received by any Borrower or ERISA Affiliate
with respect to such request;
(C) promptly, and in any event within three
Business Days after receipt by any Borrower or ERISA Affiliate
of the PBGC's intention to terminate a Pension Plan or to have
a trustee appointed to administer a Pension Plan, a copy of
each such notice;
(D) promptly, and in any event within three
Business Days after the occurrence thereof, notice (including
the nature of the event and, when known, any
-88-
89
action taken or threatened by the Internal Revenue Service or
the PBGC with respect thereto) of:
(I) any Prohibited Transaction which
could subject any Borrower or ERISA Affiliate to a
civil penalty assessed pursuant to Section 502(i) of
ERISA or a tax imposed by Section 4975 of the
Internal Revenue Code in connection with any Plan, or
any trust created thereunder,
(II) any cessation of operations (by any
Borrower or ERISA Affiliate) at a facility in the
circumstances described in Section 4062(e) of ERISA,
(III) a failure by any Borrower or ERISA
Affiliate to make a payment to a Plan required to
avoid imposition of a Lien under Section 302(f) of
ERISA or Section 412(n) of the Internal Revenue Code,
(IV) the adoption of an amendment to a
Plan requiring the provision of security to such Plan
pursuant to Section 307 of ERISA or Section
401(a)(29) of the Internal Revenue Code, or
(V) any change in the actuarial
assumptions or funding methods used for any Plan,
where the effect of such change is to increase
materially or reduce materially the unfunded benefit
liability or obligation to make periodic
contributions;
(E) promptly upon the request of the
Agent, each annual report (IRS Form 5500 series) and all
accompanying schedules, the most recent actuarial reports,
the most recent financial information concerning the
financial status of each Plan administered or maintained by
any Borrower or ERISA Affiliate, and schedules showing the
amounts contributed to each Pension Plan by or on behalf of
any Borrower or ERISA Affiliate in which any of its personnel
participate or from which such personnel may derive a
benefit, and each Schedule B (Actuarial Information) to the
annual report filed by any Borrower or ERISA Affiliate with
the Internal Revenue Service with respect to each such Plan;
(F) promptly upon the filing thereof,
copies of any Form 5310, or any successor or equivalent form
to Form 5310, filed with the Internal Revenue Service in
connection with the termination of any Plan, and
-89-
90
copies of any standard termination notice or distress
termination notice filed with the PBGC in connection with the
termination of any Pension Plan;
(G) promptly, and in any event within three
Business Days after receipt thereof by any Borrower or ERISA
Affiliate, notice and demand for payment of withdrawal
liability under Section 4201 of ERISA with respect to a
Multiemployer Plan;
(H) promptly, and in any event within three
Business Days after receipt thereof by any Borrower or ERISA
Affiliate, notice by the Department of Labor of any penalty or
any purported violation of ERISA with respect to a Plan;
(I) promptly, and in any event within three
Business Days after receipt thereof by any Borrower or ERISA
Affiliate, notice by the Internal Revenue Service or the
Treasury Department of any income tax deficiency or
delinquency, excise tax penalty, audit or investigation with
respect to a Plan; and
(J) promptly, and in any event within three
Business Days after receipt thereof by any Borrower or ERISA
Affiliate, notice of any administrative or judicial complaint,
or the entry of a judgment, award or settlement agreement, in
either case with respect to a Plan that could reasonably be
expected to have a Material Adverse Effect.
(iv) Material Contracts. Within ten Business Days
after any Material Contract is terminated or amended in any
material respect that is adverse to a Borrower or any
Designated Affiliate, or any new Material Contract is entered
into, a written statement describing such event, with copies
of amendments or new contracts, and an explanation of any
actions being taken with respect thereto.
(v) Environmental Matters. Within ten Business
Days after receipt by a Borrower thereof, copies of each (A)
written notice from a Governmental Authority that any
violation of any Environmental Law may have been committed or
is about to be committed by a Borrower or any Designated
Affiliate which violation could reasonably be expected to
result in liability or involve remediation costs in excess of
US$1,000,000 per violation or US$5,000,000 in the aggregate
for all such liability or costs of the Borrowers and such
Affiliates in the aggregate payable at any time, (B) written
notice that any administrative or judicial complaint or
-90-
91
order has been filed or is about to be filed against a
Borrower or any Designated Affiliate alleging violations of
any Environmental Law or requiring a Borrower or such
Affiliate to take any action in connection with the release of
toxic or Hazardous Materials into the environment which
violation or action could reasonably be expected to result in
liability or involve remediation costs in excess of
US$1,000,000 per violation or US$5,000,000 in the aggregate
for all such liability or costs of the Borrowers and such
Affiliates in the aggregate payable at any time, (C) written
notice from a Governmental Authority or other Person alleging
that a Borrower or any Designated Affiliate may be liable or
responsible for costs associated with a response to or cleanup
of a release of a Hazardous Material into the environment or
any damages caused thereby which costs could reasonably be
expected to exceed US$1,000,000 per release or US$5,000,000 in
the aggregate for all such liability or costs of the Borrowers
and the Designated Affiliates in the aggregate payable at any
time or (D) any Environmental Law of the United States or
Canada adopted, enacted or issued after the date hereof of
which a Borrower becomes aware which could reasonably be
expected to have a Material Adverse Effect.
(vi) Equipment Sales. Within one Business Day of
any sale or other disposition of any Equipment by any Borrower
for consideration in excess of US$500,000, a reasonably
detailed description of such Equipment and the terms of such
sale or disposition.
(i) Casualty Loss. Each Borrower shall (i) provide written
notice to the Agent, within ten Business Days, of any material damage to, the
destruction of or any other material loss to any tangible asset or property
owned or used by such Borrower or any Designated Affiliate other than any such
asset or property (A) with a net book value (individually or in the aggregate)
less than US$2,000,000 or (B) does not constitute Collateral and is covered by
insurance complying with the terms of this Agreement, or any condemnation,
confiscation or other taking, in whole or in part, or any event that otherwise
diminishes so as to render impracticable or unreasonable the use of such asset
or property owned or used by such Borrower or any Designated Affiliate together
with a statement of the amount of the damage, destruction, loss or diminution in
value (a "Casualty Loss") and (ii) diligently file and prosecute its claim for
any award or payment in connection with a Casualty Loss.
(j) Qualify to Transact Business. Each Borrower shall, and
shall cause each Designated Affiliate to, qualify to transact business as a
foreign corporation in each jurisdiction
-91-
92
where the nature or extent of its business or the ownership of its property
requires it to be so qualified or authorized and where failure to qualify or be
authorized could reasonably be expected to have a Material Adverse Effect.
(k) Financial Reporting. The Administrative Borrower shall
deliver to the Agent the following:
(i) Annual Financial Statements. (A) As soon as
available, but not later than ninety days after the end of
each fiscal year of GPI, beginning with the fiscal year ended
December 31, 2000, (I) the annual audited and certified
consolidated Financial Statements of GPI and its Subsidiaries
and the annual unaudited consolidating Financial Statements of
GPI and its Subsidiaries, (II) a comparison in reasonable
detail to the prior fiscal year's audited Financial Statements
(it being agreed that GPI's Management Discussion and Analysis
of Financial Condition and Results of Operations contained in
its Form 10-K for such fiscal year shall be deemed to be a
sufficient comparison) and (III) the Auditors' opinion without
Qualification and a statement indicating that the Auditors
have not obtained knowledge of the existence of any Default or
Event of Default during their audit, each of which shall be in
form and substance reasonably satisfactory to the Agent, and
(B) as soon as practicable following receipt thereof by the
Administrative Borrower, the Management Letter delivered by
the Auditors for such fiscal year.
(ii) Projections. Not later than thirty days after
the end of each fiscal year of GPI, the Business Plan for the
upcoming fiscal year, certified by a Responsible Officer of
GPI.
(iii) Monthly Financial Statements. As soon as
available, but not later than thirty days after the end of
each month, commencing with the month in which the Closing
Date occurs, (A) the interim consolidated and consolidating
Financial Statements of GPI and its Subsidiaries as at the end
of such month and for the fiscal year to date, (B) a
certification by GPI's Chief Financial Officer that such
Financial Statements have been prepared in accordance with
GAAP and present fairly in all material respects the financial
condition and results of operations of GPI and its
Subsidiaries taken as a whole (subject to normal year-end
audit adjustments and the absence of footnotes), (C) a
comparison of the interim consolidated and consolidating
Financial Statements of GPI and its Subsidiaries as of the end
of such month and for the
-92-
93
fiscal year to date to the projected Financial Statements set
forth in the Business Plan for the same period and (D) a
compliance certificate, substantially in the form of Exhibit
O (a "Compliance Certificate"), signed by GPI's Chief
Financial Officer, with an attached schedule of calculations
demonstrating compliance with the Financial Covenants as of
the end of such month.
(iv) Quarterly Cash Flow Statements. As soon as
available, but not later than forty-five days after the end of
each fiscal quarter of GPI (except for the fourth quarter, in
which such statements will be delivered with the annual
statements pursuant to Section 7.1(k)(i)), a consolidated
statement of cash flows of GPI and its Subsidiaries for such
quarter, prepared in accordance with GAAP and consistent with
prior practices.
(v) Borrowing Base Certificate. Monthly (or more
frequently as the Agent may from time to time request), not
later than the tenth Business Day of each month, a borrowing
base certificate, substantially in the form of Exhibit N,
detailing the Eligible Receivables and the Eligible Inventory
of the U.S. Borrowers and of the Cdn. Borrower, containing a
calculation of availability and reflecting all sales,
collections, and debit and credit adjustments, as of the last
day of the preceding month (or as of a more recent date as the
Agent may from time to time request), which shall be prepared
by or under the supervision of the Chief Financial Officer of
the Administrative Borrower and certified by such officer (a
"Borrowing Base Certificate"); provided, however, that in the
event the average borrowing availability for any consecutive
sixty-day period is less than US$10,000,000, such Borrowing
Base Certificate shall be provided weekly.
(vi) Agings. Monthly, not later than the tenth
Business Day of each month, agings and reconciliations of the
Receivables of the U.S. Borrowers and the Cdn. Borrower and
accounts payable, in scope and detail satisfactory to the
Agent, as of the last day of the preceding month; provided,
however, that in the event the average borrowing availability
for any consecutive sixty-day period is less than
US$10,000,000, such agings and reconciliations shall be
provided weekly.
(vii) Inventory Report. Monthly, not later than the
tenth Business Day of each month, a report
-93-
94
listing all Inventory of the U.S. Borrowers and the Cdn.
Borrower by location, in form satisfactory to the Agent;
provided, however, that in the event the average borrowing
availability for any consecutive sixty-day period is less than
US$10,000,000, such inventory reports shall be provided
weekly.
(viii) Shareholder and SEC Reports. As soon as
available, but not later than five days after the same are
sent or filed, as the case may be, copies of all financial
statements and reports that GPI or any of its Subsidiaries
sends to any of its shareholders or files with the Securities
and Exchange Commission.
(ix) Other Financial Information. Promptly after
the request by the Agent therefor, such additional financial
statements and other related data and information as to the
business, prospects, operations, results of operations,
assets, liabilities or condition (financial or otherwise) of
any Borrower or any Designated Affiliate as the Agent may from
time to time reasonably request.
(x) Quarterly Equipment Sales and Purchases
Report. Quarterly, not later than forty-five days after the
end of each fiscal quarter of GPI, a reasonably detailed
report listing (i) all sales, purchases or other dispositions
of Equipment made by each Borrower during such quarter and
(ii) the amount of the proceeds of Loans used by each Borrower
to purchase replacement equipment within ninety days of the
date of sale or other disposition of such Equipment replaced
thereby in which replacement equipment the Agent has been
granted a perfected first priority security interest for the
benefit of the Lenders, in form satisfactory to the Agent.
(l) Payment of Liabilities. Each Borrower shall, and shall
cause each Designated Affiliate to, pay and discharge, in the ordinary course of
business, all obligations and liabilities (including, without limitation, tax
liabilities and other governmental charges), except where the same may be
contested in good faith by appropriate proceedings and for which adequate
reserves with respect thereto have been established in accordance with GAAP.
(m) ERISA. Each Borrower shall, and shall cause each of its
ERISA Affiliates to, (i) maintain each Plan intended to qualify under Section
401(a) of the Internal Revenue Code so as to satisfy the qualification
requirements thereof, (ii) contribute, or require that contributions be made, in
a timely manner (A) to each Plan in amounts sufficient (I) to
-94-
95
satisfy the minimum funding requirements of Section 302 of ERISA or Section 412
of the Internal Revenue Code, if applicable, (II) to satisfy any other
Requirements of Law and (III) to satisfy the terms and conditions of each such
Plan, and (B) to each Foreign Plan in amounts sufficient to satisfy the minimum
funding requirements of any applicable law or regulation, without any
application for a waiver from any such funding requirements, (iii) cause each
Plan or Foreign Plan to comply in all material respects with applicable law
(including all applicable statutes, orders, rules and regulations) and (iv) pay
in a timely manner, in all material respects, all required premiums to the PBGC.
As used in this Section 7.1(m), "Foreign Plan" means a plan
that provides retirement or health benefits and that is maintained by, or
otherwise contributed to, a Borrower for the benefit of employees outside the
United States.
(n) Environmental Matters. Each Borrower shall, and shall
cause each Designated Affiliate to, conduct its business so as to comply in all
respects with all applicable Environmental Laws including, without limitation,
compliance with the terms and conditions of all permits and governmental
authorizations except for such failures to comply that could not reasonably be
expected to have a Material Adverse Effect.
(o) Trademarks. Each Borrower shall, and shall cause each
Designated Affiliate to, do and cause to be done all things necessary to
preserve and keep in full force and effect all of its material registrations of
trademarks, service marks and other marks, trade names and other trade rights.
(p) Solvency. Each Borrower shall, and shall cause each
Designated Affiliate to, be and remain Solvent at all times.
(q) Billing Practices. The Administrative Borrower shall
notify the Agent of any Receivable of any Borrower generated pursuant to the
sale of goods on any basis other than on the terms specified in Schedule 7.1(q).
(r) Year 2000 Compliance. Each Borrower shall be, and shall
cause each Designated Affiliate to be, Year 2000 Compliant.
(s) Foreign Subsidiary Capital Stock Pledge and Guaranty. If,
following a change in the relevant sections of the Internal Revenue Code or the
regulations issued or promulgated thereunder, counsel for the Loan Parties
reasonably concludes, within thirty days after a request from the Agent, with
respect to any Foreign Subsidiary or Cdn. Subsidiary all of whose Capital Stock
has not been pledged to the Agent under the Pledge Agreement that (A) a pledge
of (I) 66-2/3% or more of the total combined voting power of all classes of
Capital Stock of such
-95-
96
Subsidiary entitled to vote and (II) any promissory note held by such Subsidiary
and (B) the entering into by such Subsidiary of a guaranty in substantially the
form of the Guaranty, in either such case could not reasonably be expected to
cause at the time of such change in law (w) any undistributed earnings of such
Subsidiary as determined for federal income tax purposes to be treated as a
deemed dividend to such Subsidiary's United States parent for federal income tax
purposes or (x) other material adverse federal income tax consequences to the
Loan Parties (or if counsel for the Loan Parties either does not respond to such
request or delivers an unreasonable conclusion within such thirty-day period),
then, (1) that portion of such Subsidiary's outstanding Capital Stock or any
promissory notes held by such Subsidiary, in each case not theretofore pledged
under the Pledge Agreement, shall be pledged to the Agent for the benefit of the
Lenders under the Pledge Agreement or a Supplement in the form of Annex III
thereto and deliver all remaining certificates representing such additional
Capital Stock to the Agent and undated stock or other transfer powers therefor,
executed by the applicable pledgor in blank, and (2) such Subsidiary shall
execute and deliver to the Agent, (y) a Supplement to the Guaranty in the form
of Annex 1 thereto, guaranteeing the Obligations, and (z) a Supplement to the
Contribution Agreement in the form of Annex 1 thereto.
(t) Further Assurances. Each Borrower shall, and shall cause
each Designated Affiliate to, take all such further actions and execute all such
further documents and instruments as the Agent may reasonably determine to be
necessary or desirable to perfect or protect the Liens (and the priority status
thereof) of the Agent and the Cdn. Agent on the Collateral.
SECTION VII.2. Negative Covenants. Until termination of the
Commitments, payment and satisfaction of all Obligations in full, and
termination, Collateralization or expiration of all Letters of Credit:
(a) Indebtedness. Each Borrower will not, and will not permit
any Designated Affiliate (other than any Foreign Subsidiary) to, directly or
indirectly, at any time create, incur, assume or suffer to exist any
Indebtedness other than the following Indebtedness (so long as, in the case of
Indebtedness of the type specified in clauses (iv), (v) and (vi) below, no
Default or Event of Default has occurred and is continuing or would result
therefrom at the time of the incurrence thereof):
(i) Permitted Indebtedness;
(ii) endorsement of negotiable instruments for
deposit or collection in the ordinary course of
-96-
97
business;
(iii) Indebtedness specified in Schedule 7.2(a);
(iv) unsecured Indebtedness with respect to which
not more than 25% of the original principal amount thereof is
payable or may be declared payable (other than by acceleration
upon the occurrence of a default or an event of default) by
any holder thereof on or before the then effective Expiration
Date;
(v) Indebtedness incurred to finance Capital
Expenditures to the extent permitted under Section 8.2 or
Indebtedness assumed or acquired in connection with a
Permitted Acquisition; and
(vi) Indebtedness of Foreign Subsidiaries,
provided that nothing herein shall prohibit any Indebtedness to continue to
exist if such Indebtedness was not prohibited hereunder at the time it was
created, incurred, assumed or first suffered to exist.
(b) Contingent Obligations. Except as specified in Schedule
6.1(i), each Borrower will not, and will not permit any Designated Affiliate to,
directly or indirectly, incur, assume, or suffer to exist any Contingent
Obligation, excluding (i) indemnities given in connection with this Agreement or
the other Loan Documents in favor of the Agent and (ii) such Contingent
Obligations as would be permitted to be incurred if such Contingent Obligations
were incurred as Indebtedness by such Borrower or any Designated Subsidiary
under Section 7.2(a).
(c) Corporate Changes, Etc. Except as specified in Schedule
7.2(c), each Borrower will not, and will not permit any Designated Affiliate to,
directly or indirectly, merge or consolidate with any Person or amend, alter or
modify its corporate or partnership name, mailing address, chief executive
office or principal place of business, structure, status or existence, or
liquidate or dissolve itself (or suffer any liquidation or dissolution) or issue
any capital stock or other equity interests, other than (i) Permitted
Acquisitions, (ii) transactions permitted under Section 7.1(a) and (iii) any
change of name, mailing address, chief executive office or principal place of
business so long as (A) the Administrative Borrower provides written notice of
such event to the Agent at least thirty days before the occurrence thereof and
(B) the Administrative Borrower provides, before the occurrence of such event,
to the Agent all such documents and instruments, and takes all such further acts
of the type specified in Section 3.7, as may be necessary or desirable to
maintain the Liens in favor of
-97-
98
the Agent and the Cdn. Agent covering the Collateral and the priority and
continued perfection thereof, all of which shall be at the Borrowers' expense.
(d) Change in Nature of Business. Each Borrower will not, and
will not permit any Designated Affiliate to, engage in or enter into any new
line of business other than a Permitted Business.
(e) Sales, Etc. of Assets. Each Borrower will not, and will
not permit any Designated Affiliate (other than any Foreign Subsidiary) to,
directly or indirectly, in any fiscal year, sell, transfer or otherwise dispose
of any of its assets, or grant any option or other right to purchase or
otherwise acquire any of its assets, other than the sale of Inventory in the
ordinary course of business and, so long as no Default or Event of Default has
occurred and is continuing or would result therefrom (including, without
limitation, an Event of Default under Section 2.1(a) or (b) or Section 2.4(b) as
the result of such sale, transfer or other disposition causing the amount of
outstanding Loans and Letters of Credit to exceed the U.S. Borrowing Base or the
Cdn. Borrowing Base, as applicable) and such sale, lease, assignment, transfer,
license or other disposition is for fair consideration (which may consist of
Indebtedness constituting Permitted Intercompany Debt arising thereby in favor
of such Borrower or Affiliate) and, to the extent applicable, complies with
Section 7.1(c), (i) the sale, transfer or other disposition of Property and
Equipment (other than Equipment that constitutes Collateral) in any fiscal year
of the Borrowers with an aggregate value not to exceed 5% of the shareholders
equity of GPI as of the end of the prior fiscal year; (ii) sales or transfers of
assets between and among GPI and any of its Subsidiaries pursuant to the Spinoff
specified in Schedule 6.1(i); (iii) the lease of Equipment in the ordinary
course of business; (iv) the sale, lease, assignment, transfer or other
disposition of any or all of the assets (other than Collateral) of such Borrower
or Subsidiary thereof to any other Loan Party or Subsidiary thereof; (v) the
license of patents, trademarks or copyrights to any other Loan Party or
Subsidiary thereof; (vi) like-kind exchanges of assets (other than Collateral);
(vii) sales or dispositions of Equipment that constitutes Collateral for fair
consideration provided that (A) the consideration therefor shall consist
exclusively of cash, which shall be immediately paid to the Agent by the
applicable Borrower for application to the U.S. Loans or the Cdn. Loans, as
applicable and (B) if, on the date such cash is paid to the Agent, no Base Rate
Advance, Prime Rate Advance, or LIBOR Rate Advance with an Interest Period that
ends on (or ended before) such date is outstanding, the Agent shall deposit such
cash in a cash collateral account established by or on behalf of the Agent which
shall be under the sole dominion and control of the Agent (which the Agent shall
invest in Cash Equivalents determined by
-98-
99
the Agent in its sole discretion) for future application by the Agent to repay
LIBOR Rate Advances on the last day of the Interest Periods therefor or to repay
other Obligations as they come due; (viii) sales of obsolete, underutilized or
damaged or defective Equipment; or (ix) transfers of assets (other than
Receivables) (A) in the ordinary course of such Borrower's or Affiliate's
business to any Subsidiary of GPI or (B) outside the ordinary course of such
Borrower's or Affiliate's business to any Subsidiary of GPI that is not a
Borrower or a Subsidiary of a Borrower so long as the aggregate value of all
such assets transferred under this clause (ix) (I) in any fiscal year of GPI is
not greater than US$25,000,000 less the amount of all Investments made under
Section 7.2(k)(ii)(C) in such fiscal year or (II) during any consecutive
three-fiscal year period is not greater than US$50,000,000 less the amount of
all Investments made under Section 7.2(k)(ii)(C) during such consecutive
three-fiscal year period.
(f) Use of Proceeds. Each Borrower will not (i) use any
portion of the proceeds of any Loan in violation of Section 2.3 or for the
purpose of purchasing or carrying any "margin stock" (as defined in Regulation U
of the Federal Reserve Board) in any manner which violates the provisions of
Regulation T, U or X of the Federal Reserve Board or for any other purpose in
violation of any applicable statute or regulation, or of the terms and
conditions of this Agreement, or (ii) take, or permit any Person acting on its
behalf to take, any action which could reasonably be expected to cause this
Agreement or any document or instrument delivered pursuant hereto to violate any
regulation of the Federal Reserve Board.
(g) Cancellation of Debt. Except with respect to amounts owed
by OCTL to a Loan Party, each Borrower will not, and will not permit any
Designated Affiliate to, cancel any liability owed to it, except for (i) the
cancellation of liabilities for consideration in the ordinary course of business
and (ii) so long as no Default or Event of Default has occurred and is
continuing or would result therefrom, the cancellation of (A) liabilities (that
do not constitute part of the Collateral) relating to the Loan Parties' and
their Subsidiaries' investment in, and manufacturing arrangement with, OCTL; (B)
liabilities (that do not constitute part of the Collateral) that are cancelled
for fair consideration, as determined by the Board of Directors of the
applicable Borrower or Affiliate; and (C) liabilities that are cancelled in the
ordinary course of business in connection with the workout of slow paying or
doubtful accounts.
(h) Location of Inventory and Equipment. No Borrower shall
move any Inventory or Equipment (other than Equipment with respect to which the
Agent has released its Lien under Section 2.4(d)) owned by it at such time from
any of the jurisdictions therefor specified in Schedule 6.1(b) to any
-99-
100
jurisdiction other than a jurisdiction in the United States specified for such
Borrower in Schedule 6.1(b), except that, so long as no Default or Event of
Default has occurred and is continuing or would result therefrom, a Borrower may
move Inventory or Equipment from such jurisdictions (i) with an aggregate value
not to exceed US$500,000 to any other jurisdiction, (ii) to any other
jurisdiction such that the security interest of the Agent or the Cdn. Agent, as
the case may be, in such Inventory or Equipment would continue to be perfected
and of the same priority without the taking of any further action at any time
(other than the filing of continuation statements upon expiration of any then
effective financing statements, registrations or similar filings covering such
Inventory or Equipment), (iii) to any other jurisdiction in the United States or
Canada, as the case may be, upon thirty days' prior written notice to the Agent
and the delivery to the Agent, before the occurrence thereof, of all documents
and instruments, and the taking of all further acts of the type specified in
Section 3.7, as may be necessary or desirable to maintain the Liens in favor of
the Agent and the Cdn. Agent covering such Inventory or Equipment and the
priority and continued perfection thereof, all of which shall be at the
Borrowers' expense and (iv) in connection with any sale or other disposition of
such Inventory or Equipment that is sold or disposed of by a Borrower in
accordance with Section 7.2(e).
(i) Liens, Etc. Each Borrower will not, and will not permit
any Designated Affiliate (other than any Foreign Subsidiary) to, directly or
indirectly, at any time create, incur, assume or suffer to exist any Lien on or
with respect to any assets, other than:
(i) Permitted Liens; and
(ii) Liens securing Indebtedness of a Borrower or
any such Affiliate to finance the acquisition of fixed or
capital assets, provided that (A) such Liens shall be created
substantially simultaneously with the acquisition of such
assets, (B) such Liens do not at any time encumber any assets
other than the assets financed by such Indebtedness, (C) such
Liens are not modified to secure other Indebtedness and the
amount of Indebtedness secured thereby is not increased and
(D) the principal amount of Indebtedness secured by any such
Lien shall at no time exceed the original purchase price of
such assets;
provided that nothing herein shall prohibit any Lien to continue to exist if
such Lien was not prohibited hereunder at the time it was created, incurred,
assumed or first suffered to exist.
(j) Restricted Payments. Each Borrower will not, and
-100-
101
will not permit GPI or any Designated Affiliate (other than any Foreign
Subsidiary) to, make any Restricted Payment, directly or indirectly, or make any
payment on account of or set apart assets for a sinking or other analogous fund
for the making of any Restricted Payment, either directly or indirectly, whether
in cash or property or in obligations of GPI or such Affiliate or Borrower,
except that, so long as no Default or Event of Default has occurred and is
continuing or would result therefrom, (i) GPI or such Affiliate or Borrower may
make any Restricted Payment payable solely to one or more of the Loan Parties to
the extent such Restricted Payment is made on account of a Permitted
Intercompany Debt; (ii) GPI or such Affiliate or Borrower may make any
Restricted Payment to a Loan Party or a Subsidiary thereof (but not to any other
Person) if the aggregate amount of all Restricted Payments expended subsequent
to the Closing Date (the amount so expended, if other than in cash, to be valued
at its fair market value as reasonably determined by the Board of Directors of
GPI or such Affiliate or Borrower) does not exceed the sum of (A) US$20,000,000,
plus (B) 50% of the Excess Cash Flow during the period (treated as one
accounting period) subsequent to December 31, 1999, and ending on the last day
of the fiscal quarter immediately preceding the date of such Restricted Payment,
the amount of which shall be determined as of the date of delivery of the
consolidated cash flow statement for such fiscal quarter under Section
7.1(k)(iv), plus (C) 50% of the aggregate Net Cash Proceeds (other than to the
extent such proceeds have been used to make Capital Expenditures or to repay
Indebtedness) received by GPI subsequent to December 31, 1999, and ending on the
last day of the fiscal quarter immediately preceding the date of such Restricted
Payment; (iii) such Affiliate or Borrower may declare or pay dividends or
otherwise effect distributions on account of its Capital Stock to GPI or any
other Loan Party; (iv) GPI or such Affiliate may make offsets against and
acquisitions of Capital Stock of GPI in satisfaction of indemnification and
other obligations owed to GPI and its Subsidiaries under acquisition
arrangements in which Capital Stock of GPI is issued as consideration for the
acquisition; (v) GPI or such Affiliate or Borrower may make Restricted Payments
payable solely in shares of Capital Stock of GPI or warrants, rights or options
to acquire shares of Capital Stock of GPI including, without limitation, any
stock split or stock dividend effected by GPI; (vi) GPI may purchase, redeem,
retire or otherwise acquire any shares of its Capital Stock in exchange for
other shares of Qualified Stock of GPI or from Net Cash Proceeds; and (vii) GPI
or such Affiliate or Borrower may purchase or otherwise acquire Capital Stock of
GPI relating to Grant Prideco, Inc. Executive Deferred Compensation Plans or
employee benefit plans for tax withholding or pursuant to the cashless exercise
of stock options or warrants in connection with customary employee compensation
programs, in each case so long as such purchase or exercise has been approved by
the Board of Directors of GPI or such Affiliate or Borrower.
-101-
102
(k) Investments. Each Borrower will not, and will not permit
any Designated Affiliate (other than any Foreign Subsidiary) to, directly or
indirectly, at any time make or acquire any Investment in any Person (whether in
cash, securities or other property of any kind), provided that, so long as (i)
such Investment is not otherwise prohibited by this Agreement and (ii) in the
case of clauses (D) and (F) below, no Default or Event of Default has occurred
and is continuing or would result therefrom, such Borrower or Affiliate may make
(A) Permitted Acquisitions; (B) Investments in any Loan Party; (C) Investments
in any Subsidiary (that is not a Loan Party) or other Affiliate of GPI or in any
other Permitted Joint Venture so long as the aggregate amount of such
Investments (net of, and after being reduced from time to time by, all
Restricted Payments by such other Subsidiary or Affiliate to a Loan Party) in
any fiscal year of GPI does not exceed US$25,000,000 less the value of all
assets transferred under Section 7.2(e)(ix)(B) in such fiscal year or during any
consecutive three-fiscal year period does not exceed US$50,000,000 less the
value of all assets transferred under Section 7.2(e)(ix)(B) during such
consecutive three-fiscal year period; (D) Investments in Cash Equivalents; (E)
Investments that constitute Permitted Intercompany Debt, (F) Permitted Business
Investments; (G) Permitted Financial Investments; (H) Investments, made with
cash or other property that could otherwise be used to make a Restricted Payment
under Section 7.2(j) at such time; (I) Investments resulting from a merger,
amalgamation or other business combination or other change or transaction
permitted under Section 7.1(a); (J) any Investment in any Person to the extent
the consideration paid consists of Qualified Stock of GPI; (K) any Investment
arising from (I) the conversion of any indebtedness of OCTL to any Loan Party
into Capital Stock of OCTL and (II) the reinvestment of up to US$2,500,000 of
proceeds received by any Loan Party from OCTL as a result of the repayment of
such indebtedness; or (L) the acquisition of Capital Stock or securities of any
Loan Party or Subsidiary thereof by another Loan Party or Subsidiary thereof if
the acquiring Loan Party would be permitted to have the other Loan Party or
Subsidiary thereof merge into it pursuant to Section 7.1(a).
(l) Partnerships; Subsidiaries; Joint Ventures; Management
Contracts. Except as permitted under Section 7.2(k), each Borrower will not, and
will not permit any Designated Affiliate to, at any time create any direct or
indirect Subsidiary, enter into any joint venture or similar arrangement or
become a partner in any general or limited partnership or enter into any
management contract permitting third party management rights with respect to
such Borrower's or Subsidiary's business, provided that, so long as no Default
or Event of Default has occurred and is continuing or would result therefrom,
such Borrower or any of its Subsidiaries may (i) form or acquire
-102-
103
a Subsidiary (a "New Subsidiary") whereupon (A) the Administrative Borrower
shall give the Agent written notice of such formation or acquisition within five
Business Days thereof, (B) such Borrower or Subsidiary shall, within ten
Business Days of such formation or acquisition, (I) cause such New Subsidiary to
execute and deliver to the Agent (x) a Supplement to the Guaranty in the form of
Annex 1 thereto and (y) a Supplement to the Contribution Agreement in the form
of Annex 1 thereto, whereupon such New Subsidiary shall become a Loan Party, and
(II) execute and deliver to the Agent (x) if the pledgor is theretofore a
Pledgor, an amendment to the Pledge Agreement, in form and substance
satisfactory to the Agent, or, if the pledgor is not theretofore a Pledgor, a
Supplement to the Pledge Agreement in the form of Annex II thereto, in each case
pledging all (or, subject to Section 7.1(s), if such New Subsidiary is a Foreign
Subsidiary or a Cdn. Subsidiary, 65% (excluding Qualified Stock issued to
directors of such Subsidiary and immaterial interests in one share of any such
Subsidiary held to meet the Requirements of Law of the jurisdiction of
organization of such Subsidiary)) of the Capital Stock of such New Subsidiary
together with all certificates representing such Capital Stock and undated stock
or other transfer powers therefor, executed by the Pledgor in blank, and (C)
such Borrower or Subsidiary, as the case may be, and such New Subsidiary shall
take all such further actions and execute all such further documents and
instruments as may be required to authorize the execution, delivery and
performance of such documents and instruments and to grant and perfect in favor
of the Agent a first priority Lien on all (or, subject to Section 7.1(s), 65%,
as the case may be) of the Capital Stock of such New Subsidiary including,
without limitation, the execution and delivery to the Agent by such New
Subsidiary of an Acknowledgment and Consent to the Pledge Agreement in the form
attached thereto, or (ii) enter into management contracts or similar
arrangements between or among such Borrower or Subsidiary and any Loan Party or
any Subsidiary thereof, provided that the Person that obtains managerial rights
under such management or similar contract is a Loan Party; provided, however,
that nothing contained in this Section 7.2(l) shall, (i) subject to Section
7.1(s), be deemed or construed to require (A) any pledge of more than 65% of the
Capital Stock of any Foreign Subsidiary or Cdn. Subsidiary, (B) the granting of
any Lien on any asset of any Cdn. Subsidiary (including the Capital Stock owned
by such Subsidiary in any other Person) to secure any Obligations of the U.S.
Lenders, (C) the granting of any Liens on any assets of any Foreign Subsidiary
(including the Capital Stock owned by such Subsidiary in any other Person) or
(D) the guaranty by any Foreign Subsidiary of any of the Obligations or by any
Cdn. Subsidiary of any of the Obligations of the U.S. Borrowers or (ii) be
deemed or construed to require the pledge of the Capital Stock of, or the
guaranty of the Obligations by, any Subsidiary with a net worth of less than
US$250,000.
-103-
104
(m) Fiscal Year. Each Borrower will not, and will not permit
any of its Subsidiaries to, change its fiscal year from a year ending December
31.
(n) Accounting Changes. Each Borrower will not, and will not
permit any of its Subsidiaries to, at any time make or permit any change in
accounting policies or reporting practices, except as required by or in
accordance with GAAP.
(o) No Prohibited Transactions Under ERISA. Each Borrower will
not, and will not permit any of its ERISA Affiliates to, directly or indirectly:
(i) Engage in any Prohibited Transaction which
could reasonably be expected to result in a civil penalty or
excise tax described in Section 406 of ERISA or Section 4975
of the Internal Revenue Code for which a statutory or class
exemption is not available or a private exemption has not been
previously obtained from the Department of Labor;
(ii) permit to exist with respect to any Pension
Plan any accumulated funding deficiency (as defined in Section
302 of ERISA and Section 412 of the Internal Revenue Code),
whether or not waived;
(iii) terminate any Pension Plan where such event
would result in any liability of any Borrower or ERISA
Affiliate under Title IV of ERISA;
(iv) fail to make any required contribution or
payment to any Multiemployer Plan;
(v) fail to pay any required installment or any
other payment required under Section 412 of the Internal
Revenue Code on or before the due date for such installment or
other payment;
(vi) amend a Pension Plan resulting in an increase
in current liability for the plan year such that any Borrower
or ERISA Affiliate is required to provide security to such
Plan under Section 307 of ERISA or Section 401(a)(29) of the
Internal Revenue Code;
(vii) withdraw from any Multiemployer Plan where
such withdrawal is reasonably likely to result in any
liability of any such entity under Title IV of ERISA; or
(viii) take any action that would cause the
imposition of an excise tax under Section 4978 or
-104-
105
Section 4979A of the Internal Revenue Code.
(p) Prepayments and Amendments of Material Contracts. Each
Borrower will not, and will not permit any Designated Affiliate to, at any time
(i) make any prepayment of any Indebtedness, other than the prepayment of the
Loans in accordance with the terms of this Agreement and, so long as no Default
or Event of Default shall have occurred and be continuing or would result
therefrom, (A) prepayments that would be permitted to be made as Restricted
Payments under Section 7.2(j), (B) the prepayment of the Subordinated Note from
the proceeds of Permitted Refinancing Indebtedness or from Net Cash Proceeds,
and (C) the prepayment of Permitted Intercompany Debt, or (ii) amend, modify,
cancel or terminate, or permit the amendment, modification, cancellation or
termination of, any Material Contract, except where such amendment or
modification could not be reasonably expected to have a Material Adverse Effect.
(q) Lease Obligations. Each Borrower will not, and will not
permit any Designated Affiliate to, at any time create, incur or assume any
obligations as lessee for the rental or hire of real or personal property in
connection with any sale and leaseback transaction.
(r) Bank Accounts. Each Borrower will not, and will not permit
any Designated Affiliate to, open, maintain or otherwise have any checking,
savings or other accounts at any bank or other financial institution, or any
other account where money is or may be deposited or maintained with any other
Person, other than (i) payroll accounts, (ii) accounts specified in Schedule
7.2(r) and (iii) other accounts of which the Administrative Borrower has given
the Agent written notice and which are subject to a blocked account arrangement
in favor of the Agent or the Cdn. Agent, as applicable, under documentation
satisfactory to the Agent.
-105-
106
ARTICLE VIII.
FINANCIAL COVENANTS
Until termination of the Commitments, payment and satisfaction
of all Obligations in full, and termination, Collateralization or expiration of
all Letters of Credit:
SECTION VIII.1. Fixed Charge Coverage Ratio. The Fixed Charge
Coverage Ratio for any period set forth below shall not be less than the ratio
set forth below opposite such period:
Period Minimum Fixed Charge
------ Coverage Ratio
--------------------
January 1, 2000 to June 30, 2000 0.22 to 1.00
January 1, 2000 to September 30, 2000 0.32 to 1.00
January 1, 2000 to December 31, 2000 0.70 to 1.00
April 1, 2000 to March 31, 2001 0.83 to 1.00
July 1, 2000 to June 30, 2001 1.14 to 1.00
Each consecutive twelve-month period ending each fiscal 1.50 to 1.00
quarter-end thereafter
SECTION VIII.2. Capital Expenditures. The aggregate amount of
GPI's and its Subsidiaries' consolidated Capital Expenditures made or committed
to be made in any fiscal year commencing with the fiscal year ending December
31, 2000 shall not exceed US$45,000,000, provided that, if a Default or Event of
Default shall have occurred and be continuing or would result therefrom, no such
Capital Expenditures may be made or committed to be made.
SECTION VIII.3. Net Worth. The Borrowers shall cause GPI and
its Subsidiaries to maintain a consolidated net worth of GPI and its
Subsidiaries, determined in accordance with GAAP, (A) of not less than
US$400,000,000 at all times from the Closing Date through the fiscal year ending
December 31, 2000 and (B) of not less than US$400,000,000 plus 50% of the
consolidated net earnings (if positive) of GPI and its Subsidiaries for each
fiscal year since fiscal year 2000, determined on a cumulative basis, at all
times in each subsequent fiscal year.
-106-
107
SECTION VIII.4. Business Plan. The Agent and the Borrowers
acknowledge that the foregoing financial covenants were established by the Agent
and the Borrowers on the basis of the Business Plan delivered to the Agent on
the Closing Date (as defined in the Original Loan Agreement), after leaving a
margin in favor of the Borrowers which the Agent and the Borrowers have agreed
is fair. Accordingly, the parties hereto have agreed that any failure by the
Borrowers to comply with the terms of any Financial Covenant shall be deemed
material for purposes of this Agreement.
ARTICLE IX.
EVENTS OF DEFAULT
SECTION IX.1. Events of Default. The occurrence of any of the
following events shall constitute an "Event of Default":
(a) the Borrowers shall fail to pay any principal, interest,
fees, expenses or other Obligations when payable, whether at stated maturity, by
acceleration, or otherwise; or
(b) any Loan Party shall (i) default in the performance or
observance of any agreement, covenant, condition, provision or term contained in
Section 2.3, 2.4, 2.6, 7.1(a)(i), 7.1(f), 7.1(h), 7.1(k), 7.2, 8.1, 8.2, 8.3,
8.4 or 11.4 hereof, or in Section 4(c) or 5 of the Pledge Agreement; or (ii)
default in the performance or observance of any agreement, covenant, condition,
provision or term contained in this Agreement or any other Loan Document (other
than those referred to in Sections 9.1(a) and (b)(i)) and such failure continues
for a period of ten days without cure; or
(c) any Loan Party shall (except as otherwise expressly
permitted under Sections 7.1(a) and 7.2(c)) dissolve, wind up or otherwise cease
to conduct its business; or
(d) any Loan Party shall become the subject of an Insolvency
Event; or
(e) (i) any Loan Party shall fail to make any payment (whether
of principal, interest or otherwise and regardless of amount) in respect of any
Material Indebtedness when due (whether at scheduled maturity or by required
prepayment, acceleration, demand or otherwise), or (ii) any event or condition
occurs (other than due to an event that accelerates GPI's obligations under the
Subordinated Note which obligations are simultaneously repaid as permitted under
Section 7.2(p)(i)) that results in any
-107-
108
Material Indebtedness becoming due prior to its scheduled maturity or that
enables or permits the holder or holders (or a trustee or agent on behalf of
such holder or holders) to declare any Material Indebtedness to be due, or to
require the prepayment, repurchase, redemption or defeasance thereof, prior to
its scheduled maturity; or
(f) any representation or warranty made by any Loan Party
under or in connection with any Loan Document or amendment or waiver thereof, or
any Financial Statement, report, document or certificate delivered in connection
therewith, shall prove to have been incorrect in any material respect when made
or deemed made; or
(g) any judgment or order for the payment of money which, when
taken together with all other judgments and orders rendered and outstanding
against the Loan Parties taken together, exceeds US$5,000,000 in the aggregate
shall be rendered against the Loan Parties and shall not be stayed, vacated,
bonded or discharged within thirty days; or
(h) Any Person or group (as such term is used in Section
13(d)(3) and 14(d)(2) of the Exchange Act, other than any Loan Party either (i)
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act)
of more than 49.9% of the voting power of the Capital Stock of any Loan Party
entitled to vote for the election of directors (or persons performing similar
functions) and by reason thereof such Person or group is entitled to elect a
majority of the members of the board of directors (or similar governing body) of
such Loan Party or (ii) otherwise has the ability to elect, directly or
indirectly, a majority of the members of any such board of directors (or similar
governing body); or
(i) any material covenant, agreement or obligation of a Loan
Party contained in or evidenced by any of the Loan Documents shall cease to be
enforceable, or shall be determined to be unenforceable, in accordance with its
terms; a Borrower or any other Loan Party shall deny or disaffirm its
obligations under any of the Loan Documents or any Liens granted in connection
therewith or shall otherwise challenge any of its obligations under any of the
Loan Documents; or any Liens granted on any of the Collateral with a fair market
value in excess of US$250,000 in the aggregate shall be determined to be void,
voidable or invalid, are subordinated or are not given the priority contemplated
by this Agreement or any other Loan Document; or
(j) a Security Document shall for any reason cease to create a
valid and perfected first priority Lien (subject, in the case of Inventory, to
Permitted Liens) on the Collateral purported to be covered thereby; or
-108-
109
(k) the independent public accountants for the Borrowers shall
deliver a Qualified opinion on any Financial Statement; or
(l) the occurrence of any event or condition that, in the
Required Lenders' judgment, could be expected to have a Material Adverse Effect;
or
(m) the amount or terms of credit provided by suppliers of raw
materials or services necessary for the operation of any Borrower's business
shall be materially less favorable to such Borrower than the amount or terms of
such credit provided by suppliers to competitors of such Borrower.
SECTION IX.2. Acceleration, Termination and Cash
Collateralization. Upon the occurrence and during the continuance of an Event of
Default, the Agent may or, upon the request of the Required Lenders, the Agent
shall, take any or all of the following actions:
(a) Acceleration. To declare all Obligations
immediately due and payable (except with respect to any Event
of Default with respect to a Loan Party specified in Section
9.1(d), in which case all Obligations shall automatically
become immediately due and payable) without presentment,
demand, protest or any other action or obligation of the Agent
or any Lender.
(b) Termination of Commitments. To declare the
Commitments immediately terminated (except with respect to any
Event of Default with respect to a Loan Party set forth in
Section 9.1(d), in which case the Commitments shall
automatically terminate) and, at all times thereafter, any
Loan made by a Lender or Letter of Credit caused to be issued
by the Agent pursuant to this Agreement shall be in such
Lender's or the Agent's sole and absolute discretion.
Notwithstanding any termination of this Agreement, until all
Obligations shall have been fully and indefeasibly paid and
satisfied, the Agent shall retain all security in all
guaranties and in all existing and future Receivables,
Inventory and Equipment of the Borrowers and all other
Collateral held by it hereunder and under the Security
Documents, and the Borrowers shall continue to turn over all
Collections to the Agent.
(c) Cash Collateralization. With respect to all
Letters of Credit outstanding at the time of the acceleration
of the Obligations under Section 9.2(a) or otherwise at any
time after the Expiration Date, the
-109-
110
Borrowers shall at such time (i) deposit in a cash collateral
account established by or on behalf of the Agent an amount
equal to 105% of the aggregate then undrawn and unexpired
amount of such Letters of Credit or (ii) provide to the Agent
backstopping letters of credit in form and substance
satisfactory to the Agent in an amount equal to the aggregate
then undrawn and unexpired amount of such Letters of Credit.
Amounts held in such cash collateral account shall be under
the sole dominion and control of the Agent and applied by the
Agent to the payment of drafts drawn under such Letters of
Credit, and the balance, if any, in such cash collateral
account, after all such Letters of Credit shall have expired
or been fully drawn upon shall be applied to repay the other
Obligations. After all such Letters of Credit shall have
expired or been fully drawn upon and all Obligations shall
have been satisfied, the balance, if any, in such cash
collateral account (or the originals of any letters of credit
delivered to the Agent to backstop any Letters of Credit)
shall be returned to the Borrowers or to such other Person as
may be lawfully entitled thereto.
SECTION IX.3. Other Remedies.
(a) Upon the occurrence and during the continuance of an Event
of Default, the Agent shall have all rights and remedies with respect to the
Obligations and the Collateral under applicable law and the Loan Documents, and
the Agent may do any or all of the following:
(i) remove for copying all documents,
instruments, files and records (including the copying of any
computer records) relating to a Borrower's Receivables or use
(at the expense of a Borrower) such supplies or space of a
Borrower at such Borrower's places of business necessary to
administer and collect such Receivables;
(ii) accelerate or extend the time of payment,
compromise, issue credits, or bring suit on a Borrower's
Receivables (in the name of such Borrower or the Agent) and
otherwise administer and collect such Receivables;
(iii) sell, assign and deliver a Borrower's
Receivables with or without advertisement, at public or
private sale, for cash, on credit or otherwise, subject to
applicable law; and
(iv) foreclose the security interests created
-110-
111
pursuant to the Loan Documents by any available procedure, or
take possession of any or all of the Collateral, without
judicial process and enter any premises where any Collateral
may be located for the purpose of taking possession of or
removing the same.
(b) The Agent may bid or become a purchaser at any sale, free
from any right of redemption, which right is expressly waived by each Borrower.
If notice of intended disposition of any Collateral is required by law, it is
agreed that five days' notice shall constitute reasonable notification. Each
Borrower will assemble the Collateral in its possession and make it available at
such locations as the Agent may specify, whether at the premises of such
Borrower or elsewhere, and will make available to the Agent the premises and
facilities of such Borrower for the purpose of the Agent's taking possession of
or removing the Collateral or putting the Collateral in saleable form. The Agent
may sell the Collateral or any part thereof in one or more parcels at public or
private sale, at any exchange, broker's board or at any of the Agent's offices
or elsewhere, for cash, on credit or for future delivery, and upon such other
terms as the Agent may deem commercially reasonable. The Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. The Agent may adjourn any public or private sale from time to time
by announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned. Each
Borrower hereby grants the Agent a license to enter and occupy any of such
Borrower's leased or owned premises and facilities, without charge, to exercise
any of the Agent's rights or remedies.
SECTION IX.4. License for Use of Software and Other
Intellectual Property. To the extent permitted by law and not otherwise
prohibited by contracts with third parties, each Borrower hereby grants to the
Agent, for use by the Lenders and the Agent solely in connection with the
preservation or sale of any Collateral, a license or other right to use, without
charge by any Loan Party or Subsidiary thereof, all computer software programs,
data bases, processes, trademarks, tradenames, copyrights, labels, trade
secrets, service marks, patents, advertising materials and other rights, assets
and materials used by such Borrower and needed in connection with the
preservation or sale of such Collateral.
-111-
112
SECTION IX.5. No Marshalling; Deficiencies; Remedies
Cumulative. The Agent shall have no obligation to marshal any Collateral or to
seek recourse against or satisfaction of any of the Obligations from one source
before seeking recourse against or satisfaction from another source. The net
cash proceeds resulting from the Agent's exercise of any of the foregoing rights
to liquidate all or substantially all of the Collateral, including any and all
Collections (after deducting all of the Agent's expenses related thereto), shall
be applied by the Agent to such of the Obligations and in such order as the
Agent shall elect in its sole and absolute discretion, whether due or to become
due. The Borrowers shall remain liable to the Agent and the Lenders for any
deficiencies and the Agent and the Lenders in turn agree to remit to the
applicable Loan Party or its successor or assign, any surplus resulting
therefrom. All of the Agent's and the Lenders' remedies under the Loan Documents
shall be cumulative, may be exercised simultaneously against any Collateral and
any Loan Party or in such order and with respect to such Collateral or such Loan
Party as the Agent may deem desirable, and are not intended to be exhaustive.
SECTION IX.6. Waivers. Except as may be otherwise specifically
provided herein or in any other Loan Document, each Borrower hereby waives any
right to a judicial or other hearing with respect to any action or prejudgment
remedy or proceeding by the Agent to take possession, exercise control over, or
dispose of any item of Collateral in any instance (regardless of where the same
may be located) where such action is permitted under the terms of this Agreement
or any other Loan Document or by applicable law or of the time, place or terms
of sale in connection with the exercise of the Agent's rights hereunder and also
waives any bonds, security or sureties required by any statute, rule or other
law as an incident to any taking of possession by the Agent of any Collateral.
Each Borrower also waives any damages (direct, consequential or otherwise)
occasioned by the enforcement of the Agent's rights under this Agreement or any
other Loan Document including the taking of possession of any Collateral or the
giving of notice to any account debtor or the collection of any Receivable of
such Borrower. Each Borrower also consents that the Agent may enter upon any
premises owned by or leased to it without obligations to pay rent or for use and
occupancy, through self-help, without judicial process and without having first
obtained an order of any court. These waivers and all other waivers provided for
in this Agreement and the other Loan Documents have been negotiated by the
parties, and each Borrower acknowledges that it has been represented by counsel
of its own choice, has consulted such counsel with respect to its rights
hereunder and has freely and voluntarily entered into this Agreement and the
other Loan Documents as the result of arm's-length negotiations.
-112-
113
SECTION IX.7. Further Rights of the Agent. In the event that a
Borrower shall fail to purchase or maintain insurance (where applicable), or to
pay any tax, assessment, governmental charge or levy, except as the same may be
otherwise permitted hereunder or which is being contested in good faith by
appropriate proceedings and for which adequate reserves have been established in
accordance with GAAP, or in the event that any Lien prohibited hereby shall not
be paid in full or discharged, or in the event that a Borrower shall fail to
perform or comply with any other covenant, promise or obligation to the Agent or
any Lender hereunder or under any other Loan Document, the Agent may (but shall
not be required to) perform, pay, satisfy, discharge or bond the same for the
account of such Borrower, and all amounts so paid by the Agent shall be treated
as a Loan hereunder to the Borrowers and shall constitute part of the
Obligations.
SECTION IX.8. Interest and Letter of Credit Fees After Event
of Default. Each Borrower agrees and acknowledges that the additional interest
and fees that may be charged under Section 4.2 are (a) an inducement to the
Lenders to make Advances and to the Agent to use its best efforts to cause
Letters of Credit to be issued hereunder and that the Agent and the Lenders
would not consummate the transactions contemplated by this Agreement without the
inclusion of such provisions; (b) are fair and reasonable estimates of the
Agent's and the Lenders' costs of administering the credit facility upon an
Event of Default; and (c) are intended to estimate the Agent's and the Lenders'
increased risks upon an Event of Default.
-113-
114
ARTICLE X.
THE AGENT
SECTION X.1. Appointment of Agents.
(a) Each Lender hereby designates TBCC as its agent and
irrevocably authorizes it to take action on such Lender's behalf under the Loan
Documents and to exercise the powers and to perform the duties described therein
and to exercise such other powers as are reasonably incidental thereto. Each
Cdn. Lender hereby designates TCFC as its agent and irrevocably authorizes it to
take action on such Cdn. Lender's behalf under the Security Agreement, the
Blocked Account Agreement and any other Loan Document to which the Cdn. Agent is
a party and to exercise the powers and to perform the duties described therein
and to exercise such other powers as are reasonably incidental thereto. Either
of the Agents may perform any of its respective duties by or through its agents
or employees.
(b) The provisions of this Article are solely for the benefit
of the Agents and the Lenders, and the Borrowers shall not have any rights as
third party beneficiaries of any of the provisions hereof. The Agents shall act
solely as agents of the Lenders and assume no obligation toward or relationship
of agency or trust with or for the Borrowers.
SECTION X.2. Nature of Duties of Agents. Neither of the Agents
shall have any duties or responsibilities except those expressly set forth in
the Loan Documents. Neither of the Agents nor any of their respective officers,
directors, employees or agents shall be liable for any action taken or omitted
by it or them as such hereunder or in connection herewith, unless caused by its
or their gross negligence or willful misconduct. The duties of the Agents shall
be mechanical and administrative in nature. The Agents do not have a fiduciary
relationship with or any implied duties to any Lender or any participant of any
Lender.
-114-
115
SECTION X.3. Lack of Reliance on Agents.
(a) Independently and without reliance upon either of the
Agents, each Lender, to the extent it deems appropriate, has made and shall
continue to make (i) its own independent investigation of the financial or other
condition and affairs of the Borrowers and the other Loan Parties, in connection
with the taking or not taking of any action in connection herewith and (ii) its
own appraisal of the creditworthiness of the Borrowers and the other Loan
Parties, and except as expressly provided in this Agreement, neither of the
Agents shall have any duty or responsibility, either initially or on a
continuing basis, to provide any Lender with any credit or other information
with respect thereto, whether coming into its possession before the making of
the initial Loans or the issuance of the Initial Letter of Credit or at any time
or times thereafter.
(b) Neither of the Agents shall be responsible to any Lender
for any recitals, statements, information, representations or warranties herein
or in any document, certificate or other writing delivered in connection
herewith or for the execution, effectiveness, genuineness, validity,
enforceability, collectibility, priority or sufficiency of this Agreement or the
Notes or the financial or other condition of the Borrowers and the other Loan
Parties. Neither of the Agents shall be required to make any inquiry concerning
either the performance or observance of any of the terms, provisions or
conditions of this Agreement or any other Loan Document, or the financial
condition of the Borrowers and the other Loan Parties, or the existence or
possible existence of any Default or Event of Default.
SECTION X.4. Certain Rights of the Agents. Either of the
Agents may request instructions from the Required Lenders at any time. If either
of the Agents requests instructions from the Required Lenders with respect to
any action or inaction, it shall be entitled to await instructions from the
Required Lenders before such action or inaction. No Lender shall have any right
of action based upon either of the Agents' action or inaction in response to
instructions from the Required Lenders.
SECTION X.5. Reliance by Agent. Each of the Agents may rely
upon written or telephonic communication it believes to be genuine and to have
been signed, sent or made by the proper Person. Each of the Agents may obtain
the advice of legal counsel (including counsel for the Borrowers with respect to
matters concerning the Borrowers), independent public accountants and other
experts selected by it and shall have no liability for any action or inaction
taken or omitted to be taken by it in good faith based upon such advice.
-115-
116
SECTION X.6. Indemnification of Agents. To the extent either
of the Agents is not reimbursed and indemnified by the Borrowers, each Lender
will reimburse and indemnify such Agent to the extent of such Lender's Pro Rata
Share (determined as of the time that such indemnity payment is sought) for any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including counsel fees and disbursements) or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by or asserted against either of the Agents in performing its duties hereunder
or otherwise relating to the Loan Documents unless resulting from such Agent's
gross negligence or willful misconduct. The agreements contained in this Section
shall survive any termination of this Agreement and the other Loan Documents and
the payment in full of the Obligations.
SECTION X.7. The Agents in Their Individual Capacity. In its
individual capacity, each of the Agents shall have the same rights and powers
hereunder as any other Lender or holder of a Note or participation interest and
may exercise the same as though it was not performing the duties specified
herein. The terms "Lenders," "Required Lenders," "holders of Notes," or any
similar terms shall, unless the context clearly otherwise indicates, include
each of TBCC and TCFC in its individual capacity. Each of the Agent and its
Affiliates may accept deposits from, lend money to, acquire equity interests in,
and generally engage in any kind of banking, trust, financial advisory or other
business with the Borrowers or any Affiliate of the Borrowers as if it were not
performing the duties specified herein, and may accept fees and other
consideration from the Borrowers for services in connection with this Agreement
and otherwise without having to account for the same to the Lenders.
SECTION X.8. Holders of Notes. The Agent may deem and treat
the payee of any Note as the owner thereof for all purposes hereof unless and
until a written notice of the assignment or transfer thereof shall have been
filed with the Agent. Any request, authority or consent of any Person who, at
the time of making such request or giving such authority or consent, is the
holder of any Note, shall be conclusive and binding on any subsequent holder,
transferee or assignee of such Note or of any Note or Notes issued in exchange
therefor.
-116-
117
SECTION X.9. Successor Agent.
(a) Either of the Agents may, upon twenty Business Days'
notice to the Lenders and the Borrowers, resign by giving written notice thereof
to the Lenders and the Borrowers. Any such resignation shall be effective upon
the appointment of a successor Agent.
(b) Upon receipt of notice of resignation by either of the
Agents, the Required Lenders may appoint a successor agent which shall also be a
Lender. If a successor agent has not accepted its appointment within fifteen
Business Days, then the retiring agent may, on behalf of the Lenders, appoint a
successor agent which shall be subject to approval by the Borrowers, which
approval shall not be unreasonably withheld and shall be delivered to the
Required Lenders within ten Business Days after the Borrowers' receipt of notice
of a proposed successor agent.
(c) Upon its acceptance of the agency hereunder, such
successor agent shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring agent, and the retiring agent shall be
discharged from its duties and obligations under this Agreement. The retiring
agent shall continue to have the benefit of the provisions of this Article for
any action or inaction while it was agent.
SECTION X.10. Collateral Matters.
(a) Except as otherwise set forth herein, any action or
exercise of powers by either of the Agents (at the request of the Required
Lenders) under the Loan Documents, together with such other powers as are
reasonably incidental thereto, shall be deemed authorized by and binding upon
all of the Lenders. Without limiting the generality of the foregoing, each
Lender authorizes the Agent, on behalf of such Lender, to execute, deliver and
perform its obligations under the Subordination Agreement, and each Lender
agrees that the Subordination Agreement shall be binding on it. At any time and
without notice to or consent from any Lender, the Agents may take any action
necessary or advisable to perfect and maintain the perfection of the Liens upon
the Collateral.
(b) Each of the Agents is authorized to release any Lien
granted to or held by such Agent upon any Collateral (i) upon termination of the
Commitments, termination or Collateralization of all outstanding Letters of
Credit and payment and satisfaction of all of the Obligations, (ii) required to
be delivered from permitted sales of Collateral hereunder, if any, upon receipt
of the proceeds or (iii) if the release can be
-117-
118
and is approved by the Required Lenders. Either of the Agents may request and
the Lenders will provide confirmation of such Agent's authority to release
particular types or items of Collateral.
(c) Upon any sale or transfer of Collateral which is expressly
permitted pursuant to the terms of this Agreement, or consented to in writing by
the Required Lenders or all of the Lenders, as applicable, and upon at least
five Business Days' prior written request by the Administrative Borrower, the
Agent or the Cdn. Agent, as applicable, shall (and is hereby irrevocably
authorized by the Lenders to) execute such documents as may be necessary to
evidence the release of the Liens granted to such Agent for the benefit of the
Lenders herein or pursuant hereto upon the Collateral that was sold or
transferred, provided that (i) such Agent shall not be required to execute any
such document on terms which, in such Agent's opinion, would expose such Agent
to liability or create any obligation or entail any consequence other than the
release of such Liens without recourse or warranty and (ii) such release shall
not in any manner discharge, affect or impair the Obligations or any Liens upon
(or obligations of the Borrowers in respect of) all interests retained by the
Borrowers, including (without limitation) the proceeds of the sale, all of which
shall continue to constitute part of the Collateral. In the event of any sale or
transfer of Collateral, or any foreclosure with respect to any of the
Collateral, the Agent shall be authorized to deduct all of the expenses
reasonably incurred by the Agent or the Cdn. Agent, as the case may be, from the
proceeds of any such sale, transfer or foreclosure.
(d) Neither of the Agents shall have any obligation to assure
that the Collateral exists or is owned by any Borrower, that such Collateral is
cared for, protected or insured, or that the Liens on the Collateral have been
created, perfected or have any particular priority. With respect to the
Collateral, the Agent or the Cdn. Agent, as the case may be, may act in any
manner it may deem appropriate, in its sole discretion, given TBCC's or TCFC's,
as the case may be, own interest in the Collateral as one of the Lenders, and it
shall have no duty or liability whatsoever to the Lenders, except for its gross
negligence or willful misconduct.
SECTION X.11. Actions with Respect to Defaults. In addition to
each of the Agents' right to take actions on its own accord as permitted under
this Agreement, such Agent shall take such action with respect to an Event of
Default as shall be directed by the Required Lenders. Until either of the Agents
shall have received such directions, such Agent may act or not act as it deems
advisable and in the best interests of the Lenders.
-118-
119
SECTION X.12. Delivery of Information. Neither of the Agents
shall be required to deliver to any Lender originals or copies of any documents,
instruments, notices, communications or other information received by the Agent
from the Borrowers, the Required Lenders, any Lender or any other Person under
or in connection with this Agreement or any other Loan Document except (i) as
specifically provided in this Agreement or any other Loan Document and (ii) as
specifically requested from time to time in writing by any Lender with respect
to a specific document, instrument, notice or other written communication
received by and in the possession of such Agent at the time of receipt of such
request and then only in accordance with such specific request.
ARTICLE XI.
GENERAL PROVISIONS
SECTION XI.1. Notices. Except as otherwise provided herein,
all notices and other communications hereunder shall be in writing and sent by
certified or registered mail, return receipt requested, by overnight delivery
service, with all charges prepaid, or by telecopier followed by a hard copy sent
by regular mail, if to the Agent or the Cdn. Agent, then to Transamerica
Business Credit Corporation, 000 Xxxxxxxx Xxxxx Xxxxxx, Xxxxx X-000, Xxx, Xxx
Xxxx 00000, Telecopy: (000) 000-0000, Attn.: Xx. Xxxxxx X. Xxxxxxx, Executive
Vice President, with a copy to Transamerica Business Credit Corporation, 0000
Xxxx Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxx 00000, Telecopy: (847)
685-1143, Attn.: General Counsel, if to any Lender, then to its address
specified on Schedule 2 or in the Assignment and Acceptance Agreement pursuant
to which it became a party hereto and if to a Borrower, then c/o the
Administrative Borrower, to Grant Prideco, LP, 0000 Xxxx Xxxxxxx Xxxxx, Xxxxx
000, Xxx Xxxxxxxxx, Xxxxx 00000, Telecopy: (000) 000-0000, Attn.: Xx. Xxxxxxx X.
Xxxxxx and Xxxxxx X. Xxxxxx, Esq., with a copy to Fulbright & Xxxxxxxx L.L.P.,
0000 XxXxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000-0000, Telecopy: (000) 000-0000,
Attn.: Xxxxxx X. Xxxxxx, Esq., or, in each case, to such other address as the
Agent, the Borrowers or a Lender may specify to the other parties in the manner
required hereunder. All such notices and correspondence shall be deemed given
(i) if sent by certified or registered mail, three Business Days after being
postmarked, (ii) if sent by overnight delivery service, when received at the
above stated addresses or when delivery is refused and (iii) if sent by
telecopier transmission, when such transmission is confirmed.
-119-
120
SECTION XI.2. Delays; Partial Exercise of Remedies. No delay
or omission of the Agent or any Lender to exercise any right or remedy hereunder
shall impair any such right or operate as a waiver thereof. No single or partial
exercise by the Agent or any Lender of any right or remedy shall preclude any
other or further exercise thereof, or preclude any other right or remedy.
SECTION XI.3. Right of Setoff. In addition to and not in
limitation of all rights of offset that the Agent, any Lender or any of their
respective Affiliates may have under applicable law, and whether or not the
Agent has made any demand or the Obligations of the Borrowers have matured, the
Agent, the Lenders and their respective Affiliates shall have the right to set
off and apply any and all deposits (general or special, time or demand,
provisional or final, or any other type) at any time held and any other
Indebtedness at any time owing by the Agent, any of the Lenders or any of their
Affiliates to or for the credit or the account of any Borrower or any Borrower's
Affiliate against any and all of the Obligations. In the event that the Agent or
any Lender exercises any of its rights under this Section 11.3, the Agent or
such Lender shall provide notice to the Administrative Borrower of such
exercise, provided that the failure to give such notice shall not affect the
validity of the exercise of such rights.
-120-
121
SECTION XI.4. Indemnification; Reimbursement of Expenses of
Collection.
-121-
122
(a) Each Borrower hereby agrees that, whether or not any of
the transactions contemplated by this Agreement or the other Loan Documents are
consummated, such Borrower will indemnify, defend and hold harmless (on an
after-tax basis) the Agents and the Lenders, and their respective successors and
assigns and their respective directors, officers, agents, employees, advisors,
shareholders, attorneys and Affiliates (each, an "Indemnified Party") from and
against any and all losses, claims, damages, liabilities, deficiencies,
obligations, fines, penalties, actions (whether threatened or existing),
judgments, suits (whether threatened or existing) or expenses (including,
without limitation, reasonable fees and disbursements of counsel, experts,
consultants and other professionals) incurred by any of them (collectively,
"Claims")(except, in the case of each Indemnified Party, to the extent that any
Claim is determined in a final and non-appealable judgment by a court of
competent jurisdiction to have directly resulted from such Indemnified Party's
gross negligence or willful misconduct) arising out of or by reason of (i) any
litigation, investigation, claim or proceeding related to (A) this Agreement,
any other Loan Document or the transactions contemplated hereby or thereby, (B)
any actual or proposed use by a Borrower of the proceeds of the Loans, (C) the
issuance of any Letter of Credit or the acceptance or payment of any document or
draft presented to any issuer thereof or (D) the Agents' or any Lender's
entering into this Agreement, the other Loan Documents or any other agreements
and documents relating hereto (other than consequential damages and loss of
anticipated profits or earnings), including, without limitation, amounts paid in
settlement, court costs and the fees and disbursements of counsel incurred in
connection with any such litigation, investigation, claim or proceeding, (ii)
any remedial or other environmental response action taken or required to be
taken by a Borrower in connection with compliance by such Borrower, or any of
its properties, with any Environmental Laws and (iii) any pending, threatened or
actual action, claim, proceeding or suit by any shareholder or director of a
Borrower or any actual or purported violation of a Borrower's Governing
Documents or any other agreement or instrument to which a Borrower is a party or
by which any of its properties is bound. In addition, the Borrowers shall, upon
demand, pay to the Agents all costs and expenses incurred by the Agents
(including the fees and disbursements of counsel and other professionals) in
connection with the preparation, execution, delivery, administration,
modification and amendment of the Loan Documents, and pay to the Agents and each
Lender all costs and expenses (including the fees and disbursements of counsel
and other professionals) paid or incurred by the Agents or such Lender in (A)
enforcing or defending its rights under or in respect of this Agreement, the
other Loan Documents or any other document or instrument now or hereafter
executed and delivered in connection herewith, (B) collecting the Obligations or
otherwise administering this Agreement and (C) foreclosing or otherwise
-122-
123
realizing upon the Collateral or any part thereof. If and to the extent that the
obligations of the Borrowers hereunder are unenforceable for any reason, the
Borrowers hereby agree to make the maximum contribution to the payment and
satisfaction of such obligations that is permissible under applicable law.
(b) The Borrowers' obligations under Sections 4.6 and 4.7 and
this Section 11.4 shall survive any termination of this Agreement and the other
Loan Documents, the termination, expiration or Collateralization of all Letters
of Credit and the payment in full of the Obligations, and are in addition to,
and not in substitution of, any of the other Obligations.
-123-
124
SECTION XI.5. Amendments, Waivers and Consents. No amendment
or waiver of any provision of this Agreement or any other Loan Document, or
consent to any departure by the Borrowers therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Borrowers and
the Required Lenders (or by the Agents on their behalf), or by the Borrowers and
the Supermajority Lenders (or by the Agents on their behalf) in the case of any
amendment, waiver or consent with respect to the definitions of "Eligible
Inventory" and "Eligible Receivables" and the second sentence of Section 2.1(c),
in each case without taking into account the Commitments or Loans held by
Defaulting Lenders, and then such amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no amendment, waiver or consent shall, unless in
writing and signed by the Borrowers and all the Lenders (other than any
Defaulting Lender), do any of the following at any time: (a) change the number
of Lenders that shall be required for the Lenders or any of them to take any
action hereunder; (b) amend the definition of "Required Lenders" or
"Supermajority Lenders"; (c) amend this Section 11.5; (d) reduce the amount of
principal of, or interest on, or the interest rate applicable to, the Loans or
any fees or other amounts payable hereunder; (e) postpone any date on which any
payment of principal of, or interest on, the Loans or any fees or other amounts
payable hereunder is required to be made; (f) increase advance rates against
Eligible Receivables or Eligible Inventory; or (g) release any material portion
of the Collateral except as otherwise provided in this Agreement, permit the
creation, incurrence, assumption or existence of any Lien on any item of
Collateral, or release any guaranty of the Obligations, provided, further that
no amendment, waiver or consent shall, unless in writing and signed by (i) a
Lender, change the Pro Rata Share or increase the Commitment of such Lender, and
(ii) the Agents, in addition to the Lenders required above, to take any such
action that affects the rights or duties of the Agents under this Agreement or
any other Loan Document. Anything contained herein to the contrary
notwithstanding, the Agents are hereby authorized, on behalf of the Lenders, to
execute such documents as may be required to terminate Liens on such Collateral
as any Loan Party is authorized to sell, transfer or otherwise dispose of in
accordance with the terms hereof, provided that the Administrative Borrower has
requested such release of Liens by the Agents in accordance with the terms
hereof.
-124-
125
SECTION XI.6. Nonliability of Agents and Lenders. The
relationship among each Borrower and each Lender shall be solely that of
borrower and lender. Neither the Agents nor any Lender shall have any fiduciary
responsibilities to the Borrowers. Neither the Agents nor any Lender undertakes
any responsibility to the Borrowers to review or inform the Borrowers of any
matter in connection with any phase of the Borrowers' business or operations.
SECTION XI.7. Assignments and Participations.
(a) Borrower Assignment. None of the Borrowers shall assign
this Agreement or any of its rights or obligations hereunder without the prior
written consent of the Agent and the Required Lenders.
(b) Lender Assignments. Each Lender may assign to one or more
Eligible Assignees all or a portion of its rights and obligations under this
Agreement, the Notes and the other Loan Documents, with the consent of the Agent
(not to be unreasonably withheld), and upon execution and delivery to the Agent,
for its acceptance and recording in the Register, of an Assignment and
Acceptance, together with surrender of any Note or Notes subject to such
assignment and a processing and recordation fee payable to the Agent for its
account of US$3,500. No such assignment shall be for less than US$5,000,000 of
the Commitments or Loans in the case of an assignment by a U.S. Lender or less
than US$1,000,000 of the Commitments or Loans in the case of an assignment by a
Cdn. Lender, in each case unless it is to another Lender. Upon the execution and
delivery to the Agent of an Assignment and Acceptance and the payment of the
recordation fee to the Agent, from and after the date specified as the effective
date in the Assignment and Acceptance (the "Acceptance Date"), (x) the assignee
thereunder shall be a party hereto, and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, such assignee shall have the rights and obligations of a Lender
hereunder and (y) the assignor thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights (other than any rights it may have pursuant to
Sections 4.6, 4.7 and 11.4 which shall survive such assignment) and be released
from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto).
(c) Agreements of Assignee. By executing and delivering an
Assignment and Acceptance, the assignee thereunder
-125-
126
confirms and agrees as follows: (i) other than as provided in such Assignment
and Acceptance, the assigning Lender makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement, the Notes or any other Loan Documents, (ii) such assigning Lender
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of any Loan Party or the performance or observance by
any Loan Party of any of its obligations under this Agreement or any other Loan
Document, (iii) such assignee confirms that it is an Eligible Assignee and has
received a copy of this Agreement, together with copies of the Financial
Statements referred to in Section 6.1(i), the Financial Statements delivered
pursuant to Section 7.1(k), if any, and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance, (iv) such assignee will, independently and
without reliance upon the Agent, such assigning Lender or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement, (v) such assignee appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Agent by the terms hereof, together with such
powers as are reasonably incidental thereto and (vi) such assignee agrees that
it will perform in accordance with their terms all of the obligations which by
the terms of this Agreement are required to be performed by it as a Lender.
(d) Agent's Register. The Agent shall maintain a register of
the names and addresses of the Lenders, their Commitments and the principal
amount of their Loans (the "Register"). The Agent shall also maintain a copy of
each Assignment and Acceptance delivered to and accepted by it and modify the
Register to give effect to each Assignment and Acceptance. The entries in the
Register shall be conclusive and binding for all purposes, absent manifest
error, and the Borrowers, the Agent and the Lenders may treat each Person whose
name is recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register and copies of each Assignment and Acceptance shall be
available for inspection by the Borrowers or any Lender at any reasonable time
and from time to time upon reasonable prior notice. Upon its receipt of each
Assignment and Acceptance and surrender of the affected Note or Notes subject to
such assignment, the Agent will give prompt notice thereof to the Administrative
Borrower. Within five Business Days after its receipt of such notice, the
Borrowers shall execute and deliver to the Agent a new Note to the order of the
assignee in the amount of the applicable Commitment or Loans assumed by it and
to the assignor in the amount of the applicable
-126-
127
Commitment or Loans retained by it, if any. Such new Note or Notes shall
re-evidence the indebtedness outstanding under the surrendered Note or Notes and
shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note or Notes and shall be dated as of the Effective
Date. The Agent shall be entitled to rely upon the Register exclusively for
purposes of identifying the Lenders hereunder.
(e) Lender Participations. Each Lender may sell participations
to one or more parties (each, a "Participant") in or to all or a portion of its
rights and obligations under this Agreement, the Notes and the other Loan
Documents. Notwithstanding a Lender's sale of a participation interest, such
Lender's obligations hereunder shall remain unchanged. The Borrowers, the Agent,
and the other Lenders shall continue to deal solely and directly with such
Lender. No Lender shall grant any Participant the right to approve any amendment
or waiver of this Agreement except to the extent such amendment or waiver would
(i) increase the Commitment of the Lender from which the Participant purchased
its participation interest; (ii) reduce the principal of, or rate or amount of
interest on, the Loans subject to such participation interest; (iii) postpone
any date fixed for any payment of principal of, or interest on, the Loans
subject to such participation interest; or (iv) release all or a substantial
portion of the Collateral, other than in each case when otherwise permitted
hereunder. To the extent permitted by applicable law, each Participant shall
also be entitled to the benefits of Section 11.3 as if it were a Lender,
provided that such Participant agrees to be subject to the last sentence of
Section 2.8(b) as if it were a Lender.
(f) Securities Laws. Each Lender agrees that it will not make
any assignment hereunder in any manner or under any circumstances that would
require registration or qualification of, or filings in respect of, any Loan,
Note or other Obligation under the securities laws of the United States or of
any other jurisdiction.
(g) Information. In connection with their efforts to assign
their rights or obligations or sell participations pursuant to Sections 11.7(b)
and (e) hereof, the Agent and the Lenders may disclose any information they
have, now or in the future, with respect to the business of the Loan Parties to
prospective assignees or purchasers, provided that such disclosure is subject to
written confidentiality arrangements customary for assignment or participation
transactions of such type.
(h) Pledge to Federal Reserve Bank. Any Lender may at any time
pledge or assign a security interest in all or any portion of its rights under
this Agreement to secure obligations of such Lender, including any pledge or
assignment to secure
-127-
128
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
SECTION XI.8. Counterparts; Telecopied Signatures. This
Agreement and any waiver or amendment hereto may be executed in counterparts and
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all of which shall together constitute
one and the same instrument. This Agreement and each of the other Loan Documents
may be executed and delivered by telecopier or other facsimile transmission all
with the same force and effect as if the same was a fully executed and delivered
original manual counterpart.
SECTION XI.9. Severability. In case any provision in or
obligation under this Agreement, any Note or any other Loan Document shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
-128-
129
SECTION XI.10. Maximum Rate. Notwithstanding anything to the
contrary contained elsewhere in this Agreement or in any other Loan Document,
the parties hereto hereby agree that all agreements between them under this
Agreement and the other Loan Documents, whether now existing or hereafter
arising and whether written or oral, are expressly limited so that in no
contingency or event whatsoever shall the amount paid, or agreed to be paid, to
the Agent or any Lender for the use, forbearance, or detention of the money
loaned to the Borrowers and evidenced hereby or thereby or for the performance
or payment of any covenant or obligation contained herein or therein, exceed the
maximum non-usurious interest rate, if any, that at any time or from time to
time may be contracted for, taken, reserved, charged or received on the
Obligations, under the laws of the State of New York (or the laws of any other
jurisdiction whose laws may be mandatorily applicable notwithstanding other
provisions of this Agreement and the other Loan Documents), or under applicable
federal laws which may presently or hereafter be in effect and which allow a
higher maximum non-usurious interest rate than under the laws of the State of
New York (or such other jurisdiction), in any case after taking into account, to
the extent permitted by applicable law, any and all relevant payments or charges
under this Agreement and the other Loan Documents executed in connection
herewith, and any available exemptions, exceptions and exclusions (the "Highest
Lawful Rate"). If due to any circumstance whatsoever, fulfillment of any
provision of this Agreement or any of the other Loan Documents at the time
performance of such provision shall be due shall exceed the Highest Lawful Rate,
then, automatically, the obligation to be fulfilled shall be modified or reduced
to the extent necessary to limit such interest to the Highest Lawful Rate, and
if from any such circumstance any Lender should ever receive anything of value
deemed interest by applicable law which would exceed the Highest Lawful Rate,
such excessive interest shall be applied to the reduction of the principal
amount then outstanding hereunder or on account of any other then outstanding
Obligations and not to the payment of interest, or if such excessive interest
exceeds the principal unpaid balance then outstanding hereunder and such other
then outstanding Obligations, such excess shall be refunded to the Borrowers.
All sums paid or agreed to be paid to the Lenders for the use, forbearance, or
detention of the Obligations and other Indebtedness of the Borrowers to the
Lenders shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full term of such Indebtedness,
until payment in full thereof, so that the actual rate of interest on account of
all such Indebtedness does not exceed the Highest Lawful Rate throughout the
entire term of such Indebtedness. The terms and provisions of this Section shall
control every other provision of this Agreement, the other Loan Documents and
all other agreements among the parties hereto.
-129-
130
SECTION XI.11. Administrative Borrower; Nature of Borrowers'
Liabilities; Equivalent Amounts.
(a) Each Borrower hereby appoints the Administrative Borrower
irrevocably for the term of this Agreement, to act as its agent,
attorney-in-fact and legal representative in all matters pertaining to the
administration of this Agreement and the other Loan Documents including, without
limitation, to execute and deliver to the Agent or any Lender any notices,
certificates or other documents permitted or required to be executed and
delivered, and to take any and all other actions as are permitted or required to
be taken, under or in connection with the Loan Documents. Any such action taken
by the Administrative Borrower shall bind each of the Borrowers.
(b) The Borrowers' liabilities in respect of the Obligations
shall at all times be joint and several notwithstanding that, from time to time,
any one Borrower may use or derive the exclusive benefit of any Loan or the
proceeds thereof or of any Letter of Credit, provided that neither the Cdn.
Borrower nor any Foreign Subsidiary shall be liable for, and none of the assets
of the Cdn. Borrower or any Foreign Subsidiary shall serve as direct or indirect
security for, any of the U.S. Loans or the U.S. Letters of Credit, or any
interest thereon or fees related thereto.
(c) All monetary amounts expressed in this Agreement or any
other Loan Document in U.S. Dollars that may, as the context permits, include
Cdn. Dollars shall, for purposes of such Cdn. Dollar amounts, be computed at the
Equivalent Amount thereof in U.S. Dollars.
SECTION XI.12. Entire Agreement; Successors and Assigns. This
Agreement and the other Loan Documents constitute the entire agreement among the
parties, supersede any prior written and verbal agreements among them, and shall
bind and benefit the parties and their respective successors and permitted
assigns.
-130-
131
SECTION XI.13. LIMITATION OF LIABILITY. NEITHER THE AGENTS
NOR ANY LENDER SHALL HAVE ANY LIABILITY TO ANY BORROWER (WHETHER SOUNDING IN
TORT, CONTRACT, OR OTHERWISE) FOR LOSSES SUFFERED BY ANY BORROWER IN CONNECTION
WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO THE TRANSACTIONS OR RELATIONSHIPS
CONTEMPLATED BY THIS AGREEMENT, OR ANY ACT, OMISSION OR EVENT OCCURRING IN
CONNECTION THEREWITH, UNLESS IT IS DETERMINED BY A FINAL AND NONAPPEALABLE
JUDGMENT OR COURT ORDER BINDING ON THE AGENTS OR SUCH LENDER THAT THE LOSSES
WERE THE RESULT OF ACTS OR OMISSIONS CONSTITUTING GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF THE AGENTS OR SUCH LENDER. EACH BORROWER HEREBY WAIVES ALL FUTURE
CLAIMS AGAINST EACH LENDER FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE
DAMAGES.
SECTION XI.14. GOVERNING LAW. THE VALIDITY, INTERPRETATION AND
ENFORCEMENT OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND ANY DISPUTE
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS, WHETHER SOUNDING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE
GOVERNED BY THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAW PROVISIONS
OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW) AND DECISIONS
OF THE STATE OF NEW YORK.
SECTION XI.15. SUBMISSION TO JURISDICTION. ALL DISPUTES
BETWEEN OR AMONG A BORROWER, THE AGENTS AND A LENDER, WHETHER SOUNDING IN
CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE RESOLVED ONLY BY STATE AND FEDERAL
COURTS LOCATED IN NEW YORK, NEW YORK AND THE COURTS TO WHICH AN APPEAL THEREFROM
MAY BE TAKEN; PROVIDED, HOWEVER, THAT THE AGENTS OR A LENDER SHALL HAVE THE
RIGHT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST EACH
BORROWER OR ITS PROPERTY IN ANY LOCATION SELECTED BY THE AGENTS OR SUCH LENDER
TO ENABLE THE AGENTS TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A JUDGMENT OR
OTHER COURT ORDER IN FAVOR OF THE AGENTS OR SUCH LENDER. EACH BORROWER AGREES
THAT IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS, SETOFFS OR CROSS-CLAIMS IN
ANY PROCEEDING BROUGHT BY THE AGENTS. EACH BORROWER WAIVES ANY OBJECTION THAT IT
MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE AGENTS OR A LENDER HAVE
COMMENCED A PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON FORUM NON CONVENIENS.
-131-
132
SECTION XI.16. SERVICE OF PROCESS. THE BORROWERS HEREBY
IRREVOCABLY DESIGNATE CSC UNITED STATES CORPORATION, 00 XXXXX XXXXXX, 0XX XXXXX,
XXXXXX, XXX XXXX 00000, AS THE DESIGNEE AND AGENT OF THE BORROWERS TO RECEIVE,
FOR AND ON BEHALF OF EACH BORROWER, SERVICE OF PROCESS IN ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT. IT IS
UNDERSTOOD THAT A COPY OF SUCH PROCESS SERVED ON SUCH AGENT AT ITS ADDRESS WILL
BE PROMPTLY FORWARDED BY MAIL TO THE ADMINISTRATIVE BORROWER, BUT THE FAILURE OF
THE ADMINISTRATIVE BORROWER TO RECEIVE SUCH COPY SHALL NOT AFFECT IN ANY WAY THE
SERVICE OF SUCH PROCESS. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT OR
ANY LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
SECTION XI.17. JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT TO A TRIAL BY JURY IN
ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO
(I) THIS AGREEMENT; (II) ANY OTHER LOAN DOCUMENT OR OTHER PRESENT OR FUTURE
INSTRUMENT OR AGREEMENT BETWEEN OR AMONG A BORROWER, THE AGENTS AND A LENDER; OR
(III) ANY CONDUCT, ACTS OR OMISSIONS OF A BORROWER, THE AGENTS, A LENDER OR ANY
OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR OTHER
AFFILIATES, IN EACH CASE WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE.
SECTION XI.18. JUDGMENT.
(a) IF FOR THE PURPOSES OF OBTAINING JUDGMENT IN ANY COURT IT
IS NECESSARY TO CONVERT A SUM DUE HEREUNDER IN DOLLARS INTO ANOTHER CURRENCY,
THE PARTIES HERETO AGREE, TO THE FULLEST EXTENT THAT THEY MAY EFFECTIVELY DO SO,
THAT THE RATE OF EXCHANGE USED SHALL BE THAT AT WHICH IN ACCORDANCE WITH NORMAL
BANKING PROCEDURES THE AGENT COULD PURCHASE DOLLARS WITH SUCH OTHER CURRENCY AT
NEW YORK, NEW YORK ON THE BUSINESS DAY PRECEDING THAT ON WHICH FINAL JUDGMENT IS
GIVEN.
(b) THE OBLIGATION OF THE BORROWERS IN RESPECT OF ANY SUM DUE
FROM THEM TO ANY LENDER OR THE AGENT HEREUNDER SHALL, NOTWITHSTANDING ANY
JUDGMENT IN A CURRENCY OTHER THAN DOLLARS, BE DISCHARGED ONLY TO THE EXTENT THAT
ON THE BUSINESS DAY FOLLOWING RECEIPT BY SUCH LENDER OR THE AGENT (AS THE CASE
MAY BE) OF ANY SUM ADJUDGED TO BE SO DUE IN SUCH OTHER CURRENCY SUCH LENDER OR
THE AGENT (AS THE CASE MAY BE) MAY IN ACCORDANCE WITH NORMAL BANKING PROCEDURES
PURCHASE DOLLARS WITH SUCH OTHER CURRENCY. IF THE DOLLARS SO PURCHASED ARE LESS
THAN THE SUM ORIGINALLY DUE TO SUCH LENDER OR THE AGENT (AS THE CASE MAY BE) IN
DOLLARS, THE BORROWERS AGREE, AS A SEPARATE OBLIGATION AND NOTWITHSTANDING ANY
SUCH JUDGMENT, TO INDEMNIFY SUCH LENDER OR THE AGENT (AS THE CASE MAY BE)
AGAINST SUCH LOSS, AND IF THE DOLLARS SO PURCHASED EXCEED THE SUM ORIGINALLY DUE
TO ANY LENDER OR THE AGENT (AS THE CASE
-132-
133
MAY BE) IN DOLLARS, SUCH LENDER OR THE AGENT (AS THE CASE MAY BE) AGREES TO
REMIT TO THE BORROWERS SUCH EXCESS.
SECTION XI.19. Amendment and Restatement. This Agreement
amends and restates, and supersedes in its entirety, the Original Loan
Agreement.
-133-
134
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its (or its general partner's) proper and duly
authorized officer as of the date first set forth above.
U.S. BORROWERS
--------------
GRANT PRIDECO, LP
By: Grant Prideco Holding, LLC,
its general partner
By: /s/ XXXXXX X. XXXXXX
----------------------------------------------
Xxxxxx X. Xxxxxx
Vice President
XL SYSTEMS, INC.
By: /s/ XXXXXX X. XXXXXX
----------------------------------------------
Xxxxxx X. Xxxxxx
Vice President
TEXAS ARAI, INC.
By: /s/ XXXXXX X. XXXXXX
----------------------------------------------
Xxxxxx X. Xxxxxx
Vice President
TUBE-ALLOY CORPORATION
By: /s/ XXXXXX X. XXXXXX
----------------------------------------------
Xxxxxx X. Xxxxxx
Vice President
-134-
135
DRILL TUBE INTERNATIONAL, INC.
By: /s/ XXXXXX X. XXXXXX
----------------------------------------------
Xxxxxx X. Xxxxxx
Vice President
PETRO-DRIVE, INC.
By: /s/ XXXXXX X. XXXXXX
----------------------------------------------
Xxxxxx X. Xxxxxx
Vice President
CDN. BORROWER
-------------
GRANT PRIDECO CANADA LTD.
By: /s/ XXXXXX X. XXXXXX
----------------------------------------------
Xxxxxx X. Xxxxxx
Secretary
U.S. LENDERS
------------
TRANSAMERICA BUSINESS CREDIT
CORPORATION
By: /s/ XXXXXX X. XXXXXXX
----------------------------------------------
Xxxxxx X. Xxxxxxx
Executive Vice President
BANK OF AMERICA, N.A.
By: /s/ XXXXX X. XXXXXXXXX
----------------------------------------------
Xxxxx X. Xxxxxxxxx
Senior Vice President
-135-
000
XXX XXXXX XXXXXXXXX BANK
By: /s/ XXXXXX X. XXXX
----------------------------------------------
Xxxxxx X. Xxxx
Vice President
FLEET CAPITAL CORPORATION
By: /s/ XXXXXX X. XXXXXX
----------------------------------------------
Xxxxxx X. Xxxxxx
Senior Vice President
CDN. LENDER
-----------
TRANSAMERICA COMMERCIAL FINANCE
CORPORATION, CANADA
By: Transamerica Business Credit
Corporation, as Attorney-in-Fact
By: /s/ XXXXXX X. XXXXXXX
----------------------------------------------
Xxxxxx X. Xxxxxxx
Executive Vice President
-136-
137
AGENT
-----
TRANSAMERICA BUSINESS CREDIT
CORPORATION
By: /s/ XXXXXX X. XXXXXXX
----------------------------------------------
Xxxxxx X. Xxxxxxx
Executive Vice President
CDN. AGENT
----------
TRANSAMERICA COMMERCIAL FINANCE
CORPORATION, CANADA
By: Transamerica Business Credit
Corporation, as Attorney-in-Fact
By: /s/ XXXXXX X. XXXXXXX
----------------------------------------------
Xxxxxx X. Xxxxxxx
Executive Vice President
-137-
138
SCHEDULE 1
Borrowers
---------
1. Grant Prideco, LP, a Delaware limited partnership.
2. XL Systems, Inc., a Texas corporation.
3. Texas Arai, Inc., a Delaware corporation.
4. Tube-Alloy Corporation, a Louisiana corporation.
5. Drill Tube International, Inc., a Texas corporation.
6. Petro-Drive, Inc., a Louisiana corporation.
7. Grant Prideco Canada Ltd., an Alberta corporation.
139
SCHEDULE 2
COMMITMENTS OF LENDERS
Lenders U.S. Loan and Cdn. Loan and Cdn.
------- Letter of Credit Letter of Credit
Commitment Commitment
---------------- ------------------
Transamerica Business Credit
Corporation US$30,000,000 -0-
Address:
000 Xxxxxxxx Xxxxx Xxxxxx
Xxxxx X-000
Xxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attn.: Xx. Xxxxxx X. Xxxxxxx
Bank of America, N.A. US$30,000,000 -0-
Address:
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attn.: Xx. Xxxxx Xxxxxxxxx
The Xxxxx Manhattan Bank US$22,500,000 -0-
Address:
000 Xxxxx Xxxxxx, Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopier: (000) 000-0000
Attn.: Xx. Xxxxxx X. Xxxx
Fleet Capital Corporation US$17,500,000 -0-
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
Telecopier: (000) 000-0000
Attn.: Loan Administration Manager
Transamerica Commercial Finance
Corporation, Canada -0- US$7,000,000*
Address: (or Equivalent
000 Xxxx Xxxxxx Xxxxx, Xxxxxx)
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxx
XXXXXX X0X 0X0
Telecopier: (000) 000-0000
Attn.: Xx. Xxxxx X. Xxxxxx
-----------------
* The Cdn. Commitments are a sublimit of the U.S. Commitments.
140
SCHEDULE 3
Guarantors
1. Grant Prideco, Inc., a Delaware corporation.
2. Grant Prideco Holding, LLC, a Delaware limited liability company.
3. Channelview Real Property, Inc., a Delaware corporation.
4. XL Systems International, Inc., a Delaware corporation.
5. XLS Holding, Inc., a Texas corporation.
6. TA Industries, Inc., a Delaware corporation.
7. Tube-Alloy Capital Corporation, a Texas corporation.
8. Petroleum Equipment Supply Company, a Louisiana corporation.
9. Tube-Alloy Corporation International, a Texas corporation.
10. Grant Austria, Inc., a Delaware corporation.
11. Grant Prideco Technology, Inc., a Delaware corporation.
12. Grant Prideco USA, LLC, a Delaware limited liability company
141
SCHEDULE 4
Eligible Assignees
IBJ Whitehall Financial Group
LaSalle National Bank
Xxxxx Fargo Bank, N.A.
142
SCHEDULE 5
Eligible Foreign Account Debtors
143
================================================================================
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
among
GRANT PRIDECO, LP, XL SYSTEMS, INC.,
TEXAS ARAI, INC., TUBE-ALLOY CORPORATION,
DRILL TUBE INTERNATIONAL, INC.,
PETRO-DRIVE, INC., AND GRANT PRIDECO CANADA LTD.,
as Borrowers,
EACH OF THE FINANCIAL INSTITUTIONS
FROM TIME TO TIME PARTIES HERETO,
as Lenders,
TRANSAMERICA BUSINESS CREDIT CORPORATION,
as Agent for the U.S. Lenders,
and
TRANSAMERICA COMMERCIAL FINANCE CORPORATION, CANADA,
as Agent for the Cdn. Lenders
Dated as of July 10, 2000
================================================================================
144
TABLE OF CONTENTS
Page
----
ARTICLE I.
DEFINITIONS
SECTION 1.1. General Definitions........................................ 2
SECTION 1.2. Accounting Terms and Determinations........................ 36
SECTION 1.3. Other Terms; Headings...................................... 36
ARTICLE II.
THE CREDIT FACILITIES
SECTION 2.1. Loans...................................................... 37
SECTION 2.2. Procedure for Borrowing; Notices of Borrowing; Notices of
Continuation; Notices of Conversion; TBCC Loans; TCFC
Loans; Settlement.......................................... 39
SECTION 2.3. Application of Proceeds.................................... 48
SECTION 2.4. Maximum Amount of the Loans; Mandatory Prepayments;
Early Termination of Agreement; Release of
Equipment Collateral....................................... 48
SECTION 2.5. Maintenance of Loan Account; Statements of Account......... 49
SECTION 2.6. Collection of Receivables.................................. 50
SECTION 2.7. Term....................................................... 51
SECTION 2.8. Payment Procedures......................................... 51
SECTION 2.9. Defaulting Lenders......................................... 52
SECTION 2.10. Letters of Credit.......................................... 54
ARTICLE III.
SECURITY
SECTION 3.1. General.................................................... 57
SECTION 3.2. Further Security........................................... 57
SECTION 3.3. Recourse to Security....................................... 57
SECTION 3.4. Special Provisions Relating to Inventory................... 57
SECTION 3.5. Special Provisions Relating to Receivables................. 59
SECTION 3.6. Special Provisions Relating to Equipment................... 60
SECTION 3.7. Continuation of Liens, Etc................................. 61
SECTION 3.8. Power of Attorney.......................................... 61
-i-
145
ARTICLE IV.
INTEREST, FEES AND EXPENSES
Page
----
SECTION 4.1. Interest................................................... 62
SECTION 4.2. Interest and Letter of Credit Fees After Event of
Default.................................................... 62
SECTION 4.3. Closing Fee................................................ 62
SECTION 4.4. Unused Line Fee; Letter of Credit Fees..................... 63
SECTION 4.5. Calculations............................................... 63
SECTION 4.6. Indemnification in Certain Events.......................... 63
SECTION 4.7. Taxes...................................................... 64
ARTICLE V.
CONDITIONS OF LENDING
SECTION 5.1. Conditions to Initial Loan or Letter of Credit............. 66
SECTION 5.2. Conditions Precedent to Each Loan and Each Letter
of Credit.................................................. 69
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
SECTION 6.1. Representations and Warranties of the Borrowers............ 70
SECTION 6.2. Survival of Representations and Warranties................. 79
SECTION 6.3. Updating of Schedules...................................... 79
ARTICLE VII.
COVENANTS OF THE BORROWERS
SECTION 7.1. Affirmative Covenants...................................... 79
SECTION 7.2. Negative Covenants......................................... 92
ARTICLE VIII.
FINANCIAL COVENANTS
SECTION 8.1. Fixed Charge Coverage Ratio................................101
SECTION 8.2. Capital Expenditures.......................................102
SECTION 8.3. Net Worth..................................................102
SECTION 8.4. Business Plan..............................................102
-ii-
146
ARTICLE IX.
EVENTS OF DEFAULT
Page
----
SECTION 9.1. Events of Default..........................................102
SECTION 9.2. Acceleration, Termination and Cash Collateralization.......104
SECTION 9.3. Other Remedies.............................................105
SECTION 9.4. License for Use of Software and Other Intellectual
Property...................................................107
SECTION 9.5. No Marshalling; Deficiencies; Remedies Cumulative..........107
SECTION 9.6. Waivers....................................................107
SECTION 9.7. Further Rights of the Agent................................108
SECTION 9.8. Interest and Letter of Credit Fees After Event of
Default....................................................108
ARTICLE X.
THE AGENT
SECTION 10.1. Appointment of Agents......................................108
SECTION 10.2. Nature of Duties of Agents.................................109
SECTION 10.3. Lack of Reliance on Agents.................................109
SECTION 10.4. Certain Rights of the Agents...............................110
SECTION 10.5. Reliance by Agent..........................................110
SECTION 10.6. Indemnification of Agents..................................110
SECTION 10.7. The Agents in Their Individual Capacity....................110
SECTION 10.8. Holders of Notes...........................................111
SECTION 10.9. Successor Agent............................................111
SECTION 10.10. Collateral Matters.........................................111
SECTION 10.11. Actions with Respect to Defaults...........................113
SECTION 10.12. Delivery of Information....................................113
ARTICLE XI.
GENERAL PROVISIONS
SECTION 11.1. Notices....................................................113
SECTION 11.2. Delays; Partial Exercise of Remedies.......................114
SECTION 11.3. Right of Setoff............................................114
SECTION 11.4. Indemnification; Reimbursement of Expenses of Collection...114
SECTION 11.5. Amendments, Waivers and Consents...........................116
SECTION 11.6. Nonliability of Agents and Lenders.........................117
SECTION 11.7. Assignments and Participations.............................117
SECTION 11.8. Counterparts; Telecopied Signatures........................120
SECTION 11.9. Severability...............................................120
SECTION 11.10. Maximum Rate...............................................120
SECTION 11.11. Administrative Borrower; Nature of Borrowers'
Liabilities; Equivalent Amounts............................121
SECTION 11.12. Entire Agreement; Successors and Assigns...................122
-iii-
147
SECTION 11.13. Limitation of Liability....................................122
SECTION 11.14. Governing Law..............................................122
SECTION 11.15. Submission to Jurisdiction.................................122
SECTION 11.16. Service of Process.........................................123
SECTION 11.17. Jury Trial.................................................123
SECTION 11.18. Judgment...................................................123
SECTION 11.19. Amendment and Restatement..................................124
Exhibits
--------
Exhibit A - U.S. Note
Exhibit B - Cdn. Note (Cdn. $)
Exhibit C - Cdn. Note (US $)
Exhibit D - Assignment and Acceptance
Exhibit E - Pledge Agreement
Exhibit F - Guaranty
Exhibit G - Contribution Agreement
Exhibit H - Lockbox Agreement
Exhibit I - Security Agreement
Exhibit J - Blocked Account Agreement
Exhibit K - Subordination Agreement
Exhibit L-1 - Collateral Access Agreement (Lessor)
Exhibit L-2 - Collateral Access Agreement (Processor)
Exhibit M - Solvency Certificate
Exhibit N - Borrowing Base Certificate
Exhibit O - Compliance Certificate
Exhibit P - Perfection Certificate
Exhibit Q - Notice of Borrowing
Exhibit R - Notice of Continuation
Exhibit S - Notice of Conversion
Exhibit T - Letter of Credit Request
Exhibit U - Consent and Reaffirmation of Guaranty
Schedules
---------
Schedule 1 Borrowers
Schedule 2 Lenders and Commitments
Schedule 3 Guarantors
Schedule 4 Eligible Assignees
Schedule 5 Eligible Foreign Account Debtors
Schedule 5.1(a)(xii) Leased Locations
Schedule 6.1(a) Qualification to do Business in Foreign
Jurisdictions
Schedule 6.1(b) Principal Places of Business; Locations of
Collateral
Schedule 6.1(f) Consents and Authorizations
Schedule 6.1(g) Ownership; Subsidiaries
-Borrowers
-Guarantors
-Pledged Foreign Companies
-Others
Schedule 6.1(i) Contingent Obligations
-iv-
148
Schedule 6.1(k) Joint Ventures and Partnerships
Schedule 6.1(l) Former Names; Trade Names
Schedule 6.1(q) Tax Agreements
Schedule 6.1(r) Judgments; Litigation
Schedule 6.1(s) Title to Property
Schedule 6.1(u) Investments, Contracts
Schedule 6.1(x) ERISA Plans
Schedule 6.1(y)-A Intellectual Property (Rights)
Schedule 6.1(y)-B Intellectual Property
(Infringement; Claims)
Schedule 6.1(z) Labor Contracts
Schedule 6.1(aa) Environmental Compliance
Schedule 6.1(ad) Material Contracts
Schedule 6.1(ag) Affiliate Transactions;
Spinoff Transactions
Schedule 7.1(q) Billing Practices
Schedule 7.2(a) Indebtedness
Schedule 7.2(c) Corporate Changes, Etc.
Schedule 7.2(i) Permitted Liens
Schedule 7.2(r) Bank Accounts
-v-
